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Paritosh Jha (supervisior)     11 August 2010

Liability for power of attorney

Dear Sir,

I have entered into a partnership in the year 1993 with my friend in Delhi who intend to set up a factory there. It was done just on friendship gesture as he was not having financial strength on paper to avail Loan from the financial instituition. As I was staying in kolkata it was not possible to sign up the day to day papers I have given a power of attorney to sign singly to my friend. Anyway after that I have not kept proper track of the business as I was not having any interest. In 2008 I came to know that the unit was taken over by the State financial institution for non payement of dues. The said unit was auctioned and the realisation was also done. As per my knowledge the unit is still having 25Lakhs outstanding. Till today I have not recieved any correspondences from the financial instituition. Now it is query that will I be still liable for the power of attorney I have executed in favour of my friend? Can the financial institution take possesion of my Flat Iam having in Delhi? Can my bank accounts be attached?

I would like to request to suggest me the remedy or legal process by which I can safeguard myself. Awaiting early Reply,

Thanking you,

Yours faithfully,

Paritosh Jha


 3 Replies

CS Pooja (Company Secretary)     11 August 2010

In my opinion, at this stage, PoA being revoked or not revoked is of no use.

Since, you are a partner, hence you are bound by the repercussions...

T.R. Ganesan (Advocate)     12 September 2010

Mr. Paritosh Jha, 


You have not clearly stated, whether the Power of Attorney is registered with the Registrar of Assurances/Notorized by a Public Notary.  You were well awre that your friend was not having financial stability and you have helped your friend for taking Loan from the financial institutions, what are other documents/papers you have parted with and amount of your share.  You may also  specify any other details to answer your query. 

Prasun Chandra Das (Banker)     01 May 2012

the exact case is not clear. you are a partner as well as a POA issuer. if any loan has been taken by the partnership firm, then "all partners of the firm are jointly and severally liable for the dues of the firm". your being a partner only is bad news for you.

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