The term “Powers-of-Attorney” includes any instrument empowering a specified person to act for and in the name of the person executing it.

Execution under power-of-attorney

According to Section 2 of the Power of Attorney Act, the donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof.

This section applies to power-of-attorney created by instruments executed either before or after this Act comes into force.

Mahendra Pratap Singh & Anr. v. Smt. Padam Kumari Devi, A.I.R. 1993 All. 143

A holder of a power-of-attorney or an agent can not go beyond the principal. If it is found that there is a serious doubt as to whether the principal may have authorised in a ‘normal state of mental frame’ or mind which would give him/her independent disposition and thinking power so as to exercise control over the agent, then such ‘power-of-attorney’ becomes worthless and null & void from the legal angle.

(ii) In circumstances, when the principal has become old, weak, mentally infirm/incapable, and not in a position to have independent disposition and thinking power, continuing to act on such power of attorney will be unethical & immoral on the part of the agent and would amount to fraud, cheating, misappropriation & criminal breach of trust. It would cease to have validity in law.

(iii) By virtue of the principal being not in a position to reflect or depose on the validity or bona fide of a power of attorney before the court of law due to old age, weakness, mental infirmity or incapacity, the credibility of such an instrument becomes worthless, in the eyes of law.

(iv) A power of attorney holder cannot give evidence on behalf of the Principal. According to Order 32, Rule 15 of C.P.C. the general principals relating to a suit by or against a minor would also apply to persons of unsound mind or mentally infirm in capable. In this regard, a suit on behalf of such person may be filed by the next of guardian or friend but by leave and an order of a court of law.

(v) If the principal is suffering from mental infirmity or incapacity to such an extent that he/she can neither comprehend/safeguard his/her assets and properties nor can take accounts from the agent or enable the agent to do so, then such ‘power of attorney’ is worthless. Consequently, the relation between such principal and agent is non- existent and treated as unforceable in the eyes of the law.

(vi) Syndicate Bank, Bangalore v. I.K. Amita & Ors.; A.I.R. 1985 Karn. 213 –

Where from the language of a general power of attorney, it is immaculate clear that the intention is to confer such power which is “absolutely unqualified” and it doesn’t express any “limitation or restriction”, then it must be read or held in the same manner.

(vii) It was held that a power of attorney may also need judicial interpretation of the facts & circumstances of each case and a legal look at the “manner & purpose” of the principal giving the power to the agent so as to “fathom the yardstick” of the power. The principles enunciated for proper construction of a power of attorney were:

(a) Only in case of ambiguity, the operative part of the instrument is controlled by the recitals. The underlying fact/point is that “only in case of ambiguity, and not otherwise shall this principle be applied or referred to.

(b) When the general words follow a particular set of a acts, the role of the former is restricted to what is necessary/essential for the proper execution/performance of such particular acts.

(viii) Doddarajappa v. Ven Koba Rao; A.I.R. 1986 Karn. 70 –

A power of attorney holder who has necessary power to sell properties i.e. execute sale and convey proper title to the purchaser, of the executant to discharge his debts by applying sale proceeds of the scheduled property binds the executant to perform the obligations arising out of such contractual deal. It was held that in case of an auction sale, if the bidder fails to deposit balance of the amount by the stipulated date, he is not entitled to “specific performance” of the contract. However, consequently his right to get the refund is not forfeited.

(ix) A duly ‘authorised agent of a partner is precluded from signing on behalf of the partner an application u/s 26 A of the Income-tax Act, for registration of the firm. The applicant has to do it “personally” as per Rule 6 of the Income-tax Rules.

(x) Another exception is in case of “application for letters of administration” when the applicant has to execute a ‘personal bond’.

Payment by attorney under power without notice of death, etc., good

According to Section 3 of the said Act, Any person making or doing any payment or act in good faith, in pursuance of a power-of-attorney, shall not be liable in respect of the payment or act by reason that, before the payment or act, the donor of the power had died or become of unsound mind, or insolvent, or had revoked the power, if the fact of death unsoundness of mind, insolvency or revocation was not, at the time of the payment or act, known to the person making or doing the same.

But this section shall not affect any right against the payee of any person interested in any money so paid; and that person shall have the like remedy against the payee as he would have had against the payer, if the payment had not been made by him.

This section applies only to payments and acts made or done after this Act comes into force.

Deposit of original instruments creating powers-of-attorney –

As per Section 4 of the Power of Attorney Act,1882

(a) An instrument creating a power-of-attorney, its execution being verified by affidavit, statutory declaration or other sufficient evidence, may, with the affidavit or declaration, if any, be deposited in the High Court or District Court within the local limits of whose jurisdiction the instrument may be.

(b) A separate file of instruments so deposited shall be kept and any person may search that file, and inspect every instrument so deposited, and a certified copy thereof shall be delivered out to him on request.

(c) A copy of an instrument so deposited may be presented at the office and may be stamped or marked as a certified copy, and when so stamped or marked, shall become and be a certified copy.

(d) A certified copy of an instrument so deposited shall, without further proof be sufficient evidence of the contents of the instrument and of the deposit thereof in the High Court or District Court.

1(e) The High Court may, from time to time, make rules for the purposes of this section, and prescribing, with the concurrence of the state Government, the fees to be taken under clauses (a), (b) and (c)3.

Power-of-attorney of married women –

According to Section 5 of the Power of Attorney Act, A married woman, of full age, shall, by virtue of this Act, have power, as if she were unmarried, by a non-testamentary instrument, to appoint an attorney on her behalf, for the purpose of executing any non-testamentary instrument or doing any other act which she might herself execute or do; and the provisions of this Act, relating to instruments creating powers-of-attorney shall apply thereto.

This section applies only to instruments executed after this Act comes into force.