Making an Indian Power of Attorney can be a confusing process, especially if you are residing outside of India. Without the proper knowledge and guidance, you may end up wasting your time and resources following a process only to end up with an invalid Power of Attorney.
The requirements of making an Indian Power of Attorney (or simply POA) are different from that of POA’s made for the UK, USA or Canada. Under Indian Law POA’s are required to have a specific structure as well as include certain legal language. And further, there are different types of POA’s, such as General Power of Attorney’s (GPA) and Special Power of Attorney’s (SPA). Hence it is advisable that you seek advice from qualified professionals who are experienced in Indian Law.
In this post, we will explore some of the important differences between GPA’s and SPA’s.
What is an NRI General Power of Attorney?
A General Power of Attorney is a legally binding document that can be used for a variety of purposes, with a GPA, you can empower a specified person to act for you in all matters whatsoever or in all matters of a particular nature. Some examples are property management, carry out personal or business financial transactions, representing in all legal matters in all courts and so on. A GPA can start as soon as you sign it, or it can start on a specific date that you write in the document.
What is an Indian Special Power of Attorney?
As expected, in contrast with a General Power of Attorney, a Specific or Special Power of Attorney is also a legally binding document; however, it is used for specific purposes or to deal with specific or restricted matters. Sometimes, this is also referred to as a limited power of attorney. Some examples would be – withdrawing money from an account, running a business, buying a property.
General Power of Attorney OR Special Power of Attorney
| General Power of Attorney (GPA) | Special Power of Attorney (SPA) | |
|---|---|---|
| Scope of authority | Broad. Covers a range of matters. | Confined to one defined purpose. |
| Typical NRI use | Managing several properties, banking and general administration. | A single transaction, such as selling one named property. |
| Duration | Continues until it is revoked or the donor dies. | Ends once the defined purpose is completed. |
| Risk exposure | Wider, because the authority is broad. | Narrower, because the authority is confined to the task. |
| Using it for a property sale | Can authorise the attorney to execute and register the sale deed. | Usually preferred for a sale, as it keeps the authority to that property. |
| Revocation | By a deed of revocation; also ends on the donor’s death. | By a deed of revocation; also ends on completion or the donor’s death. |
Which one for a property sale?
For selling property in India, a Special Power of Attorney scoped to the property is usually preferred, because it keeps the authority to that one transaction. A General Power of Attorney can also be used, provided it authorises the attorney to execute and register the sale deed. What is not valid is a “GPA sale” that treats the power of attorney as itself the transfer: following Suraj Lamp & Industries (P) Ltd v State of Haryana (2011), immovable property passes only by a registered sale deed, which the attorney signs on the donor’s behalf. See our guides to selling Indian property through a Power of Attorney and to Indian Power of Attorney format.
Understanding the key differences will help you decide whether you will need a GPA or an SPA:
Restricted Powers
The attorney in a SPA cannot exercise any other power beyond the scope of the document. Let’s take an example, an NRI gives a special power of attorney to his relative to represent him in his property matter in court. The SPA will specify that the relative is only allowed to represent the NRI in court. So the relative will not be able to exercise powers outside of what is mentioned in the document, for example, the relative will not be able to sell the property.
General Powers
If you wish for your attorney to act for you in a different matter or go beyond the scope of the powers mentioned in the SPA, you will have to make another power of attorney authorising them accordingly. However, with a GPA, they may be able to complete all tasks within the general scope of the GPA, without the need for any other authorisation.
More than one SPA
Usually, you can make several different SPA’s, with different agents/attorneys for each, however, with a GPA, a broader or several powers are usually given to one agent. For example, you could create a SPA that only allows your spouse to manage a property and another SPA that allows your business partner to manage your business. Alternatively, with a GPA, you can allow your spouse to manage your property and business.
Expiration or cancellation
A special power of attorney expires on the completion of the specified task, once the task mentioned in the document has been completed, the SPA cannot be used for anything else, therefore it ends up becoming unusable. For example, an SPA to sell a property can no longer be used for anything else after the said property has been sold.
In contrast with a GPA, which either will expire upon an date/event specifically mentioned in the document or if nothing is specified, then it can only be cancelled if revoked through a deed of revocation.
Risk
A GPA will empower a person to carry out a range of activities on your behalf, for example – management of property may include selling, leasing and upkeep, etc. With a SPA you can limit the powers to a specific task, such as just leasing and upkeep. Therefore, a SPA will carry less risk of abuse of power by the attorney due to its limited scope.
In conclusion, the most important aspects of making a Power of Attorney are to understand what type of POA will best suit your needs, based on the nature and extent of powers that need to be given and period of validity. Regardless of whether it is a GPA or a SPA, you need to make sure that the person you choose is someone that you can trust to act on your behalf the way that you want.
How we can help
The team at Whytecroft Ford is highly experienced in Indian Power of attorney matters. If you are looking for assistance with your Indian Power of Attorney, call us on 02087575751 or use our contact form to get in touch with our team today.
Frequently asked questions
A General Power of Attorney confers broad authority across a range of matters, while a Special Power of Attorney is confined to one defined purpose. Both are recognised under the Powers of Attorney Act 1882; the difference is the scope of the authority granted.
It depends on what you need. A Special Power of Attorney suits a single transaction, such as selling one property, and is usually preferred for a one-off because it keeps the authority narrow. A General Power of Attorney suits situations where several matters must be managed on your behalf.
Yes, provided it authorises the attorney to execute and register the sale deed. What is not valid is a “GPA sale” that treats the power of attorney as the transfer itself; under Suraj Lamp (2011) immovable property passes only by a registered sale deed. A Special Power of Attorney scoped to the property is usually preferred.
A Special Power of Attorney ends once its defined purpose is completed, for example after the named property is sold. A General Power of Attorney continues until it is revoked. Both end on the donor’s death, subject to the limited exception of a power coupled with an interest.
Yes. A donor can grant several Special Powers of Attorney, to the same or different attorneys, each scoped to its own purpose.
