Report No. 67

Chapter 7

Definitions in Sections 2(21) to 2(25)

7.1. Section 2(21)-"Power of attorney".-

Section 2(21) defines the expression "power of attorney" as follows:-

"21. Power of attorney' includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it";

The duty on a power of attorney is chargeable under Article 48.

The definition of "power of attorney" in section 3(16) of the Stamp Act of 1879, read as follows:-

"Power of Attorney means any instrument (not chargeable with a fee under the law relating to court fees for the time being in force) empowering a specified person to act in the stead of the person executing it."

The definition in section 3(24) of the Act of 1869 ran as follows:-

"Power of Attorney" includes every instrument except a proxy empowering a person to act in the stead of the person executing it".

The material change in the definition in the present Act is the addition of the words as to the specified person being employed to act in the name of the person executing the instrument. In the remarks about this clause in the Statement of Objects and Reasons, it has been said that the amendment has been made in order to make it clear that the definition "relates only to powers of attorney and does not include all contracts creating the relationship of principal and agent."

7.2. Powers of Attorney Act, 1882.-

There is a Central Act entitled, "The Powers of Attorney Act"1, but that Act does not contain a definition of "power of attorney". In fact, that Act does not purport to deal comprehensively with the subject of powers of attorney, but deals with certain aspects thereof, which are not material for the present purpose.2

1. The Powers of Attorney Act, 1882.

2. That Act will be examined separately.

7.3. Definition.-

Briefly speaking, a power of attorney is the formal appointment of an agent by a deed. It usually runs thus:-

"Know all men that I, AB, have appointed CD my true and lawful attorney, in my name or otherwise and on my behalf to do and execute the following acts and deeds in witness etc."

7.4. General and special power.-

The authority created by the power of attorney may be general, or it may be special. For this reason, a power of attorney is usually classified as general or special. This distinction is reflected in Article 48. It is also indirectly recognised in the Indian Contract Act, section 188, which reads1-

"188. An agent having an authority to do an act has authority to do every lawful thing which is necessarily in order to do such act.

An agent having an authority to carry on a business has authority to do every lawful thing necessary for the purpose, or usually done in the course of conducting such business."

1. Section 188, Indian Contract Act, 1872.

7.5. Story quoted.-

Story, in his work on Agency, section 17, says:-

"A special agency properly exists, when there is a delegation of authority to do a single act; a general agency properly exists where there is a delegation to do all acts connected with a particular trade, business or employment. Thus, a person, who is authorised by his principal to execute a particular deed, or to sign a particular contract, or to purchase a particular parcel or merchandise, is a special agent. But a person, who is authorised by his principal to execute all deeds, sign all contracts, or purchase all goods, required in a particular trade, business, or employment, is a general agent."1

In Persons on Contracts, volume 1, page 39, a special agent is defined as one authorised "to do one or two particular things" and a general agent as one authorised "to transact all his principal's business or his business of a particular kind."

In Bouvier's Law Dictionary,2 Volume 2, page 714, the statement is-"a general power authorises an agent to act generally in behalf of the principal: a special power is one limited to a particular act".

Wharton3 defines a power of attorney as "a writing given and made by one person authorising another, who, in such case, is called the attorney of the person (or donee of the power), appointing him to do any lawful act in the stead of that person, as to receive rents, debts, to make appearance and application in court, before an officer of registration and the like. It may be either general or special, i.e., to do all acts or to do some particular Act." Stroud4 defines it as an authority whereby one is "set in turn, stead or place" of another to act for him. In an English case,5 Coltman J. observed as follows:-

"Where one is authorised, in writing, on behalf of another and in his name to do an act, that is an appointment of an attorney within the meaning of the Stamp Act."

1. Story, cited in V. liter v. Narasimha Rao, ILR 38 Mad 134 (136).

2. Bouvier, cited in V. lyer v. Narasimha Rao, ILR 38 Mad 134 (136).

3. Wharton Law Lexicon, (1953), p. 784.

4. Stroud Judicial Dictionary, (1953), p. 2257.

5. Walker v. Remmett, (1896) 135 ER 1181.

7.6. The definition in our Act also lays emphasis on the use of name. Thus, if a person writes a letter to his brother, authorising him to sell their joint property, the letter is sufficient authority for the sale, but is not a power of attorney for the purposes of the Stamp Act.1 The reason is that the use of the name of the sender of the letter is not expressly authorised in the letter.

1. Kala Khan v. Nathu Khan, AIR 1926 Lah 229.

7.7. Formalities when required in England.-

Apart from statute, an agency can be created orally, but statute may require writing, and there may be special rules apart from statute. Thus, for example, in England, an appointment under seal is necessary to enable an agent to execute a deed on behalf of his principle. One person cannot authorise another to execute a deed for him except by deed.1

1. Berkeley v. Hardy, (1826) 5 B&C 355.

7.8. Formalities when required in India.-

Under the Indian Contract Act,1 an agent is a person employed to do any act for another, or to represent another in dealings with third person.2 As a rule, an agent may be appointed without any special formality, in India also.

1. Section 182, Indian Contract Act, 1872.

2. Section 182.

7.9. Indian statute law, excepting for a few scattered provisions,1 does not provide in what cases a written power of attorney is required.

1. Order 3, rule 4, Code of Civil Procedure, 1908; sections 32, 33 and 34, Indian Registration Act, 1908.

7.10. Under the Evidence Act1, the Court shall presume that every document purporting to be a power of attorney, and to have been executed, before, and authenticated by, a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government, was so executed and authenticated. The Registration Act also requires certain powers of attorney to be authenticated2 Registration of a power of attorney may become compulsory in certain cases.3

1. Section 85, Indian Evidence Act, 1872.

2. Sections 32(c), 33(1), 33(4), Indian Registration Act, 1908.

3. See AIR 1954 TC 10.