A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal, grantor, or donor (of the power), and the one authorized to act is the agent, donee, attorney or appointee.
The appointee can be bestowed with several rights, such as the right to sign a contract on your behalf, the right to take your health care decisions, the right to handle your monetary transactions, the right to sell your property or any other legal right.
As per Indian law, a power of attorney is a legal document that has to be properly framed, using the right legal terminology and setting out the objectives and responsibilities that you wish to authorize the appointee to carry out on your behalf.
Here are some types of power of attorney documents:
A limited (specific) power of attorney gives the appointee very limited powers, to do a specific act, such as authority to sell property on the appointer's behalf.
A general power of attorney authorizes the appointee with several rights and very broad powers, to execute any legal act on behalf of the appointer. This type of a Power of Attorney provides a list of activities that the appointer wants the appointee to perform on his behalf.
A general or limited power of attorney expires in case the principal or appointer becomes incapacitated. A durable power of attorney was created to overcome this limitation. A durable power of attorney does not terminate, if the appointer becomes incapacitated. It still remains effective. However, a durable power of attorney must include specific conditions, which authorize the appointee to survive the incapacity of the appointer. Such a power of attorney comes into effect as soon as it is signed by the appointer, unless restricted by some legal condition.
For a power of attorney document to be legally valid under Indian law, it must be exhaustive in its provisions, properly stamped, executed and attested by a certified notary advocate. Remember, in a court of law, if there is a dispute pertaining to the scope of the power of attorney, the interpretation of the court is always strict. Therefore, the legal document should bestow the responsibilities clearly so that the functions are specific and comprehensive.
The provision to have a Power of Attorney is a boon for NRI's to carry out their operations in India without their presence being required. However with the ease in operations there have been numerous cases of misuse of the POA, hence care should be taken while drafting a POA.