Power of Attorney has been defined in Section 1A of Powers of Attorney Act, 1882 as “any instrument authorizing a specific person to act on behalf of and in the name of the individual who executes it.”
In India there are two types of Power of Attorney – General and Special.
Any individual can issue a POA. However, no person with unsound mind can issue Power of Attorney.
Agent has the complete legal authority to act in the name of Principal and therefore the activities done by Agent are deemed to be the actions of Principal. Acting through Another is founded on the legal maxim “Qui Facit Per Aliumfacit Per Say.” It’s easy for an agent to abuse the power for their selfish motives therefore a power of attorney with generic powers is far exceedingly risky.
To protect one’s interests, it is critical to limit the Power of Attorney so that the agent/attorney does not abuse his authority. There is no guarantee that an Agent will always work honestly. Failure to limit the Agent’s/authority could result in significant losses.
To comply with the requirements governing Non-Resident alien Powers of Attorney, the first step is to draft the Power of Attorney on plain white paper with particular terms and conditions. Two witnesses must sign the Power of Attorney, both of whom must be well known to the Principal who is issuing the Power of Attorney.
The Power of Attorney must have the photograph of the Principal. It is mandatory that the Attorney is stamped by the Indian Embassy/High Commission/Consulate or by the Foreign Commonwealth Office.
The Stamped Power of Attorney must be embossed by the office of the Financial Commissioner/SDM/or other authority within 90 days of the attorney being signed by the Principal. The presence of the Attorney is required for the embossing in India.
Upon the purpose of the Attorney being fulfilled or if the attorney holder is trying to misuse the document; the Principal must immediately revoke the Power of Attorney.
If the person is residing in foreign country and issuing a Power of Attorney from that country then issuing a Power of Attorney on stamp paper is not required. Power of Attorney can be made on a plain A4 paper which is duly stamped and signed as per the requirement under law.
No, there is not a specific draft but each Power of Attorney is created as per the requirement of a transaction.
Power of Attorney is valid unless it is revoked as per the procedure under law or on death of either the person giving the Attorney or Principal .
When drafting a General Power of Attorney from outside India, make sure to include the following information:
Grantor’s Information– The grantor’s name, age, foreign address, Indian address, and occupation should be listed first.
Attorney’s Information– Includes the name, age, address, father’s name, and occupation of the person in whose favour the deed has been made.
The rationale for the POA– You must explain why you are performing this act and for what purpose. For example, if you are living abroad and want to buy, sell, or rent out your property in India, you can do so.
Commencement Date – You should clearly state when the POA goes into effect.
Signature– The Grantor must sign on all pages, including the final page.
The following documents are required for the attestation of Power of Attorney (POA)by Indian Embassy –
- Two copies of Power of Attorney.
- Valid passport. Photocopies of first and last pages of passport
- Copies of address proof of the resident country in which an individual resides. For instance – bank statement, driving license, or utility bills.
- Two photos of passport size.
- Visa/ green card.
- Attestation charges.
- Valid identity proofs of the witnesses.
A Power of attorney issued by an NRI must be revoked in the same manner that it was issued. However, additional steps are taken after the revocation deed is stamped by the Indian High Commission/Consulate/Embassy. The attorney holder must be issued a legal notice and also the notice must be published in a Newspaper.
- A Special Power of Attorney should be preferred over a General Power of Attorney by the clients since the powers of Agents are clearly defined under Specific POA which prevents misuse of powers on part of Agent.
- It is always advised that an individual double-check the wordings and the implications of their actions.
- The POA must be immediately revoked when the purpose/job for which it is given is completed.