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‘Power Of Attorney’ is an authority given by an instrument by one person, called as the donor or principal, authorizing another person, called done or agent to act on his behalf. There may be possibility of giving ‘Power of Attorney’ by two or more persons jointly to one or more persons. Here a legal authority is given by the principal to the agent which may be broad or limited and an agent can take all necessary decisions i.e., financial, property related matters and all other matters where principal cannot be present to sign or in the case of principal’s illness and disability. A paper signed by principal giving powers to an agent is sometimes itself called a power of attorney. A paper giving a power of attorney should be clear and understandable.
The power of Attorney can be divided into two categories which include:
The general power of attorney is when a tool used by the principal authorizes an agent to perform certain actions normally on his or her behalf. The word ‘General’ here means that power must be general in relation to the subject matter and not just general in terms of power in relation to a particular subject. If the title is not ordinary but is limited to something specific or directly stated by the principal during the writing of the instrument it will not create the power of attorney general. Alternatively, it is called the limited power of attorney.
The special power of attorney is the person by which a person is appointed by the principal to perform a specific act or actions. In this type of attorney’s power, the agent is empowered to perform a specific act on a single payment or named on behalf of the principal.
Advocate Strength means otherwise; agent power expires if the principal is mentally disabled. However, the power of attorney may say that he should continue to work in case the principal is unable to work in the future. The power of attorney says this is called durable power of attorney.
To ensure that the power of attorney is general or special in nature, the title in relation to the delegated powers must be clearly identified. The power of attorney is a joint document in which the donor or principal authorizes the agent by signing the document and the agent’s mark is not always required.
The power of attorney can be exercised by any person with the ability to enter into a contract. However, married women can use the power of attorney even when they are young. The company while exercising the power of attorney must comply with the ‘Organization Documents’ and its standard logo. The person must have the ability to delegate power to the nominee so as not to affect the legitimacy of the instrument / act of power of attorney.
The power of attorney can be exercised by two or more persons jointly in favor of one or more persons and if there are a few persons as attorneys’ full authorization in the letter to be given by one of them for the other party. A clause should be included in the drafting of the power of attorney that all attorneys must act collectively or separately.
Ordinary power of attorney remains in effect unless explicitly withdrawn or determined by the death of the party. The special power of attorney shall apply until the said action is completed. The duration of the term of office will depend on the type of attorney or there may be a limited period of time granted to the principal to be included in the title deed.
Power of attorney may be revoked at any time by the principal or donor by giving written notice to the agent, unless for a specified period. Withdrawals usually occur when the principal dies or falls asleep or becomes bankrupt. The principal himself may withdraw the power of attorney if the business designated by the agent has expired as agreed upon by the principal and the agent. In the event that the principal has designated a marriage partner or a registered domestic partner as his or her agent, his or her authority to act under the power of attorney is automatically terminated in the event of a divorce, legal separation or termination of a registered domestic partnership.
A power of attorney is not compulsorily registrable unless it creates an interest in any immovable property i.e., charge in favour of done. Registration of power of attorney is optional In India, where the ‘Registration Act, 1908’, is in force, the Power of Attorney should be authenticated by a Sub-Registrar only, otherwise it must be properly notarized by the notary especially where in case power to sell land is granted to the agent. If a power of attorney is in respect of an immovable property of value more than Rs100 it must be registered. Registration of power of attorney authenticates the deed of power of attorney.
A power of attorney is chargeable under Section: 48 of Schedule 1 of the ‘Indian Stamp Act, 1899’. A stamp duty has to be paid compulsorily by the principal or donor in the jurisdictional registrar’s office.
Broadly speaking a power of attorney provides an agent “all powers that the principal has” to manage the principal’s financial affairs or make health care decisions may be enough for many purposes. An agent may be authorised to: