Tuesday, February 2, 2016

PROCEDURE FOR EXECUTION OF POWER OF ATTORNEY

PROCEDURE FOR EXECUTION OF POWER OF ATTORNEY


Power of Attorney is the must widely used document in property transactions.  This is because many acts, transactions have to be carried out simultaneously and the same persons cannot be present at different places at the same time.Moreover, timing is very important in property transactions.Power of Attorney in simple terms means a person authorizing another person to do acts or certain acts on his behalf.
The Power of Attorney Act 1882, defines power of attorney “includes any instrument empowering a specified person to act for and in the name of the person executing it”.The Karnataka Stamp Act 1957 defines power of Attorney as “includes any instrument (not chargeable with fee under the law relating to court fees for the time being in force) empowering a specified person to act for and in the name of the person executing it”.
The Power of Attorney Act 1882 has five sections only and provisions of Indian Contract Act Chapter X dealing with Agency are applicable to power of attorneys. Section 182 of Indian Contract Act defines agent as “a person employed to do any dealings with the third persons”.The person for whom such act is done or so represented is called principal.
The person who is executing the power of attorney is called principal or the executant and the person to whom power is granted is called GPA holder or beneficiary.  Both the principal and agent should be of sound mind and majors.The relation between donor and donee is one of principal and agent, which has its genesis in a contract.
There are two kinds of Power of Attorney.
a)General Power of Attorney
b)Specific Power of Attorney
The general power of attorney gives wide powers to the agent to do various things on behalf of principal as detailed in deed and not confined to any specific act or acts relating to a specific subject.
Specific power of attorney is given in respect of single specified transaction like selling of particular property.  Once the said particular act is completed, the special power of attorney naturally gets revoked or the powers of the holder get exhausted.
Though power of attorney is a contract of agency,there are certain differences between agency and power of attorney.Power of attorney creates special power of agency, which entitles the holder to use principal’s name in the transaction entered into.  Whereas an agent who is not a power of attorney holder is not entitled to for such special powers, power of attorney holder acts in the name of his donor.
Stamp duty
Power of attorney attracts stamp duty which varies from state to state.  Article 41 of the Karnataka Stamp Act prescribes the stamp duty as follows:
Description of Instrument: Proper Stamp Duty
a)When executed for the sole purpose of procuring the registration of one or more documents in relation to a single transaction or for admitting execution of one or more such documents;  One hundred rupees.
b)When authorizing one person or more to act in a single transaction other than the case mentioned in clause (a) One hundred rupees.
c)When authorizing not more than five persons to act joint and severally in more than one transaction or generally; One hundred rupees.
d)When authorizing more than five persons but not more than 10 persons to act jointly and severally in more than one transaction or generally; Two hundred rupees.
e)When given for consideration and authorizing the attorney to sell any immovable property; The same duty as a conveyance for a market value equal to the amount of the consideration.
i)When given to a promoter or developer along with Joint Venture agreement, by whatever name called for construction, development on, or sale or transfer (in any manner whatsoever) of any immovable property situated in Karnataka State;  One thousand rupees.
ii)When given to person other than the father, mother, wife or husband, sons, daughters, brothers, sisters in relation to the executant authorizing such person to sell immovable property situated in Karnataka State;  Eight rupees for every one hundred rupees or part thereof on the market value of the property which is the subject-matter of power of attorney; Provided that the duty paid on such instrument is adjustable towards the duty payable on the instrument of sale or transfer executed subsequently in favour of either the attorney holder or any other person.
f)In any other case, One hundred rupees.
NB: The terms “Registration” includes operation incidental to registration under the Registration Act, 1908.
Explanation
For the purposes of this Article more persons than one when belonging to the same firm, shall be deemed to be one person.
Attestation
The attestation of power of attorney is not compulsory but in order to avoid any disputes, and to establish the proof of genuineness it is advisable to get the document attested by two witnesses.
Registration
The registration of document is not compulsory, when it is to be registered it shall be presented at the sub registrar’s office who has jurisdiction over the immovable property, referred to in the document.However in other cases, the document may be presented for registration either in the office of the sub registrar in whose sub-district the document was executed or in any other sub registrar office in the state as the executants desire.
Notarising
Notarising the Power of Attorney is as good as registration.  Section 85 of Indian Evidence Act applies to the documents authenticated by the notaries.
The court shall presume that every document purporting to be power of attorney and have been executed before and authenticated by notary public or any court, judge, magistrate, Indian consul or vice consul or representative of Central Government shall be presumed to be properly executed and would be a conclusive proof.
Each page of the document notarized should bear the official stamp of the notary disclosing his registration number, jurisdiction and also signature of the notary public.  Appropriate notary stamp has to be affixed.
Documents executed outside India; any power of attorney executed outside India needs authentication, which means it has to be executed in the presence of certain designated officers.
As per section 85 of Indian Evidence Act the following persons are empowered to authenticate the documents;
1.Notary public
2.Any court of Judge or Magistrate
3.Indian consul or vice consul
4.Representative of the Central Government
Section 85 of the Indian Evidence Act applies equally to the documents authenticated by notary public of other countries.So any power of attorney executed outside India shall be authenticated by Notary public of such country or Indian consul, vice consul or by representative of Central Government.
Such documents need to be stamped within three months from the date of receipt in India, to be payable at the District Registrar’s Office as per Section 31 and 32 of Karnataka Stamp Act 1957.
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Whitefield     
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