The dominance of commercialization in the world has seen a concurrent rise in the intricacy of legal compliances wherein an unintended lapse can turn out to be costly indeed. The complexity of legal documents is owing to the fact that such documents try to encompass all possible scenarios that might relate to the concerned subject-matter. Such documents require close scrutiny and attention. An inadvertent mistake can have very serious ramifications. It is common for NRIs to bequeath Power Of Attorney (POA) to a specified agent owing to their inability to be present in-person to deal with the various aspects of the legal proceedings pertaining to their assets in their homeland. Another reason for bequeathing a POA is the complexity of the legal proceedings that do take some getting used to. Before go further than how to cancel power of attorney in India, you should go for what is power of attorney.
A Power of Attorney, in the Power Of Attorney Act, 1882, is defined as “any instrument empowering a specified person to act for and in the name of the person executing it.”
The Power of Attorney (POA) is a legal document by which one person can bequeath, upon a qualified another, the power to make certain decisions on his behalf. The person granting the POA is known as the principal-agent. The person (or agent) being authorized by the POA, to make decisions about a specified subject-matter on behalf of the principal-agent, is known as the attorney-in-fact.
A Power of Attorney letter has to be registered at the office of the concerned Sub-registrar to avoid any legal complications in the future. A Power Of Attorney should necessarily be a written document, failing in which, it does not hold validity in a court of law. Another point to be noted is that a POA has to be signed in the presence of at least one witness and notarised.
The principal-agent is legally bound for the acts of the attorney-in-fact with regard to the provisions wherein the latter has been afforded authorization to act on behalf of the former. The scope of the attorney-in-fact’s powers is necessarily specified in the POA. The principal-agent (the NRI in this case), in the event of seeking how to cancel power of attorney India you should follow a specific general power of attorney format for NRI, has to follow a fixed procedure. We shall discuss it below. But before that, let us have a look at why, and under what conditions, it might be necessary to cancel a Power of Attorney.
- Breach of Provisions – The authority afforded to the attorney-in-fact in a Power of Attorney, depending on the purpose of the POA, can be generalized (Financial POA), or restricted to specific provisions (Medical POA), or a timescale (Limited POA), or come into effect only in the case that the principal-agent is incapacitated (Springing POA). In the event of sufficient cause for the belief that the attorney-in-fact has acted beyond the scope of his specified powers, or has been involved in a case of mismanagement of the same, the principal-agent can seek to how to cancel power of attorney in india that was bequeathed.
- Renouncement of Rights – In the case of either party to a Power Of Attorney wishing to abdicate their rights as specified in the POA, the bequeathed POA might be revoked. If both the parties have an interest in the subject-matter of the pertinent POA, the express consent of both the parties concerned is necessary to cancel the Power of Attorney, following the Indian Contract Act (Section 202).
- Discretion of Principal-Agent – A bequeathed revocable Power Of Attorney can be terminated at the discretion of the principal-agent through revocation of the authority afforded to the attorney-in-fact. Such an action can be the result of the reason for the contract coming to an end, or even owing to medical or financial reasons on the part of either of the concerned parties.
It is to be noted that in the case of death, or financial bankruptcy, or mental instability on the part of the principal-agent (or the attorney-in-fact), a revocable POA is automatically terminated. In the case of an irrevocable POA, wherein all parties concerned have an interest in the concerned enterprise, to cancel a Power Of Attorney would require the express consent of all the concerned parties, except in the case of actions in excess of the afforded authority on the part of the attorney-in-fact. Such a scenario might necessitate judicial interference.
Coming back to the point, let us now discuss the steps one needs to follow to cancel a Power Of Attorney.
- A revocation deed has to be drafted. A revocation deed is a legal document, written on legal (stamp) paper that declares the name of the parties concerned, the date of enforcement of the POA, the intent and reason for the revocation, the effective date of the revocation, and also the consequence of such a deed.
- An intimation of the revocation deed, informing of the decision to cancel the General Power Of Attorney that was bequeathed, has to be sent to the attorney-in-fact.
- The deed of revocation has to be registered at the same office of the Sub-registrar where the initial Power of Attorney letter had been registered.
- It is preferable to also have the deed of revocation published in a regional or national newspaper. This is all the more necessary in the case of an NRI as the news article can let the concerned people (with whom the attorney-in-fact had engaged) know that further dealings are not to be conducted with the aforementioned agent. As an alternative to a newspaper article, copies of the deed of revocation can be sent to the relevant parties who had had dealings with the agent.
A person seeking to cancel a formerly issued Power of Attorney can follow the steps mentioned above for the efficient dissolution of the concerned Power of Attorney.