The judgments being discussed under this article pertain to the law on the legal instrument referred to as ‘power of attorney’. Power of attorney is a common tool of business practice which essentially permits one person to legally act on behalf of another and enables delegation of power to a legal representative. This is a legal instrument by way of which a person referred to as the ‘principal’ appoints another person known as the ‘agent’ to act on his behalf granting him powers of a legally recognised representative. The law pertaining to the use of power of attorneys is governed by the Power of Attorney Act, 1882. The judgments hereunder expand and elucidate the law regarding the use of power of attorneys under the Indian legal system and lay down guidelines to ensure prevention of abuse and misuse of this legal instrument. These judgments explain what is a legally binding power of attorney and what actions an agent can take on behalf of a principal under law, including concepts such as revocation of a power of attorney, its registration and its binding nature.
The Supreme Court by way of the judgments below decided upon some key issues related to the law on power of attorneys in India. These included issues such as: -
The scope of power of attorneys
Revocability of power of attorneys
Mandate on registration of power of attorneys
Transfer of title by way of power of attorney
Validity of power of attorney
In the judgments discussed below, the Supreme Court analyses the law regarding power of attorneys. In a landmark case, the Supreme Court held that the power of attorney cannot be utilised as an instrument of transfer with respect to any right, title or interest in any form of immovable property. The Supreme Court also found that the requirement for registration of a power of attorney is a mandatory pre-requisite for the purposes stated in the act. While deciding upon the revocation of a power of attorney, the Supreme Court held that in case an agency is created in exchange for some consideration, such agency cannot be revoked unless there is an express contract to such effect. The Supreme court also held in a case that a principal cannot be held liable for the acts of his/her agent where such agent exceeds the authority granted under the power of attorney.
State Of Rajasthan & Ors vs Basant Nahata on 7 September, 2005
Author: S.B. Sinha
Bench: Ashok Bhan, S.B. Sinha
CASE NO.:
Appeal (civil) 7800 of 2001
PETITIONER:
State of Rajasthan & Ors.
RESPONDENT:
Basant Nahata
DATE OF JUDGMENT: 07/09/2005
BENCH:
Ashok Bhan & S.B. Sinha
JUDGMENT:
J U D G M E N T S.B. SINHA, J:
Constitutionality of Section 22-A of the Registration Act (The Act) as amended by the State of Rajasthan as also the notifications issued by it in terms thereof are in question in this appeal which arises out of a judgment and order dated 28.11.2000 passed by a Division Bench of the High Court of Judicature for Rajasthan at Jodhpur in D.B. Civil Writ Petition No. 3554 of 1999.
FACTS:
The Respondent herein is a resident of town of Bikaner. He was a Khatedar tenant of agricultural lands situated at Chak No. 13 KYD, Square No. 110/24, Killa No. 1 to 25 Bighas, Tehsil Khajuwala, District Bikaner. He appointed one Sukhdeo Singh as his attorney authorizing him to look after his lands, cultivate the same and to do all other acts, deeds and things including mortgage or sell the same, get the requisite deeds and documents registered, by a deed of Power Of Attorney dated 16.7.1999. The said deed was presented before the Sub-Registrar, Bikaner on 30.7.1999 for the purpose of registration which was refused by making an endorsement on the document that the same could not be registered in terms of the Government Notification dated 26.3.1999 published in the Rajasthan Gazette dated 1.4.1999 as amended on 22.4.1999 whereby and whereunder registration of such documents have been prohibited as being 'opposed to public policy'. The said notifications were said to have been issued by the State of Rajasthan in exercise of its power conferred upon it under Section 22-A of the Act.
The Respondent herein questioned the constitutionality of Section 22- A of the Act as inserted by the legislature of Rajasthan as also the aforementioned notifications by filing a writ petition before the Rajasthan High Court.
HIGH COURT:
By reason of the impugned judgment the Rajasthan High Court declared Section 22-A of the Act as inserted by the Rajasthan Amendment Act, 1976 being Act No. 16 of 1976 as unconstitutional and consequently the notifications as contained in annexures 3, 4, 6 and 7 of the writ petition were also quashed. The Sub-Registrar was also directed to register the power of attorney dated 16.7.1999 which was presented on 30.7.1999 within two weeks from the date of presentation of the copy of the order....
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The judgments in this article discuss the law pertaining to the use of power of attorneys in India, which is enshrined under the Power of Attorney Act, 1882 and also governed by the Indian Stamp Act of 1899. The judgements analyse various provisions of these enactments to determine key issues guiding the use of power of attorneys in India. The judgments discuss the law with respect to both general power of attorneys and special power of attorneys and their permitted use in law.
Power of attorney is an intricate legal instrument with far reaching ramifications on both the principal and the agent bound under this legal instrument. The act of delegation of power under a power of attorney gives rise to the possibility of misuse and disputes. Therefore, it is imperative to engage the services of a trained documentation lawyer to ensure that your interest and rights are protected in this process. A lawyer with the correct expertise is essential from the very stage of drafting a power of attorney to help understand the implications of the document and ensure that the instrument is drafted in a manner so that all interests are protected, thereby reducing the risk of dispute at a later stage. Furthermore, even for individuals embroiled in a dispute arising out of the use of a power of attorney, the services of a lawyer are integral to ensure proper legal advice and representation before a court of law. You can also seek free legal advice on your case from lawyers through LawRato's Free Legal Advice program.
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