Power of Attorney is most widely used document in property transactions. This is because many acts, transactions have to be carried out simultaneously and the same persons cannot be present at different place at the same time. Moreover, timing is very important in property transactions.
Power of Attorney in simple terms means a person authorizing another person to do acts or certain acts on his behalf.
The Power of Attorney Act 1882, defines power of attorney "includes any instrument empowering a specified person to act for and in the name of the person executing it".
The Karnataka Stamp Act 1957 defines power of Attorney as "includes any instrument (not chargeable with fee under the law relating to court fees for the time being in force) empowering a specified person to act for and in the name of the person executing it".
The Power of Attorney Act 1882 has 5 sections, only and provisions of Indian Contract Act under Chapter X dealing with Agency are applicable to Power of Attorneys. Section 182 of Indian Contract Act defines agent as "an agent is a person employed to do any dealings with the third persons". The person for whom such act is done or so represented is called principal.
The person who is executing the Power of Attorney is called principal or the executant and the person to whom power is granted is called GPA holder or beneficiary. Both the principal and agent should be of sound mind and majors. The relation between donor and donee is one of principal and agent, which has its genesis in a contract.
There are two kinds of powers of attorney
a. General Power of Attorney.
b. Specific Power of Attorney.
The general power of attorney gives wide powers to the agent to do various things on behalf of principal as detailed in deed and not confined to any specific act or acts relating to a specific subject.
Specific power of attorney is given in respect of single specified transaction like selling of particular property. Once the said particular act is completed, the special power of attorney naturally gets revoked or the powers of the holder gets exhausted.
Though power of attorney is a contract of agency, there are certain differences between agency and power of attorney. Power of attorney creates special power of agency, which entitles the holder to use principal's name in the transaction entered into. Where as an agent who is not a power of attorney holder is not entitled to for such special powers, power of attorney holder acts in the name of his donor.
Power of attorney attracts stamp duty which varies from state to state. Article 41 of the Karnataka Stamp Act prescribes the stamp duty as follows:
|DESCRIPTION OF INSTRUMENT||PROPER STAMP DUTY|
|(a) When executed for the sole purpose of procuring the registration of one or more documents in relation to a single transaction or for admitting execution of one or more such documents;||One hundred rupees|
|(b) when authorizing one person or more to act in a single transaction other than the case mentioned in clause (a)||One hundred rupees|
|(c) when authorizing not more than five persons to act joint and severally in more than one transaction or generally;|
|One hundred rupees||Two hundred rupees|
|(e) when given for consideration and authorizing the attorney to sell any immovable property;||The same duty as a conveyance for a market value equal to the amount of the consideration.|
|(ea) when given to a promoter or developer along with Joint venture agreement, by whatever name called for construction, development on, or sale, or transfer (in any manner whatsoever) of any immovable property situated in Karnataka State.||One thousand rupees|
|(eb) when given to person other than the father, mother, wife or husband, sons, daughters, brothers, sisters in relation to the executant authorizing such person to sell immovable property situated in Karnataka State.|
|Eight rupees for every one hundred rupees or part thereof on the market value of the property which is the subject-matter of power of Attorney:
Provided that the duty paid on such instrument is adjustable towards the duty payable on the instrument of sale or transfer executed subsequently in favour of either the Attorney holder or any other person.
|One hundred rupees.N.B.- The term "Registration" includes operation incidental to registration under the Registration Act, 1908 Explanation- For the purposes of this Article more persons than one when belonging to the same firm, shall be deemed to be one person|