THE POWER OF ATTORNEY


Inasmuch as human being becomes busier, it becomes more necessary for him to depend on others for getting his things done. Owing to this reason, the power of attorney is now playing vital role. While the main concern of Indian philosophy is to analyse the fundamental concepts of ethics, religion, epistemology and metaphysics, its ultimate concern is the social well-being of individuals.

In the recent computer era, where commerce and industry assured large role to play , the need for entering into contracts of agreements in relation to business and other transactions become a common and primary feature of daily life. Because of human being became busier, it became more necessary for him to depend on others for getting his things done. The hectic activities of the businessmen and industrialists have made the execution of power of attorney for delegating his functions. A "power of attorney" is a legal instrument whereby one person gives another person the authority to act on his or her behalf as his legal representative, and to make binding legal and financial decisions on your behalf.

Defining A Power Of Attorney

In Blacks dictionary it is described as the instrument by which a person is authorized to act as an agent of the granting it. It is pertinent to mention here a person need not be a lawyer to hold a Power of Attorney as an agent for someone else. In Strouds judicial dictionary "power of attorney is defined extensively as an authority whereby one is set in the stead or place of another to act for him".

Power of Attorney is a document of agency whereby the principal appoints an agent to do and execute certain acts or deeds on his behalf. Various can be found in different enactments like according to the Bombay Stamp Act it is defined as "any instrument empowering a person to act for and in the name of the person executing it and includes an instrument by which a person a not being a legal practitioner is authorized to appear on behalf of any party in proceedings before any court tribunal or authority"

The Indian Stamps Act defines it "any instrument empowering any specified person to act for and in the name of the person executing it"

Despite there is a specific act pertaining to Power of attorney but it is a very precise and brief one , the basic principles of these document are governed by the law of agency as provided for in the Indian Contract Act. A power of attorney may be of two types-

1) General 2) Specific-

The test to determine under which category a given document falls is as to what is the subject matter in respect of which power is given and if it is restricted to some specific matter it is specific else it is general.

Construction of a power of attorney-

There are two main rules in construing a power of attorney.

1) The operative part of the deed is controlled by the recitals wherever there is any ambiguity

2) Where authority is given to do particular acts followed by general words the general words are restricted to what is necessary for the performance of the particular acts

The Power of Attorney can be effective immediately upon signing or only upon disability.

Some illustrations of legal aspects containing in the Power of Attorney:

Contracts, Agreements

1. To enter into contacts,

2. Perform any contract, agreement, writing, or thing

3. To make, sign, execute, and deliver, acknowledge any contract, agreement,

The Power Of Attorney In Real Estate Field

1. To sell, exchange, lease, collect rents, grant, bargain, or borrow and mortgage.

2. To execute all deeds, bonds, contracts, mortgages, notes, checks, drafts, money orders;

3. To manage, compromise, settle, and adjust all matters relating to real estate;

Bank Accounts, Certificates Of Deposit, Money Market Accounts

1. To add to or withdraw any amounts from any of my bank accounts, Certificates of Deposit, Money Market Accounts, etc.

2. To make, execute, endorse, accept and deliver any and all cheques and drafts

3. Execute or release such deeds of trust or other security agreements as may be necessary

4. Deposit and withdraw fundsAcquire and redeem certificates of deposit, in banks, savings and loan

Tax Returns, Insurance And Other Documents

1. To file, sign all tax returns, insurance forms and any other documents

2. To represent in all matters concerning the foregoing.

Stocks, Bonds, And Securities

1. To sell any and all shares of stocks, bonds, or other securities

2. To make, execute, and deliver any assignment, or assignments, of any such shares of stock, bonds, or other securities.

Kinds Of Power Of Attorney

Every act performed by the agent within the authority of the Power of Attorney is legally binding upon the persons granting it. A power of attorney must be given only to a trustworthy person, and only when it is absolutely necessary. The person who empowers is the Principal and the person to whom the power is conferred is the Agent.

There are two kinds of power of attorney viz., "General Power of Attorney" and "Special (or limited) Power of Attorney".

What is a General Power of Attorney ?

1. The principal empowers the agent with the right to carry out all legal acts on his behalf without restricting it to a particular transaction or act,

2. Gives the agent very broad powers to act on behalf of the Principal

What is a Special Power of Attorney?

1. The authority is restricted to act only on certain matters or only a particular kind of transaction or to carry out a specific legal transaction for the Principal.

2. The agent's power of attorney expires on the completion of the transaction

The Basic Principles To Remember:

1. The general rule of power of attorney is that it should be strictly construed.

2. Unless an express power is conferred on an agent to enter into contracts of guarantees on behalf of his principal or to execute or negotiate , negotiable instruments for his principal jointly with others

3. An agent cannot by his acts bind the principal to a larger extent than he is empowered to do under the power of attorney.

4. Fraud by the power agent does not bind the principal. He cannot be sued or otherwise held responsible for fraud by the agent

5. If the power does not authorize the agent to carry on a business except with limitations any act done by him in excess of such power will not bind the principal.

6. For example power to dispose of property does not confer a power to mortgage the property.

7. Power to manage immoveable property cannot permit principal's ornaments which are a moveable proper.

Important Rules For Construction Of Power Of Attorney

1. The operative part of the deed is controlled by the recitals.

2. Where authority is given to do a particular act, followed by general words, the general words are restricted to do what is necessary for the proper performance of the particular acts.

3. General words do not confer general powers, but are limited to the purpose for which the authority is given, and are construed as enlarging the special powers only when necessary for that purpose.

4. The deed must be construed so as to include all powers necessary for its execution.

Registration Of Power-Of-Attorney

1. Registration of power of attorney is not compulsory. it is optional

2. In India, where the Registration Act, 1908, is in force, the Power of Attorney should be authenticated by a Sub Registrar only, (Whenever a person signs the document and his attorney presents/ admits execution).

3. In other areas, attestation should be by a Notary or diplomatic agents

4. In case an attorney under a valid Power of Attorney himself signs a document, he may, as an executing (signing) party present/admit execution of a document though it is attested by a Notary, unless the text of the power specifically excludes such powers

5. Foreign Power of Attorney should be got stamped by the Collector after its receipt in India within prescribed time of 3 months

6. Registration of power of attorney authenticates the deed of power of attorney

7. Power of Attorney shall be attested by two or more adult independent witnesses who are of sound mind.

8. If a power of attorney is in respect of an immovable property of value more than Rs100 it must be registered.

Revocation of Power Of Attorney

Power of Attorney can be revoked in the following cases, in case of :

1. Revoked by the principal himself

2. The principal dies or becomes insane or becomes bankrupt

3. The business for which the agent was appointed is over

4. Mutually agreed upon by the principal and agent

5. The right under the power of attorney is renounced by the agent

Revocation Of General Power Of Attorney

According to the Judicial perception, under the following circumstances, the power of attorney can be revoked.

If the power given to the attorney is coupled with an interest it is irrevocable.

To decide whether a given power is coupled with interest or not regards are to be given to the facts of each case and the wordings of the instrument itself.

The right of an agent to remuneration though stipulated in the form of property to be produced by exercise of power is not an interest in the required sense.

If the power is irrevocable as per the test laid down the parties are nevertheless free to make it revocable by an express stipulation to the contrary.

If the power is revocable than the parties cannot make it irrevocable merely by writing that the instrument is irrevocable.

The position in our country is the same as that in England.

A power of attorney is automatically terminated if- One of the parties to the instrument dies or becomes insane, The principal becomes insolvent or bankrupt, any specific condition in the instrument is breached, the business comes to an end.

Courts refer to Indian Contract Act provisions to determine this question.