A Power of Attorney (POA) is legal document that enlists the powers and responsibilities a person i.e. the principal that he wishes to share with his POA holder. It is mostly used by NRIs (Non-Resident Indians) for effective administration of their property in India. This is done by conferring the authority on some other person, known as the agent to undertake any responsibilities and actions in the absence of the principal.
Need for a POA
A POA reduces security concerns for the principal as it simplifies the decision making even when the true owner is absent. A POA makes it convenient to do property planning and representation in case of business development and trade transactions.
This article will help you better your understanding about the POA, its execution and more-
Types of POA
Importance of notarizing a Power of Attorney
Even though the law does not prescribe any special way to execute the POA, it is recommended to notarize it. Notarize means to authenticate, verify, certify or attest any instrument/ document. It is governed by the Notaries Act and managed by the State or Central Government.
Additionally, as per the Indian Evidence Act a POA is presumed to be in accordance with law if it is executed before a Notary and verified by it.
Is execution of POA from abroad valid in India?
Section 14 of the Notaries Act states that the Central Government has the power to accept notaries done legally from other nations. For this purpose the Government has notified three nations, being New Zealand, Belgium and Ireland.
In this matter, the Calcutta High Court has observed that it is not compulsory to notify POA under Section 14 and that Section 85 of the Indian Evidence Act can also apply for notification of documents from different nations.
However, it is best recommended that in cases of execution of POA from outside India, it must be certified by a Central Government Representative due to lack of consistency between the various High Courts in India. It can also be certified by the Indian Consul or Vice- Consul and not by any other notary.
Need for Authenticating POA for Presentation of a Document for Registration
Registration Act, 1908 governs the registration of a document for authenticating a POA. This can be done by two methods-
Further, S. 32 of the Registration Act provides conditions to be fulfilled for the legal recognition of a POA. S. 33 of the Act stipulates the conditions under S. 32-
However, in certain cases, the law bars in-person representation of principals for execution of a POA. These include-
If the principal is himself the executrix of the POA, he is not required to make an in-person appearance.
Registering a POA
Following features must be noted about registration of a POA-
Payment of Stamp Duty
It is governed by S. 48 of Schedule I of the Indian Stamp Act. It prescribes the consequences associated with the non-payment of various kinds of POAs-