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Validity of a Power of Attorney – A Registration Act Perspective

In the matter of Amar Nath v. Gian Chand & Ors.[1], an appeal was filed in the Apex Court against a High Court order holding that production of a true copy of Power of Attorney (“POA”) was essential for the execution of a sale deed under Section 18 of the Registration Act, 1908 (“Act”).

The dispute in the said case involved 2 Kanals and 10 Marlas of land belonging to the plaintiff (i.e. Gian Chand). The plaintiff entered into an oral agreement with the first defendant (i.e. Amar Nath) for the sale of the said property for a consideration of INR 55,000/- (Rupees Fifty Five Thousand Only), for which he executed a POA in favour of the second defendant (i.e. Yash Pal Singh). However, when the first defendant failed to arrange the money, the negotiation fell through and the plaintiff cancelled the sale agreement. Although the second defendant surrendered the original POA, he applied for its copy and fraudulently, in collusion with the first defendant, executed the sale deed on April 28, 1987 for INR 30,000/- (Rupees Thirty Thousand Only). The plaintiff contended that as the original POA stood cancelled, the sale deed executed was null and void, and subsequently, filed a suit seeking permanent injunction on the sale declaring that he was the owner of the said property. The High Court held that the second defendant was not competent to execute the sale deed as the POA granted to him on January 28, 1987 had been cancelled on February 2, 1987. The High Court further observed that Section 18 of the Act clearly states the need for the Registering Authority to see the true copy of the special Power of Attorney. Relying on the evidence given by PW6 (i.e. Dev Raj), the Court concluded that the first defendant was aware of the status of the POA since he was present at the time of its cancellation. The High Court decreed the suit by declaring the plaintiff as the owner in possession of the land and the mutation showing the sale in favour of the first defendant was declared null and void. The learned counsel for the first defendant argued that the registered POA could have been cancelled only vide a registered document which would have brought it into the public domain (reliance was placed on the judgment in the case of Daya Shanker & Ors. v. Rajendra Kumar and Ors.[2]). The counsel for the first defendant also referred to Section 32(a) of the Act to state that basis the POA executed by the plaintiff, the second defendant was competent to execute the sale deed (reliance was placed on the judgment in the case of Rajni Tandon v. Dulal Ranjan Ghosh Dastidar and anr.[3]). On the other hand, the learned counsel for the plaintiff referred to Section 33(4) of the Act that contemplates production of the original POA at the time of presentation of the sale deed, which the second defendant failed to comply/bypassed/contravened. He contended that the entire process of — making an application by the second defendant for a copy, its preparation and receipt shows fraud committed by the defendants in collusion with the Sub-Registrar and officials of the Registering Authority.

The issue before the Apex Court was whether the production of the original Power of Attorney before the Registering Authority was essential for the execution of the sale deed or not?

The Apex Court noted the fact that in the state of Himachal Pradesh, where the case arises, the Government by amendment to the Act has inserted Section 18A, which contemplates the production of the true copy of the document for its registration to execute a sale. In the present case, it was the sale deed that was to be registered and not the POA. Hence, the High Court erred in its judgment to hold that Section 18A of the Act contemplated the production of a true copy of the POA. In light of the provisions of the Act, the High Court rejected the plaintiff’s contention that a certified copy of the POA was necessary for the execution of the sale deed. Further, the Apex Court referred to a letter by the plaintiff, dated June 16, 1987, addressed to the second defendant. The plaintiff in the letter referred to the said property and requested the second defendant to hasten the process as the plaintiff was in dire need of money. The said letter had no mention of the surrender of POA on February 2, 1987 or its cancellation.

In light of the above observations, the Apex Court concluded that the case of the plaintiff regarding the cancellation of the POA by writing the word ‘cancelled’ on the POA on February 2, 1987, upon it being surrendered by the second defendant, cannot be accepted and, therefore, set aside the judgment of the High Court and allowed the appeal. Further, the Apex Court has held that it is important to bear in mind that among the categories of persons eligible to present documents before the registration office in terms of Section 32 of the Act is the ‘person executing’ the document. The expression ‘person executing’ used in Section 32 of the Act, can only refer to the person who actually signs or marks the document in token of execution, whether for himself or on behalf of some other person. Thus, ‘person executing’ as used in Section 32(a) of the Act signifies the person actually executing the document and includes a principal who executes by means of an agent. Where a person holds a Power of Attorney which authorises him to execute a document as agent for someone else, and he executes a document under the terms of the power of attorney, he is, so far as the registration office is concerned, the actual executant of the document and is entitled under Section 32(a) to present it for registration and get it registered.

Additionally, the object of registration is to guard against fraud by obtaining a contemporaneous publication and an unimpeachable record of each document. The said case is one where no allegation of fraud has been raised. In view thereof, the duty cast on the registering officer under Section 32 of the Act was only to satisfy himself that the document was executed by the person by whom it purports to have been signed. The Registrar upon being so satisfied and upon being presented with a document to be registered had to proceed with the registration of the same.

Further, Section 32(c) read with Section 33 and Section 34(2)(c) of the Act are interrelated and would have no application in regard to the document presented for registration by a power of attorney holder who is also the executant of the document. In other words, “there is really no need for the production of the original power of attorney when the document is presented for registration by the person standing in the shoes of the second defendant in this case as he would be covered by the  provisions of Section 32(a) as he has executed the document on the strength of the Power of Attorney”. To further clarify, the inquiry contemplated under the Act cannot extend to the question if the person who executed the document in his capacity as the Power of Attorney holder of the principal was indeed having a valid Power of attorney or not. The Apex Court held that “If the registering Authority is satisfied about the identity of the person and that he admits the execution of the document, it may not be a part of the Registrar’s duty to enquire further. The registration by itself will not bring the curtains down on questions relating to title to the property. The very purport of the Law of Registration is to usher in and maintain a transparent system of maintaining documents relating to property rights”.

[1] Civil Appeal No. 5797 of 2009

[2] (2016) 118 ALR 62

[3] (2019) 14 SCC 782