Govt tightens power of attorney rules

Times of India News | Updated: Feb 9, 2013, 03:20 IST

CHENNAI: The Tamil Nadu registration department has tightened the noose around
realtors using power of attorney (POA) for fraudulent land deals. Power of attorney
authorizes a person to carry out transactions or act legally on behalf of another.

Under the new rules, a power of attorney holder seeking to carry out a land transaction
will have to provide documentary evidence to the sub-registrar to prove that the principal,
the person who issued the power of attorney, is alive. The principal has to obtain a "live"
certificate with his photograph affixed to it from a registered medical practitioner or a
gazetted officer. These certificates are valid for 30 days.

As per a recent order of the inspector general of registration, the new rules are applicable
to all POAs registered from February 4. By law, POA is not valid once the principal dies.
Section 34 of Tamil Nadu Registration Act says it is the duty of the sub-registrar to
ascertain whether the POA holder has the right to execute a transaction on behalf of the
principal. But sub-registrars register property documents without bothering to verify
whether the principals were alive.

"In Tamil Nadu, where a large number of land transactions are carried out on the basis of
POAs to circumvent payment of stamp duty and registration fees. Many instances have
been reported of POA holders selling land after the death of the principal. Buyers get into
trouble when legal heirs of the principal claim rights over the property. Such cases end up
in protracted legal battles and ultimately the sale deeds are declared invalid," said a senior
official.

There have been instances of people impersonating land owners and executing fraudulent
POAs. In one case, land worth 9 crore on Venkatnarayana Road was sold to a business
group based on a POA, reportedly executed by the land owner in 2008. Legal heirs of the
land owner subsequently filed a case of forgery against the business group, brokers and
others involved in the deal as the owner had died 28 years earlier. When police refused to
take prompt action, the owners moved the court.

As per law, the principal also has the right to rescind a POA. "If there is a mention of a
consideration (amount) in the POA, the holder can claim that money through legal
means. But he cannot claim rights over the property once the POA is rescinded or the
principal dies," said the official.

In 2010-11, more than 3.75 lakh POAs were registered across Tamil Nadu for property-
related transactions. The number came down to 1.8 lakh last year. It is going up again this
year, said the official.

Last December, the department made it mandatory that photographs of the holder and the
principal be affixed on the POA.

LIFE CERTIFICATE FOR THE PURPOSE OF REGISTRATION OF

DOCUMENTS BASED ON POWER OF ATTORNEY
Life Certificate for Doc based on POA

In the state of Tamilnadu, the above form is required for the execution of documents by an Agent under General
Power of Attorney based on a Deed of General Power of Attorney that was executed on 1/2/2013 or later. The
relevant circular of the department is available
at http://www.tnreginet.net/circular/public_Circulars/POA_Circular_04022013.pdf

manjari | 02/01/2016 at 20:34

what if POA is executed before 1/2/2013. It is a registered POA against full settlement

Reply

snowypeaks | 08/01/2016 at 12:00

Life Certificate is not required for subsequent registration based on Deed of POA which was registered before
the cut off date mentioned in the circular.