What is a Power of Attorney?
A Power of Attorney (PoA) is a legal instrument signed or executed by a person who, by this instrument, empowers another person to act for or perform something on his behalf.
The person gives authority is called as the donor or principal, the person so authorised is called donee or agent. The legal authority given by the principal to the agent may be broad or limited. The agent can legally do what he is specifically authorised to do by the instrument in clear terms.
The PoA clearly defines the executor (the one executes/authorises) and the attorney (the one who is given power) with addresses and list out the duties to be performed based on it. A PoA is operative and effective only during the life time of the donor, and ceases to be operative when he dies. The PoA is a unilateral document. Agent’s sign is not required on the PoA.
The power of attorney should be clear and understandable. There may be possibility of giving ‘Power of Attorney’ by two or more persons jointly, to one or more persons.
The law that governs power of attorney is the Powers of Attorney Act 1882.
The contents of PoA determine its type
Broadly there are two major kinds of POA: a General Power of Attorney (GPA) and a Special Power of Attorney.
However, in order to find out whether the PoA is General or Special one, the characteristic or nature of the powers conferred under it is to be examined.
A General Power of Attorney empowers the attorney holder to act for the executor in all matters. A GPA remains in force till it is expressly revoked or in the event of death of either of the parties.
A Special Power of Attorney (SPA) which authorizes someone to do a specified act. A special power of attorney will be in force until the specified act is not completed.
Duration of the power will depend upon the type of attorney. In some cases, the power is given for a fixed period.
Powers that can be assigned in a PoA
Some of the types of duty the principal can assign to the agent through a PoA are:
- To execute contracts, deeds, bonds, mortgages, notes, checks, drafts, money orders.
- To manage, compromise, settle, and adjust all matters pertaining to real estate.
- To lease, collect rents, grant, bargain, sell, or borrow and mortgage.
- To sell shares of stocks, bonds, or other securities.
- To file, sign all tax returns, insurance forms and any other documents.
- To enter into contracts, and to perform any contract, agreement, writing, or thing to make, sign, execute, and deliver, acknowledge any contract, agreement.
- To sue on behalf of the principal.
- Any such matter
Evidence act presumes PoA to be proper
The court, under Section 85 of the Indian Evidence Act, shall presume that every power of attorney has been executed before, and authenticated by a Notary Public, or any Court, Judge, Magistrate [Indian] Consul or Vice Consul, or representative of the Central Government, was duly executed and authenticated.
The term execution refers to the signing of the instrument. Authentication means that the person authenticating it has assured himself of the identity of the person who had signed the instrument and the fact of execution. An authentication by a Notary Public is sufficient for a Power of Attorney.
However, if the Power of Attorney is for registration of a document, then it must be a registered one as well, except in the case of some relatives specified under the law.
Stamp duty of PoA
A PoA is to be prepared on stamp paper, specifically prescribed under Section: 48 of Schedule 1 of the Indian Stamp Act, 1899. The stamp duty has to be borne by the principal.
If the power of attorney chargeable with stamp duty is produced before an officer in charge of a public office, on which duty as specified in the stamp act is not paid, then the officer shall impound the instrument and send it to the Collector. Then the Collector must stamp the instrument impounded. Once it is stamped with penalty, it becomes a valid instrument for all purposes thereafter.
Insufficiently stamped instrument is inadmissible in evidence. But it can be admitted by paying ten times the amount of the proper duty.
Registration of Power of Attorney
Registration of power of attorney is not compulsory. It is optional in India. If a power of attorney is in respect of an immovable property of value more than Rs100/-, it must be registered.
The attestation of PoA is done by a Notary or diplomatic agents but it must be registered by the Sub Registrar.
A PoA needs to be attested by two or more adult witnesses who are of sound mind.
Duties of holder of a PoA
An attorney is duty bound to do what all he is assigned with, and not to exceed the authority given to him. If some method of doing is prescribed he should do it only in that manner.
If the attorney exceeds their authority, he or she may be liable for the damages suffered by the principal or others. In case of any breach of any condition by the attorney then he shall be liable to the principal except when he has acted reasonably in good faith.
The attorney holder must act with the utmost good faith. He must tell the donor the nature and extent of any interest which may conflict with his duty.
An attorney cannot pass on his or her powers and duties to another person. But that can be done only if he is authorized to do so by the power of attorney
Revocation of Power of Attorney
The principal can revoke a power of attorney at any time by giving a written notice to the agent and the parties concerned. He can revoke it, if the task for which the agent was appointed is over, as mutually agreed upon by the principal and the agent.
If the PoA was registered with the Sub-Registrar, you have to get it cancelled from the same office itself. The parties concerned need to be informed of the cancellation of the POA. If a reasonably large number of people are involved, then a notice need to be published in one or two newspapers to make all them aware of the cancellation.
When the principal dies or becomes insane / bankrupt, the PoA automatically gets revoked. In case, if principal has named a spouse as his agent, her authority to act under the PoA automatically gets terminated in the event of divorce, or termination of the relation.
Power of Attorney issued outside India
There are two ways to authenticate a legal instrument, such as a power of attorney, executed outside in such a way that can be used in India.
One way is authentication by the Consulate or Embassy, and the other is the authentication by the process of apostillisation.
Authentication by the Consulate or Embassy
If a power of Attorney is executed outside India it should be authenticated by the Consulate / Embassy or a Notary in that country. If a Consular Officer authenticates the PoA then it needs no attesting witnesses. It should be registered in India before it could be used in the country.
The PoA prepared outside India can be on plain paper but it should be stamped within 3 months from the date of receipt of the POA India or penalty will have to be paid.
Such a PoA should have your photograph, left thumb impression, and signature. But it should be brought before the Collector in the district where the PoA would be used, in order to stamp it.
Documents required for attestation in embassy
- Two copies of POA along with the copies of other document
- Original passport and copies of all non-blank pages including first and last one
- Copy of address proof in the country of your residence.
- Proof of legal status in the country of residence, such as visa etc.
- Two passport size photographs
- The fee applicable attestation.
- Witnesses if going to Consulate should also take their proof of identity documents. They will be required to confirm their identity when they sign POA at the consulate.
Apostilisation
Apostilisation is another process though which an Indian legal instrument or document, such as a notarized PoA, can easily be authenticated in a foreign country or vice versa. A legal instrument from abroad can be authenticated for use in India by the process of apostilisation.
The apostille is a certificate. An apostilled document is treated as legalized document for all purposes in India in accordance with the obligation under the Hague Convention. Apostilisation confirms and verifies the signature/seal of the person who attested or authenticated the document. Apostilles are affixed to public documents by “competent authorities” designated by (or under delegation from) the government. It is analogous to notarization in national law and normally supplements notarization of the document under applicable domestic law.
Apostille does not certify that the contents of the document are correct. It only certifies that the signatures of the public officials on the document are authentic, the public official signing the document is acting in his proper capacity when he signs, and that any government seal or stamp is authentic.
Apostilisation removes the need for double-certification such as notarization by the originating country and legalization by the receiving country.
Apostilisation is done under the regulations of Hague Apostille Convention, 1961. The Convention covers only “public documents,” such as a court document, an administrative document, a notarial act, or other official certificates. An apostille instrument needs to comply with Indian laws such as the Indian Registration Act, 1908 and Power of Attorney Act, 1882.
When you apostille a document, an apostille sticker and/or an apostille stamp is obtained from the authority. The stamp assigns a unique identification number that applies to the document. They maintain a record online for the concerned authorities to check the authenticity easily. After this application of the sticker from the Ministry of External Affairs (MEA), there is no need for any added certification from the embassy.
Impounding of un/under stamped PoA executed abroad
The District Collector is duty bound to determine the proper stamp duty of an instrument and certify it, under Section 31 & 32 of the Indian Stamp Act (ISA).
When an un or under stamped power of attorney, executed outside India, is produced before a public officer or in evidence in a proceeding before a court, within three months after it has been received in India, the stamp duty can be collected as decided by the District Collector without impounding & without penalty, as per Section 18 of the ISA.
If such a document is produced after expiry of three months from the date of execution, the officer or court can impound the document, under Section 33 of the ISA and collect stamp duty along with penalty.
But such a document can be admitted in evidence by a court by charging ten times of the proper stamp duty to be paid (see Section 35(a) of the ISA).
All instrument chargeable with duty and executed in India shall be stamped before or at the time of execution, as per Section 17 of the ISA. No instrument chargeable with duty shall not be admitted in evidence or acted upon or registered or authenticated by any officer, unless such instrument is duly stamped u/s 35 of the ISA.
Revoking a Power of Attorney from abroad
A revocable PoA can be cancelled by sending a copy of the revocation letter to the Power of Attorney holder and publishing the notice of revocation in two reputed newspapers.
But in the case of irrevocable POA, the revocation can only be done by approaching a court in India in the appropriate jurisdiction.
If a POA is not registered, it can be revoked by sending a revocation document by registered post to the POA holder and publishing a public notification in two well-circulated vernacular newspapers in the area.
Attestation of Power of Attorney in a foreign country
When Power of Attorney is required for personal and other purpose in UAE or similar countries it must be attested from Ministry of Foreign Affairs (MOFA) for valuing it there.
The procedure for attestation of PoA in a foreign country is as follows:
The first step is to get the power of attorney signed before a notary public in the home country. Then it must be attested by an authorized officer of the Ministry of Foreign Affairs of the home country. It must again be certified by the UAE Embassy/Consulate of the home country.
After that, power of attorney can be brought into the UAE for further processing. It must be stamped by the UAE Ministry of Foreign Affairs in UAE.
Then it must be translated into Arabic by the legal translators authorized to undertake legal translation by the UAE Ministry of Justice.
And at the last it must be stamped by the UAE Ministry of Justice to certify the Arabic translation.
Property transfer by General PoA illegal
The practice of transferring property through the three-step of Sale Agreement, General Power of Attorney, and Will route, is illegal, says the Supreme court in a three-judge bench judgement in Suraj Lamp & Industries (P) v State Of Haryana & Anr.
The seller, under this practice, executes a sale agreement in favour of the buyer confirming the terms of sale, receipt of payment and delivery of possession and gives an undertaking to execute any document whenever required.
The seller then executes an irrevocable power of attorney in favour of the buyer authorising him to manage and dispose of the property.
In the last step, the seller bequeaths the property to the buyer through a Will as a safeguard against any dispute arising after the death of the seller.
Such kinds of transactions were evolved mainly to override the payment of stamp duty, registration charges and capital gains tax. Such transfers of property, by using general PoA, is unlawful.
Special PoA can be used to transfer property
However, a person who is incapacitated can use a registered Special PoA to authorize another person to do all that is needed to transfer a property on his behalf.
Authenticated PoA is presumed to be duly executed
Authentication is a solemn act performed by the Notary Public. The duty of him is to ensure that the executant is the person before him, and is identified to his satisfaction.
Once a document is authenticated by a Notary Public it will be presumed that the document was duly executed and was in order. Then the onus of disproving it lies on the opposite party. Authentication is more than mere execution.
Additional Reading
- The Powers of Attorney Act, 1882, at https://indiankanoon.org/doc/1232250/
- The Notaries Act, 1952, at https://indiankanoon.org/doc/486735/
- The Registration Act, 1908, at https://indiankanoon.org/doc/1489134/
- Click this link to see the Instructions of MEA (GoI) on apostilisation
- To see the Format of a General Power of Attorney, please click here
- Please click here to see the Format of a Special Power of Attorney to sell a specific property.
