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Concept of ‘Power of Attorney’ (POA)


Meaning of the term ‘Power Of Attorney’

‘Power Of Attorney’ is an
authority given by an instrument by one person, called as the donor or
principal, authorising another person, called donee or agent to act on his
behalf. There may be possibility of giving ‘Power Of Attorney’ by two or more
persons jointly to one or more persons. Here a legal authority is given by the
principal to the agent which may be broad or limited and an agent can take all
necessary decisions i.e. financial, property related matters and all other
matters where principal cannot be present to sign or in the case of principal’s
illness and disability. A paper signed by principal giving powers to an agent
is sometimes itself called a power of attorney. A paper giving a power of
attorney should be clear and understandable.

 Importance of Power of Attorney

A power of attorney document is an
extremely important part of estate planning yet one of the most misunderstood.
It is often convenient or even necessary to have someone else act for you as
there is advancement in the business and commerce transactions. As many people
confuse the power of attorney (POA) with a will (Probate), but these documents
are two very different things and have two very different functions. A will
comes into effect on the day person die. A POA applies during a person’s
lifetime and ceases to apply when he dies. So you actually need both a POA and
a will as they complement, and do not overlap, each other. To add a twist to
the subject, there are two types of POA: one for property and one for personal care.
These two types are completely separate. They deal with different areas of your
life and both are required for effective estate planning.

Classification of Attorney

 The Power of Attorney can be
classified into two categories which includes:

 General Power of Attorney: A general power of attorney is one by which an instrument is
executed by the principal authorising the agent to do certain acts in general
on his behalf. The word ‘General’ here means that the power must be general
regarding the subject matter and not general with regard to powers in respect
of a subject matter. If the subject matter is not general but restricted to
something either specific or specifically mentioned by the principal while
drafting an instrument then it will not constitute a general power of attorney.
It is otherwise called as limited power of attorney.

 Special Power of Attorney: A special power of attorney is one by which a person is appointed
by the principal to do some specified act or acts. In this type of power of
attorney, an agent conferred with a power to do specific act in a single or
specified transactions in the name of the principal.

 Durable Power of Attorney: A Power of Attorney which specifically says otherwise, agent’s
power ends if principal become mentally incapacitated. However, a power of
attorney may say that it is to remain in effect in the event of future
incapacity of the principal. A power of attorney that says this is called a
durable power of attorney.

To ascertain whether power of attorney
is of general or special in nature, the subject matter in respect of which
power is conferred Is to be seen accurately. The power of attorney is the
unilateral document wherein donor or the principal gives authoritative power to
the agent by signing the document and the agent’s sign is not always required.

 Persons Competent To Execute

A power of attorney can be executed by
any person who is competent to enter into a contract. However, the married
women can execute powers of attorney even if they are minors. A company while
executing power of attorney must make conformity with the ‘Articles of
Association’ and its common seal. A person must be competent to give power to
the appointed person so that it will not affect the legality of the instrument/deed
of power of attorney.

Authentication of power of Attorney

As per Indian law, a power of attorney
is a legal document that has to be properly framed, using the right legal
terminology and setting out the objectives and responsibilities that you wish
to authorise the appointee to carry out on your behalf. If a person wants to
authorise someone to act as a power of attorney on his behalf, it must be
signed and notarised by a certified notary advocate, who is able to declare
that you are competent at the time of signing the document to issue the said
power of attorney. You will need to show your ID to the notary advocate before
he/she is able to certify and issue the document. It must be executed and
authenticated by the registrar or sub-registrar of assurances as per the
‘Registration Act, 1908’.

Presumption About Power of Attorney

 A power of attorney is legal
written document which has more legal value and the authenticated attorney will
be presumed by the court as legal document under ‘Indian Evidence Act, 1872’.
According to the Section: 85 of ‘Indian Evidence Act, 1872’, which provides
that the court shall presume that every document purporting to be a power of
attorney, and has to be clearly authenticate and executed before the notary or
magistrate. If there is any issue arises concerning to the genuineness of the
attorney then proof of its execution can be called for the verification.

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