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Latest Supreme Court Judgement on Power of Attorney 2023

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  • Post published:December 18, 2023
  • Post category:Law & Act

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Last Updated on January 3, 2024 by Kanakkupillai

A major decision regarding the legality of power of attorney (POA) documents was recently made by the Supreme Court of India, particularly in relation to real estate transactions. The important case Ghanshyam v. Yogendra Rathi will indefinitely affect principals and holders of power of attorney.

Supreme Court Verdict on Power of Attorney

The Supreme Court made it clear in its decision on June 6, 2023, that a power of attorney can only be used to transfer immovable property if the principal has given clear agreement and all necessary paperwork has been properly completed. Significant ramifications flow from this ruling for those who provide and receive powers of attorney.

The ruling in the Ghanshyam v. Yogendra Rathi case highlights the fact that a power of attorney and a will do not serve as titles or legal documents bestowing rights onto any real estate. This article explores the specifics of the court’s decision, its importance in clearing up the legal murk surrounding the power of attorney agreements, and the guidance that follows for principals and POA holders. The implications on real estate transactions and the legal obligations of persons participating in the power of attorney procedure are also covered.

The court further stressed that the execution of pertinent documents by the power of attorney is a necessary condition for a POA to be effective. Put another way, even if the POA gives the holder permission to sell or transfer real estate, the holder cannot act without the principal’s express approval and the execution of the required paperwork. This ruling emphasizes how crucial it is for the principal to be involved in the process of carrying out any actions that a POA has allowed.

This decision is significant because it clarifies the legal status of power of attorney forms and their use in real estate transfer. It also terminates the common practice of people completing real estate transactions based only on power of attorney forms.

Important Repercussions of the Historic Supreme Court Decision Regarding Power of Attorney: Advice for Principals and Holders

Principals and POA holders are impacted differently by the Supreme Court’s decision.

It emphasizes the necessity for principals to execute POA documents with great care, stressing the significance of granting only the precise powers necessary. It is recommended that principals carefully monitor the POA holder’s behaviour and promptly revoke the POA if any issues emerge.

POA holders need to understand that it is not acceptable to transfer immovable property based just on POA documentation. Before transferring any real estate, holders of power of attorney must have the principal’s express consent and guarantee the execution of all required paperwork.

Conclusion

Protecting the interests of principals and power of attorney holders and elucidating the legal validity of these papers are the goals of the Supreme Court’s power of attorney verdict. It highlights the need for principals to carefully consider POA documents and the need for holders to be aware of their limitations.

To sum up, this ruling encourages a more open and equitable structure for the power of attorney agreements, encouraging caution and clarity in their application to the mutual advantage of all parties.

Divya

Telecom engineer turned content creator with a knack for crafting compelling narratives. Experienced in client management and community engagement, and ventured into freelance content creation, contributing tailored and impactful content across diverse industries. Currently, collaborating with companies like Kanakkupillai, dedicated to delivering inspiring technical content rooted in a solid foundation.