Power of attorney does not convey any title

Person A has a property in Tamil Nadu. He lives in Pune but can’t go due to health issues. Can he give the power of attorney to a person who is not a relative to sell the property?

—Name withheld on request

The Supreme Court has held that an immovable property could be legally and lawfully transferred only by registered deed of conveyance and that a general power of attorney (PoA) authorizing the person for sale of an immovable property does not convey any title. A PoA is executed by the donor so as to enable the donee to act on his behalf. Except in cases where PoA is coupled with interest, it is revocable.

Person A can execute a special power of attorney (SPoA) in favour of a trustworthy person, not necessarily a relative, who is eligible to enter into a contract as per the India Contract Act, 1872. Accordingly, person A can execute an SPoA in favour of a person who is not a relative. If such a person is authorized by person A with full rights to sell the property, it is mandatory to get this SPoA registered in favour of such a person from Pune so that the same can be used for selling the property at Tamil Nadu in favour of the purchaser. That will also attract stamp duty in terms of the Maharashtra Stamp Act, 1958.

However, what one can ideally do is to limit the authority to such an attorney for negotiations with the third-party purchaser and person A can sign the sale deed at Pune on mutually agreeable terms with the purchaser and send the signed and executed copy of the sale back to the attorney. Thereafter, the purchaser can sign and execute on his part. The attorney can then use the SPoA for only admitting the execution of the sale deed by person A in favour of the purchaser at the time of registration of such sale deed in Tamil Nadu.

The limitation on authority of an attorney can be circumscribed under SPoA and, therefore, it is important to clarify the scope of powers of such an attorney who may have only the authority on behalf of person A to negotiate with prospective purchasers for the purposes of sale of the property at Tamil Nadu and, thereafter, to admit execution and registration of the sale deed before the concerned sub-registrar of assurances in Tamil Nadu.

Aradhana Bhansali is partner, Rajani Associates. Queries at mintmoney@livemint.com