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Validity of a Power of Attorney – A Registration Act Perspective

An appeal was filed against the High Court order in the case of Amar Nath v. Gian Chand & Ors, stating that the original Power of Attorney (POA) was necessary to be produced for the execution of a sale deed under Section 18 of the Registration Act, 1908.

The case’s dispute was composed of 2 Kanals and 10 Marlas of land which belonged to the plaintiff (i.e. Gian Chand). The plaintiff and the first defendant (i.e. Amar Nath) entered into an oral agreement for the sale of the concerned property for a consideration of INR 55,000/-, for which a Power of Attorney was executed in favour of the second defendant (i.e. Yash Pal Singh). But, when the first defendant failed to arrange the money, the sale was cancelled by the plaintiff because the negotiation fell through. Even though the original POA was surrendered by the second defendant, he applied for its copy and in collision with the first defendant, fraudulently, moved on with the sale deed on April 28th, 1987, just for INR 30,000/-. The plaintiff argued that since POA stood cancelled, the sale deed stood null and void, and simultaneously, a suit was filed seeking a permanent injunction on the sale on the basis that he was the owner of the concerned property. The High Court decided that since the POA granted to the second defendant on January 28th, 1987, had already been cancelled on February 2nd, 1987, he was ineligible to execute the sale deed. The High Court further noticed that according to Section 18 of the Act, the Registering Authority was to see the true copy of the special Power of Attorney. Leaning on the evidence given by PW6 (i.e. Dev Raj), the court concluded that the first defendant was present at the time of the cancellation of the POA and was completely aware of its status. The High Court responded to the suit by declaring the plaintiff the owner of the concerned land, and the mutation showing the sale in the first defendant’s favour was declared null and void. The counsel for the first defendant argued that the registered Power of Attorney could only be cancelled vide a registered document which should have brought it into the public domain (focus was placed in  Daya Shanker & Ors. v. Rajendra Kumar and Ors. case’s judgement). The first defendant’s counsel also pointed out Section 32(a) of the Act to state that according to the POA executed by the plaintiff, the second defendant was eligible to execute the sale deed (focus was placed in Rajni Tandon v. Dulal Ranjan Ghosh Dastidar and anr. case’s judgement). 

But then again, the counsel for the plaintiff argued on the basis of Section 33(4) of the Act which requires the production of the POA at the time of presentation of the sale deed, which was left unfulfilled by the second defendant. He argued that the entire process of application of a copy, receipt, and preparation of POA by the second defendant points towards a fraud committed by the defendants in collusion with the officials of the Registering Authority and the Sub-Registrar.

The issue that was brought to the Apex Court was that whether the production of the original POA was before the Registering Authority was essential for the execution of the sale deed or not. 

The amendment to Section 18A of the Act by the Government in Himachal Pradesh was noted by the Apex Court, which states that if the case arises, there is a requirement for the production of the true copy of the document for its registration to execute a sale. Hence, in the present case, the requirement was that the sale deed is registered and not the Power of Attorney. Hence, it was established that the High Court erred in its judgement to hold that Section 18A of the Act required the production of the original copy of the POA. Following this, the High Court rejected the plaintiff’s plea that the original POA copy was required for the execution of the sale deed. Later, the Apex Court referred to a letter, dated June 16, 1987, by the plaintiff,  addressed to the second defendant. The plaintiff in the letter referred to the concerned property and requested the second defendant to hasten the process as the plaintiff was highly in need of money. The letter in concern did not mention of the surrender of POA on February 2nd, 1987, or its cancellation.

Following the above observations, the Apex Court decided that the plaintiff’s case about the cancellation of the Power of Attorney by writing the word “cancelled” on the POA on February 2nd, 1987, and upon it being surrendered by the second defendant, cannot be accepted, and hence dissolved the judgement of the High Court and allowed the appeal. Furthermore, the Apex Court has held that it is important to keep in mind that the “person executing” the document is one of the persons eligible to present documents before the registration office according to the terms of Section 32 of the Act. The phrase ‘person executing’ introduced in Section 32 of the Act, can only refer to the person who marks or signs the document for execution, either for himself or on the behalf of another person, which can mean the person himself or introduces the concept of an agent. If a person holds a POA which allows him to execute a document as an agent for someone else, and he executes a document under the terms of the power of attorney, he is, so far as the registration office is concerned, the actual executant of the document and is entitled under Section 32(a) to present it get it registered. 

The main objective of registration is guarding against fraud by getting a coeval publication and a faultless record of every document. No allegation of fraud has been raised in the case in concern. Taking this in view, the duty cast on the registering officer under Section 32 of the Act was only to satisfy himself that the document was executed by the person by whom it seems to have been signed. Being so satisfied and upon being presented with a document to be registered, the Registrar had to proceed with the registration of the same. 

Moreover, Section 32(c) along with Section 33 and Section 34(2)(c) of the Act are interrelated and have no application regarding the document presented for registration by a POA holder who is also the executant of the document. It can be concluded that there is no real need for the production of the original |POA when the document is being presented for registration by the person standing on behalf of the second defendant in this case as he would be covered by the provisions of Section 32(a) as he has executed the document on the basis of the POA. To clarify further, the inquiry view under the Act can’t extend to the question if the person who executed the document in his capacity as the POA holder of the principal was indeed having a valid POA or not. The Apex Court held that if the identity of the person satisfies the registering authority and the person admits to the execution of the document, it may not be a part of the Registrar’s duty to enquire further. The registration itself will not lead to questions relating to the title to the property. The very claim of the Law of Registration maintains a transparent system of maintaining documents relating to property rights.

By Anoushka Amar