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Power of Attorney means the power or authority given to a person (agent) by an individual (principal) to act on his behalf or on behalf of a group of individuals in business matters or any other matter.

It plays a vital role in transferring the lawful ownership of immovable property like land, building and water source, from one person to another. The person who holds the power is called the Power of Attorney Holder. He is employed by the principal to take care of his dealings with third persons.

A person competent to contract can execute a Power of Attorney. He can appoint one person or several persons to act on his behalf. Where several persons are appointed as attorneys, it is advisable to mention as to how they will act jointly or independently. If this is not mentioned, then they are at liberty to act jointly.

Power of Attorney, generally speaking, is of two types. Power of Attorney for a single specific purpose is known as "Special Power of Attorney" and the one involving more than one work or transaction is called "General Power of Attorney".

The duration of special power of attorney may be for a particular period or for an indefinite period until the task is completed.

A General Power of Attorney may continue to be in force until it is revoked or by death of either party. A registered Power of Attorney can be revoked by a Cancellation Deed.

Though, in general, a Power of Attorney is revocable, it cannot be done so in matters pertaining to debt security till the debt is cleared even though the debtor is not alive. It can be revoked if the principal becomes of unsound mind or he is declared insolvent. It cannot be revoked if it is made irrevocable. However it should be registered by paying applicable stamp duty. Power of Attorney attracts various provisions of The India Stamp Act, Powers of Attorney Act, Registration Act, The Indian Contract Act, Indian partnership Act, and the Indian Evidence Act.

A Power of Attorney is divided into ten categories according to the stamp duty payable. A Special Power of Attorney is given for a court case, for appointing one attorney in place of another, for collection of debts and for admitting execution and a General Power of Attorney is given for selling shares, to execute a Sale Deed, to prepare a layout and sell plots, to raise money through mortgage of property, to recover rents and many other acts.

A Power of Attorney need not be registered except in the case where immovable property is involved. According to the Registration Act, if a Power of Attorney gives power to present documents for registration, then it must be executed before and authenticated by the Registrar or the Sub-Registrar.

If the Registration Act is not in force at a place where the Executant lives, then a Magistrate's authentication is necessary.

If the Power of Attorney is registered outside India a Notary Public and Court Judge, Magistrate of that country, or Indian Consul or Vice-Consul or a representative of Central Government must authenticate it.

A Power of Attorney is executed in the form of a legal document generally in first person and begins either as "Know all men by these presents that I.." or "By the power of attorney I.. or "This Power of Attorney made and executed on this...."

After a brief introduction, the operative part is brought in. Thereafter, the specific powers given to the person are mentioned in separate paragraphs. After these a general clause is added empowering the attorney to do such lawful acts and deeds, as he deems fit and proper in the performance of his duties.

It is the duty of the agent, the Power of Attorney holder, to act honestly and faithfully on behalf of his principal, the giver. He is legally bound to perform the tasks according to the wishes of the principal. If the agent acts otherwise and the principal suffers any loss, he must compensate the principal. He is bound to keep all accounts in a proper manner and produce it to the principal on demand. An agent possessing authority to carry on business has authority to do every lawful thing necessary for the purpose. Being a legal document, a Power of Attorney must be strictly interpreted and understood. Therefore, special care must be taken while drafting General Power of Attorney.