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
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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