INTRODUCTION
POWER OF ATTORNEY
Section 1(A) of Powers of Attorney Act 1882 says,“power-of-attorney” specifies any instrument authorising a specified person to act for and in the name of the person executing it.An official instrument known as a power of attorney enables one individual to act on behalf of another. While the principle is the object of the POA, the agent or attorney-in-fact is the one who receives the authority. The agent’s legal ability to make choices regarding the principal’s possessions, income, or medical care may be extensive or restricted. When the principal cannot be present to sign the required legal paperwork for a financial transaction, the POA is frequently used. In the event that the principle becomes ill or disabled and is unable to act directly, a durable power of attorney nevertheless holds true.A power of attorney is a legal designation that enables someone to act in your place. Depending on how it is stated in the POA paperwork, the person designated as POA may have extensive or limited legal authority to make decisions regarding a person’s property, finances, or medical directives.According to Section 2 (21) of The Indian Stamp Act,1899,any instrument enabling any designated person to act for and in the name of the person executing it.. There is a very particular and condensed act that deals specifically with powers of attorney. Agency law in the Indian Contract Act governs the fundamental ideas of these documents.
WHO CAN EXECUTE A POWER OF ATTORNEY
Any person who is able to enter into a contract may execute a power of attorney. Married women, even if they are minors, can execute powers of attorney. A company must adhere to its “Articles of Association” and common seal while executing a power of attorney. To ensure that the instrument/deed of power of attorney is valid, the person granting authority to the designated person must be competent.
TYPES OF POWER OF ATTORNEY
The various types of power of attorney will be discussed in detail below:-
Power of Attorney Types
1)General Power of Attorney (GPA)
A person has the ability to provide another person full legal authority over his or her property, bank accounts, tax obligations, registration documents necessary to bring a lawsuit against a third party, etc. Either one can grant general authority to any category, such as simply for property matters, or one can grant general power to all of your properties, banking transactions, tax matters, registration, and legal conflicts.However this kind of power is sometimes open for huge risks if the the person is unreliable.
2)Special Power of Attorney
This form of power granted is exceptional power, which specifies that it is given for purposes other than a specific duty. The special power of Attorney expires once the actual act is finished. This can generally be used when someone wants to appear for the registration of any property, among other things.
3) Non-Durable Power of Attorney
The non-durable power of attorney is only used as a temporary solution, typically for one-time transactions where the principal gives the agent the capacity to act on their behalf. The non-durable power of attorney terminates when the deal is done.
4)Durable Power of Attorney
A durable power of attorney is far more comprehensive than a non-durable one, and it is frequently used to empower an agent to handle all of the affairs of the principal in the event that the latter is unable to do so on their own. It doesn’t have a group basic measure, and it takes effect right away if the principal is rendered incapable. It does end following the passing of the principal.
5)Special or Limited Power of Attorney
This form generally deals with exclusive or restricted power of attorney.In this category agent is appointed for a specific financial or banking transaction, the sale of particular property, or other limited circumstances, a special or limited power of attorney is used. This form of power of attorney is appointed when the principal is not able to finish
transactions due to some illness or previous commitments.The person appointed under this category of POA is only having limited rights or power to complete the work on behalf of the principal.
6)Health Care or Medical Power of Attorney
The medical power of attorney gives the agent the right to make decisions regarding the principal’s healthcare when they are unable to do so themselves. This normally comes into effect with the attending physician’s approval and gives the agent the power to make all medical decisions.
7)A Springing Power of Attorney
A springing power of attorney only takes effect if and when a specific event occurs, such as an unavoidable circumstance or something that happens while the principal is abroad and unable to influence it. This type of power of attorney could have been permanent or temporary, and it could cover any number of matters the principal wishes to assign to it.
PROPERTY RELATED TRANSACTIONS THROUGH POWER OF ATTORNEY
In this topic we will go back to an important judgement of honourable Supreme Court,in the year 2011, in a landmark case of Suraj Lamp & Industries Pvt Limited v. the State of Haryana that property transactions made through a Power of Attorney are not legitimate under the law in its 2011 decision. It was decided that the validity of sale agreements and Powers of Attorney (PoAs) signed in genuine transactions would not be impacted by the verdict, which was reached after interpreting several aspects of the legislation relating to property sales and became applicable retroactively. To further interpret this we can say that till 31st March 2002 there were various transactions and property related transfers were done through unregistered GPAs(Notary Attestation which involves only basic or preliminary procedures).But after the judgement by honourable Supreme Court in the year 2011,it was stated that GPAs must be registered for property related transactions.There were few observations made by the SC behind this judgement like,generally sale and purchase done through GPAs is basically done to hide black money and to execute “benami transactions”,GPA is not an absolute title document and sale transaction done through this will not be considered as absolute sale transaction.However if the principal is unable to visit the sub-registrar office for some reasons GPA agents can be appointed to carry out sale deeds, thus, GPAs are not completely stopped or restricted by this judgement but is asked to be registered.There were various properties that were sold out through GPAs in Delhi and other states which are considered illegal in the eyes of law, in such cases it is not a valid sale or the GPA is not considered as the title holder.Unless the sale deed is not registered in sub-registrar office title transfer will not be considered i.e without registration it will not be valid.Many property owners in the national capital region (NCR), where sales through GPA had become pervasive, were impacted by the Delhi government’s circular. Numerous applications seeking remedy were filed with the Delhi High Court after the notification. According to the HC, the SC judgement made it plain that registration cannot be denied in legitimate instances. The SC has not stated that a conveyance cannot ever be registered by using a GPA. The sub-registrar will need to register the transaction as long as it is legitimate, the HC stated. A person may enter into a development agreement with a land developer for the purpose of developing a parcel of land or erecting apartments, and for this reason, a POA may be used.Thus,To be legally legitimate, a GPA must be registered with the sub-office. registrar’s Additionally, the GPA is not valid indefinitely. It is valid for the duration of the principal’s or the GPA’s lifetime. It may also be revoked at any time throughout the owner’s lifetime. On the other hand, the SPA is revoked after the particular duty that was given to it is finished. The GPA holder is not permitted to sell the property on behalf of the owner, even if the GPA is registered with the sub-office. registrar’s The sale of a property through GPA is completely invalidated by even the most recent ruling by the Supreme Court of India. A GPA holder is only permitted to do activities delegated by the owner, except selling of property.In the case of State of Rajasthan and Others v. Basant Nahata, in its contested decision, the High Court found, among other things, that Section 22-A of the Act gives the State Government arbitrary authority to decide whether to declare a certain document to be against public policy. It was said that the Sub-Registrar cannot decide if a transaction is against public policy; only the courts can make that determination. The contested legislation, which violates a citizen’s right to interact with property, is completely arbitrary and unjustified. The contested legislation fails to accomplish the goal of document registration. The Act addresses paperwork and deeds, not transactions.Another question that comes while talking about POA is the issue at hand is whether the agent or power of attorney holder for a party may testify competently on that party’s behalf during the court proceedings.
The court determined that the person holding the power of attorney is a competent witness and is entitled to attend as such in the case of Kailash Devi vs. Matadeen Agarwal . Because he came in court as a power of attorney and the parties to the lawsuit do not elect to appear as witnesses in the witness box, his testimony cannot be disregarded or it cannot be claimed that his testimony should not be read in evidence.
CONCLUSION
To conclude we can say that property transactions through GPAs after 2011 judgement by SC without proper registration remains invalid.A deed of power of attorney and the sale agreement were regarded as finalising or confirming the sale for several years, which was a common practise in some Indian States. There were no recorded sale deeds transferring the properties. There cannot be a valid conveyance under a sale agreement or power of attorney because, as courts have repeatedly held, these alone do not confer any right or title over immovable property. As discussed earlier the landmark judgement on 2011 clarified all the issues regarding POA, though various property transactions in Delhi and other states were earlier made through GPA but the landmark judgement restricted this to stop fraudulent practices like hiding black money.Then onwards proper registration of GPAs became necessary.As a precaution one should always make a verification before buying a property through GPA, to make a clarification about registration of the GPA to safeguard themselves from further issues.
SOURCES
- 1.The Power Of Attorney Act,1882
- 2.https://www.legalserviceindia.com/legal/article-1482-sale-of-property-through-power-of-attorney-not-valid-supreme-court.html(LEGAL SERVICES INDIA)
- 3.The Indian Stamp Act,1899
- 4.Advocate Pragya Bhushan’s Youtube Channel.
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