What Is Power Of Attorney : A Complete Guide To Understand General Power of Attorney

What is Genera Power of Attorney ?

A General Power of Attorney (GPA) is a legal document that allows one person (the “principal”) to grant another person (the “agent” or “attorney-in-fact”) the authority to act on his behalf in legal or financial matters. The scope of this authority can be broad or limited, depending on how the GPA is drafted. This document is often used in situations where the principal is unable to manage their affairs due to absence, illness, or incapacity.

Governing Acts for GPA

In India, the GPA is primarily governed by the Indian Contract Act, 1872, and the Power of Attorney Act, 1882. These acts outline the rights and obligations of the parties involved and the legal framework within which GPAs operate.

Types of Power of Attorney (POA)

1. General Power of Attorney:

A legal instrument with several powers is the General Power of Attorney (GPA). It gives the attorney various Power to act in the principal’s place. A GPA covers everything, including signing a sale deed , business papers and appearing on your behalf in court , bank etc.

2. Limited or Special Power of Attorney:

A Special Power of Attorney is restricted to specific task or circumstances, unlike a GPA. It’s more targeted and prevents the attorney from having complete control over all of your matters.

3. Durable Power of Attorney:

The duration of a durable power of attorney is for indefinite period. The POA is still in effect even if you become incapacitated. This guarantees that, whatever be the situation in life , your affairs will be taken care of.

4. Medical or Healthcare Power of Attorney

This kind of POA is made for healthcare decisions. It only becomes relevant when you are unable to take those choices for yourself. The agent can make your medical decisions/ expenses but is not able to make decisions that might end your life, such as removing your life support.

How to Draft a GPA

Drafting a GPA involves several important steps:

1. Identify the Parties: Clearly state the name , father name ,  addresses and Aadhar No.  of the principal and the Attorney 
   
2. Define the Powers Granted: Clearly Specify the powers  granted by the principal to the attorney , which can include managing bank accounts, buying or selling of  property, and making healthcare decisions etc.
   
3. Limitations and Conditions: If necessary, include any limitations or specific conditions under which the attorney can act.
   
4. Duration: State whether the GPA is effective immediately or only under certain conditions, and whether it will remain in effect if the principal becomes incapacitated.
   
5. Signature and Witnesses: The document must be signed and thumb impression by the principal and  two witnesses.
   
6.  Notarization Or Registration :  Notarization or Registration of power of attorney depend on local laws.  It advisable to register power of attorney in case of POA is related to real estate transactions 
   
7. Consult Legal Advisor : It’s advisable to consult with a legal professional to ensure that the GPA complies with all relevant laws and accurately reflects the principal’s intentions.
   

Is Registration of GPA Necessary?

The registration of a GPA is not always mandatory but is advisable for certain transactions, especially in real estate. When a GPA is executed for the sale or transfer of property, GPA must be registered legally enforceable. Non-registration can lead to disputes and complications in asserting rights over the property.

What is Stamp Duty for GPA?

Stamp duty on a GPA is generally calculated as per Indian  Stamp Act 1899 . But it varies as per states rules and regulations , as each state has its own regulations regarding stamp duty rates. For example GPA can be registered on a Rs 100/- stamp in Delhi but as per current regulation in UP  Rs 5000/- stamp paper is required

Is GPA  Revocable Document

Yes, a General Power of Attorney (GPA) is revocable document .  The principal can revoke the GPA at any time, as long as they are mentally competent to do so. The revocation should be documented in writing and communicated to the agent and any relevant third parties. This ensures that the agent no longer has authority to act on behalf of the principal.

Suraj Lamp & Co. Case: Overview

The Suraj Lamp & Co. vs. State of Haryana case (2012) is a landmark judgment by the Supreme Court of India concerning the validity of unregistered GPAs. The court ruled that an unregistered GPA cannot be used to transfer property rights. This ruling clarified that only a registered GPA could convey property rights, thereby enhancing the importance of proper registration and documentation.

Validity of GPA Post-Suraj Lamp Case

Following the Suraj Lamp case, the validity of GPAs remains intact; however, any GPA used to transfer property must be registered. This judgment emphasizes the need for compliance with registration requirements, making it essential for parties to understand the legal implications of their GPAs.

What are the ways to execute a power of attorney from abroad:

If the country where the GPA is executed is a signatory to the Hague Convention, you can obtain an apostille for the document. If it’s not a signatory, you may need to get the document authenticated by the Indian embassy or consulate in that country.

Apostilisation

It is the process by which deed of POA executed outside India is proven through an apostalisation which is governed by Hague Convention, 1961. The apostille is a certificate which confirms and verifies the signature/seal of the person who verified the document. However, this deed too needs to comply with Indian laws such as the Indian Registration Act, 1908 and Power of Attorney Act, 1882.

Through Legislation

In this case, signatures of the notary or judge before whom the POA is executed are required to be authenticated by the duly authorized representative of the Indian embassy. As per section 3 of the Diplomatic and Consular Officers Act, 1948 notarizing a deed from an authorized officer of the Indian embassy would be considered a valid notary. Such power of attorney is not required to be stamped at the time of execution. However, it needs to be stamped within 3 months from the date of receipt in India.

FAQs Regarding GPA

1. What is the difference between General and Special Power of Attorney?

A General Power of Attorney grants broad powers to the attorney , while a Special Power of Attorney limits the agent’s powers to  specific acts or transactions.

2. Can I revoke a GPA?

Yes, a principal can revoke a GPA at any time, provided they are mentally competent. The revocation should be documented in writing.

3. Is a GPA valid if the principal becomes incapacitated?

If the GPA is durable (specifically stated to remain effective upon incapacity), it remains valid. Otherwise, it ceases to be effective.

4. Can a GPA be challenged in court?

Yes, a GPA can be challenged in court, particularly if there are allegations of coercion, fraud, or if it is deemed invalid due to non-registration when required.

5. How do I ensure my GPA is valid?

To ensure validity, have the GPA properly drafted, include necessary clauses, get it registered , and pay the appropriate stamp duty.

Conclusion

Understanding the intricacies of a General Power of Attorney is crucial for anyone looking to delegate authority in legal or financial matters. With proper drafting, registration, and adherence to legal requirements, a GPA can serve as a powerful tool in managing one’s affairs effectively. Always consult legal professionals to navigate this complex area confidently.