Power of Attorney (POA)

INTRODUCTION:

It is a written document which includes the powers and responsibilities of a person i.e. the agent or attorney-in-fact, appointed by another person i.e. the principal or owner to make decisions on his behalf. The principal through this attorney can authorize the agent to act or represent on his behalf in various matters like legal, business or even private affairs.

IMPORTANCE:

POA allows the principal to shift the burden of decision making on the agent when the true owner is absent or in case the owner is incapable to take the decision due to his mental condition or any other health issues. However, the agent does not become the owner it has solely the power to take decisions on behalf of the owner/principal.

There is no special way defined under the law to execute a POA, however, it is suggested to notarize the legal document. Notarize means to certify or attest a certain instrument or a document by a Notary (managed by the State or Central Government). It should be made carefully and the principal is in his/her complete senses. It's always recommended to take help of a legal expert while drafting the content of a POA to make it perfect. However, the language used in POA should be simple which can be understood by the principal.

In case the principal is an illiterate person it should be made sure that the contents of the legal document are explained to him in the language which is known to him/her. 

Additionally, as per the Indian Evidence Act, a POA is considered as a shred of evidence under the law if it is executed before a Notary and verified by it.

TYPES OF POWER OF ATTORNEY:

A Power of Attorney is of following types:

  • General Power of Attorney: This type of attorney allows the agent to act on behalf of the principal with almost any prohibition, which may include, opening financial accounts and managing it. The agent is at a similar position as of the principal. It can only be terminated when the principal is handicapped, revokes the POA or is no more.
  • Special Power of Attorney: Under this type of an attorney, the agent has limited powers confined to a certain area defined by the principal. For instance, special or limited power of attorney allows the agent to buy or sell in real estate properties.
  • Financial Power of Attorney: It grants the agent to generally handle the financial affairs of the principal. However, the principal doesn't give up on any of their decision making authority, they only delegate powers to a representative who acts on their behalf.
  • Durable Power of Attorney: In this instance, the principal grants powers to the agent when an individual becomes disabled or is a handicap.
  • Health Care Power of Attorney: This kind of power of attorney the principal to allow the agent to make medical decisions for him or her when the principal is incapable of doing so.
  • Irrevocable Power of Attorney: It is a kind of an attorney the principal cannot revoke.

STEPS FOR MAKING POWER OF ATTORNEY:

  • A proper draft of POA by a legal expert.
  • The document should be drafted on a stamp paper according to the cost of the property.
  • The POA shall be registered to pay the registration fee at the sub-registrar's office.
  • Witnesses required to be present at the sub-registrar office should be two for each party i.e. the principal and the agent.
  • The legal document can be collected from the sub-registrar office usually within a week.

DUTIES OF THE AGENT:

The duties of the agent are as follows:

  • The agent should not exceed the limit of authority granted to him/her by the principal. In case the agent exceeds the limit of authority then, he/she should be held liable for the damages suffered by the principal.
  • Work assigned to the agent should be performed in the way mentioned in POA. If there is a breach of condition by the agent then, he/she shall be liable to the principal.
  • The agent may delegate his/her powers and duties to the other person only if he is authorized to do it in POA.

EXECUTION 0F POWER OF ATTORNEY FROM ABROAD VALID IN INDIA:  

Under section 14 of the Notaries Act is stated that the Central Government has the power to accept Notaries done legally from other nations, which includes New Zealand, Ireland, and Belgium.

However, it is best recommended that in case of execution of POA from outside India, it must be certified by a Central Government Representative due to lack of consistency between the various High Courts in India. It can also be certified by the Indian Counsel or Vice- Counsel and not by any other notary.   

 

Rashi Chandok 
on 01 March 2019
Published in Legal Documents
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