MISCONCEPTIONS ABOUT POWER OF ATTORNEY

MISCONCEPTIONS ABOUT POWER OF ATTORNEY

Power of Attorney is a legal document that you sign to authorize someone else to act on your behalf on matters that you specify.  Mostly powers of attorneys are limited in the certain circumstances in which the power of attorney is triggered. The person who is holding a power of attorney is entitled to exercise any of the powers defined as per the document on behalf of the person who created the document.

A Power Of Attorney allows your Attorney to manage your affairs either for a limited period of time or on a continuing basis. It is advisable to designate someone to manage your property and financial matters before you met with any sudden illness or accident.

One of the main misconceptions about General Power Of Attorney is that it ensures legal title to the person in whose favor GPA has been issued.  But the fact is that GPA does not ensure any title transfer or transfer of ownership rights because it is a general authorization to do certain deeds and acts.

There are two kinds of Power of attorney general power of attorney and special power of attorney.  There exist some confusions in the difference between these.

A General power of attorney can be considered as a legal document authorisingauthorizing to act on behalf of another. The principal transfers his authority to someone because he is unable to make the decisions by himself/herself. This type of PoA is not specific in nature and the agent to whom the principal transfers the power would have the authority to make legal, medical, financial and business decisions except real estate. This is irreversible and the principal should agree to approve what is done as per the GPA.

Special power of attorney can be considered as a legal document authorising one person (agent) to act on behalf of another person (principal). The principal transfers his authority to an agent because he is unable to make the decisions by his/herself. This type of PoA is specific to property. It is also irreversible and the principal must agree to whatever done by the SPoA.

Both the General Power of Attorney  and Special Power of Attorney contain the clause of enduring Power Of Attorney depending on the needs and conditions of the principal.

A Power Of Attorney can also be cancelled in case, the agent and all such institutions where the agent acted on behalf of principal should be notified in writing.  Or by writing an expiration date on the POA can automatically leads to cancellation. If there is any suspicion from the agent’s side then it can reported to law agency.

For registering Power of Attorney In cases where the principal is personally present at the sub registrar office then POA is printed on a RS100 stamp paper and notarized. The Power Of Attorney holder is then presented before the sub registrar office along with two witnesses. The Sub registrar keeps the record of POA and the POA gets registered.

In the case if POA holder is residing out of India then the POA holder is required to send an affidavit through the Embassy of India to that country and the agent in India should establish his/her relationship with POA holder with relevant address as well as ID proofs.

In a Landmark judgment  in 2011, the Supreme Court held that the transfer of Immovable properties through GPA was no longer valid. But this rule was misused by GPA holders to execute sale transactions through GPA.  So the Court ordered to make GPA registration mandatory else the transfer will be considered to be invalid. Due to this most of the state governments have charging heavy stamp duty tax on registration of GPA which is equivalent to that of Sale Deeds.

Provisions regarding General Power of Attorney is anticipated through the Power of Attorney Act. The relevant provisions related to the Power of Attorneys in India are contained in Section 3 of the Specific Relief Act, Section 5, 15 A ,40,55 of Transfer of Property Act and Section 82 (1 A), 2,69,70 in Indian Succession Act.

Power of Attorney is an important legal document between the attorney and principal which functions as an important evidence . So, it is relevant to clearly define the scope of powers and responsibilities of an attorney.