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Can You Transfer Property on basis of Power of Attorney?

June 7, 2020

Let us understand what id Power of Attorney ( POA) ? The term POA is defined in the Power of Attorney Act,1882 and it says Definition.—In this Act, “Power-of-Attorney” includes any instruments empowering a specified person to act for and in the name of the person executing it. 1A. Definition.—In this Act, “Power-of-Attorney” includes any instruments empowering a specified person to act for and in the name of the person executing it. It means that definition is inclusive and any document which empowers to act on behalf of executor is POA. It attracts Stamp Duty and in certain cases if property is transferred by virtue of POA, than Stamp Duty is attracted as on Deed of Conveyance. Scope of Power of Attorney A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see section 1A and section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. In State of Rajasthan v. Basant Nehata – 2005 (12) SCC 77, Court held: A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee.- An attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on […]

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