In this article, Smita Singh discusses all you need to know about the execution of power of attorney.
In the world of business and industry, contracts of agreements play an important role. It became necessary for the businessman to depend on others for getting his things done. The execution of power of attorney is the one who delegates the business functions. The power of attorney is a legal process which is granted to the person to act as legal representative of the businessman. A principal will authorize an agent as the attorney to avoid any inconvenience of any legal proceedings.
Power of Attorney: A Mode of Creation of Agency
Chapter X of the Contract Act 1872 governs agency. An ‘Agent’ is someone employed to do any act for another or to represent another in dealings with third person/s. The person for whom such act is done, or who is so represented, is called the ‘Principal’.”
The authority of an Agent may be expressed or implied. An express authority, in turn, could be given by words spoken or written. An implied authority is inferred from the circumstances of the case.
A “power of attorney” is a mode of creating an express agency. It is a written instrument executed by a Principal to appoint an Agent to act for the Principal in one or more transactions. “Power-of-attorney” includes any instruments empowering a specified person to act for and in the name of the person executing it.
Is It Necessary to Notarize a Power of Attorney?
There is no specific mode prescribed for the execution of power-of-attorney. Yet it is not uncommon to notarize the execution of power of attorney. An aspect of notarization is governed by provisions of Notaries Act, 1952. Under the said Act a notary is appointed by Central or State Government to do specified acts inter alia to verify, authenticate, certify or attest the execution of any instrument.
Under the provisions of Indian Evidence Act, a power of attorney executed before and authenticated by a Notary Public carries a presumption that it was properly executed.
Section 85 of the Indian Evidence Act reads:
“85. Presumption as to powers-of-attorney.—The Court shall presume that every document purporting to be a power-of-attorney, and to have been executed before, and authenticated by, a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government, was so executed and authenticated.”
In Kamla Rani and Ors. vs. Texmaco Ltd. MANU/DE/7343/2007, the High Court of Delhi explained the effect of notarization as follows:
“Authentication by a notary public is a solemn act performed by the notary public whose duty is to ensure that the executant is the person before him and is identified to his satisfaction. Once a document is authenticated by a notary public, it will be presumed that the document was duly executed and was in order. The use of the expression ‘shall presume’ shows that the section is mandatory and the court has to presume that all necessary requirements for the proper execution of the power of attorney were duly fulfilled before the notary public. As observed in AIR 1984 363 E.C. & E. Co. Ltd. v. J.E. Works, if 2 conditions are satisfied, firstly the power of attorney being executed before a notary public and secondly it being authenticated by a notary public, a presumption would arise under Section 85 about the executant of the power of attorney. Onus would thus lie on the opposite party to prove to the contrary. It is well settled that authentication would mean more than mere execution. Where proof of authentication surfaces, the benefit of Section 85 has to be granted.”
While a power of attorney executed before and authenticated by a Notary carries a presumption as to its due execution, the absence of such authentication would not render the document invalid. Explaining this aspect, the Delhi High Court in Grafitek International Versus K.K. Kaura & Ors. 2002 SCC OnLine Del 3 held as under:
“Merely because the power of attorney is not duly notarized does not mean that the concerned person was not authorized to institute the suit. Notarization raises the presumption as to its authentication and no more. Notarization of power of attorney is a matter of procedure and raises the presumption of the authority of the person to institute the suit. In other words, it does not mean that power of attorney executed in favour of a particular person but not duly notarized does not confer power upon the person to institute the suit.”
Keeping in view the benefit of presumption as to its due execution, it is advisable to notarize the power of attorneys.
Power of Attorney Executed Abroad
Section 14 of the Notaries Act, 1952 empowers the Central Government to declare that notarial act lawfully done by Notaries in other countries shall be recognized for specified purposes. Pursuant to power under said Section 14 Central Government has notified only three countries namely Belgium, New Zealand and Ireland.
Calcutta High Court in a recent decision took a view that notification under Section 14 of the Notaries Act is not mandatory and Section 85 of the Evidence Act applies to documents authenticated by the notary public of other countries. The contrary view was taken by High Court of Kerala.
In absence of uniformity of view amongst the High Courts, in order to seek the benefit of section 85 of Evidence Act, it is advisable that power of attorney executed outside India, should to be authenticated by Indian Consul, Vice-Consul or representative of the Central Government in that country and not by any Notary Public.
Need to Authenticate Power of Attorney to be Used for Presenting a Document for Registration
In case the document to be registered under the Registration Act 1908, it is possible to present the same for registration either through the person executing such document or through an Agent of the executrix duly authorized by power-of-attorney executed and authenticated in the manner specified in section 33 of the Registration Act.
Section 33 of Registration Act provides:
“(1) For the purposes of section 32, the following powers-of-attorney shall alone be recognized, namely:-
(a) if the principal at the time of executing the power-of-attorney resides in any part of 18[India] in which this Act is for the time being in force, a power-of-attorney executed before and authenticated by the Registrar or Sub-Registrar within whose district or sub-district the principal resides;
(b) if the principal at the time aforesaid resides in any part of India in which this Act is not in force, a power-of-attorney executed before and authenticated by any Magistrate;
(c) if the principal at the time aforesaid does not reside in India, a power-of-attorney executed before and authenticated by Notary Public, or any court, Judge, Magistrate, Indian Consul or vice-consul, or representative of the Central Government:
PROVIDED that the following persons shall not be required to attend at any registration-office or court for the purpose of executing any such power-of-attorney as is mentioned in clauses (a) and (b) of this section, namely-
(i) persons who by reason of bodily infirmity are unable without risk or serious inconvenience so to attend;
(ii) persons who are in jail under civil or criminal process; and
(iii) persons exempt by law from personal appearance in court.”
No Need for Authentication of Power of Attorney when Agent Himself id the Executrix
The provisions of Section 33 of Registration Act, 1908 requiring the Power of attorney to be used by an Agent to present a document for registration to be authenticated, are not applicable in all cases where presentation is by an Agent. The requirement of authentication applies only where the person presenting a document is the Agent/attorney of the person executing it, and not where it is presented for registration by the actual executrix, even though such executrix may have executed it as an Agent for the Principal. Here the decision of Supreme Court in Rajni Tandon v. Dulal Ranjan Ghosh Dastidar, (2009) 14 SCC 782 is relevant wherein it was held:
“Where a deed is executed by an agent for a principal and the same agent signs, appears and presents the deed or admits execution before the registering officer that is not a case of presentation under Section 32(c) of the Act. As mentioned earlier the provisions of Section 33 will come into play only in cases where presentation is in terms of Section 32(c) of the Act. In other words, only in cases where the person(s) signing the document cannot present the document before the registering officer and gives a power of attorney to another to present the document that the provisions of Section 33 get attracted. It is only in such a case, that the said power of attorney has to be necessarily executed and authenticated in the manner provided under Section 33(1)(a) of the Act.”
Registration of Power of Attorney
- Registration of all power of attorney is not compulsory.
- Only in certain states in case the power-of-attorney relates to transfer of immovable property possession whereof has been or is handed over to the attorney holder or where Irrevocable power of attorney relating to the transfer of immovable property is made, that the deed of power of attorney is required to be registered.
- The registration of all other power of attorneys is optional. Yet a registered document carries with it a presumption that it was validly executed. Consequently, it is for the party questioning the genuineness of the transaction to show that transaction was invalid.
- Therefore, to preempt any possible attack that power of attorney was not duly executed, it can always be registered.
Payment of Stamp Duty
A Power of Attorney is chargeable under section 48 of Schedule I of the ‘Indian Stamp Act, 1899’. The Stamp Act as applicable in different States prescribe the stamp duty payable on different types of power of attorney. Non-payment of prescribed stamp duty may entail the following consequences:
- The power of attorney would be inadmissible in evidence before any authority capable of receiving evidence or before any public authority.
- The document can also be impounded for enforcing the payment of full stamp value.
- An unstamped or under the stamped power of attorney can be admitted in evidence only if penal stamp duty 10 times the value of the original amount is paid.
To sum up notarization and registration of power of attorney though not essential in all cases, to effectively meet any challenge as to due execution thereof, it is better to get the same notarized. In case substantial rights are derived under/through power of attorney, the same could even be registered. In cases where authority is conferred on an Agent to present a document executed by Principal for registration, its authentication by registering authority is essential. Payment of appropriate stamp duty is invariably be ensured.
 Section 182 of Indian Contract Act, 1872
 Section 186 of Indian Contract Act, 1872
  Section 187 of Indian Contract Act, 1872
 Section 1A of Power of Attorney Act, 1882
 Section 8 of Notaries Act
 Jaldhi Overseas Pvt. Ltd. v/s Bhushan Power & Steel Limited
2017 SCC OnLine Cal 4414
 Karachan Veettil Mariyam v. Alima Beevi 2015 SCC OnLine Ker 31317
 Section 32 of the Registration Act, 1908
 Section 17 of Registration Act
 Orissa State Amendment to Registration Act
 Rajasthan State Amendment to Registration Act
 Abdul Rahim v. Sk. Abdul Zabar, (2009) 6 SCC 160
 Section 35 of Indian Stamp Act
 Section 33 of Indian Stamp Act