A legal document which gives the person (agent) the power to act for another person (the principal) is known as Power of Attorney. The authority of an agent has the limited authority or legal authority to make the decisions for the principal's property, his/her medical care or finances. A power of attorney is generally used in the event of an illness or disability of the principal, or when the principal cannot be present to sign necessary legal documents for financial transactions.
A Power of Attorney (POA) is a crucial document listing the powers that a person wants to share with the POA holder. It is primarily used by Non-Resident Indians to manage or direct their property by authorizing another person known as the agent to act in their absence on their behalf.
The purpose of having a POA simplifies decision making in the absence of the valid owner, thereby minimizing security concerns. Moreover, POA is an essential part of property planning. It is convenient to have the other person to action behalf of the principal in the development of business and transactions.
A power of attorney deed is a most commonly used document which authorizes the Attorney (power of attorney holder) to acts on behalf of the Principal. The principal has a right to decide what powers he wants to share with the attorney and the acts which are done by an agent or attorney be considered as done by the principle.
Procedure to Register Power of Attorney
- Write down the POA terms on a Legal Paper.
- Visit the Sub- Registrar of your resident jurisdiction.
- Office of registrar would need two witnesses to sign the POA in front of the registrar (Physical presence is required).
- Carry all the documentary proof documents like voter ID card, address proof, passport, Aadhar card original along with the photocopy.
- All photocopies shall be notarized or attested by a gazetted officer (First class government officer).
- Registrar saves and stores a picture of you, POA holder and the witnesses in the government records.
- The copy of POA will be kept in government records by the registrar, and one copy will be provided to you with his registry stamp. At this time, your simple POA becomes ‘Registered Power Of Attorney’.
Revocation of Power of Attorney
The principal has a right to terminate the power of attorney whenever he will to do so. The terms and conditions for the revocation of power of attorney are specified in section 201 of the Indian Contract Act, 1872. It is necessary to mention about the revocation of a Power of Attorney explicitly in the agreement. The principal can mention the date of expiration in order to misuse the powers handed to the Attorney.
In case of the Specific Power of Attorney, it expires after the specific task allotted to the attorney is done.
Conditions for Revocation of Power of Attorney
The following are the conditions for revocation of power of attorney:
- If the Principal, himself/herself is willing to revoke the POA.
- When either of the Principal or agent dies (Either the Principal or agent dies. In case of a durable power of attorney, despite the death of the principal, the POA stands.
- The principal is not of sound mind or becomes bankrupt
- The business so appointed for is over.
- Mutual Agreement between the Agent and Principal
- The Powers bestowed to an agent is renounced by self-will
How to execute a Power of Attorney from Abroad
Legalization: In this case, the signatures of the judge or notary before whom the POA is executed are required to be verified by the duly certified representative of the Indian Embassy. It is not necessary to stamp the POA at the time of execution. However, it should be stamped within three months from the date of receipt of the POA in India. The Stamp duty is payable according to Section 2(17) read with Schedule-I of the Indian Stamp Act, 1899, in his case, when the document is presented for the registration in India.
Apostalisation: The POA executed outside India are proven through the process known as apostalisation, which is governed under the provisions of Hague Convention, 1961. The process is also known as super legalisation. It is a certificate which verifies and confirms the seal/signature of the person who authenticates the document. It is essential to comply that POA is as per the Indian laws such as the Power of Attorney Act, 1882 and Indian Registration Act, 1908. The stamp duty should be paid.
Payment of Stamp Duty
- The stamp duty for a POA can be paid as per section 48 of Schedule I of Indian Stamp Act.
- Non- payment of the Stamp Duty can result in the following outcomes:
- The POA cannot be allowed as evidence before any authority that is capable of admitting the evidence.
- An unstamped POA can be allowed when the penal stamp duty is paid ten times than the value of the original amount.