Page 75 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes Self Assessment

Fill in the blanks:
15. When the agency is for a fixed period of time, it comes to an end on the ………………..of
that time.

16. Insolvency of the ………………..terminates the agency

3.9 Power of Attorney

A power of attorney is defined by s.2 (21) of the Stamp Act, as including “any instrument not
chargeable with a fee under the law relating to court fees for the time being in force,” which
empowers “a specified person to act for and in the name of the person executing it”. It is the
Powers of Attorney Act, 1882, which deals with the subject, but does not define it. In common
parlance, a power of attorney is an instrument or a deed by which a person is empowered to act
for and in the name of the person executing it. The person executing the deed is known as the
Principal or donor and the one in whose favour it is executed is the agent, or the power agent or
the power of attorney agent.
Section 2 of the Powers Attorney Act, 1882, provides that the donee may execute any instrument
in and with his own name and signature and his own seal, where sealing is required, by the
authority of the donor of the power. And such an instrument shall be as effectual in law as if it
had been executed by the donor.

As mentioned earlier, no consideration is necessary to create agency. Therefore, the deed of
Power of Attorney may stipulate that the agent will not get any remuneration.

3.9.1 A Power of Attorney may be Special or General

If the deed conferring power by one to another relates to one single transaction, it is known as
special power of attorney. If the deed conferring power relates to several transactions it is
general power of attorney.

3.9.2 Registration

As a general rule, registration of power of attorney is not necessary but if it authorises the donee
to recover the rents of an immovable property of the donor for the donee’s benefit, it would
require registration. And so also a power creating a charge in favour of the donee upon an
immovable property referred to therein.
Further s.32 (c) of the Registration Act, 1908, requires that where a document is presented for
registration by the agent of a person entitled to present it for registration, such agent must be
duly authorised by power of attorney executed and authenticated in manner as mentioned in
s.33 of the Act.
Such a power of attorney is to be executed before and authenticated by a registrar or sub-
registrar. Unregistered power executed in a foreign country before a notary public can be used
by the agent for presentation of document for registration. The power of attorney, however,
executed before a notary public in India will not enable the agent to present any document for
registration under the Registration Act, 1908.
The power of attorney is required to be engrossed on non-judicial stamp paper. The amount of
stamp duty varies with different types of powers as described in the Stamp Act and varies
among different States of India. Section 4 of the Power of Attorney Act, 1882 provides that the

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