Power of Attorney
It is an instrument that gives authority to undertake legal matters on behalf of a person called donor or principal through a person called agent or donee. The power to take decisions on behalf of principal could be related to property related matters or financial matters. This is because the principal is unable to personally execute himself due to the reasons of living abroad or suffering illness of some kind.
Types of Power of attorney
There are two kinds of Power of attorney, general power of attorney and special power of attorney. A special power of attorney is one where a principal gives special powers to the agent or it’s an authority to act in specified circumstances only. A General power of Attorney on the other hand gives broad powers to the attorney-in–fact (agent). The agent is allowed to take decisions on principal’s behalf which are pertaining to business, financial, insurance, medical or legal matters.
There’s another POA known as Enduring Power of Attorney where the principal authorizes the agent to take decisions on his behalf even at the time the principal becomes mentally incapacitated.
Both GPA and SPA can contain the clause of enduring POA depending on the needs and circumstances of the principal.
Registration of power of attorney
In cases where the principal is personally present at the sub registrar office:
The POA is printed on a RS100 stamp paper and notarized. The POA holder is then required to present himself at the sub registrar office along with two witnesses. The Sub registrar keeps a record of POA and the POA gets registered.
It is different when the POA holder is residing out of India:
The POA holder is required to send an affidavit through Indian Embassy of that country and the agent in India is required to establish his/her relationship with the POA holder with relevant address and ID proofs. Any immovable property
having value more than RS 100 is required to be necessarily registered.
Landmark judgment by Supreme Court
The Supreme Court in 2011 gave a judgment that the transfer of Immovable properties through GPA was no longer valid. There are properties that are not allowed to be sold for a number of reasons. This rule was misused by GPA holders to execute sale transactions through GPA. The Court ordered to make GPA registration mandatory otherwise the transfer shall be deemed to be invalid. For this reason, most of the state governments have started levying heavy stamp duty tax on GPA registration which is equivalent to that of Sale Deeds.
Disadvantages of not having a Power of Attorney
It is advisable to have a power of attorney when a principal feels unable to handle personal or business affairs at any future date. Not having a POA gives authority to court to appoint a POA which often becomes an expensive, complicated and time consuming affair and invites unnecessary publicity of family or business affairs.
A Power of Attorney is an important legal document between the attorney and principal which serves an important evidence at the time of tension pertaining to financial or business matters. So, it becomes pertinent to clearly define the scope of powers and responsibilities of an attorney.
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