Validity of GPA given by a Private Limited company
srinivas
(Querist) 09 January 2011
This query is : Resolved
Sir/Madam,
i want to know the status of Registered GPA document given by a Pvt Ltd Company for sale and development of Land if the company is winded up. Will be there any legal consequences and what are the steps to be taken for avoiding any further complications.Please advice me in this matter
Arun Kumar Bhagat
(Expert) 09 January 2011
After winding up, How the company can give POA ? Its value is NIL.
srinivas
(Querist) 09 January 2011
Thank u sir for ur reply, but sir, already i got GPA in 2010. Now the company's venture is over and it is going for winding up. Does my GPA will act as a link document for further transactions done by me or any other document is required from that company before it wind up.
Devajyoti Barman
(Expert) 09 January 2011
No that GPA would suffice to take care of future activities till the company ceases to exist altogether.
A V Vishal
(Expert) 09 January 2011
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.
Generally the POA becomes invalid on the death of the principal or agent. The principal or agent may be a natural person or a artificial juridicial person. Revocation of power is as important as delegation of power itself otherwise it might be to the prejudice of the parties themselves. In deciding whether the agency can be revoked or not two conflicting interests are to be reconciled and a suitable middle way is to be formed so that none of the parties suffer unjustly. The interest of the one who has delegated power is in conflict with that to whom the power is given.
Therefore the test to check whether the POA is revocable or irrevocable are:
#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.
# 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.
Advocate. Arunagiri
(Expert) 09 January 2011
If the POA is coupled with interest, the benefits of the POA will not be taken away just because of the winding up.
For example. If you have a POA to develop a building. You have invested X amount of money. Then your POA will be attached to that project till you realize your money. If there is any compensation to be claimed, you can claim it from the company during the liquidation.
srinivas
(Querist) 10 January 2011
Sir, instead of GPA, if the company sells the property for a valid consideration and got the documents registered in the name of the purchaser, and later if the company applies for voluntary exit scheme and applies for winding up, does the sale transaction will be valid and can the purchaser enjoy the ownership rights, even if the company is winded up?
Advocate. Arunagiri
(Expert) 11 January 2011
Once the sale is registered by using the GPA, that will not affect the purchaser, even if the company is wound up.
srinivas
(Querist) 12 January 2011
Thank u for all of you sir.
