Power of Attorney

1.    Order 3 Rules 1 and 2 CPC, 1908, empowers the holder of power of attorney to institute and prosecute the Suit proceedings on behalf of the Plaintiffs (Principal). However, it must be bear in mind that Suit must be instituted in the name of Principal only, for, the power of attorney holder is the agent of the Principal. When the Principal authorizes the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates such legal proceedings, he does so as the agent of the Principal and the initiation is by the Principal represented by his attorney holder.

2.    Where any legal proceedings are instituted by PoA holder, then, a Para to that effect that PoA is duly executed and Resolution, wherever necessary, is passed.

3.    In so far filing of evidence and deposing on behalf of principal is concerned, the power of attorney holder can depose to the extent acts which have been done by him by virtue of said PoA, but he cannot depose for the principal for the acts done by the principal. The power-of-attorney holder in such cases does not have personal knowledge of the matter and therefore he can neither depose on his personal knowledge nor can he be cross-examined on those facts which are to the personal knowledge of the principal.

What is Power of Attorney [PoA]:  Power of Attorney is an written instrument executed by a person, authorizing the person named therein, to do some specified acts on behalf of the executor, such acts which otherwise could be done by executor only. The person who gives the power / authority is called the “Donor” or “Principal” and to whom the power is given is called the “Donee” or the “Attorney”. The said Attorney acts as an agent of the Principal.

Power of Attorney is a very important instrument, which facilitates in the running and conducting of businesses, prosecuting and representing legal cases in the Court of law and also making due representations before various statutory authorities, including tax and revenue authorities. It is also a very important medium in effecting the transfers of immovable properties.

PoA ordinarily are of two types: General and Special. A General PoA authorizes the Attorney to act on behalf of his Principal in all matters of a particular nature, or generally in respect of a particular business. A Special PoA authorizes the Attorney to represent his Principal only in respect of some particular specified acts mentioned in the document so executed in that behalf.

Nature and extent of authority of the Attorney: Section 188 of the Indian Contract Act, 1872 provides that an agent having an authority to do an act, is deemed to have authority to do every lawful thing, which is necessary in order to do such act. Section 237 of the Indian Contract Act, 1872 provides that when an agent, without authority, has done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if the principal has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority.

Interpretation of terms of Powers which are set out in the instrument: The nature of powers which are conferred under the instrument of Power of Attorney are always strictly construed, that is to say, they are construed as giving only such authority as they confer expressly or by necessary implication. The following are the most important rules of construction.

Purposes for which PoA may be executed: The list stated hereinafter is only an illustration under which PoA may be executed. (a) Execution of Sale deed (b) Presenting documents before Registering authorities (c) Conducting / Representing in Court / Tribunals / any other legal proceeding before any Public authority (d) Conducting businesses (e) to receive Rent, etc.

Both Civil and Criminal proceedings may be instituted and prosecuted through Power of Attorney: However, it must be bear in mind that the concerned legal proceedings must be instituted in the name of Principal only, for, the power of attorney holder is merely the agent of the Principal. In so far as criminal complaints are concerned, which are filed before Magistrates Court u/s 200 of CrPC, 1973, if the Power of Attorney Holder is volunteering to be examined before the Magistrates Court u/s 200, then in the body of the Complaint it must set out that the Power of Attorney Holder is personally aware of the transaction in question for which the present complaint is filed. In so far filing / giving of evidence and deposing on behalf of principal is concerned, the power of attorney holder cannot depose for the principal for the acts done by the principal nor can he be cross-examined on those facts which are to the personal knowledge of the principal.

A perusal of Section 85 of Indian Evidence Act, 1872, shows that the court must presume that a PoA duly authenticated by a Public Notary or any court, Indian Consul or representative of the Central Govt, was validly executed and authenticated.

Registration of PoA: A PoA is a document within the meaning of Section 17 of the Indian Registration Act, 1908 which provides certain kinds of documents must be registered before the competent Registrar to get its validity and sanctity in the eyes of law. Therefore, all PoA which falls within the subjects of Section 17 of Indian Registration Act, 1908, would require to be registered, failing which they are not valid.

Notice to Attorney is Notice to Principal: Any Notice given to Attorney is presumed to be Notice given to the Principal, The test is – Notice was given during his agency; in his capacity as an agent; in the course of an agency; and in the matter material to his agency business, that is, the knowledge derived from the Notice must be material to his business for which the agent was employed; it would be the duty of the Agent to communicate the fact to the Principal.

Mode of execution of Power of Attorney: A PoA may be executed in the like manner MoU / Agreement are entered into between two parties. Photograph of both the donor and donee are to be affixed in the end and they both have to put their left thumb impression along with the signature against their respective photographs. A PoA needs to be attested by two witnesses. Usual mode of execution of POA is that the donor of power first executes the document in the presence of two witnesses and then the Donee accepts the power and signs it. The PoA then is required to be notarized.

A foreign national or an Indian living outside India and who wish to execute a PoA, may execute the same by – (a) the “donee” (receiver) of power residing in India, according to the instructions of the “Donor”, would prepare the instrument of PoA, would affix the applicable Stamp duty on the instrument, would affix his photo, and would send the document to the Principal living abroad; (b) the Principal living abroad may execute the said PoA by affixing his photograph and would sign the said PoA and put left thumb impression, in the presence of Indian Consul or representative of the Central Govt, and in the presence of two witnesses; (c) and would send back said PoA to the “donee”; (e) the donee on receiving the said PoA, may execute the same before Notary, by signing and putting his/her left thumb impression.

Stamp duty on PoA: The execution of PoA attracts Stamp duty, and the amount of stamp duty would depend upon the nature of powers which are sought to be conferred by virtue of said instrument of Power of Attorney. Whereas levying of stamp duty is a State subject, and therefore the liability of Stamp duty would vary depending upon the place where the instrument of PoA is executed. An ordinary instrument of PoA authorizing to prosecute legal proceedings in the court of law may attract a stamp duty of Rs.100 to Rs.500. Further, stamp duty rate changes every financial year. An instrument of PoA which confers the power to deal and dispose of any immovable property may even attract the stamp duty which is otherwise paid on conveyance of immovable property. Therefore whilst drafting the instrument of PoA, due care must be taken in articulating the nature of powers which are sought to be given by virtue of the instrument of PoA, and accordingly the requisite Stamp duty must be paid. In Maharashtra, the Stamp duty rates of instrument of PoA are governed by Article No.48 of Schedule 1, Maharashtra Stamp Act, 1958.

Consideration as to their relationship: Section 185 of the Indian Contract Act, 1872 provides that no consideration is necessary to create an agency, i.e. to say, the legal relationship between the principal and the Attorney may be completely gratuitous.

Retrospective ratification of acts done by PoA holder: When certain acts are done by a person on behalf of another, but without his knowledge and authority, the principal may elect to ratify those acts in the instrument of PoA which would be executed. At the same time, the law doesn’t allow the ratification where the ratification would have the effect of subjecting a third person to damages, or where the ratification would have the effect of terminating any right or interest of a third person.

Joint execution of PoA: A PoA must be executed in favour of a single person. It cannot be executed in favour of several persons. However, two or more persons may jointly execute an instrument of PoA in favour of a single person.

Termination and Revocation of PoA: The mere use of the word “Irrevocable” in the instrument of PoA will not make the PoA irrevocable. However, the PoA cannot be revoked in cases where (a) Some interest is created in favour of the Attorney; or (b) Valuable consideration was paid pursuant to execution of PoA. Such PoA can only be revoked with the concurrence of the Attorney. The powers given under PoA would also comes to an end on the death of the donor, or where the donor is declared insolvent / bankrupt, or where the donor incurs some legal disability, or has become of unsound mind. However, where power of attorney was executed for valuable consideration, it continue to operate even on the death of the donor / principal.

Sandeep Jalan

Advocate

Legal issues !!

If you are facing any of these issues like (a) Recovery of Moneys (b) Immovable property disputes (c) grievances against Municipalities & Govts., including challenge to legitimacy of laws etc. (d) grievances against illegalities and highhandedness of Police like illegal arrests, refusal to register FIR, deliberately flawed investigations, etc (e) False FIRs (f) False Claims (g) False evidences (h) Grievances against Judges (i) Illegal or perverse Orders of the Courts / Tribunals, among others.

or

If you are looking for draft of any legal proceeding; or if you want to know the nature and attribute of any legal proceeding; or if you want to know the procedure followed in any legal proceeding; or if you want to know the grounds on which any order of the court / tribunal is challenged; or if you are facing any frivolous litigation.

https://www.litigationplatform.com/

Thank you.