Power of attorney used for transactions of property and investments
A power of attorney (PoA) is a legal document, which gives a person (attorney holder or agent) the power to act on behalf of another person (principal) and undertake activities set out in the document. It is used for transactions related to property, investments and legal proceedings and is widely used by NRIs for financial transactions in India. It is also used if the principal is ill or disabled or if he can't be present to sign legal documents.
There are two types of PoA-general and special. Under a general PoA, the principal empowers the agent with legal authority to act on his behalf without restricting it to a particular transaction or act. A special PoA restricts the authority to only a set of transactions that are sanctioned by the principal. It can be revoked by the principal, or under the following circumstances: if the principal dies, becomes insane, bankrupt, or if the business for which the agent was appointed is over, or if it is mutually agreed upon by the principal and agent, or if the agent renounces his right.
Parties to PoA
A person who has attained majority can execute a power of attorney in favour of another, who should also be a major.
Signature
The PoA should be signed by both parties, that is, the principal and the agent.
Attestation
The PoA has to be attested by two or more independent, adult witnesses who are of sound mind.
Registration
While this is not compulsory, a principal can register the PoA at the office of the sub-registrar within whose jurisdiction the former resides. The fee is fixed by the state government. The Supreme Court has ruled that a PoA given to sell immovable property be registered.
Points to note
Legal procedure: A PoA can be drafted without a lawyer's help. The document needs to be notarised for it to be enforceable.
Revocation: If the PoA has outlived its purpose, one can revoke it by issuing the relevant instructions to the notary.
Options for NRI: If a person resides abroad, the PoA should be attested by the Indian consulate in that country. Such a PoA should be used within three months of the date of execution.
Source: Economic Times
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