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Legal Implications of Power of Attorney

Power of attorney is a legal document that enables a person to grant some specific rights to another person who will act as an administer to those rights. Thus, this contract creates a relationship between the Principal (the person granting the rights) and the Agent (the person receiving the said rights). An agent can exercise these rights only until the Principal is alive and not after his/her death.

Power of Attorney is of two types:

  1. General Power of Attorney is not specific in nature and gives the Agent a general right to administer the Principal’s medical, business, legal and other decisions.
  2. Special Power of Attorney is specific to the area of rights that the Principal wants the Agent to overlook. Property rights come under Specific Power of Attorney.

Registration of power of attorney is not compulsory in many cases. For example, while appointing a lawyer or business decisions. Section 17 of the Registration Act, 1908 states documents of which registration is compulsory. In case of transfer of sale of an immovable property, a registered deed of such a document is required.

In the case of Suraj Lamp & Industries vs State of Haryana & Anr, adverse effects of non-registration of such Power of Attorney have been mentioned, its ill-effect on corruption and black money, avoidance of stamp duty, cases of increasing fraud. It has been stated in the said case, “We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of `GPA sales’ do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property.” 

Thus, as noted from above, a deed of registration is required by a power of attorney in case of transfer of immovable property.

Written by Darshni Gala, Rizvi Law College, Mumbai

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