In the world of technology, business and industry, contracts and agreements play an important role. At present it is necessary for the businessman to depend on others for getting his things done. With the execution of power of attorney one delegates his powers relating to the business functions to the other called an agent. Power of attorney is a legal document or the authority given by one party to the other party to act as per the authority granted. The relationship between the two parties is similar to the relationship of Principal and agent. An agent’s authority may be expressed or implied. An express authority could be given by spoken words or written. An implied authority is inferred from the circumstances or nature of the act.Decision taken by the attorney holder within the circumference of the authority given is binding on the principal. A power of attorneycan remain in action as long as the principal is alive and not disabled or incapacitated. Power of attorney ends with the death of the principal or the grantor. Through power of attorney, the attorney represents a number of affairs such as private affairs, business, or legal matters. Through power of attorney the maker or the principal lists out the number of powers he wants to share with the power of attorney holder. Most of the time such power of attorney is used by the NRIto manage their properties in India. Decision making in the absence of the true owner gets simplified by Power of attorney, thereby minimizing security concerns. Moreover, an extremely important part of property planning is by way of power of attorney. When there is development in the business and trade transactions it is considered convenient and imperative to have another person to act on other’s behalf.An individual or the grantor or the principal can designate power of attorney to any person whether friend, family member etc. If one is interested in buying any property or want to make any sale of the immovable property he need not to mark his physical presence, but can use his power of attorney. Sharing the rights with the family members or other trusted persons is a legal and correct way of managing the property through power of attorney. Regular type of power of attorney all ends on the death or incapacity of the principal or the grantor. In India there are two type of Power of Attorney i.e. Specific Power of Attorney and General Power of Attorney. A General Power of Attorney empowers the agent to carry out various responsibilities as detailed in the deed on behalf of the principal.On the other hand Specific Power of Attorney is given to the agent for a specific purpose and time. An agent can be engaged in legal business on behalf of the grantor until the principal dies. Once any of the events happens i.e. death of the principal or if he is mentally incompetent to act, the power of attorney ends. The power of attorney is used in cases where the principal is disabled or because of his illness or is not present to sign necessary legal documents for financial transactions. The power of attorney creates an agency and the same is governed by the Indian contract act 1872 and it states that an agency gets terminated on revocation by the principal or by the death of either party.A power of attorney remains in effect until revoked by the principal or he becomes incapable or dies. Most of the times a power of attorney is used for specific transactions such as if the principal is not present to handle the financial affairs. Once the transactions are completed, the seller may enforce its terms against the principal’s estate. It is advisable to notarize the Power of Attorney for the execution. A notary is appointed by State or Central Government moreover notarization is managed under the Notaries Act. If the agent keeps on indulging into the financial matters with the third party and binds the estate of the principal after acquiring the knowledge about the death of the principal, the heirs of the deceased can sue such agent in civil litigation for misappropriating the power of attorney.
Monnishaa Mahajan, Principal Attorney at Legal Help NRI. Monnishaa has an experience of more than 15 years in assisting and advising NRI's in resolving their disputes in India.