This article has been written by Amanpreet Singh,BA LL.B 2ND Year,Fairfield Institute of Management and Technology during his internship
Keywords– power of attorney,General Power of Attorney,Special Power of Attorney,registration
Abstract
This article explains the fundamental legal and practical components of a power of attorney, with special emphasis on a power of attorney for the sale or purchase of real estate as well as a power of attorney for managing bank accounts and investing. It outlines the Indian law that is in effect.
Introduction
The requirement to engage into contracts of agreements in regard to business and other activities has become a regular and necessary aspect of daily life in the modern world where trade and industry have assured huge and long roles to play. As man’s workload increased, he was forced to depend more and more on others to complete his tasks. The businessmen’s and industrialists’ busy schedules have made it necessary to execute a power of attorney before assigning his duties. A Power of Attorney is a legal process that entails the creation of a document that gives another person the authority to act on your behalf.
Meaning of the Term “ Power Of Attorney “
The term “power of attorney” refers to the legal authority granted by one person, known as the donor or principle, to another person, known as the donee or agent, to act on his behalf. A “Power of Attorney” may be granted to one or more people jointly by two or more people. Here, the principal grants the agent a legal authority that may be broad or specific, and the agent is able to make all necessary decisions, including those regarding finances, real estate, and other matters where the principal cannot be present to sign or in the event of the principal’s illness or disability. A power of attorney can also refer to a document that a principal signs and grants authority to an agent.
Importance of Power of Attorney
One of the most crucial but misunderstood components of estate preparation is a power of attorney paperwork. As business and commerce transactions progress, having someone else represent you is frequently convenient or even required. Powers of attorney and wills are sometimes confused, although they serve very different purposes and are two quite different types of legal papers. A will becomes effective on the day of death
A POA is effective while the individual is alive and expires upon his death. In light of the fact that they are complementary and do not cross over, you actually need both a POA and a will. There are two different kinds of POA: one for property and one for personal care, which gives the topic a unique spin. They are entirely different from one another. They address various aspects of your life, and both are necessary for sound estate planning.
Classification of Attorney
Two categories of powers of attorney exist, and they are as follows:
General Power of Attorney: A general power of attorney is a legal document that the principle signs allowing the agent to carry out specific general actions on his behalf. The word “generic” in this context refers to the need that the power be general with respect to the subject matter and not with respect to powers with respect to a subject matter. It will not be considered a generic power of attorney if the subject matter is restricted to something specific or is specifically indicated by the principal while creating a document. Other names for it include restricted power of attorney.
Special Power of Attorney: A special power of attorney allows the principal to appoint someone to carry out one or more specific tasks. In this kind of power of attorney, the agent is given the authority to act on behalf of the principal in a single or specific transactions.
A durable power of attorney clearly states that the agent’s authority expires should the principal become mentally incapable. A power of attorney, however, may specify that it will continue to be in effect in the event that the principal becomes incapacitated in the future. A durable power of attorney is one that includes this clause.
Authentication of Power of Attorney
According to Indian law, a power of attorney is a legal document that needs to be correctly drafted, utilising the appropriate legal vocabulary and outlining the goals and duties that you desire to designate the appointee to carry out on your behalf. A power of attorney must be signed and notarized by a certified notary advocate who can certify that you were competent to grant the power of attorney at the time of signing the document. This is required if you want to authorise someone to act on your behalf. Before the notary advocate can certify and issue the document, you will need to present your ID.
According to the “Registration Act, 1908,” it must be signed and validated by the registrar or sub-registrar of guarantees.
Registration
A power of attorney is not required to be registered unless it generates a charge in favour of the done,or an interest in any immovable property. It is not required to register a power of attorney. In India, when the “Registration Act, 1908” is in effect, the Power of Attorney should only be certified by a Sub-Registrar; otherwise, it must be properly notarized by the notary, particularly in cases where the agent is given the authority to sell land. A power of attorney must be registered if it pertains to an immovable property with a value greater than Rs. 100. The deed of power of attorney is authenticated by registration.
Legal Powers which can be granted to the Attorney
To manage the principal’s financial affairs or make health care choices, a power of attorney generally gives an agent “all rights that the principle possesses,” which may be sufficient for many reasons. Agents may have the following powers:
To sign and seal all agreements, deeds, bonds, mortgages, notes, cheques, draughts, and money orders.
ii. To oversee, negotiate, resolve, and adjust all real estate-related issues.
iii. To grant, bargain, sell, lease, collect rents, or borrow money and mortgage it.
iv. To offer all of your stocks, bonds, or other securities for sale.
v. To submit and sign all tax returns, insurance applications, and other paperwork.
Conclusion
The power is constrained to handle only particular issues, a specific type of transaction, or to complete a specific legal transaction for the Principal. When the transaction is finished, the agent’s power of attorney ends. If the power agent commits any fraud, it does not obligate the principal. The agent cannot bring a claim against him or hold him accountable in any other way. Any action taken by the agent beyond the scope of the authority will not bind the principal if the power does not permit the agent to conduct business, except with restrictions. Additionally, an agent is not permitted to bind the principal in a way that goes beyond what the power of attorney permits.
