What is the Power of Attorney?
Power of Attorney (Power of Attorney) is a legal document wherein you authorize another person (known as agent or attorney or attorney in fact) and gives that person all the legal rights to act on your behalf. The authorized person can make a decision, enter into a contract, and make sale/purchase of property, etc. in your place as if you were doing it. Issuing a Power of attorney is a vital legal document by a person to a third party. It gives one the right to act, appear and sign on all relevant documents on behalf of him/her, if:
- He/she is unable to do any particular act, or
- Appear before the Court/any other authority, or
- To execute any particular document
The person who is issuing the Power of Attorney is referred to as 'the Principal', whereas to whom the Principal is issuing it, is the ‘Attorney’. Through the power of attorney, the Principal authorizes the Attorney to do all acts (carry out all the necessary steps), or appear and sign on all relevant documents on behalf of the Principal.
Table of Content:
- Purpose of Power of Attorney
- General Power of Attorney
- Special Power of Attorney
- Durable Power of Attorney
- Sample Power of Attorney
- Types of Power of Attorney
- Registered Power of Attorney
- Unregistered Power of Attorney
- Revocable Power of Attorney
- Irrevocable Power of Attorney
- How to draft a Power of Attorney?
- Essentials for Power of Attorney
- How to register a Power of Attorney
- How do you choose an attorney-in-fact?
- Cancellation of power of attorney in India
- When can you revoke a Power of Attorney?
- When can you not revoke the power of attorney?
- Laws governing the Power of Attorney
- How to revoke a Power of Attorney?
- How to revoke a General Power of Attorney?
- How to revoke revocable Power of Attorney?
- How to revoke irrevocable Power of Attorney?
- Essentials of Legal notice for cancellation of power of attorney:
- Who can revoke a power of attorney if there are multiple Principals or the Power of Attorney authorizes multiple agents?
- When does a Power of Attorney arrangement come to an end?
- Is the execution of the Power of Attorney from abroad valid in India?
- Frequently Asked Questions
Purpose of Power of Attorney
There are different purposes for each type of Power of Attorney, such as
General Power of Attorney – It is an extensive Power of Attorney where you give all the rights and powers you have with you. The authorized person would be able to perform your daily transactions, make payments, sign documents for you, etc.
Special Power of Attorney – This Power of Attorney is executed for specific performance. In such Power of Attorneys, the work assigned to an attorney is clearly mentioned and the rights and powers are limited. The attorney is bound to act by terms mentioned in the Power of Attorney.
Durable Power of Attorney - There are cases where you need someone to make decisions for you in case you become incapacitated i.e. not able to take a decision for you either physically or mentally. It becomes effective when the principal becomes incapacitated.
Sample of Power of Attorney:
Types of Power of Attorney:
There are two types of Power of Attorney on the basis of the registration
Registered Power of Attorney: When a power of attorney has signatures before the registering authority i.e. the Additional District Sub-Registrar or the District Sub-registrar. The office of the Registrar records it as a registered power of attorney. At the time of the revocation of a registered power of attorney, one needs to draft a Deed of revocation of power of attorney. This has to be registered in the Registry office.
There are two types of Power of Attorney in respect of Revocation.
Revocable Power of Attorney: If the power of attorney is revocable at any time after execution in accordance with the will of the principal. This Power of Attorney can be revoked by signing a Deed of Revocation.
Irrevocable Power of Attorney:
"If there is a clause in Power of Attorney deed which clearly states that you give away your right of revocation, it makes the Power of Attorney irrevocable i.e. cannot be revoked solely at the will of the Principal. For such Power of Attorney, the Principal must give a public notice through two national and regional esteemed daily newspapers and later approach the Court of law to terminate the Power of Attorney,” says Advocate Pushkar Taimni.
Note: It is pertinent to mention here that a power of attorney will not be treated as an irrevocable one merely because the clause of irrevocability is mentioned in the deed of power of attorney.
How to draft a Power of Attorney
Power of Attorney can be oral or written document, however, it is recommended to have a written Power of Attorney that states its purpose clearly. There are a plethora of online free templates available to use but it is highly advised to abstain from using them because if your Power of Attorney does not mention its purpose clearly and is full of ambiguity, then it might create legal issues and could be challenged easily. Therefore it is recommended to always consult a lawyer who can make a draft of your Power of Attorney suitable to your requirements.
Essentials for Power of Attorney
A Power of Attorney should include details like Name, Address of Principal and Agent along with date and place where the Power of Attorney is being executed. Apart from that, it should
- describe the type of powers that are being delegated and whether the Power of Attorney is general, specific, durable or irrevocable.
- state the list of powers that are being conferred on agents like, custody, management of property, healthcare, etc.
- include the liabilities of principal, agent or third party if any.
- have signatures of respective parties along with notary.
How to register a Power of Attorney
For the Indian residents, the registration process of a Power of Attorney is as follows.
STEP 1: Draft a Power of Attorney on a stamp paper of value depending upon your state with all the terms and conditions.
STEP 2: Make sure the deed is signed by you and the attorney and get it notarized.
STEP 3: Visit your local registrar or sub-registrar office for submission with 2 witnesses along with all the supporting documents like Aadhar Card, Photographs, Residence Proof, etc. in original and photocopies (Makes sure the photocopies are attested by a gazetted officer)
STEP 4: After submission, the registrar will deposit your documents and shall provide you with one copy of the same.
How do you choose an attorney-in-fact?
The attorney-in-fact can be family, friends, relatives or someone of your trust. Important considerations before choosing attorney-in-fact are
Your Attorney of Fact should be a person of proper age and mature enough to understand the transactions involved.
It is recommended that your attorney-in-fact should be easily reachable and live in close proximity to you.
Mere trust and goodwill is not a sole criterion, he/ she should have sound knowledge of financial affairs and experienced enough to perform legal transactions if and when required.
Cancellation of power of attorney in India
In India, if the attorney is unable to do any particular act, execute any particular document, or fails to appear before the Court or any other authority, then the principal can revoke a Power of Attorney.
When can you revoke a Power of Attorney?
The principal can revoke a Power of Attorney if,
- The attorney does anything contrary to the terms and clauses of the Power of Attorney then the principal can revoke the power of attorney after giving prior legal notice for cancellation of power of attorney.
- The due completion of work or business for which there is a power of attorney.
The issuance of the power of attorney ends when the principal himself/ herself completes the business. Then it becomes unnecessary to keep the power of attorney and the Principal can revoke the power of attorney.
When can you not revoke the power of attorney?
- When the attorney has some rights and interests over the subject matter. For that, the power of attorney, the principal cannot revoke the power of attorney. In this case, the consent of the attorney is mandatory for revocation.
- In case the attorney partly exercises his duty in accordance with the clauses of the power of attorney. Then there is no deprivation of the right of the act which he performs.
Laws governing the Power of Attorney:
Relevant Statutes dealing with Revocation of Power of Attorney
- The Power of Attorney Act, 1882 (2)
- The Indian Contract Act, 1872(1)
How to revoke a Power of Attorney?
You can revoke a Power of Attorney by signing a Deed of Revocation. Also, it is mandatory at the time of execution of his/her duty, the attorney is a guaranteer by the Principal. However, if the attorney doesn’t act lawfully or in good faith, or does such work attracting criminal punishment. Then the Principal is not liable to secure the Attorney.
How to revoke a General Power of Attorney?
The General Power of Attorney can be revoked in the same manner which is,
Get a notarized document drafted for revocation of the Power of Attorney expressing clearly that you want to revoke the authority of the said person.
Advertise the same in a local or national newspaper that the said person is no longer authorized by you, to act on your behalf.
- If your Power of Attorney was registered at the registrar or sub-registrar office, then you need to get your revocation deed registered by the same office. It is also advisable to send the legal notice of cancellation of power of attorney along with a copy of revocation deed to the attorney and to the concerned persons with whom the attorney has or likely to enter into transactions.
- In the case of unregistered Power of Attorney, you are only required to issue a public notice in local or national newspapers to make it valid.
How to revoke revocable Power of Attorney?
This Power of Attorney can be revoked by signing a Deed of Revocation.
How to revoke irrevocable Power of Attorney?
For such Power of Attorney, the Principal must give a public notice through two national and regional esteemed daily newspapers and later approach the Court of law to terminate the Power of Attorney.
The Issue arises on how to cancel an irrevocable power of attorney. Our Courts have clearly stated that A Power of Attorney shall not be deemed to be an irrevocable one merely because it states, in the clauses of the deed. "To revoke an irrevocable power of attorney, a public notice is mandatory and without it, the revocation shall be held invalid. However, there are exceptions to this,” says Advocate Pushkar Taimni.
Suppose you owe someone a certain amount of money and to pay off the due you execute a Power of Attorney and gives the authorized person rights and powers to deal with your property law to recover his amount. Now, you cannot revoke this Power of Attorney because there is an interest of agent as well in the subject matter i.e. your property. The agent is protected under Section 202 of the Indian Contracts Act, 1872. It requires the consent of Agent too.
If the agent while acting followed the guidelines mentioned in the Power of attorney and exercised his powers in good faith or even partly acted, the Power of Attorney becomes irrevocable.
Another situation where irrevocable Power of Attorney can be canceled was laid down in Govindoss Krishnadoss vs Gopeswar Lalji Maharaj And Anr, where Court established “power of attorney though irrevocably granted shall be revocable on strong proof of gross mismanagement on the part of the said attorney”. So where a person appointed cheats or breaches the terms of the Power of Attorney, you have full rights to revoke the Power of Attorney even if it is of irrevocable nature, all you have to prove is that the authorized person acted beyond powers delegated to him or there was mismanagement.
Essentials of Legal notice for cancellation of power of attorney:
- Name, description, and place of residence the person or persons
- Name, description, and place of residence of the sender of the notice
- Details of the cause of action
- The detailed description of the incident which raised the cause of action
- The specific time for revoking the power of attorney
Who can revoke a power of attorney if there are multiple Principals or the Power of Attorney authorizes multiple agents?
If there are multiple Principals or the Power of Attorney authorizes multiple agents then:
- If the Power of Attorney has been executed jointly by either multiple principals or multiple agents, then the revocation cannot be done by one Principal alone or if any agent dies, then other agents cannot exercise their powers.
- If the Power of Attorney has been executed separately, then the revocation can be done. If one out of four agents die, and each of them separately executed the Power of Attorney, then the other three can exercise their powers.
- If a company/ firm gives a Power of Attorney to a person: The dissolution of that company or firm is a way to revoke the power of attorney automatically.
When does a Power of Attorney arrangement come to an end?
A Special/ Limited Power of Attorney i.e. a power of attorney which is for the performance of specific purpose under certain laid down terms and conditions, like sale of property; in such cases it ends when the said purpose is fulfilled. However, in cases of the general Power of Attorney, it comes to end in either of the following cases:
If the principal revokes the Power of Attorney by expressing his intent and serving notice to the attorney for the same.
Death of Agent or Principal or if the principal is not mentally stable makes Power of Attorney ineffective except in case of Durable Power of Attorney, where the agent is authorized to act even if the principal is incapacitated and therefore such Power of Attorney ends only after the death of Principal.
There is illegality in your Power of Attorney or the court has annulled your Power of Attorney. For example, you have executed a Power of Attorney for sale/purchase of property, but haven’t registered it or didn’t submit it to the registrar office.
The agent fails to carry the objective of the Power of Attorney due to certain reasons or circumstances.
Is the execution of the Power of Attorney from abroad valid in India?
Yes, according to Section 14 of Notaries Act, 1952 which states “Reciprocal arrangements for recognition of notarial acts done by foreign notaries”, recognizes notaries done in other countries as valid in India.
You can execute your Power of Attorney from abroad in the following ways –
If you have a Power of Attorney executed abroad, then as per Section 3 of Diplomatic and Consular Officers Act, 1948, you have to get it authenticated from the Indian Embassy or Consulate in your country. Once it is attested by Indian Embassy Officer, it can be executed in India but within three months of receiving the Power of Attorney in India, you need to get it stamped.
Apostalisation: It is a certificate issued by Government, which verifies the document and the process is governed as per Hague Convention, 1961. This Apostille certificated is accepted in 105 countries mentioned in the convention. To get this certificate you need to follow rules as per your country. For example, in India, you can visit the Ministry of External Affairs online portal E-Sanad and get your document verified.
Why does one require an attorney?
Granting Power of Attorney to someone you trust comes in handy when you are unavailable or unable to act on your own and you need someone to act on your behalf. Whether you're a service person away from home or a retiree or dependent experiencing medical limitations, these are some of the common reasons to grant Power of Attorney.
Can the power of attorney be revoked?
Yes. The court can revoke the power of attorney if it is proved that the agent is abusing his/ her position contrary to the interests of the principal. It then passes the power on to a guardian. Revocation helps reduce risks of granting power to someone who can obligate you to deaths or purchases, you can't afford. When an agent acts on your behalf, you will be the one responsible to pay the bills.
Does power of attorney continue after the death of the principal?
No. Power of attorney gets nullified after the death of the principal. However, family members can assign power of attorney to the attorney if they wish to.
What happens when the Attorney disagrees with his principal?
The attorney is in charge of making decisions for his principal. But if there comes a time when the principal disagrees with the decision of his attorney, then the case is taken to court to come to a fair conclusion.
Which type of Power of Attorney comes with the highest risk and which type comes with the lowest risk?
A Non-Springing General Durable Power of Attorney is the broadest and riskiest Power of Attorney available because it comes into effect immediately after signing it and has virtually no limitations. A Special Power of Attorney is least risky because they limit the powers you grant your agent and they automatically expire after one year.
Is registration of Power of Attorney compulsory?
Whether it is a special or general Power of Attorney, it is not mandated by law to be registered. However, when it comes to dealing with immovable properties or the person resides abroad, it is necessary to get the Power of Attorney registered at the registrar or sub-registrar office which is within the jurisdiction of the person giving his powers. The registration ensures that you do not face any trouble at a later stage.
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