Compulsory Registration of Power of Attorney in India

The Compulsory Registrability of a Power of Attorney in India: A Legal Analysis

Introduction

A Power of Attorney (PoA) is an instrument of significant legal import, empowering a specified person (the attorney or agent) to act for and in the name of the person executing it (the principal). The question of whether a PoA is compulsorily registrable in India has been a subject of considerable legal discourse, involving an interplay of various statutes including the Registration Act, 1908, the Powers of Attorney Act, 1882, the Indian Contract Act, 1872, and the Indian Evidence Act, 1872, alongside numerous judicial pronouncements. This article seeks to provide a comprehensive analysis of the legal position regarding the compulsory registration of PoAs in India, examining the general principles and the specific circumstances that may necessitate registration.

The core of the inquiry lies in determining whether the law mandates the registration of a PoA for its validity or for specific legal effects, particularly when it pertains to transactions involving immovable property. While the general rule leans towards optional registration, several exceptions and state-specific amendments introduce complexities that require careful consideration.

The General Principle: Optional Registration of Powers of Attorney

The prevailing legal consensus, supported by statutory provisions and judicial interpretations, is that a Power of Attorney, in its general form, is not a compulsorily registrable document under the central Registration Act, 1908.

The Registration Act, 1908: Sections 17 and 18

The Registration Act, 1908, is the primary legislation governing the registration of documents in India. Section 17 of the Act enumerates the documents for which registration is compulsory. This list is exhaustive. A Power of Attorney is not explicitly mentioned in Section 17(1) as a document requiring compulsory registration. Conversely, Section 18 of the Act lists documents of which registration is optional. As observed by the Supreme Court in Manik Majumder v. Dipak Kumar Saha (D) Thr. Lrs. (2023 SCC OnLine SC 301), Section 18(f) states that "all other documents not required by Section 17 to be registered" may be registered. The Court explicitly held, "Since, a power of attorney does not come within the ambit of Section 17 or clause (a) to (e) of Section 18, registration of a power of attorney is optional."

This position has been consistently affirmed. For instance, the Supreme Court in Syed Abdul Khader v. Rami Reddy And Others (1979 SCC 2 601) held that a general power of attorney is not a compulsorily registrable document. Similarly, the Rajasthan High Court in Basant Nahata v. State Of Rajasthan & Other (2000 SCC OnLine Raj 140) noted, "There is no provision of law by which a special Power of Attorney becomes compulsory registrable." The Punjab & Haryana High Court in Gurdev Kaur And Others v. Daljit Singh Dhingra And Others (2017 SCC OnLine P&H 3977) also reiterated that a PoA is not compulsorily registrable under Section 17 of the Registration Act, 1908, or the Powers of Attorney Act, 1882.

Judicial Affirmations of Optional Registration

Numerous High Courts have echoed this sentiment. The Delhi High Court in Corporationbank v. Sushil Enterprises And Ors. (2003 SCC OnLine Del 411) stated that a power of attorney is not compulsorily registrable when the relation between the donor and donee is one of principal and agent. The Madras High Court in B. Maragathamani v. Member Secretary, Chennai Metropolitan Development Authority (2009 SCC OnLine Mad 1618) also referred to Syed Abdul Khader to support the view that a General Power of Attorney is not compulsorily registrable.

Evidentiary Value of Registered/Notarized PoAs (Section 85, Evidence Act)

While registration may be optional, registration or notarization carries significant evidentiary value. Section 85 of the Indian Evidence Act, 1872, provides for a presumption as to powers-of-attorney. It states: "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 Supreme Court in Manik Majumder v. Dipak Kumar Saha (D) Thr. Lrs. (2023) affirmed that a duly notarized PoA "carries the presumption of being valid in view of Section 85 of Evidence Act." The Allahabad High Court in Bharat Petroleum Corporation Ltd. v. Amar Autos And Others (2008 SCC OnLine All 118) also referred to this presumption. Thus, while not mandatory for validity in general, authentication (such as notarization or registration) lends a strong presumption of genuineness and due execution.

Circumstances Affecting or Mandating Registration of Powers of Attorney

Despite the general rule of optional registration, certain specific circumstances and provisions can influence or mandate the registration of a Power of Attorney.

Powers of Attorney for Presentation of Documents (Section 33, Registration Act)

Section 32 of the Registration Act, 1908, specifies who can present documents for registration. Section 32(c) allows presentation by an agent of the person executing or claiming under the document, provided such agent is "duly authorised by power-of-attorney executed and authenticated in manner hereinafter mentioned." Section 33 then lays down the specific requirements for the authentication of such PoAs.

The Supreme Court in Rajni Tandon v. Dulal Ranjan Ghosh Dastidar And Another (2009 SCC 14 782) clarified the scope of Section 33. It held that the authentication requirements under Section 33 apply primarily when a third-party agent presents a document for registration, not when the agent who themselves executed the document (on behalf of the principal) presents it. The Court stated: "The provisions of Section 33 will come into play only in cases where presentation is in terms of Section 32(c) of the Act... only in cases where the person(s) signing the document cannot present the document before the registering officer and gives a power of attorney to another to present the document that the provisions of Section 33 get attracted." This interpretation was reiterated in Asset Reconstruction Company (India) Limited (S) v. S.P. Velayutham And Others (S) (2022 SCC OnLine SC 543).

Furthermore, Section 33(1)(c) provides for PoAs executed outside India, requiring them to be authenticated by a Notary Public, Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government for them to be valid for presentation purposes in India, as noted in Manik Majumder (2023).

State Amendments Making Specific PoAs Compulsorily Registrable

Several states in India have amended the Registration Act, 1908, in its application to their territories, making certain types of PoAs compulsorily registrable, particularly those relating to immovable property or irrevocable PoAs.

  • Rajasthan: The State of Rajasthan inserted clauses (f) and (g) to Section 17(1) of the Registration Act, making registration compulsory for an "agreement to sale" and an "irrevocable power of attorney relating to transfer of immovable property in any way" respectively (State Of Rajasthan And Others v. Basant Nahata, 2005 SCC 12 77). The Rajasthan High Court in Mahesh Joshi v. Ramesh Parekh (2020 SCC OnLine Raj 1978) dealt with Section 17(1)(g) (Rajasthan amendment) and clarified that for a PoA to be compulsorily registrable under this provision, it must be irrevocable and relate to the transfer of immovable property.
  • Tamil Nadu: The State of Tamil Nadu amended Section 17(1) by substituting clause (f) with new clauses, including clause (h) which specifically insists upon the registration of "instruments of Power of Attorney relating to sale of immovable property other than those executed outside India" (Confederation Of Real Estate Developers' Association Of India v. State Of Tamil Nadu, 2014 SCC OnLine Mad 9358). The Madras High Court in Great Lakes Multi State Co-O v. The Inspector General Of Reg (2023 SCC OnLine Mad 2769) discussed the applicability of this amendment.
  • Karnataka: The Karnataka High Court in cases like SRI SURESH BABU v. SMT KAMAKSHI (2024 KHC 11781) and SRI.GUNABHUSAHAN v. SMT.B.G.MEENAKSHI (2021 SCC OnLine Kar 15159) has clarified that amendments to Section 17 of the Registration Act making General Powers of Attorney compulsorily registrable came into force from a specific date (24.09.2001, via Act 48 of 2001). PoAs executed prior to such amendments did not require compulsory registration.

Therefore, it is imperative to examine the specific state laws to determine if a particular type of PoA is compulsorily registrable in that jurisdiction.

Powers of Attorney Creating an Interest in Immovable Property

A PoA, in its typical form, is an instrument of agency and does not itself create, declare, assign, limit, or extinguish any right, title, or interest in immovable property. If a document, styled as a PoA, actually purports to achieve any of these effects with respect to immovable property of the value of one hundred rupees and upwards, it would fall under Section 17(1)(b) of the Registration Act and require compulsory registration.

The Andhra Pradesh High Court in M. John Kotaiah v. A. Divakar And Others (1984 SCC OnLine AP 75), cited with approval by the Madras High Court in Nagammal v. K.Thangavel (2010 SCC OnLine Mad 5800), observed: "Unless the document itself created a right in immoveable property thereby attracting S. 17 of the Registration Act there is no question of the power of attorney becoming compulsorily registrable." This distinction is crucial. An "irrevocable power of attorney" under Section 202 of the Indian Contract Act, 1872 (where the agent has an interest in the property which forms the subject-matter of the agency) does not automatically become compulsorily registrable under the central Registration Act unless it independently satisfies the conditions of Section 17(1)(b) or is covered by a specific state amendment.

The Impact of Suraj Lamp Judgments

The Supreme Court in Suraj Lamp And Industries Private Limited (2) Through Director v. State Of Haryana And Another (2012 SCC 1 656) and its precursor (2009 SCC OnLine SC 1179) strongly deprecated the practice of transferring immovable property through Sale Agreement/General Power of Attorney/Will (SA/GPA/Will) transactions. The Court clarified that such instruments do not convey title and cannot be recognized as valid modes of transfer of immovable property; only a registered conveyance deed can confer title.

It is important to note that the Suraj Lamp judgments did not hold that all PoAs are compulsorily registrable. Instead, they addressed the misuse of PoAs as a means to circumvent the legal requirements of registration of conveyance deeds and payment of stamp duty. As affirmed in Manik Majumder (2023), which referenced Suraj Lamp (2012), an attorney holder may execute a deed of conveyance in exercise of the power granted under the PoA and convey title on behalf of the principal, provided the PoA specifically grants such power. The concern in Suraj Lamp was the treatment of the PoA itself (often coupled with an agreement to sell) as a document of title transfer, rather than the registration requirement of the PoA document per se, unless mandated by specific state laws.

The Challenge of "Public Policy" and Legislative Competence (Basant Nahata)

The State of Rajasthan had introduced Section 22-A into the Registration Act, empowering the State Government to declare by notification that the registration of any document or class of documents is opposed to public policy, and the registering officer would then refuse registration. Several notifications were issued under this section, including those concerning certain types of PoAs.

The Supreme Court in State Of Rajasthan And Others v. Basant Nahata (2005 SCC 12 77), affirming the Rajasthan High Court's decision (Basant Nahata v. State Of Rajasthan & Other, 2000 SCC OnLine Raj 140), declared Section 22-A of the Registration Act (as inserted by the Rajasthan Amendment) unconstitutional. The Court held that the term "public policy" is vague and uncertain, and delegating the power to define it to the executive without adequate guidelines amounted to an excessive delegation of essential legislative functions, violating Articles 14 and 246 of the Constitution. The Court noted, "Execution of power of attorney per se is not invalid. On the other hand, it is lawful."

However, this judgment did not invalidate other specific state amendments to Section 17 that mandate registration for certain PoAs (like Rajasthan's own S.17(1)(g) for irrevocable PoAs relating to immovable property), provided such amendments are otherwise constitutionally valid.

Conclusion

In conclusion, the legal position in India is that a Power of Attorney, as a general instrument of agency, is not compulsorily registrable under the central Registration Act, 1908. Its registration falls under the optional category as per Section 18 of the Act. This has been consistently upheld by the judiciary, including the Supreme Court. However, this general rule is subject to important exceptions and nuances:

  • A PoA used for presenting a document for registration by an agent (other than the executing agent) must be executed and authenticated in the manner prescribed by Section 33 of the Registration Act.
  • Several State Governments have amended Section 17 of the Registration Act to make specific types of PoAs compulsorily registrable within their respective jurisdictions. These typically include PoAs relating to the sale of immovable property or irrevocable PoAs concerning immovable property. Practitioners and parties must consult the applicable state laws.
  • If a document, though termed a PoA, itself creates, declares, assigns, limits, or extinguishes a right, title, or interest in immovable property valued at Rs. 100 or more, it would require compulsory registration under Section 17(1)(b) of the Act.
  • While not always compulsory for validity, registration or notarization of a PoA provides a strong presumption of its due execution and authenticity under Section 85 of the Indian Evidence Act, 1872.

The judgments in Suraj Lamp have curtailed the misuse of PoAs as instruments of title transfer but do not alter the fundamental principles regarding the registration of PoAs themselves, unless they fall into the specific categories requiring registration. The legal landscape concerning the compulsory registrability of a Power of Attorney in India is thus a blend of general federal principles and specific state-level legislative interventions, necessitating a careful, context-specific legal assessment.