A Non-Resident Indian who grants a Power of Attorney expects the named attorney to act, not to hand the task to a stranger. Under Indian law an attorney generally cannot appoint another attorney, and may do so only where the Power of Attorney expressly allows it. Where a substitute acts without that authority, the acts may not bind the donor, and a deed executed by the substitute can be challenged. This post provides an overview of appointing a substitute under an Indian Power of Attorney for Non-Resident Indians (NRIs).
Can an attorney appoint another attorney under an Indian Power of Attorney?
An attorney can appoint another attorney only where the Power of Attorney (POA) expressly authorises it. The default position under Indian law is that the attorney, known as the donee, must act personally and cannot pass the authority to someone else. However, a donor who wants to allow substitution must say so in the deed.
This reflects a general principle of the law of agency, that a person trusted to act cannot transfer that trust without permission. A Power of Attorney is read strictly, so the attorney holds only the authority the deed actually grants, together with what is necessary to carry that authority into effect. Authority to appoint a substitute is not implied into an ordinary POA. Where the deed is silent, the attorney cannot lawfully delegate the task to another person.
What does Indian law say about an attorney delegating authority?
Indian law prohibits an agent from delegating duties they have undertaken to perform personally, unless an exception applies. This is set out in section 190 of the Indian Contract Act 1872. The agent cannot lawfully employ another to perform acts the agent has expressly or impliedly undertaken to perform personally. The two exceptions in the section are where the ordinary custom of trade allows a sub-agent, or where the nature of the agency requires one.
The principle is often expressed in the maxim that a delegate cannot further delegate. Applied to a Power of Attorney, it means the donee cannot ordinarily hand the matter to a third party of their own choosing. A property sale, the signing of a deed, or attendance before a sub-registrar are acts the attorney is trusted to carry out, not to subcontract. The legal framework governing these documents is covered in the guide on which laws govern Indian Powers of Attorney.
What is the difference between a sub-agent and a substituted agent?
The difference between a sub-agent and a substituted agent decides whether the donor is bound by the substitute’s acts. The distinction is drawn by the Indian Contract Act 1872, and it is the heart of this topic. The table below sets out the two.
| Feature | Sub-agent (section 191) | Substituted agent (section 194) |
|---|---|---|
| How appointed | Employed by, and under the control of, the original attorney | Named by the attorney under express or implied authority from the donor |
| Whose agent | The attorney’s agent | The donor’s own agent for the work entrusted |
| Effect on the donor | Generally no direct relationship with the donor | Acts directly for the donor within the scope entrusted |
| Attorney’s liability | The attorney remains answerable to the donor for the sub-agent’s acts | The attorney is answerable only for using ordinary care in choosing the person |
A sub-agent, defined in section 191, works under the control of the original attorney and answers to the attorney rather than the donor. A substituted agent, under section 194, is named by the attorney using authority the donor has given. The substituted agent becomes the donor’s own agent for the part of the matter entrusted to them. A substitute appointed under an express power in the deed is a substituted agent, whose proper acts bind the donor. A person brought in without authority is, at most, an unauthorised sub-agent.
What clause allows an attorney to appoint a substitute?
A substitution or delegation clause is the clause that allows an attorney to appoint a substitute. It is an express term in the Power of Attorney granting the attorney power to appoint one or more substitutes or delegates, and usually to remove them and appoint others in their place. Without such a clause, the attorney has no power to substitute.
A clause of this kind typically gives the attorney “full power and authority from time to time to appoint one or more substitute(s) or delegate(s)”. It allows the attorney to do the acts authorised by the deed, and to remove a substitute at pleasure. Where this language is present, the donor has given the express authority that section 194 of the Indian Contract Act 1872 requires for a substituted agent. The clause should make clear which acts may be delegated, because a substitute can hold no wider authority than the attorney was given. A donor who does not want the matter passed on should ensure the deed contains no such clause. The guidance on selecting the right attorney for an Indian Power of Attorney explains why the choice of a single trusted attorney often matters more than a power to substitute.
Does the Powers of Attorney Act 1882 allow sub-delegation?
The Powers of Attorney Act 1882 does not give an attorney any power to appoint a substitute. The Act is short and facilitative. Section 2 allows the donee to execute documents in their own name under the authority of the donor. Section 1A defines a Power of Attorney as an instrument empowering a specified person to act for the person executing it. Neither provision confers a power to sub-delegate.
A power to appoint a substitute must therefore come from the deed itself, read together with the agency rules in the Indian Contract Act 1872. The 1882 Act facilitates how an attorney acts, but does not widen what the attorney is authorised to do. Where the deed contains no substitution clause, the silence of the 1882 Act means there is no fallback power to delegate. The steps to create a valid Power of Attorney from the UK are covered in the guide on how to make an Indian Power of Attorney in the UK.
What happens if an attorney appoints a substitute without authority?
Where an attorney appoints a substitute without authority, the donor is not bound by that person’s acts. Section 193 of the Indian Contract Act 1872 provides that where an agent appoints a person to act without authority to do so, the principal is not represented by, and not responsible for, the acts of that person. The unauthorised appointee is treated as the attorney’s own agent, not the donor’s.
The consequence for a property matter can be serious. A sale deed signed by an unauthorised substitute may not bind the donor and is open to challenge as executed without authority. A buyer and their advisers are likely to scrutinise the chain of authority, and a defect in it can stall or unwind the transaction. Where a substitute is properly appointed, a fresh Power of Attorney may be executed in their favour in India. That document may itself need to be stamped, and registered under section 17 of the Registration Act 1908 where it relates to immovable property of a value of ₹100 or more. Stamp duty on a Power of Attorney is governed by the applicable state stamp law, and the rate varies by state [AUTHORITY TBC: confirm the article and rate under the relevant state stamp act]. Where a document has already been rejected on a question of authority, the guide on an Indian Power of Attorney rejected in the UK explains the common causes and the way forward.
How Whytecroft Ford can help
The Whytecroft Ford Indian Law Team drafts and advises on Powers of Attorney for Non-Resident Indians and Overseas Citizens of India and non-Indian nationals based in the UK. The firm prepares Indian power of attorney documents to reflect exactly what the donor intends, including whether the attorney may appoint a substitute, and advises on the execution and authentication steps that give the document effect in India. The firm’s Power of Attorney service is set out on the Indian Power of Attorney service page.
To discuss a Power of Attorney for India, call 0208 757 5751 or use the contact form.
Sources and further reading
- Indian Contract Act 1872 (India Code): sections 190 to 195 on agents, sub-agents and substituted agents.
- Powers of Attorney Act 1882 (India Code): the statute governing the execution of powers of attorney in India.
- Registration Act 1908 (India Code): section 17, compulsory registration of documents relating to immovable property.
This article is for general information only and does not constitute legal advice. Whytecroft Ford advises UK-based clients on Indian law matters including Power of Attorney, PAN Card, and Indian property work.
