This is a Presentation that seeks to educate & inform the reader about the basics of Power Of Attorney. Along with a brief explaination about the concept it also elucidates on the need, types, validity and the precautions to be followed while making a POA. It is of special importance to NRIs since it gives them an understanding of this crucial issue. We hope it would help all overseas citizens to take better decisions while handling legal issues.

1. POWER OF ATTORNEY
A General Overview of the Concept

2. The Need
• We live in a world of multi tasking, business structuring/restructuring
and increasing global commercial activities
• Commerce at a global level would come to a standstill if people had to
be everywhere to perform all tasks themselves
• Important to have some agency authorised to represent us for various
business and legal purposes
• In other words, we need to give somebody else the ‘power’ to act on
our behalf
• Along with this, for our own safety we would need to declare the exact
sphere within which the authorised person can represent us or
perform certain functions on our behalf

3. What is the “Power Of Attorney”?
• Power of attorney legally gets defined as the “authority whereby
one is set in the turn/stead or place of another to act for him.”
• It means handing over to somebody, the authority to act on your
behalf
• We refer to the person granting the POA as the ‘principal’
individual involved or the ‘donor’ or ‘grantor’ and the person
who stands to attain the POA the ‘donee’ or grantee’ or the
‘agent’.
• Remember, an agent need not be a lawyer to hold a power of
attorney.
• In India, issues related to the Power of Attorney are governed by the
‘The Powers of Attorney Act, 1882 – applicable to the entire country
except Jammu & Kashmir.

4. NRIs and POA in Property
• NRIs have the right to buy commercial or residential property in
India
• There is no limit to the property they can buy
• However they can’t buy agricultural land or farm houses or even
plantations – neither can they be gifted these
• But they can gain the latter in inheritance
• There are various aspects that need to be comprehended and adhered
to, as far as property issues are concerned
• It is imperative therefore that they have full knowledge on this issue
and understand how to protect themselves from any harassment
• However overseas citizens don’t always find it easy to travel back and
forth to India to sort out such issues-hence the importance of a POA

5. What an NRI needs to know….
• In case of any POA three aspects need to be very clear in the minds of
people opting for it
▫ the purpose of creating the document
▫ the powers that are being vested in the agent
▫ the method in which the document would finally be brought to an
end.
• It is a universally accepted fact that all documents relating to a
POA must be interpreted strictly-It is assumed that the POA grants
only that power as is specified in the document.
• POA issuance and implementation are both sensitive issues which
need to be addressed carefully by all NRIs so that they do not have to
undergo any harassment or ambiguity later on.

6. Types of POA
• Two types – GENERAL and SPECIAL.
• GENERAL
▫ authorises the agent to act for the principal person in all
matters, or in all matters of a particular nature or generally
in respect of a general business.
▫ document executor gets the power to do everything that an
actual owner can do in regards to a particular matter
including the power of sale.
▫ whatever the person can do himself, he is authorising another
to do.
▫ needs to be titled as the ‘General Power of Attorney’ for
greater clarity.

7. • SPECIAL
▫ authorises the representative agent to represent the principal party
only in context of some particular specified activity e:g recovery of
a particular debt.
▫ Is a restrictive POA and titled as a ‘Special Power of Attorney’.
▫ Usually, it is clearly mentioned that no sale, exchange, gift or
mortgage of a property, for instance, is to be carried out.

8. Crucial Aspects
• Distinction between a general and a special POA is important to the
extent that it determines the nature and extent of the authority that is
being bestowed through the POA
• NRIs often feel the need of giving a power of attorney because it is
tough for them to be physically present always to sort out their
matters in India
• An NRI has to sign the POA in front of either a notary or a consulate
officer in whichever country he resides
• Also, for any POA to be sanctified in the case of NRIs, the document
must be notarised and signed by the Indian High Commission and
other such authorities
• It is then sent to India for ratification and within three months of the
issuance, the endorsement process in India has to be completed

9. Precautions
• Due to ignorance of law, people often fail to make a proper Power of
Attorney.
• Before anybody signs his name to legal contracts, careful
consideration needs to be given to who is chosen choose to grant those
powers, and whether any time limits are to be imposed
• The lack of properly drafted and executed Power of Attorney can lead
to a lot of complications when an individual is incapacitated due to
severe illness or injury rendering him/her, unable to travel, unable to
make decisions or manage financial and medical affairs.
• To avoid the frequently reported fraudulent cases in the context of
POAs, the Government of India has now put checks to regulate the
entire process

10. • A surcharge of 2% is needed to be paid now if the General Power of
Attorney (GPA) is granted to anybody who is not a blood relative.
• Govt also interested in discouraging the issuance of POAs
• Hence, strong checks are put on the methodology and implementation
of POAs
• If a POA is issued for purposes of sale of property, a form needs to be
filled to mandatorily state whether the sale proceeds would be
deposited in the owner’s account or the POA holder’s account

11. Validity
• The validity of a POA needs special mention
• Termination or revocation of a POA can happen only if one of the two
holders dies or through some other legal methodology
• A specific Revocation deed will need to be undertaken for this process
to be completed
• All such procedures that are carried out in the Indian context are
always done so under the ambit of the Power Of Attorney Act, 1882.

12. For further details and specifics related to the issue of
Power Of Attorney, refer to our website –
www.nrilegalservices.com