A person may not be able to be personally present to execute any document, due to various reasons such as living in a foreign country, old age, sickness, weak or otherwise busy. In such circumstances, the owner of the property may entrust the job of maintaining and managing the property in his absence, to any third person through a G.P.A. He may also authorize the GPA Holder to negotiate for sale of the property on his behalf. Such an instrument empowering a third person to perform certain general or specific acts in his absence is termed as General Power of Attorney.
Types of Power of Attorney:
There are two types of Power of Attorney. They are: General Power of Attorney & Special Power of Attorney.
General Power of Attorney is given in the circumstances where the Principal, that is, the person who executes the General Power of Attorney authorizes his Agent, the GPA Holder, to undertake all the acts which are necessary in order to accomplish the object for which power of attorney is executed.
Special Power of Attorney is executed in those cases wherein the agent is empowered by his principal to do such acts specified in such Power of Attorney. In this type of power of attorney, the authority to do specified acts will be revoked soon after that particular act is accomplished.
Revocation of Power of Attorney:
The Principal has got every right to revoke, terminate or cancel the Power of Attorney. The following are few of the circumstance wherein the power of attorney can be revoked:
1. If one of the parties to the Power of Attorney viz., the Principal or his G.P.A. holder dies, then the Power of Attorney will be revoked. Thus, if Power of Attorney is executed for presentation of a document in the Sub-Registrar office by the G.P.A. holder and the Principal dies prior to the presentation of the document, then the of Power of Attorney automatically gets revoked. But, if the Agent transacts the business on behalf of the Principal and the Principal dies after the execution of the same, the legality of document executed on behalf of the Principal is not affected. However, all further transactions by the Agent representing the Principal would be null and void;
2. If the Power of Attorney is given for a particular period, on the expiry of the period stipulated in the instrument;
3. Where the Principal is adjudicated as an Insolvent by the Court of Law;
4. If the business of agency is complete for which the Power of Attorney is executed;
5. The Power of Attorney holder renounces his powers;
6. The Principal revoks the authority of the Power of Attorney Holder;
7. When either of the parties to the instrument would become persons of unsound mind.
8. Implied revocation.
Procedure for termination of Power of Attorney:
Power of Attorney can be revocable or irrevocable. However, in either case, there is a specific procedure to be followed in order to terminate the Power of Attorney.
Registered Power of Attorney:
In case the Power of Attorney is registered, the revocation can be brought about only by a registered deed of revocation, the reason being that any registered document can be cancelled or revoked only by executing a registered instrument.
Unregistered Power of Attorney:
Power of Attorney need not compulsorily be registered. In case the Power of Attorney is unregistered, revocation of the same can be done only by an unregistered instrument of revocation, in which case the Principal can take back the Power of Attorney from the agent through an unregistered instrument of revocation. Apart from an unregistered instrument of revocation, it is also necessary that the fact of revocation has to be published in the local newspapers clearly mentioning the fact of revocation of the said Power of Attorney which operates as the notice to the public. This is necessary because registered instrument operates as notice while unregistered document does not.
Power of Attorney executed jointly:
Where several persons execute Power of Attorney jointly appointing a person as their Power of Attorney Holder/Agent, the act of revocation of Power of Attorney by one of the Principals is void in the absence of the consent of others joint principals. However, if the Power of Attorney is executed jointly and severally, revocation by one Principal is sufficient for termination of the same. On the other hand, if Power of Attorney is executed in favour of two persons jointly and if one of them dies, the survivor alone cannot exercise the authority under the Power of Attorney.
A reasonable notice must be given before revocation of Power of Attorney for the reason that both the parties must be aware about the subsistence or otherwise of the Power of Attorney. If the party who revokes the Power of Attorney fails to issue notice to the other party then any damage that may subsequently be caused on account of this will have to be made good by the person who failed to give notice.
However, reasonable notice may differ from one instrument to the other which can be ascertained from the recitals in the instrument.
Revocation of Power of Attorney may be implied or express. If it is expressed, necessary notice has to be given conveying the intention of revocation of the Power of Attorney to the other which may not be necessary if it is implied.
Exceptions for revocation of Power of Attorney:
Though Principal has got discretionary powers to revoke the Power of Attorney, there are certain exceptions which restrain the Principal from revocation, which are explained below:
1. When the Power of Attorney Holder himself has an interest in the property, which forms the subject matter of the power of attorney. In such cases, the same cannot be revoked by the Principal alone without obtaining consent from the Power of Attorney Holder.
2. When the Power of Attorney Holder has partly exercised the act for which the Principal has authorized, authority as regards the acts already exercised cannot be revoked.
3. When the Power of attorney is given for due consideration and forms part of the transaction.
Power of Attorney by Firm:
The execution of Power of Attorney by a Firm for exercising certain acts on behalf of the firm, which includes purchase or sale of the immovable property, would get terminated on the dissolution of partnership firm.
Two persons appointed jointly:
If the authority is given for two or more persons to act jointly or severally, exercise of the act by either of the Power of Attorney Holders is sufficient. However, in cases where authority is given for two or more persons to act jointly and on the death of one of them, the authority cannot be acted upon by the surviving power of authority holders.
Power of Attorney is the most extensively used document being executed by the owner due to his inability to perform many acts. However, the required procedure also has to be followed for termination of the same. Thus, before proceeding to negotiate for sale or purchase of the property and if either of the parties for the negotiations are being represented by their GPA holder it is very important to investigate the subsistence of the GPA which depends upon various factors.