Elements of a Power of Attorney ( POA )

The two different types of POA and what they mean

Power of Attorney (POA) aims at granting authority to a person to do certain acts on behalf of someone. It is given when a person authorises another person to do something on his behalf.

Under the Power of Attorney Act 1882, it includes any instrument empowering a specified person to act for and in the name of the person executing it. The person for whom such an act is done or is so represented is called principal. The person who is executing the POA is called principal or the executant. The person to whom power is granted is called GPA holder or beneficiary. Both the principal and agent should be competent to contract.

A POA creates special power of agency, which entitles the holder to use the principal's name in the transaction on his behalf. A POA can be either a general POA or a special POA. A general POA gives wide powers to the agent to do various acts on behalf of the principal as detailed in the deed and not confined to any specific act relating to a specific subject. On the other hand, a specific POA is given in respect of a single specified transaction like selling of a particular property. Once the particular act is completed, the POA naturally gets revoked or the powers of the holder get exhausted.

The attestation of a POA is not compulsory. However, in order to avoid any disputes, and to establish proof that it is genuine it is advisable to get the document attested by two witnesses.

Registration of this document is not compulsory. In case it is to be registered it should be presented at the sub-registrar's office that has jurisdiction over the immovable property, referred to in the document. In other cases, the document may be presented for registration either in the office of the sub-registrar in whose sub-district it was executed or in any other sub-registrar's office in the State as the executants desire. Notarising a POA is as good as registration. A court will presume that every document purporting to be a POA that has been executed before and authenticated by a notary public is properly executed and would be a conclusive proof. Each page of the document notarised should bear the official stamp of the notary disclosing his registration number and jurisdiction, and have his signature. Appropriate notary stamp has to be affixed.

Any POA executed outside India needs authentication. It has to be executed in the presence of certain designated officers. The persons empowered to authenticate the documents include notary public, any court, Indian consul or vice consul, and representative of the Central Government. Any POA executed outside India should be authenticated by the notary public of the foreign country, consul, vice consul or by a representative of the Central Government. Such documents need to be stamped within three months from the date of receipt in India, to be payable at the District Registrar's office.

Power of attorney attracts stamp duty which varies from State to State. Usually, if the power given was one coupled with interest, it cannot be withdrawn. In case an agent has an interest in the property that forms the subject matter of the agency created via the POA, the agency cannot be terminated to the prejudice of such an interest. Also, where an agency is created for valuable consideration and authority is given to effectuate a security, the authority cannot be revoked.

The POA is irrevocable if it creates an agency coupled with interest, unless there is an express stipulation to the contrary. Where the authority of an agent is given for the purpose of effectuating any security or of protecting any interest of the agent, it is irrevocable during the subsistence of such security. In other cases, it may be revoked by the principal at any time before the agent has acted on it.

Source:: Economic Times