POWER OF ATTORNEY: HOW TO AVOID MISUSE and REVOKE IT

By observing certain safeguards, one can safely grant a power of attorney without having to worry about it being used.

There are many cases where a power of attorney (POA) is granted with a specific intent but with passage of time the attorney holder assumes much more control due to liberal or sometimes even deficient drafting of the POA.
To ensure you power of attorney is not misused or it does not become a source of concern or a loss for you, the following factors should be remembered:

1. Ensure you know the attorney holder personally and do not issue a POA to person you are not confident about. Identification details of the attorney holder such as a passport number, PAN or election card should be available with you.
2. A POA should never be irrevocable unless you are selling a property. Always ensure the POA is revocable so that you can cancel it any time.
3. The POA should always be registered. This way it is easy to cancel or revoke it at the appropriate time.
4. You should not give open ended and sweeping powers in the POA. Avoid the use of words such as “all rights,” “and right”, “any action that the attorney holder deems fit”. You should identify to the purpose for which the POA is needed and draft a POA conforming to the duties and rights needed.
5. Always ensure that the photograph of the executives and the attorney is fixed on the POA.
6. In case the powers to the attorney are needed only for a limited period then you should prepare the POA for a fixed period only.
7. A general POA should be avoided unless absolutely necessary. You should grant a specific POA at all times.

How to revoke a power of attorney
Revocation of a power of attorney is a necessary when the purpose of which the POA is granted is no longer required or when the executants finds that the attorney is either misusing the powers under the POA or is acting against the interest of the executant.
No reasons need to be assigned in case a POA needs to be revoked. A POA is operational during the pleasure and consent of the executants. It can be revoked at any point.
The procedure usually followed when revoking a POA is as follows:

1. A notice of stop of use and cancelling of powers under the POA so granted to the attorney has to be issued. This needs to be done by recorded delivery so that a valid date of cessation of powers is recorded.
2. Further the POA has to be cancelled at the registrar’s office where it was originally registered at the time of issue.
3. In case the POA had been in widespread use then it is always advisable to publish a public notice in a newspaper which has reasonable circulation in the city where the POA was issued.
4. A POA can also be cancelled by destruction of the original document.

A POA is difficult to cancel in the following cases:

1. When the attorney holder and the original POA document is not traceable. Hence is advisable that the attorney is known to you.
2. When the POA is not registered. This creates a lot of hassle in making the POA non-operative.
3. A POA which is irrevocable cannot be revoked unless there are suitable and justified grounds that the irrevocable POA was issued fraudulently.

The key to having a control over the POA you issue and revoking it at your convenience is, to follow all procedure and precautions at the time of issue of POA.

[Source: Consumer Voice, July 2009]

For any query:- deepakmiglani@hotmail.com

Power of Attorney

General

A Power of Attorney [PoA] is governed by the Powers of Attorney Act 1882, Indian Contract Act 1872 and Indian Registration Act 1908.
There is a specific distinction between an Agent and a PoA holder. An Agent is not empowered to use the name of the principal whereas the Attorney can use the principal’s name in the transaction entered into by him.
A PoA issued in regard to a single transaction is known as a Special PoA.
An Attorney who is appointed as agent to do a certain thing and if there is no express term for termination of agency, then it can’t be terminated.
A PoA issued for registration of documents must be registered before the Registrar of the district where the Principal resides. A PoA issued out of India must be executed before a Notary Public, Magistrate or Indian Consul.
A PoA ceases on the death of either party. Where 2 Attorneys are appointed to act Jointly and one of them dies the survivor can’t act alone
A minor can’t issue Power of Attorney [POA] as a minor does not have legal rights to execute a document. A minor can execute a document only through his guardian

Duration:

A General Power of Attorney [POA], unless expressly or impliedly limited for a particular period continues in force until revoked or determined by death of either party.
A Special POA to do an act is determined when the act is done.

Termination:

1. A POA may be terminated -
1. by the Donor by revoking the attorneys authority, or
2. by the attorney renouncing his authority. or
3. after the activity is completed.
4. by the death of either party or
5. by the donor is declared as insolvent.
2. Termination of authority to the agent terminates the authority of all the sub-agents.
   
   

Irrevocable POA

A POA can not be revoked without the express consent of the attorney Where the attorney has an interest in the subject matter of the POA. Where the authority is given to the attorney by deed or for a valuable consideration or a security or for securing the interest of the attorney the POA is irrevocable during the subsistence of such security or interest.

When a POA can not be Revoked.

1. The POA can not be revoked after the agent has partly used the power vested in him.
2. Where there is an express or implied contract that the agency should be continued for a period of time. in case of revocation the Principal has to pay compensation for early revocation.
3. POA can not be revoked without giving notice.
   
   

Revocation

Revocation should be made known to the agent. The revocation does not take effect till the same is notified by the principal to the Agent.


POA ineffective

A suit filed by a POA holder on behalf of the principal is considered as nullity where the principal is dead at the time of filing the suit.


POA issued Jointly.

Death of one of the joint principals will not revoke the POA.


Authority

The power of attorney once utilised would not terminate or cease in relation to future acts which are only consequential to the previous acts already done.

An Advocate can not act simultaneously in processional capacity and also as an agent of the principal.

(c) 2006, Shreerang Ketkar, All rights reserved.