LEGAL CHAT
Power of attorney
N.C.S. RAGHAVAN
ARVIND RAGHAVAN
The legal concept and relationship of a power of attorney is based on the statutory provisions contained in Chapter X of the Indian Contract Act, 1872, which deals with “agency.”
In property transactions, a power of attorney is given by the principal, who is the owner of certain rights and interests in an immovable property, to the agent granting him the power and authority to carry out actsin relation to that immovable property for and on behalf of the owner/principal.
This will be legally valid and binding on the owner/principal to the same extent as actscarried out by the owner/principal himself directly.
There are basically two types of powers of attorney. One is a General Power of Attorney (GPA) which the owner/principal gives to the power of attorney holder, granting the latter the authority to legally deal with the owner’s rights and interests in the immovable property in the same manner as the owner himself would have carried out. Normally, such a GPA gives the power to:
1) deal with all third parties including government, semi-government and statutory authorities, local bodies etc., in respect of transactions relating to the transfer and conveyance of rights and interests of the owner/principal in the property.
2) sign and execute all documents, agreements, deeds of transfer and all other papers connected with the property for and on behalf of the owner/principal (the conveyance and transfer shall include gift, sale, mortgage, lease, easement, partition, release, settlement, licence and dealing with rights of development).
3) to formally present such agreements, documents and deeds of conveyance and transfer and other connected papers before the registration authorities and execute them and to comply with all legal formalities for and on behalf of the owner/principal.
4) to affix signatures and thumb impressions (wherever required) on documents, statutory registers, records and other legal papers for the purposes of completing the registration formalities.
5) to formally pay or receive the “agreed consideration” in cash, cheque, draft etc., for and on behalf of the owner/principal and issue or receive written acknowledgements thereof.
6) to generally carry out all other acts, deeds and things which are necessary and incidental to the completion of the transactions agreed to between the parties, including registration.
(N.C.S. Raghavan is a chartered accountant and Arvind Raghavan, an advocate)
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