What is the meaning of Power of Attorney in India? How can it be used for real estate and property transactions in India? Find out in this detailed document.

1. Power of Attorney in India
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Power of Attorney in India
A Power of Attorney is a legal instrument whereby, one person gives the authority to another person to act on his or
her behalf as a legal representative to make binding legal and financial decisions. Power of Attorney is an effective
tool to avoid inconveniences and expenses associated with immovable property transactions. The person giving the
Power of Attorney is usually referred to as donor or Principal while the person receiving the Power of Attorney is
referred to as Agent or holder.
The Power of Attorney, once granted, legally binds the Agent to perform the tasks honestly, faithfully and according to
the wishes of the Principal. If he causes the Principal any loss by acting otherwise, he must compensate for it. He is
expected to keep all accounts in a proper manner and produce It for the Principal on demand.
Legal Powers (Role) granted by the Power of Attorney
Real Estate
 To execute all contracts, deeds, bonds, mortgages, notes checks, drafts and money orders.
 To manage, compromise, settle and adjust all matters pertaining to real estate.
 To lease, collect rents, grant, bargain, sell or borrow and mortgage.
Contracts Agreement
 To enter into contracts.
 Perform any contract, agreement, writing or thing
 To make, sign, execute, and deliver, acknowledge any contract agreement.
Bank Accounts, Certificates of Deposits, Money Market Accounts
 To add to or withdraw any amounts from any bank accounts, Certificates of Deposits, Money Market
Accounts, etc.
 To make, execute, endorse, accept or deliver any and all cheques and drafts.
 Execute or release such deeds of trusts or other security agreements as may be necessary.

2. Power of Attorney in India
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Deposit and withdraw funds
 Acquire and redeem certificates of deposits, in banks, savings and loans.
 Tax Accounts, Insurance and other Documents.
 To file, sign all tax returns, insurance forms and any other documents.
If the Specific Power of Attorney authorizes the Agent to carry on a business with limitations, any act done by him in
excess will not bind the Principal. For example, power to dispose of a property does not confer power to mortgage the
property. Also, an agent cannot, by fraud or other act bind the Principal to a larger extent than he is powered to do
within the sphere of the Power of Attorney.
If a General Power of Attorney has been granted, the Power of Attorney has the authority to take decisions and
actions on the Donors/Principals behalf in relation to the Principals property and affairs. However, even if a General
Power of Attorney is granted, a Power of Attorney Holder cannot do the following.
 Open and close NRI accounts in the name of the NRI.
 Repatriate funds from accounts in the form of demand Drafts, etc., unless specified.
 Give gifts.
 Transfer funds to NRE accounts other than the principal.
 Cannot raise loans/execute documents on behalf of NRI.
 Cannot perform the role of a trustee or personal representative (e.g., administrator of someone else's estate)
.
 Cannot execute will and testament of the Principal.
Principal's Liability
It is important to bear in mind that the Donor/Principal is liable for the actions of the Power of Attorney holder. For
example, if the Agent has been granted the responsibility of repayment of EMIs on a property, and he defaults, then
the Principal's property may be taken over by the authorized bodies by issuing a SARFAESI notice and auctioned for
recovery of dues.
Source: National Housing Bank
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