“Its not faith in technology, its faith in people.”
As the quote suggests, no matter how advanced the technology may be, there are still some things that can only be settled with notions like faith, trust, and promises.
In today’s time it becomes quite impossible for an individual to be always present physically for dealing with matters and perform duties with respect to properties, bank accounts, and other possessions due to reasons such as unavailability in the same region, illness, old age, etc. Therefore, when certain transactions require the physical presence of an individual who is not able to be present personally, then the only approach to meet the inevitable obligations in hand is to delegate the power to act on behalf of that individual to some other person. It is basically authorizing a person to perform your duties on your behalf.
Stroud’s judicial dictionary extensively defines POA as “an authority whereby one is set in the stead or place of another to act for him”.
The Indian Stamps Act, 1899 defines it as “any instrument empowering any specified person to act for and in the name of the person executing it”
Further it is pertinent to bring the fact to the knowledge that a person need not be a lawyer to hold a POA.
POWER OF ATTORNEY: A LEGAL DOCUMENT
The power of attorney is a legal instrument in the form of a document/deed which delivers the authority, right or the powers of a person to perform specified transactions in matters relating to banking, legal and judicial proceedings, property, tax payments, etc.
It is a formal written piece of document which indicates the delegation of powers from the donor or principal or grantee (the one who gives the powers) to the donee, attorney, or agent who is supposed to act on his behalf.
TYPES OF POWER OF ATTORNEY
- General and Special Power Of Attorney
Commonly known as the GPA, the principal delegates the attorney with the right to lawfully carry out all legal actions on his behalf without restricting it to a specific transaction or act. The GPA authorizes the attorney with a wide range of powers. However, this type of POA also possesses a certain amount of risks considering if the attorney is not a trustworthy person.
On the other hand, a special POA is granted by the principal only in case of a specific task or right to work. Once the specific task has been accomplished, the special POA ceases to exist. However, it is important that the task is explicitly mentioned in the deed with the restricted authority.
- Durable & Non-Durable Power Of Attorney
Usually the POA ceases to operate the moment the principal is deceased, but if the principal wishes that the POA continues even after his demise, he must specifically mention it on the deed. This is a durable POA. On the other hand, when the principal does not mention any such specifications on the deed, it is said to be a non-durable POA.
CONSTRUCTION OF POWER OF ATTORNEY
The basic principle which govern the POA documents are mentioned in the Indian Contract Act,1872 under the laws of agency. The recitals in the POA document control the operational part of the deed. Where power is given to do a specific act, trailed by general words, the general words are limit the actions to do what is imperative for the proper performance of the specific tasks. The General words don’t provide general powers but are constrained to the reason for which the authority is given and are interpreted as augmenting the specific powers only when they are vital for that purpose. The deed must be construed in order to incorporate all powers fundamental for its execution.
REGISTRATION OF POWER OF ATTORNEY
As per the Registration Act, 1908, wherever in force, the power of attorney should be compulsorily be authenticated by a Sub Registrar only. However, the registration is optional and not compulsory, unless it involves an immovable property of worth ₹100. In areas where the act is not in force, the Notary or diplomatic agents are necessary for attestation.
When it comes to a foreign POA, after its receipt in India, it must be attested and stamped by the Collector within three months. Apart from these official attestations, the POA also requires attestation by two independent witnesses of sound mind.
REVOCATION OF POWER OF ATTORNEY
POA can be revoked by the principal himself at any point in time. It is automatically revoked when the principal dies or becomes insane in case of a non-durable POA. Further the POA can be revoked once the tasks in the deed have been executed successfully. Revocation may also result from the mutual agreement between the principal and the attorney. In case the attorney himself revokes the rights conferred on him through the POA, the POA is said to have been revoked.