THE POWER OF ATTORNEY
By
Y. SRINIVASA RAO,
M.A (English)., B.Ed., B.L., (LL.M),
First Additional Junior Civil Judge,
Bhimavaram
'' 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.''
INTRODUCTION
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
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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 types1) General 2) SpecificThe 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.
Somme 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;
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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
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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.
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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.
RELEVANT CASE-LAW- TABLE-I
REVOCATION OF GENERAL POWER OF
REGISTRATION OF GENERAL POWER OF
ATTORNEY: CASE-LAW
ATTORNEY: CASE-LAW
1. Avm.K.Shanmugam vs V.Shanthi;
Decided on 5 February, 2008
1. Satyawan vs Govt. Of Nct Of Delhi And
Madras High Court
Ors.
2.P.V.G.K.S.Sastry, S/O. ... vs The State Of
115 (2004) DLT 424
Andhra Pradesh ...; Decided on 21 July,
2005
2. Shri. K.P.Balaji vs Govt. Of Nct Of
6
Andhra Pradesh High Court
3.Badal & Ors. vs M/S Niranjan Proptech
Delhi,...; decided on 6 January, 2009;
Central Information Commission
& Ors.; Decided on 18 March, 2009
Delhi High Court
4.Kartar Singh (Dead) Through Lrs. vs
3. Syed Abdulkhader vs Rami Reddy &
Ors;
Jaswant Singh (Dead) Through Lrs.;
Decided on 28 April, 2004
1979 AIR 553
Punjab-Haryana High Court
(2005) 141 PLR 78
5.Smt. Rajwanti And Anr. . vs Sh. Kishan
4. Sakinabai W/O. Hatimbhai vs Sakinabai
W/O. Ibrahimbhai Bohra ... ;
Chand Shehrawat; Decided on 20 May,
2009
Delhi High Court
6.Nagaraj vs Mohan; Decided on 11
AIR 1963 MP 286
5. Basant Nahata vs The State Of Rajasthan
And Ors.
2001 (1) WLC 433
October, 1985
Karnataka High Court.
ILR 1986 KAR 236
7.Pritpal Singh Kohli vs Surjit Kaur And
6. Mahendra Investment Advisors ... vs
Md.Abdul Asad Aleem And Others ;
decided on 13 November, 2008 ;
Anr.; Decided on 23 April, 2001
Andhra Pradesh High Court
Delhi High Court
2001 IVAD Delhi 16
8.Shikha Properties(P) Limited vs
S.Bhagwant Singh & Ors.; Decided on 9
July, 1998
7. Smt. Kailash Kumari vs Smt. Rajni
Monga And Ors. Decided on 20 August,
2010
Delhi High Court
Delhi High Court
1998 VAD Delhi 28
8. Ved Parkash Gupta vs Lilu Ram Jangra
9.Smt. Vasanthi D/O B.U. Shetty And ... vs And Anr. decided on 4 April, 2002; PunjabSmt. Jayashree V. Shetty W/O K. ...;
Haryana High Court.
Decided on 5 October, 2007
Karnataka High Court
10.Sardarni Raminder Sarup Singh vs
9. Gursharan Singh vs State Of Punjab;
decided on 28 August, 2006
Govinder Singh; Decided on 25 November, Punjab-Haryana High Court.
1993
Delhi High Court
RELEVANT CASE-LAW- TABLE-II
Payment of stamp Definition of power of Specific power of General power of
duty on power of attorney: Case-Law
attorney: Case-Law
attroney: Case-Law
attorney: Case-Law
1. Institute Of
Chartered ... vs
Union Of India (Uoi)
And Anr.
1. Hormusji K.
Bhabha' case
(1934) 36 BOMLR
658
2002 256 ITR 98 Ker
2. In Re: Arthur Paul
Benthall' s case:
2. Kuldip Kaur And
AIR 1952 Cal 815
Ors. vs Prakash
Chand Khurana And
3. Satnam Channan
Ors.
vs Darshan Singh;
AIR 1983 Delhi 328
(2006) 143 PLR 459
3. Institute Of
Chartered ... vs
Union Of India &
Anr.
(2002) 174 CTR Ker
250
4. Manoharan vs
Velu And Another
1998 (2) CTC 72
1. Svenska
Handelsbanken 1. Gouni Satya
vs Indian Charge Reddi vs Govt. Of
Chrome Ltd;1994 Andhra Pradesh
And Ors.
SCR (1) 261
2. Pearson
AIR 2004 SC 3661
Education Inc.
(Formerly ... vs 2. Badri Prasad
Prentice-Hall Of Sadashivrao vs
India Pvt. Ltd., ... District Judge, Shri
2004 56 SCL 365 G.R. Kale
CLB
3. Jagdish Rai vs
Makardhwaj Ram
decided on 18
1997 88 CompCas September, 2009 ;
403 Kar
5. Mahendra Kumar
AIR 1964 MP 264
3. Corporation
Bank vs Lalitha
H. Holla And
Others
Chattisgarh High
4. Bharatbhai K. Court
7
4. Satyawan vs Govt. vs Armstrong And
Of Nct Of Delhi And Anr.
2005 (2) ALD Cri 21
Ors.
115 (2004) DLT 424
6. K.C.Bohra vs Sri
Durga Lodge Pvt.
State Of U.P.
Through Collector; Ltd ; decided on 27
decided on 2 August, June, 2008 Madras
2010 ; Allahabad High High Court
Court.
7. Anitha Rajan,
W/O.Angoor Rajan
6. Anitha Rajan,
vs The Revenue
W/O.Angoor Rajan Divisional Officer
vs The Revenue
decided on 23
Divisional Officer ; February, 2010
decided on 23
Kerala High Court
February, 2010 ;
Patel vs C.L.
4. Raj Kumar vs
Verma (Since
Decd.) Through Shri Chander Singh
...2002 CriLJ 3469 And Ors.
.
2003 (3) ARBLR 609
8. Ramkaran R.
Rajput vs Vijay CoOp. Bank Ltd. And
Ors. (1988) 2 GLR
5. Bcpp Mazdoor P H
Sangh & Anr vs
N.T.P.C. & Ors; 5. Union Of India
Supreme Court of (Uoi) And Ors. vs
S.M. Hussain
India.
6. Killick Nixon Rasheed And Ors.
2003 (5) ALD 150
Limited And
Others vs Bank
6. Potluri
Of India And
Saraswathi vs
Others
1983 (2) BomCR Vallabhaneni
Veerabhadra Rao
631
2002 (3) ALD 690
7. Manubhai
Khandubhai
7. Parikh Amratlal
Naik vs
Ramanlal And Ors.
Sumantrai
Ranchhodji Naik vs Rami Mafatlal
Since ..(2004) 1 Girdharlal And Ors.
1451
GLR 488 .
(1982) 2 GLR 337
8. Chami
Narayanan vs
V.R. Krishna
Iyer And Ors.
8. Surender Raj
Jaiswal And Ors. vs
Vijaya Jaiswal
5. Sanjay Sharma vs
Kerala High Court.
AIR 1998 Ker 365 AIR 2003 AP 317
.
9. A.S. Shaik
Fathima And
Ors. vs Omer
Cloth Store And
Ors. AIR 1986
Mad 90 .
10. Manmohan
Singh Dhaliwal
vs Gurbax Singh
Arora And
Ors.94 (2001)
DLT 820
9.P.Neelakanteswar
amma And Ors. vs
Uppari Muthamma
And Ors.
1998 (1) ALD 234
10. Tamilnad
Mercantile Bank ...
vs Mr. S.
Radhakrishnan,
Chairman ...
decided on 28
September, 2005 ;
Madras High Court.
11. Smt. Vasanthi
D/O B.U. Shetty
And ... vs Smt.
Jayashree V. Shetty
W/O K. ... decided
on 5 October, 2007
;Karnataka High
Court.
12. Jeet Kumari vs
Girdhari Lal
(2003) 135 PLR 605
13. Jasjit Singh
Bhasin And Anr. vs
State Of Punjab
And Anr.
8
2006 CriLJ 2757
14. State Of
Karnataka And Ors.
vs M. Muniraju on
25 February, 2002
AIR 2002 Kant 287
CONCLUSION:
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. The agent's power of attorney expires on the completion of the
transaction. If any fraud by the power agent does not bind the principal. He
cannot be sued or otherwise held responsible for fraud by the agent. 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. A fortiori, an agent cannot by his acts bind the principal to a larger
extent than he is empowered to do under the power of attorney.
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