Ways In Which NRIs Can Revoke Or Cancel A Power Of Attorney
It is common for NRIs to opt to assign Power of Attorney (POA) for managing their assets in India. This becomes a necessity in current times, where legal compliances are evolving, and penalties are stringent. But sometimes a situation key arise where you need to revoke the POA. Thus, it is important to understand POA and its cancellation process.
Power Of Attorney
POA is a powerful instrument. It establishes the relationship between the principal (one who grants POA - in this case an NRI) and agent (one who is authorized by POA). It is a legal document. Hence, the power to take action by an agent on behalf of the principal is legally valid and accepted through all institutions. It is always recommended to register the POA with the sub-registrar to avoid any legal hassle later on, specifically for NRIs. But a verbal POA is not valid in the court of law and should be avoided at all costs.
If there arises a circumstance where either of the party or any external situation demands that POA be canceled then it can be done through a revocation deed.
Revocation deed is a written legal document that states the intent to revoke the previous deed i.e. Power of Attorney. With this deed, the power to make a decision with the agent is nullified and it gives back the power to the principal to make any decision regarding the subject matter of POA.
When Can Power Of Attorney Be Revoked?
- If the POA is specific in nature and the raison d’etre of the POA ceased to exist. It can be any act, time period or business purpose for which POA was granted in the first place.
- If there is sufficient reason to prove that there has been mismanagement or any breach of contract on behalf of the agent.
- If any of the parties to POA wants to renounce their powers.
Procedure Of Revocation Of Deed
The first step is to draft the revocation deed, which is made on stamp paper or legal paper, depending upon the POA. It is usually made by a lawyer who knows the legal nuances. On revocation deed, the name of the parties, along with the date and time when POA was enforced is mentioned. It is pertinent that revocation deed mentions about the exact date and time from which POA will stand revoked. This brings clarity to parties and will prevent any confusion that can take place. The reason for revocation is not necessary to mention but is encouraged to be mentioned.
Once the drafting part is done, it should be notified to the agent and then only it can be considered valid. Although not mandatory, publishing revocation of POA in regional/national newspaper is recommended. This will make the revocation public and will prevent any parties to deal with the erstwhile agent.
If necessary, revocation deed must be distributed amongst parties who dealt with the agent related to the subject matter, this becomes important for NRIs.
3. Registration Of Revocation Deed
If POA was registered with the sub-registrar, then the revocation deed must be registered with the same registrar. This is mandatory and done in order to give legal character to the revocation deed. It needs to be on the paper which can be legal or stamp paper.
It is advised to consult lawyers for drafting all kinds of Power of Attorney Revocation Deeds for NRIs with complete accuracy. Lawyers meticulously draft the deed and adhere to legalities in order to avoid any type of conflict at a later stage.