A power of attorney is a written authority given by an instrument by one person, called the donor or principal, authorising another person, called the donee, attorney or agent to act on his behalf. These can be general or special. This article delves into the basic workings of a PoA and discusses its crucial elements.
Wed Jul 20 2022 | Real Estate, Wills, Probate and Trust | Comments (0)
A power of attorney is a written authority given by an instrument by one person, called the donor or principal, authorising another person, called the donee, attorney or agent to act on his behalf. The power of attorney may be general or special. The law relating to power of attorney falls within the law of agency.
The Power of Attorney Act applies to the whole of India except the state of Jammu and Kashmir. It came into force on 1st May, 1882.
A power of attorney can be executed by
A general power of attorney is one, by which authority is given by the principal to the agent to act in all matters or in all matters of a particular nature, whereas the special power of attorney gives authority to do some particular specified act.
If the powers given are not general in nature, the mere fact that wide and full powers have been conferred upon the donee with regard to specific matter does not make the power of attorney a general power of attorney.
General means powers given by it must be general in nature. To ascertain whether the power of attorney is general or special, the subject matter in respect of which power has been conferred is to be seen and if the subject matter is not general and it restricts to something specific and particular, then the power of attorney is not a general power of attorney.
Power of attorney, whether general or specific, should be understood according to the following principles:
An agent cannot by his acts bind the principle to a larger extent than he is empowered to do under the power of attorney granted to him. If the power does not authorise the agent to carry on a business except with limitations, any act done by him will not bind the principle.
A power of authority expires with the death of the principle, and is revocable at his will, unless it has been given for a valuable consideration to secure some interest of the donee.
Generalia Specialibs Non Derogant- Special powers granted under the document to be understood within the framework of the general powers given.
It is a general rule that where special powers are given in a power of attorney those powers must be construed only according to the general power given. For example, a power to "pay" does not include the power to promise to pay.
The general words used in the subsequent clauses of the power of attorney must be read with the special powers given in the earlier clause and cannot be construed so as to enlarge the restricted powers specified therein.
When a power of attorney confers a power to sell and there are no words limiting the power, a power to clarify title and to settle the disputes, insofar as it is necessary for effecting a sale, would be implied in view of the duties imposed on a seller under the Transfer of Property Act. In relation to the Contract Act, in order to determine what powers attorney purports to grant the holder, it is incorrect to take a few sentences or clauses and to consider them removed from the context.
A Vakalatnama is not defined either in the Powers-of Attorney Act, 1882 or in the Civil Procedure Code, 1908. A Vakalatnama is the document empowering a lawyer to act for and on behalf of his client.
A Vakalatnama under which a lawyer is empowered to act may be general. It may specifically confer wide authority upon a lawyer. A lawyer holding a Vakalatnama can hardly be said to be a person without authority. The rule of construction of a document appointing an agent is different from that of construing a Vakalatnama appointing a counsel. He has a tripartite relationship, one with the public, another which includes his client(s) . A Vakalatnama is, in essence, a power of attorney.
The Code of Civil procedure requires the appointment of a counsel to act in court by a document in writing. When a counsel is appointed under a document, the enumeration of certain powers in it would not exclude the implied powers necessarily inherent in the appointment, however exhaustive the enumeration of the powers necessary for the proper discharge of the work of counsel in court.
With regard to litigation in civil court, the Code of Civil procedure provides that appearances may be by recognized agents or by pleaders appearing, applying or acting on its behalf.
It further says that no pleader shall act for any person in court unless he has been appointed for the purpose by such person by a document in writing.
A pleader is defined under the Civil Procedure Code, 1908, as, any person entitled to appear and plead for another in Court and includes an Advocate, a Vakil and an Attorney of a High Court. Though in a sense a Vakalatnama is a power-of-attorney, in the matter of construction, courts have drawn a distinction between the two and in the application of the principles of construction, most of the courts while interpreting a power of attorney, strictly have interpreted a Vakalatnama liberally so as to infer the conferment of large and wide powers on the counsel.
The Civil Procedure Code further provides:
Once validly appointed a pleader's authority to act for the client shall continue until it is determined
A power of attorney for filing a compromise does not necessarily imply an authority for making a compromise on behalf of the principle without his knowledge and consent.
An agent may be authorised to enter into a submission to arbitration, and if he does so, his liability and that of the principal would seem to be based upon the same principle as the liability of principal and agent in respect of other contracts.
In order to avoid any personal liability, the agent should see that he is properly authorized. For the same reason, he should submit expressly as agent, for, if he fails to make it clear that if he submits only as agent he should be bound personally and a fortiori, if the agent binds himself for the performance of the principal, the agent is personally liable in the case of the principal’s failure to perform the award. The authority to make a submission may be express or implied authority to act as agent conferred in general terms is construed as authority to act only in the usual way and according to the ordinary course of business.
If any person makes any payment or does an act in good faith in pursuance of a power-of-attorney, he shall not be liable in respect of the payment or act by reason that, before the payment or act, the donor of the power had died or become of unsound mind, or insolvent, or had revoked the power, if the fact of death, unsoundness of mind, insolvency or revocation was, at the time of payment or act, NOT known to the person making or doing the same.
However, the above shall not affect any right against the payee of any person interested in any money so paid; and that person shall have the remedy against the payee as he would have had against the payer, if the payment had not been made by him.
This applies only to payments and acts made or done after this Act comes into force.
The purpose of the section is to indemnify the holder of a power-of-attorney for action taken by him bona fide. It does no more than indemnify the holder of the power-of-attorney for actions done by him in good faith if the determination of his power by the death of the person granting the power is unknown to him at the time.
Therefore, any person making any payment or doing any act, in good faith in pursuance of a power of attorney,
Subject to the cases of irrevocable authority, a power of attorney can be terminated in the following manner
The authority cannot be revoked after the authority has been partly exercised, so far as regards such act or obligations as arise from facts already done.
The principal should give reasonable notice to the agent before termination of agency and if the agent is not aware about the termination and he does any act in pursuance of the power of attorney, the act will not be invalidated.
Where the principal authorized the attorney to admit execution of a document, which was revoked by him before registration of the document, but revocation was not known to the attorney or to the registering officer. It was held that the document was not invalidated, as far as the grantee was concerned and was binding on the grantor, although it was registered after the revocation of his authority.
The revocation need not necessarily be made by a formal instrument. It is possible to revoke a deed by word of mouth or the principal may intervene in the course of negotiation but until such action is taken by the principal, the agent is justified in assuming that the agency continues. But not all powers-of-attorney or agency are revocable unless certain conditions are fulfilled.
Powers-of-attorney which are given for valuable consideration and which are stated in the instrument creating them to be irrevocable cannot be revoked at any time, either by anything done by the donor of the power without the concurrence of the donee or by the death, disability or bankruptcy of the donor of the power. Any purported revocation will be ineffective both as regards the donee and a purchase for value.
The Power of Attorney Act provides that an instrument creating a power-of-attorney, after its execution has been verified by affidavit, may be deposited in the High Court or District Court.
However, it is not necessary that the power of attorney must be deposited with the High Court. In order for the power of attorney to be validated, it can either be registered under the provisions of the Registration Act, 1908 or they can be notarised by Notaries appointed under the provisions of the Notaries Act, 1952.
A married woman of full age shall, by virtue of this Act, have power, as if she were unmarried, to appoint an attorney on her behalf, for the purpose of executing any non-testamentary instrument or doing any other act which she might herself execute or do, and the provisions of this Act, relating to instruments creating powers-of-attorney, shall apply thereto.
This applies only to instruments executed after this Act comes into force and it deals with power-of-attorney executed by a married woman irrespective of whether she is a minor or not.
For example, a married woman brought goods on credit from a tradesman. She was living with her husband and had no separate property of her own. Nothing having been said about whether or not she was contracting as an agent for her husband, the court held that the woman was not personally liable since, under the circumstances, she must be taken as having contracted as an agent.
