Corporate & Commercial Series
Series 1 | Article 3
A Power of Attorney (‘POA’) may be granted for various purposes. It's a versatile legal tool with a wide range of applications. For instance, a person may grant a POA for the management of their business affairs, financial affairs, property transactions, and/or legal matters. Understanding the versatility of a POA can be a valuable asset in planning for the present and the future.
POAs are broadly classified into 2 (two) categories based on the purpose for which a POA may be granted: General POAs and Specific POAs. As the name suggests, a General POA is granted for a broader range of purposes typically involving the general and overall management of a persons’ affairs. On the other hand, a Specific POA is granted for a particular purpose with limited powers to act only in respect of such purpose. In each case, a POA must clearly specify the purpose for which it is being granted and the scope of the attorneys’ authority to act by virtue of the POA.
The Indian Contract Act, 1872 and the Power of Attorney Act, 1882 do not specifically deal with the acts for which a person can or cannot grant a POA.
The general common law rule is that whatever a person can to do themselves, they may do so by appointing an attorney. Conversely, what a person cannot do themselves, they cannot do through an attorney. For instance, a person cannot grant a POA in respect of an act which itself is prohibited under law.
That said, the law on this aspect is constantly developing. Over the years, the Indian Courts have often been faced with determining the extent to which acts can be performed by a person through a POA. In deciding disputes involving POAs, the Indian Courts have established certain well-known exceptions to the general common law rule (stated above) and the acts that may be performed through a POA. See T.C. Mathai & Anr. versus District and Sessions Judge, Thiruvananthapuram, Kerala (1993 3 SCC 614)
The exceptions are:
where the act to be performed is personal in character or where a statute imposes on a person a duty which they are not free to delegate;
where the act to be performed is annexed to a public office; or
where the act to be performed is annexed to an office involving a fiduciary obligation.
This is to say, these acts cannot be delegated to another and be performed through a POA.
Building upon the general rule and the exceptions outlined earlier, the Indian Courts have on several occasions clarified and confirmed the legal principles for the usage of POAs in different situations. In this article, I have summarised a few notable cases that deal with the legal implications in respect of certain uses of POAs.
Transfer of immovable property:
A POA is not an instrument of transfer for the right, title, or interest in an immovable property. A person cannot transfer / convey their immovable property in favour of another by merely executing a POA in favour of such other person. That said, a person can, by way of a POA, authorise their attorney to execute a deed of conveyance / sale deed in favour of a third person for transfer of their immovable property to such third person. See Suraj Lamps and Industries Private Limited versus State of Haryana & Anr. (2012 1 SCC 656).
Filing a complaint under Section 138 of the Negotiable Instruments Act, 1881 (a case for cheque-bouncing):
A person can file a complaint under Section 138 of the Negotiable Instruments Act, 1881 (a case for cheque-bouncing) through their attorney, authorised under a POA, provided the complaint is signed and filed by the attorney on behalf of and in the name of the grantor and the attorney has due personal knowledge of the transaction. The attorney can also verify on oath and be examined as a witness in the case, only if the attorney has due knowledge of the transaction. In each such case, the complaint must explicitly record the attorney’s knowledge. See A.C Narayan versus State of Maharashtra & Anr. (2015 12 SCC 203).
Appearance in criminal proceedings:
A person who is accused in any criminal proceeding can appoint another person (who is not an advocate) to act as their pleader in such criminal proceedings, by way of a POA. This is provided the appointment through a POA is with the permission of the Court and the application for such permission is made by the accused themselves. See T.C. Mathai & Anr versus District and Sessions Judge, Thiruvananthapuram, Kerala (1993 3 SCC 614).
A holder of a POA i.e., an attorney, as a witness:
An attorney can testify as a witness only in respect of acts done and/or transactions undertaken by the attorney in pursuance of a POA and where the attorney has personal knowledge of such acts / transactions. An attorney cannot testify for any actions and/or transactions that are known only to the grantor. See Man Kaur (Dead) By Lrs. versus Hartar Singh Sangha (2010 10 SCC 512).
In conclusion, a POA is an adaptable legal document that may serve a diverse array of needs and situations. Whether it's managing financial affairs, conducting business transactions, or addressing legal matters, a well-drafted POA can help get tasks achieved in times of need and provide the assurance that someone you trust will act on your behalf, when you cannot.
The specific usage of a POA can vary based on your individual circumstances and legal requirements. To create a POA that aligns with your needs and complies with applicable laws, it is advisable to consult a legal advisor. This will ensure that the document accurately reflects your intentions and your interests are protected.
About the Author
Mansi Jain has been with MZD Legal Consultancy since 2016 and has also been practicing law since 2016. Mansi is a part of the Real Estate, Estates & Succession Planning, and General Corporate and Commercial practices at the firm. She can be contacted at mansi@mzdlegal.in.
About MZD Legal Consultancy
MZD Legal Consultancy is a boutique law firm in Mumbai, India. The firm was established in 2011 and comprises professionally qualified lawyers with varied levels of experience and expertise in specific practice areas. To know more, click here www.mzdlegal.in
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