S B L R 2022 Article 53
A COMPREHENSIVE STUDY OF POWER OF ATTORNEY
BY
IMTIAZ ALI SHAH
Advocate & Legal Consultant | Former Judge | Student of Doctorate
POWER OF ATTORNEY
A power of attorney (known in Urdu as “Mukhtar Nama”) is a legally binding document authorizing someone to manage a person’s property, medical, or financial affairs. It is commonly used when a person cannot manage his affairs due to his absence, disability, incapacity, or infirmity; it allows an agent to make decisions on behalf of the principal. It empowers the agent to decide the principal’s affairs. Power of attorney can be revoked/canceled by the principal, exclusive of the situation, when it creates an interest in the favour of an agent. However, it becomes null and void when its purpose is accomplished, or else the person who executes it or the agent dies. Nonetheless, instructions for managing assets and affairs after death are listed in the last will or living trust.
LEGAL DEFINITION OF POWER OF ATTORNEY
In the case of Syed Adnan Ashraf, the High Court of Sindh has defined the ‘power of attorney’ comprehensively and coherently; it was asserted that “A power of attorney is a written authorization by virtue of which the principal assigns to a person as his agent and confers upon him the authority to perform specified acts on his behalf; thus, the primary purpose of the instrument of this nature is to assign the authority of the principal to another person as his agent”.
SECTION 2 OF THE POWERS-OF-ATTORNEY ACT, 1882
It deals with the execution under power-of-attorney. The donee of a power-of-attorney may, if he thinks fit, execute or do any assurance, instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every assurance, instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. This section applies to powers-of-attorney created by instruments executed either before or after this Act comes into force
ORDER 3 RULES 1 & 2 OF THE CIVIL PROCEDURE CODE
Order 3 Rules 1 & 2 of the Civil Procedure Code deal with ‘Recognized agents and Pleaders’. A study of Order 3 Rule 1 of the Civil Procedure Code shows that it empowers the party, his recognized agent, or his pleader to make an appearance, file an application, or act in or to any court required or approved by any law. Further, Order 3 Rule 2 describes the recognized agents as persons with power of attorney and persons carrying on trade or business for and in the names of parties who are not residents within the local limits of the court’s jurisdiction. Order 3 Rules 1 and 2 of the Civil Procedure Code allows the agent holder of power of attorney to “act” on behalf of the principal. Nevertheless, if the power of attorney holder has performed some “acts” according to the instrument, he may depose for the principal for those acts, but not for acts performed by the principal and not by him. Similarly, he cannot testify on behalf of the principal in matters about which only the principal has personal knowledge and about which the principal is entitled to cross-examination.
LEGAL TERMS RELATED TO POWER OF ATTORNEY
The Principal/Donor/Grantor is the person who grants limited or broad legal authority to another person to make decisions or act on his or her behalf. Agent / Attorney-in-Fact is a person who has the authority to act on behalf of another person (principal) regarding the possessions, finances, and other legal matters under the terms of a power of attorney.
THE EXECUTANT / PRINCIPAL HAS THE AUTHORITY TO OBJECT TO THE POWER OF THE ATTORNEY
The person who has executed the instrument in favor of the general power of attorney has the power to raise objections against the authority of the general attorney. If the general attorney has misused power of attorney or traveled beyond his domain, the executant could have stopped him from doing it. Nevertheless, if there is some minor defect in the general power of attorney executed in favour of such attorney, the same must be treated to be a mere irregularity that could not have any adverse effect on the right of the plaintiff to institute suit; and by reason of such defect, defendants are not prejudiced in any manner.
REQUIREMENTS OF POWER OF ATTORNEY
Sections 2 and 4 of the Power of Attorney Act, 1882 stipulate that power of attorney has to be created by an instrument. It must be in writing. Furthermore, Article 95 of the Qanun-e-Shahadat Order of 1984 demands that every document asserting to be a power of attorney executed before and attested by a Notary Public or any court or representative of the Federal Government shall be presumed lawful by the courts. Unless a power of attorney in the shape of the written document is filed before the court, neither any assumption of its existence could be made, nor the court would make any presumption as required under the aforesaid article. In addition, two persons must witness and put their signatures/thumb impressions on a power of attorney. Article 17 of the Qanun-e-Shahadat Order, 1984 describes the procedure for execution of any document through which someone derives monetary power and future obligation. The preceding provision makes it mandatory that every document pertaining to financial or future obligations be verified by two men, or two women and one man. The reason behind the attestation of such an instrument is to protect the rights of the parties.
THE AUTHENTICITY OF POWER OF ATTORNEY
Authenticity is not merely verification but something more. The person authenticating the instrument must assume the identity of the person who signed it and the fact that it was executed. A power of attorney signed by a notary public or any other authority listed in Article 95 of the Qanun-e-Shahadat Order, 1984, is sufficient evidence of an instrument’s execution by the person who seems to be the executant on the face of it. Provision of Article 95 of Qanun-e-Shahadat, 1984, is mandatory, and it is open to the court to presume that all requirements for the appropriate execution of power of attorney have been duly satisfied. Where a purported power of attorney has actually been acted upon but does not qualify for presumption under Article 95 of Qanun-e-Shahadat Order, 1984, those who seek to rely upon it or are allegedly affected thereby may resort to due modes of its proof, which may include examination of its attesting witnesses. If the donor of power or its executant admits execution of power of attorney, none of such modes would be necessary. In such an event, the principle underlying Article 81 of Qanun-e-Shahadat Order, 1984, would become applicable, and admission of executant would be sufficient proof of execution as against himself/herself.
DEFECTIVE POWER OF ATTORNEY
A power of attorney, which is neither appropriately endorsed nor executed under Article 95 of Qanun-e-Shahadat Order, 1984, such power of attorney is legally ineffective.
POWER OF ATTORNEY MUST BE STRICTLY CONSTRUED
It is an established principle of law that power of attorney should be construed strictly, and only such powers, which are expressly and specifically mentioned in a power of attorney, must be exercised by the agent as considered to have been delegated to him. It only confers the authority that is expressly or impliedly given and cannot authorize beyond what it actually conveyed. Power of attorney is not open to liberal interpretation. It is subject to narrow elucidation because it delegates powers that must be construed in strict terms and in the manner required to carry out the mainly conferred authority. One of the essential rules for constructing power of attorney is to pay attention to the recitals, which will regulate entire general terms in the operative part of the document as they show the scope and object of the power. When an agent is permitted to undertake a particular task that is followed or led by general words, those words are restricted to what is essential for the proper performance of a specific act. The general words do not confer broad powers; instead, they limit the authority to the purpose for which it was granted. It, therefore, follows that where general words and vice versa follow special powers, the general words are to be construed as limited to what is necessary to properly exercise the special powers.
POWER OF ATTORNEY MUST CONTAIN A SEPARATE CLAUSE FOR EACH PURPOSE
A power of attorney must contain separate clear and doubtless clauses for each object. It should be comprehensive and understandable. All reasonable diligence must be exercised in communicating with the principal and seeking his instruction. The act of an agent must follow the clause of power; any action taken beyond the domain of power empowers the principal to repudiate such activity. It is incorrect to presume that every ‘general’ power of attorney means and includes the power to alienate and dispose of the principal’s property. To achieve the required object, it must contain a distinct clause. The implied authority given to the agent to sell or dispose of or alienate property would be difficult to deduce from words spoken or written that did not convey the principal’s knowledge, intention, or consent.
RELATIONSHIP BETWEEN PRINCIPAL AND AGENT
The agent or attorney-in-fact is the fiduciary of the principal. The agent is responsible for handling some or all of the principal’s affairs. It is the duty and obligation of the agent to act conscientiously, responsibly, and reasonably to the principal’s affair he is managing. Agent violating and ignorant of these duties is liable to face criminal charges and civil litigation. It is a well-established concept governing the principal-agent relationship that if the agent has any interest in the property or any personal gain from the transaction, he must disclose all information to the principal. According to section 214 of the Contract Act, it is the responsibility of an agent in challenging situations that he must utilize all reasonable ways to communicate with his principal and acquire his instructions. As a result, it requires an agent to interact with his principal and receive his directions in cases of difficulty. Besides, in cases of uncertainty and ambiguity, a power of attorney has to be interpreted in favor of the executant. A general attorney must obtain specific approval from his principal before transferring the property of his principal in his name or the name of his near fiduciary relations.
LIMITS OF POWER OF ATTORNEY
Every citizen of Pakistan, who is an adult, sound mind, and not disqualified from contracting, whether residing in or outside Pakistan, may appoint an agent to act on his behalf through a power of attorney. A power of attorney is not legally binding until it is signed and executed in accordance with the laws. Before executing power, an agent cannot decide on behalf of the principal.
It is important to note that any power granted by the principal to the attorney, whether general or special, must be written and not provided orally. If a power of attorney is for the purchase, sale, or mortgage of any immovable property, it is mandatory to register it according to section 17 of the Registration Act, 1908.
TYPES OF POWER OF ATTORNEY
Mainly, there are two types of power of attorney: general and special. Since it has the word “general” in its name, this document allows the agent to handle a wide range of matters on behalf of the principal, especially when he is ill or otherwise unavailable. A general power of attorney allows an attorney to perform multiple tasks on behalf of the executant, and all such acts are binding on the principal as he did those under his command.
Conversely, a special power of attorney authorizes an agent with limited legal authority. It asserts that it is only for one purpose. A specific or limited type of power of attorney allows an agent to make decisions on behalf of the principal in a particular situation. For example, to authorize a family member to take care of your property when you are away or to allow a person to maintain/sell your property when you are not around.
Apart from the above, there is also a legal power of attorney (known as Vakalatnama). It is a document submitted to the court to inform that advocate will represent the case on behalf of the litigant. A person who intends to be represented through an advocate in a court of law requires a legal power of attorney for each case.
POWER OF ATTORNEY EXECUTED IN FOREIGN COUNTRY
The majority of Pakistanis who reside abroad, either temporarily or permanently, own or possess properties in Pakistan. In such a case, they appoint a legal alternative and authorize one of their family members or friends to take care of property matters on their behalf with the help of a letter of attorney. A power of attorney executed in a foreign country must be authenticated by the High Commission of Pakistan in that country; without it, no benefit could be given to the attorney thereof. The First Secretary, High Commissioner of Pakistan, must stamp the document to make it valid in the foreign country.
REGISTRATION OF F.I.R. THROUGH ATTORNEY
Section 154 of the Criminal Procedure Code says that anyone who has information about the commission of a cognizable offence can lodge an F.I.R. There is no requirement that only the victim can set the law into motion. A police officer who comes to know about a cognizable offence can also register an F.I.R. against the accused. It is a well-established principle that any public member has the authority to initiate criminal proceedings. There is no embargo for any person to register a complaint to be personally aggrieved; therefore, the law doesn’t require that F.I.R. should be lodged by the attorney, as it appears to be devoid of legal force.
THE EVIDENCE OF AN ATTORNEY IS RELEVANT IN A COMPLAINT CASE
The evidence of an agent is admissible while dealing with a complaint case under section 138 of the Negotiable Instruments Act, 1882, when signed by the attorney holder of the payee. The complainant’s attorney, who has no personal acquaintance, cannot be examined. Nevertheless, if the attorney holder is in charge of the complainant’s business and alone is personally aware of the transactions and signs the complaint on behalf of the complainant payee, he can be examined. The agent is often the only person with personal knowledge of the business dealings of companies, partnerships, or proprietary concerns. It would be improper to say that the agent who has signed the complaint should not be examined under section 200 of the Cr.P.C, and only the company secretary, the firm’s partner, or the proprietor of a business should be examined even though they had no personal knowledge of the transaction.
THE ATTORNEY HOLDER CAN GIVE EVIDENCE ABOUT MATTERS INVOLVING PERSONAL KNOWLEDGE
An agent who has executed the plaint and brought the suit but has no personal information about the transaction can only give formal testimony about the legitimacy of the power of attorney and the filing of the suit. Suppose the agent performed any act or handled any transactions in accordance with a power of attorney executed by the principal. In that case, he may be called as a witness to prove those acts or transactions. Where the principal has not personally supervised and managed the dealings and transactions of a business and has no personal knowledge of such activities, and the agent performed these actions, then only the agent can give evidence concerning that business. It usually happens when the principal conduct business through authorized agents/managers or persons residing abroad managing his affairs through given power. Likewise, if the principal alone has the personal information for the actions or transactions, then the agent cannot depose or testify in place of his principal. The law necessitates or expects the plaintiff or other party to a proceeding to prove something regarding his ‘state of mind’ or ‘conduct’. As a consequence of that, the person concerned alone has to depose and not an agent. A landlord seeking eviction of his tenant due to his personal ‘bona fide’ need and a buyer who seeks specific performance of a contract has to express his ‘readiness and willingness’ comes under this classification. Nonetheless, there is a recognized exception to this requisite. Whenever an attorney manages and handles a principal’s affairs, then it is permissible to admit the evidence of such person even with reference to ‘bona fides’ or ‘readiness and willingness’. Examples of such attorney holders are parents, siblings, spouses, and sons/daughters when they completely manage the affairs of their family members, respectively.
A GIFT CAN BE MADE THROUGH AN INSTRUMENT LIKE THE GENERAL POWER OF ATTORNEY
Due to love and affection for the donee, the donor often gifts any property to him without any consideration in the shape of tangible material. A gift is a personal action that the owner can perform only. The attorney in whose favour there is a power of attorney to transfer the property has no right to gift the property to any person on his behalf. These powers can only be used if the principal transfers the property through gift and only to complete the formalities of transfer in the shape of registration of gift deed or entry of attestation of gift mutation. There is no cavil to the legal proposition that every `General Power of Attorney’ by its description does not include the power to make a gift, alienate or dispose of the principal’s property unless it mentions a specific, categoric exhaustive clause in that respect. It is the beneficial principle of law that an agent shall always act for the benefit of his principal, which shall govern his entire conduct and working. Assuming the agent deals with a property he purchased for his own advantage, contingent upon his interest, he should obtain the principal’s consent after notifying him of all relevant facts, failing which the principal is free to cancel the transaction.
IRREVOCABLE POWER OF ATTORNEY
Generally, the Power of Attorney is revocable; however, in some cases, it becomes irrevocable (Naqabal-e-Tanseekh,). That kind of Power of Attorney is called irrevocable, which is executed against consideration. For example, the principal executes a Power of Attorney (either General or Special) in favour of his agent about any property and receives its sale consideration from the agent. In this case, the agent has an interest in the property as he has paid sale consideration to the principal for the property mentioned in the deed of power of attorney.
According to section 202 of the Contract Act, where an agreement has been executed subject to consideration whereby authority is given to secure some benefit to the donee of such authority, such power is irrevocable. The interest of the agent in the subject of the agency may be inferred from the language of the document creating the agency and from the course of dealings between the parties. The existence of the interest, rather than the manner in which it is conveyed, is essential. For this purpose, the prospect of earning a commission is not an interest. Where the agent’s only interest is to receive a commission after the net collection has been accrued, he cannot be said to have any interest. The rule of S. 202 of Contract Act, 1872 applies to the cases where the authority is given to be a security or as a part of security, and not to cases where the authority is given independently, and the interest of the donee of the authority arises afterward and incidentally only. For instance: ‘A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death’.
REVOCATION/CANCELLATION OF POWER OF ATTORNEY
When the principal of a power of attorney or the agent/attorney holder dies, a power of attorney is mechanically terminated. It is also terminated if the power of attorney’s purpose is accomplished. Apart from that, the principal can revoke/cancel a power of attorney for the reason that the agent is going to defraud him or for any other cause. The process of canceling a power of attorney (registered with the Sub Registrar) differs from the process of withdrawing a power of attorney (only notarized and not registered with the Sub-Registrar Office). Suppose a power of attorney is registered in the office of the Sub-Registrar. In this situation, the principal must execute a ‘Deed of Revocation / Cancellation of Power of Attorney’ known as “Abtaal Nama”, mentioning all the details of a power of attorney earlier executed and the reason for canceling/ revoking it. The cancellation deed must be written on stamp paper and registered in the concerned Sub-Registrar’s office. The principal should also send a written notice informing the agent of the cancellation of power of attorney.
However, if that power of attorney is only notarized, in that case, revocation of authority through a registered deed is not necessary, and only notice is required to be given to the agent and said notice might be oral. Termination of authority of an agent will be effective when same becomes known to him or so far as regards third persons when same had become known to them. The principal can notify the agent about the cancellation/revocation of a power of attorney and have the details published in a newspaper.
CASE LAWS OF HON’BLE SUPERIOR COURTS FOR REFERENCES
- Syed Adnan Ashraf vs. Syed Azhar-ud-Din, (2014 MLD 342 Karachi). (Sindh)
- Qadir Bakhsh & others vs. Khawaja Ghulam Moeen-ud-Din, (1994 L.C. 1949).
- Ghulam Mustafa vs. Rashid Akbar Ansari & others, (2009 MLD 538 Karachi-Sindh).
- Bahadur Khan vs. Karim Gul & 4 others, (2022 PLD 51 Quetta).
- Iqbal Ahmed Sabri vs. Fayyaz Ahmed & another, (2007 CLC 1089 Lahore).
- Abdul Sattar & another vs. Mian Muhammad Attique & another, (2010 YLR 616 Lahore).
- Manzoor Begum vs. Haji Fazal Ellahi, (2012 YLR 2152 SC (AJ&K)).
- Chaudhry Manzoor Ahmed, through legal Representatives & another vs. Faisal Manzoor and 5 others, (2016 YLR 671 Karachi-Sindh)
- Unair Ali Khan & others vs. Faiz Rasool & others, (PLD 2013 SC 190).
- Muhammad Yasin & another vs. Dost Muhammad through Legal Heirs & another, (PLD 2002 SC 71).
- Fida Muhammad vs. Pir Muhammad Khan (Deceased) through legal heirs & others, (PLD 1985 SC 341).
- Azra Saeed vs. Raees Khan through General Attorney & 5 others, (2009 CLD 779 Karachi-Sindh).
- Aki Habara Electric Corporation (PTV.) Limited through Authorized Signatory vs. Hyper Magnetic Industries (Private) Limited through Chief Executive/Director/Secretary, (2003 PLD 420 Karachi-Sindh).
- Amanullah Khan vs. The State, (2011 P Cr. L J 774 Karachi-Sindh).
- Haji Faqir Muhammad & others vs. Pir Muhammad & another, (1997 SCMR 1811)
- Budhai through Legal Heirs vs. Ghulam Mustafa & others, (PLD 2016 Lahore 287).
- Media Max (PVT) Ltd. through Chief Executive vs. A.R.Y. Communication Pvt. Ltd. through Chief Executive & another, (P L D 2013 Sindh 555 Karachi-Sindh).
- Muhammad Iqbal through Lrs vs. Mehmood Hassan and others, (2016 M L D 1243 Lahore).
INDIAN JURISDICTION
- Janki Vashdeo Bhojwani vs. Indusind Bank Ltd, (2005(1) R.C.R. (Civil) 240), (2005 (2) SCC 217).
- Shankar Finance and Investments vs. State of Andhra Pradesh & others, (2008 (8) SCC 536 Supreme Court of India).
- Man Kaur (Deceased) by Lrs vs. Hartar Singh Sangha, (2010 (4) CivCC 792 Supreme Court of India).
(The views and opinions expressed in this Article/Blog are those to the author)