What is a Power of Attorney?
Date : 23 Apr, 2021
Post By Advocate Ashish Jain
The term Power of Attorney (POA) usually comes into play, when an individual has a chaotic or busy life and he/she is unable to take out time to manage their property for buying or selling and even plan their financial affairs. In such a situation the individual has a right under the law to hand over their property and assets to his/her family member(s) or friend(s) to look after. This is the time when a Power of Attorney deed is to be created. But it is also important that such other person should be trustworthy and reliable to have that power. This article emphasizes on firstly, the use of Power of Attorney for buying property in India, secondly, will discuss how to buy property from a deceased person and thirdly, discuss the legal forms of irrevocable Power of Attorney. What is Power of Attorney according to Indian law? According to the Power of Attorney Act, 1882 a “power of attorney includes any instrument empowering a specified person to act for and in the name of the person executing it”. Whereas, The Indian Stamp Act, 1899 defines the power of Attorney as “any instrument empowering any specified person to act for and in the name of the person executing it”. Consult the best lawyer online However, the basic principle which governs the concept of the Power of Attorney deed is the law of agency as provided under the Indian Contract Act 1872. Power of Attorney is a legal document/instrument that is used to give an individual known as an Agent/Donee authority by the person known as a Principal/Donor to do certain acts such as buying property and managing legal decisions on Principal/Donor’s behalf. The power granted to the agents can be either broad while dealing with legal decisions or these powers can be limited, it depends on the will of the Principal specified in the document. A power of attorney could be of various type- General, Special and Durable A general Power of Attorney- Under this type of POA, an agent has a larger scope of power to buy, sell or rent a property on behalf of the principal. The general POA benefits the buyer and seller to avoid the stamp duty rate, capital gains, taxes, etc imposed by the government on any transaction related to property.
A durable Power of Attorney- it is also known as Irrevocable Power of Attorney in which a deed document cannot be changed in the future. A durable POA deed usually performed for the elderly or anyone expecting illness in the future. This type of POA is irrevocable in nature. This POA document created by the principal to authorize the agent with all its power which will remain with him even after the principal passes away or suffers from any mental illness that makes him incompetent. The transfer of rights by the principal under the general power of attorney deed to the agent for the purpose of buying any immovable property in India has been declared to be null and void by the Apex Court in its judgment in 2011. A three-judge bench of the Supreme Court presided over by Justice R.V. Raveendran clearly stated that the property can be lawfully transferred only through registered sale deeds. The Court stated that the order does not apply with prospective effect as it had not made any new law to govern the issues. However, the Court said that people who bought the property through a general power of attorney (GPA) before this judgment, had to apply for the proper regulation of registered sale deeds to the respective authorities. But to protect the essence of the Power of attorney principal the Court also said its decision will not be applicable on POA executed in a lawful transaction. The authority given to agents for any transaction related to the sale or rent of any property of principal has to be done according to the instruction written in the deed of POA. In general, all the POA executed by the person later dead (deceased person) in favour of his/her agent is invalid. Since the executant of the POA is not alive, the status of the POA becomes null & void. In the case of a deceased person’s property, his/her legal heirs get the right over such property and not the agent of that deceased person. The legal heirship certificate issued by the Revenue Department or the succession certificate from the competent Court helps in identifying the real owner of that property. As the legal heir of the deceased has the lawful right over transactions related to the sale of the property. Benefits The principal can save a lot of time from busy schedules by transferring the right to an agent for planning and maintaining its business. It allows the agent to make necessary decisions in the interest of the principal. Helps the elderly or mentally ill person to manage their property and financial affair. It provides an opportunity to choose a better person who will make decisions on your behalf. The important task is to choose a trustworthy agent, who can be a family member or a friend. How to Register/Procedure to file: The procedure involved in the registration of a Power of Attorney in India is as follows: A power of attorney which deals with the power to buy or sell the Principal’s immovable property has to be registered under the law. The Power of Attorney is drafted, along with the signature of the Principal and the two witnesses. It is advisable to get a draft prepared by a legal expert. The POA draft along with stamp paper should be authenticated by the Sub-Registrar. However, in some areas draft is attested by a Notary. The sub-registrar office fixed the date for the registration of the Power of attorney instrument. On the date of registration both the parties and 2 witnesses who are of sound mind shall be present for the attestation of Power of Attorney. At last, the government registration fee is paid in the sub-registrar office. After a week the registration procedure will be completed, then collect the Power of attorney from the office. Minimum Requirements: When any person wants to transfer his/her power of attorney to another person which may be a relative or friend. Such a person should be a minimum of 18-years-old, should be of sound mind, and should not be declared insolvent by the Court of law. Get in touch with the best lawyer now Documents Required: The necessary documents required for the registration of legal Power of Attorney deeds in India are dependent on the state government guideline. It is recommended that one should consult with the local authorities to confirm exactly which documents are required in their respective states. The basic documents required for the creation of the Power of Attorney deed are as follows: A copy of the voter id for the Address verification For NRI applying for POA in India, a copy of Passport will be required Copy of POA deed document Passport size Photograph Aadhar Card, along with photocopy ID Proof of 2 witnesses It is also recommended to carry some amount of money for the stamp duty fees. The value of stamp duty varies depending on the Power of Attorney. How can Lawtendo help in the process: Any person in need to know about any of the legal issues about the procedure, requirement of the document, etc. for the Power of Attorney deed can do so through lawyers from the Lawtendo platform. The drafting and registration of Power of attorney can be difficult for common people. Therefore, Lawtendo provides you with one of the best services to address all the issues by connecting you with a lawyer who can provide you with expert advice. Under the guidance of Adv Ashish Jain, this draft was written by Mr. Kartikeya Hundet, BA LL.B - 4th year student, School of Law UPES, Dehradun
