Power of Attorney —
types and precautions.

What a Power of Attorney is

When you give someone a Power of Attorney, you are granting an authority to that person to act on your behalf and undertake the acts, deeds, and things that you specify in the Power of Attorney document. The person giving the power is the executant or donor. The person receiving it is the attorney or donee.

The document is not a transfer of the property itself. It is an authority to act in relation to it. The executant remains the owner; the attorney merely acts in the executant's name, and within the limits of the power granted.

The two principal types of power

There are several types of Power of Attorney. Two of them account for almost all cases that arise:

General Power of Attorney.
A General Power of Attorney gives substantial powers for completing the transactions expected. It is broad in scope, and typically authorises the attorney to act in relation to all or a wide class of the executant's affairs. Because of its breadth, it is the type of power that most often gives rise to problems — and, in our view, the type of power that an NRI should almost never give.

Special Power of Attorney.
A Special Power of Attorney is given for specific purposes only. Those purposes — the specific acts, the specific property, the specific transaction — are defined in the document itself. Because the scope is defined, the executant retains control over what the attorney can do. For most NRI matters, a Special Power of Attorney is the appropriate instrument.

What makes a Power of Attorney valid

The validity of a Power of Attorney is determined by a series of requirements, each of which must be satisfied:

• Competence of the parties. The person giving the Power of Attorney, and the person receiving it, must each be competent. Minors and other persons disqualified by law cannot grant a Power of Attorney.
• Legal purpose. The Power of Attorney should be given for a legal purpose. A power to commit an illegal act is not a valid power, and an act done under it is not protected.
• Proper execution. The Power of Attorney must be duly stamped, notarised, registered, or adjudicated — as the case may be, depending on the purpose for which it is given and the requirements of the receiving authority.
• Certification abroad. Powers of Attorney executed abroad have to be certified by an Indian Consulate Officer. Where the executant is in a country where the Indian consulate provides this service, that is ordinarily the correct route. In some cases, a notary may suffice, but the receiving authority's requirements should be checked first.
• Registration. Registration of a Power of Attorney is compulsory in cases of a Special Power of Attorney that authorises the holder to present, for registration, a document executed by the person giving the power. Where the power itself is to be used to present a document for registration in India, registration of the power is not optional.
• Authentication and adjudication. Powers of Attorney given abroad have to be authenticated by an Indian Consulate official or a notary. They should be stamped or adjudicated within three months after receipt in India.

Precautions to take before executing a power

The consequences of a poorly drafted or over-broad Power of Attorney can be significant. The following precautions are, in our view, essential:

• If at all possible, never give a General Power of Attorney. The breadth of authority it confers is rarely necessary, and the consequences of misuse are difficult to reverse. A Special Power of Attorney can do almost everything that an NRI needs, without the same exposure.
• Give only a Special Power of Attorney, and state clearly what the attorney can do. The document should set out, in plain terms, the specific acts, the specific property, and the specific transaction. Anything not stated should be treated as outside the power.
• Check the wording of the Power of Attorney carefully, and understand the consequences. Read the document as the attorney would read it, not as you would wish it to be read. If a clause could be construed more broadly than you intend, narrow it.
• Give the power only to someone who is honestly willing and able to perform the services for you. The attorney should be a person you trust — and, ideally, a person whose interests align with yours in the transaction. The choice of attorney is the single most important decision in the process.

Remember: a Power of Attorney cannot be given to someone to commit an illegal act. A power that purports to authorise an illegal act is not a valid power, and does not protect the attorney or the executant.

Where the disputes usually arise

In our experience with Power of Attorney matters involving NRIs, the difficulties that come to court most often are these:

• The over-broad power. A General Power of Attorney, or a Special Power of Attorney drafted too widely, allows the attorney to deal with the property in ways the executant did not intend — including sale, mortgage, or lease to a third party.
• The unsigned or unauthenticated power. A power that has not been properly executed, notarised, or authenticated is not accepted by the registering authority, the sub-registrar, or the court.
• The expired power. A power that was given for a particular transaction remains on the file after the transaction is complete, and is later relied upon by the attorney or a successor as if still in force. Revocation should be in writing, and communicated.
• The power given to the wrong person. A power given to a family member or associate who then uses it for their own purposes, rather than for the executant's, is a recurrent problem.
• The power granted without revocation of an earlier power. Where an earlier power is not revoked before a new one is given, the attorney under the earlier power may continue to act, and third parties may rely on the earlier document.

Most of these difficulties can be avoided by careful drafting, by narrowing the power to the specific transaction, and by revoking the power in writing once the transaction is complete.

How Kavao Law can assist

We advise NRIs, foreign nationals, and their families on the preparation, execution, authentication, and use of Powers of Attorney for matters connected with India. Our work typically includes:

• Drafting a Special Power of Attorney for the specific transaction the executant has in mind — sale, purchase, lease, mortgage, litigation, or representation before an authority.
• Advising on the appropriate form of attestation and authentication — Indian consulate, notary, or apostille — for the country in which the executant is resident.
• Advising on stamping and adjudication, and on the time limits within which these must be completed after receipt in India.
• Advising on the registration of the Power of Attorney where registration is compulsory — for example, where the power is to be used to present a document for registration.
• Advising on revocation, and preparing the revocation instrument where the executant wishes to bring an existing power to an end.
• Advising on the risks of a General Power of Attorney, and on the alternatives available where a broader authority is contemplated.
• Assisting the attorney in using the power before the sub-registrar, the revenue authorities, the courts, and other authorities in India.

For more on this service, see our Power of Attorney practice-area page and our Property & Land Records practice-area page.

A closing note

The information in this article is general in nature and is intended to give NRIs a clearer sense of the considerations that apply to a Power of Attorney for India. Every power depends on its own facts — the transaction, the property, the country in which the executant is resident, and the authority before which the power is to be used.

A Power of Attorney is a simple document to prepare well, and a difficult one to undo after misuse. Where the transaction is significant, or the executant is not in a position to supervise the attorney personally, seek case-specific advice before executing the power.