Power of Attorney — Sale & Registration

What this document contains

8 clauses every power of attorney — sale & registration carries, plus 1 you can add.

1. 01

   Who grants the authority, and to whom

   The head of the deed: the place and date, the grantor, and the person being authorised. The attorney is named here rather than being taken from the party picker — a power of attorney is executed by the grantor alone, and a person who signs nothing is not a party to it.

2. 02

   The attorney

   Who is being authorised, identified well enough that a bank, a society or a government office can be satisfied it is them. Their specimen signature is recorded here because that is what counterparties ask for — it is not a signature Dharaa collects, and the attorney does not execute this deed.

3. 03

   The property

   What the authority relates to, described well enough to be identified from the deed alone. A power of attorney over an unidentified property is one nobody will act on.

4. 04

   What the attorney may do

   The powers granted, chosen by the grantor. Each is a separate thing the attorney may do in the grantor's name, and only what is selected is granted — a power of attorney is read strictly against the person relying on it.

5. 05

   What the attorney may not do

   Who the buyer may not be, and what this deed does not itself do. The self-dealing exclusion is the important one: an attorney authorised to sell who sells to themselves, their spouse or a company they control is the commonest abuse of this instrument, and the one a grantor abroad is least placed to notice. Mandatory and fixed.

6. 06

   No power to gift, mortgage or lease

   A covenant lifted out of `powers-excluded`, where it was an unnumbered paragraph. The spine numbers clauses, so a covenant that shares a clause with another has no number of its own.

7. 07

   This deed transfers nothing by itself

   A covenant lifted out of `powers-excluded`, where it was an unnumbered paragraph. The spine numbers clauses, so a covenant that shares a clause with another has no number of its own.

8. 08

   How long it lasts, and how it ends

   When the authority begins, when it ends, and that the grantor may revoke it. Every power of attorney needs this: one that says nothing about its own end is one nobody can be sure has ended.

Optional clauses

• The sale

  What the attorney is being authorised to sell it for, and to whom. Optional, and worth using: an authority to sell to a named buyer at a stated price is far narrower than an open one, and an open authority to sell is the instrument that gets misused.

  Worth adding when: the buyer is already identified, or the grantor wants to fix a minimum price

What the law requires

A power of attorney does not transfer property

The Supreme Court has held that a general power of attorney is not a mode of transferring immovable property, and that arrangements combining a sale agreement, a general power of attorney and a will are not a substitute for a registered conveyance. What this deed does is authorise the attorney to execute and present a conveyance; the registered conveyance is what transfers the property.

Suraj Lamp & Industries v. State of Haryana, (2012) 1 SCC 656; Transfer of Property Act 1882, s. 54

This instrument must be registered

A power of attorney authorising an act that is itself compulsorily registrable must be registered. A sale of immovable property above the prescribed value is compulsorily registrable, so a power authorising that sale is too. Notarisation is not a substitute, and a sub-registrar will not act on a power that is unregistered or not duly stamped.

Registration Act 1908, ss. 17, 32 and 33; Indian Stamp Act 1899, s. 35

Only what is granted is granted

A power of attorney is construed strictly. An authority to do one thing does not carry an implied authority to do another, and a counterparty relying on an attorney's act takes the risk that the act was outside the authority. Anything the attorney will need has to be on the list.

Indian Contract Act 1872, ss. 186–188 (extent of an agent's authority)

When registration is required

Registration follows the transaction rather than the document. A power of attorney authorising an act that is itself compulsorily registrable must be registered; one that authorises no such act generally need not be. Notarisation is not a substitute for registration where registration is required.

Registration Act 1908, ss. 17, 32 and 33

A deed executed outside India has a clock on it

An instrument executed outside India must be stamped within three months of the date on which it is first received in India. An instrument not duly stamped is inadmissible in evidence and a sub-registrar will not act on it. Where the duty payable is not obvious the instrument may be adjudicated by the Collector.

Indian Stamp Act 1899, ss. 18, 33 and 35

Authentication abroad

A deed executed in a country party to the Hague Apostille Convention carries an apostille, which Indian authorities accept without further legalisation. Where the country is not a party, the deed is executed before an Indian Embassy or Consulate and attested there. The two are equivalent in effect for documents originating in Convention countries.

Hague Convention of 1961 abolishing the requirement of legalisation

How the authority ends

An agency may be revoked by the principal, and ends on the principal's death or insanity, on the agency being renounced by the agent, or on the business of the agency being completed. Revocation is effective against a third party only when they come to know of it, which is why a revocation is served rather than merely signed.

Indian Contract Act 1872, ss. 201–208

An attorney may not be the buyer without express consent

An agent is bound to act in the principal's interest and may not put themselves in a position where their own interest conflicts with it. An attorney authorised to sell who buys the property themselves, or sells it to a person or entity connected with them, is dealing on both sides, and the sale is liable to be set aside unless the principal consented to that particular transaction with full knowledge of it.

Indian Contract Act 1872, ss. 215 and 216 (agent dealing on his own account)

The sale is more than the deed

Verifying title, obtaining an encumbrance certificate, the buyer's deduction of tax at source, the appointment at the sub-registrar's office, and mutation of the revenue records afterwards are all separate from the instrument itself. A power of attorney and a conveyance are documents; a safe sale is a process.

Registration Act 1908; Income-tax Act 1961, s. 194-IA; the applicable state revenue law