{"id":21373,"date":"2023-04-14T10:23:51","date_gmt":"2023-04-14T04:53:51","guid":{"rendered":"https:\/\/gstguntur.com\/?p=21373"},"modified":"2023-04-14T10:29:30","modified_gmt":"2023-04-14T04:59:30","slug":"drafting-and-conveyancing-relating-to-various-deeds-and-documents-ii","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/drafting-and-conveyancing-relating-to-various-deeds-and-documents-ii\/","title":{"rendered":"Drafting and Conveyancing Relating to Various Deeds and Documents-II – CS Professional Study Material"},"content":{"rendered":"

Chapter 5 Drafting and Conveyancing Relating to Various Deeds and Documents-II – CS Professional Drafting, Pleadings and Appearances Notes<\/a>\u00a0is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

Drafting and Conveyancing Relating to Various Deeds and Documents-II – Drafting, Pleadings and Appearances Study Material<\/h2>\n

Question 1.
\nWrite notes on the following : (June 2012,)
\n(i) Irrevocable power of attorney
\n(ii) Letters of authority (4 marks each)
\nAnswer:
\n(i) irrevocable power of Attorney: A power of attorney executed, in which the donee himself has an interest, is irrevocable.
\n(a) Irrevocable powers of attorney are executed in favour of the financial institution by a company who offer financial assistance to the latter.
\n(b) Through such irrevocable powers of attorney, the powers are given to the financial institutions for executing a security document for securing the financial assistance in the event of a company failing to execute such a document by certain date.
\nNote: Such power of attorney will need registration.<\/p>\n

(ii) Power of Attorney and Letter of Authority:
\nPower of Attorney : Section 2 (21) of the Indian Stamp Act, 1899 defines power of attorney as follows :<\/p>\n

“Power of Attorney” includes any instrument (not chargeable with fee under the law relating to Court fees for the time being in force) empowering a specified person to act for and in the name of the person executing it”.<\/p>\n

In terms of Section 1A of the Powers of Attorney Act, 1882 as amended by the Powers of Attorney (Amendment) Act, 1982, a power of attorney includes an instrument empowering a specified person to act for and in the name of the person executing it. It is always kept by the attorney.<\/p>\n

Letter of Authority : Letter of authority is nothing but a power of attorney. They are executed on plain paper and not on stamp paper. Letters of authority are usually issued for collecting some documents or papers, dividend, interest etc. on behalf of another. By and large, the law relating to the powers of attorney will apply to letters of authority.<\/p>\n

\"Drafting<\/p>\n

Question 2.
\nWrite notes on the following:
\nPrinciples governing the construction of a power of attorney (Dec 2012, 4 marks)
\nAnswer:
\nPrinciples governing the construction of a power of attorney
\nThe principles governing the construction of a power of attorney are:<\/p>\n

    \n
  1. the operative part of the deed is controlled by the recitals;<\/li>\n
  2. where an authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the performance of the particular acts;<\/li>\n
  3. a power of attorney is construed so as to include all incidental powers necessary for its effective execution.<\/li>\n<\/ol>\n

    Question 3.
    \nWrite notes on the following.
    \nIrrevocable power of attorney (Dec 2013, 4 marks)<\/p>\n

    \"Drafting<\/p>\n

    Question 4.
    \nWrite note on the following:
    \nRevocable and Irrevocable Power of Attorney (Dec 2018, 4 marks)
    \nAnswer:
    \nA power of attorney executed in favour of a person can always, at the discretion of the donor thereof, be revoked.<\/p>\n

    The done of a power of attorney is an agent of the donor.<\/p>\n

    If a donee himself has an interest in the matters covered by the power of attorney, which forms the subject matter thereof, the power of attorney in the absence of express contract cannot be terminated to the prejudice of such interest.<\/p>\n

    In other words, agency coupled with interest cannot be terminated without the consent of the other party (Section 202 of the Indian Contract Act, 1872.)<\/p>\n

    Hence, a power of attorney executed, in which the donee himself has an interest, is irrevocable. Such irrevocable powers of attorney are executed in favour of the financial institutions by a company who offer financial assistance to the latter.<\/p>\n

    Through such irrevocable powers of attorney, powers are given to the financial institutions for executing a security document for securing the financial assistance in the event of a company failing to execute such a document by a certain date.<\/p>\n

    A power of attorney is revocable if the principle reserves the right to revoke the power at any time.<\/p>\n

    Once the principle revokes the power, the agent can no longer act on the principle\u2019s behalf.<\/p>\n

    But a power of attorney can be made irrevocable if the document includes a provision that particularly states that the principle gives up the right of revocation or otherwise indicates that the power is irrevocable.<\/p>\n

    As a practical matter, an irrevocable power of attorney is rarely used and is typically limited to a specific purpose.<\/p>\n

    \"Drafting<\/p>\n

    Question 5.
    \nPower of Attorney and Letter of Authority (June 2018, 4 marks)
    \nAnswer:
    \nPower of Attorney
    \nAccording to Section 2(21) of the Indian Stamp Act, 1899, \u201cPower of Attorney\u201d includes any instrument (not chargeable with fee under the law relating to Court Fees for the time being in force) empowering a specified person to act for and in the name of the person executing it\u201d. It is governed by the provisions of the Power of Attorney Act, 1882. The law pertaining to powers of attorney are based on the principles of agency as contained in the Contract Act, 1872. A power of attorney can either be general or specific.<\/p>\n

    Letter of Authority
    \nA letter of authority is nothing but a power of attorney. They are executed on plain paper and not on stamp paper. Usually, these are issued for collection of some documents, papers dividend, interest etc, by one person on behalf of another. By and large, the law relating to power of attorney will also apply to the letters of authority.<\/p>\n

    Question 6.
    \nDistinguish between the Power of Attorney and Letter of Authority. (Dec 2021)<\/p>\n

    \"Drafting<\/p>\n

    Question 7.
    \nIn the light of judicial pronouncements, discuss the following: (June 2015)
    \n(a) The Court is entitled to put itself into the testator\u2019s arm chair. (4 marks)
    \n(b) A family arrangement can be enforced in a Court of law. (4 marks)
    \nAnswer:
    \n(a) Relevant considerations: In construing the language of a Will, the courts are entitled and bound to bear in mind other matters than merely the words used. They must consider the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense and many other things which are often summed up in somewhat picturesque figure. The Court is entitled to put itself into the testator\u2019s arm chair. [Venkatanarasimha v. Parthasarthy, 41IA 51, 70(PC); GnambalAmmal v. T. Rajulyer, AIR 1951 SC 103,106].<\/p>\n

    (b) No doubt, a family arrangement, which is for the benefit of the family generally, can be enforced in a Court of law.<\/p>\n

    However, before the Court would do so, it must be shown that there was an occasion for effecting a family arrangement and that it was acted upon. [Lakshmi Perumallu v. Krishnavenarnma. AIR 1965 SC 825: 1965(1) SCR 261.]<\/p>\n

    \"Drafting<\/p>\n

    Question 8.
    \nComment on the following:
    \nA letter of authority is nothing but a power of attorney. (Dec 2015, 4 marks)<\/p>\n

    Question 9.
    \nIn the light of judicial pronouncements, discuss the following: (June 2016)
    \n(a) The family settlement must be a bona fide one. (4 marks)
    \n(b) It is to ascertain the intentions of the testator who constructed a will. (4 marks)
    \nAnswer:
    \n(a) Essentials of Family Settlement:
    \nThe principles which apply to the case of ordinary compromise between strangers, do not equally apply to the case of compromises in the nature of family arrangements. Family arrangements are governed by a special equity peculiar to themselves, and will be enforced if honestly made, although they have not been meant as a compromise, but have proceeded from an error of all parties, originating in mistake or ignorance of fact as to what their rights actually are, or of the points on which their rights actually depend.<\/p>\n

    In Kale v. Dy. Director of Consolidation, AIR 1976 SC 807 the Supreme Court has laid down the following propositions to put the binding effect and the essentials of a family settlement in a concertized form:<\/p>\n

      \n
    1. The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family.<\/li>\n
    2. The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence.<\/li>\n
    3. The family arrangement may be even oral in which case no registration is necessary.<\/li>\n
    4. It is well-settled that registration would be necessary only if the terms of the family arrangement are reduced into writing.<\/li>\n
    5. The members who may be parties to the family arrangement must have some antecedent title, claim or interest or even a possible claim in the property which is acknowledged by the parties to the settlement.<\/li>\n
    6. Even in bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable, the family arrangement is final and binding on the parties to the settlement.<\/li>\n<\/ol>\n

      \"Drafting<\/p>\n

      (b) Like any other document, a will is subject to interpretation. The Supreme Court in Gnambal Ammal v. T. Raju Iyer held that the cardinal maxim to be observed in construing a will is to endeavour to ascertain the intentions of the testator. This intention has to be primarily gathered from the document which is to be read as a whole without indulging in any conjecture or speculation as to what the testator would have done, if he had been better informed or better advised.<\/p>\n

      Question 10.
      \nComment on the following statements:
      \nRegistration and payment of stamp duty on a deed of hire-purchase is compulsory. (Dec 2016, 5 marks)
      \nAnswer:
      \nThere is no Article governing hire purchase agreement in Schedule l to the Indian Stamp Act. Such an agreement would, therefore, fall under the general Article 5 regarding agreements in general. A deed of hire-purchase is liable to stamp duty as an agreement under Article 5 of the Indian Stamp Act, 1899.<\/p>\n

      A hire purchase agreement or a hire agreement does not require registration under the Registration Act, 1908 as it relates to movable property.<\/p>\n

      \"Drafting<\/p>\n

      Question 11.
      \nComment on the following :
      \nA Power of Attorney must be strictly construed. (June 2018, 5 marks)
      \nAnswer:
      \nA Power of Attorney must be strictly construed
      \nAs a general rule, a power of attorney should be construed strictly and general words must be interpreted in the light of the special powers, although they include incidental powers necessary for carrying out the authority. The general words used in the subsequent clauses of a power of attorney must be read with the special or specific powers given in the earlier clauses and cannot be construed so as to enlarge the restricted powers mentioned in the powers of attorney.<\/p>\n

      Regard must be had to the recitals, if any, as showing the scope and object of the power, as such recitals will control any general terms in the operative part of the instrument. Any power which has not been expressly delegated should not be implied. Where an authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the performance of the particular acts.<\/p>\n

      \"Drafting<\/p>\n

      Question 12.
      \nComment on the following Statement:
      \nEssentials of a Promissory Note.\u00a0 \u00a0 (Dec 2018, 5 marks)
      \nAnswer:
      \nTo be a promissory note, an instrument must possess be following essentials be given below:<\/p>\n

        \n
      1. It must be in writing. An oral promise to pay will not do.<\/li>\n
      2. It must contain an express promise or clear undertaking to pay. X promise to pay cannot be inferred. A mere acknowledgement of debt is not sufficient. If X writes to Y.<\/li>\n
      3. The promise or undertaking to pay must be unconditional. X promise to pay \u201cwhen able\u201d, or \u201cas soon as possible\u201d, or \u201cafter your marriage to Y, is conditional. But a promise to pay after a specific time or on the happening of an event which must happen, is not conditional., for example, \u201cI promise to pay ? 5,000 ten days after the death of z\u201d, is unconditional.<\/li>\n
      4. The maker must sign the promissory note in token of an undertaking to pay to the payee or his order.<\/li>\n
      5. The maker must be a definite person, i.e., the note must show clearly who is the person engaging himself to pay.<\/li>\n
      6. The payee must be definite. The promissory note must contain a promise to pay to some person or persons ascertained by name or designation or to their order.<\/li>\n
      7. The sum payable must be definite and the amount must not be capable of contingent additions or subtractions.<\/li>\n
      8. Payment must be in legal money of the country. Hence, a promise to pay \u20b9 5,000 and deliver 20 quintals of rice is not a promissory note.<\/li>\n
      9. It must be properly stamped in accordance with the provisions of the Indian Stamp Act, 1899. Each stamp must be duly cancelled by maker\u2019s signature or initials.<\/li>\n
      10. It must contain the name of place, number and the date on which it is made.<\/li>\n<\/ol>\n

        \"Drafting<\/p>\n

        Question 13.
        \n\u201cRegistration of a Power of Attorney is not Compulsory\u201d. Comment. (June 2019, 5 marks)
        \nAnswer:
        \nYes, registration of a power of attorney is not compulsory. Section 4 of the ) Powers-of-Attorney Act, 1882 provides that it may be deposited in the High Court or District Court within the local limits of whose jurisdiction the instrument lies with an affidavit verifying its execution, and a copy may be presented at the office and stamped as the certified copy and it will then be sufficient evidence of the contents of the deed.<\/p>\n

        In certain cases, registration of power of attorney may become compulsory under Section 17 of the Indian Registration Act, 1908. Thus, a power which authorises the donee to recover rents of immovable property belonging to the donor for the donee’s own benefit is an assignment and requires registration under clause (b) of Sub-Section (1) of Section 17 of the Registration Act. Similarly, a power of attorney which creates a charge on the immovable property referred’to therein in favour of the donee of the power requires registration [Indra Bibi v. Jain Sirdar, (1908) I.L.R. 35 Cal. 845, 848].<\/p>\n

        In other cases, a mere general power of attorney, even though it deals with immovable property, need not be registered (Kochuvareed v. Mariappa, A. I.R. 1954 T.C. 10, 17) since it does not come under any of the documents specified in the Indian Registration Act as requiring registration.<\/p>\n

        \"Drafting<\/p>\n

        Question 14.
        \nDiscuss the following :
        \nIs it necessary to get the Power of Attorney attested? (June 2019, 4 marks)
        \nAnswer:
        \nA power of attorney need not be attested. However, it would be advisable to execute the power of attorney before and have it authenticated by a Notary Public or any Court Judge\/Magistrate. Indian Consul or Vice-Consul or representatives of the Central Government. If a power of attorney is so authenticated courts shall presume the authentic execution of the power of attorney (Section 85 of the Indian Evidence Act, 1872).<\/p>\n

        Under Section 85 of the Indian Evidence Act, 1872, 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.<\/p>\n

        If a power of attorney gives authority to present documents for registration under Section.32 of the Registration Act, 1908 it must be executed before and authenticated by the Registrar or Sub-Registrar within whose District or Sub-District the principal resides or where the Registration Act is not in force, before any Magistrate or if it is executed outside India, before a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul or representative of the Central Government (Section 33 of the Registration Act, 1908).<\/p>\n

        But a power of attorney empowering an agent to execute a deed conveying the property in an immovable property and get the deed registered thereby perfecting the transaction of conveyance, need not be executed before the Officer appointed to authenticate and register documents in as much as when the agent executes the document in the name of the principal, he is the executant thereof and as such can himself present the document for registration.<\/p>\n

        \"Drafting<\/p>\n

        Question 15.
        \nExplain the following :
        \nTwo types of Hire Purchase Agreements. (Dec 2019, 4 marks)
        \nAnswer:
        \nFollowing are the two types of Hire Purchase Agreements:-
        \n1. When the owner is unwilling to approach the purchaser of goods to recover the balance of the price, and the financier who pays the balance undertakes the recovery. In this form, goods are purchased by the financierthe dealer, and the financier obtains a hire-purchase agreement from the customer under which the latter becomes the owner of the goods on payment of all the instalments of the stipulated hire and exercising his option to purchase the goods on payment of a nominal price.<\/p>\n

        2. In the other form of transactions, goods are purchased by the customer, who in consideration of executing a hire-purchase agreement and allied documents remains in possession of the goods, subject to liability to pay the amount paid by the financier on his behalf to the owner or dealer, and the financier obtains a hire-purchase agreement which gives him a license to seize the goods in the event of failure by the customer to abide by the conditions of the hire-purchase agreement.<\/p>\n

        \"Drafting<\/p>\n

        Question 16.
        \nRegistration of power of Attorney is not compulsory. Explain with reference to decided cases. . (Dec 2020, 4 marks)<\/p>\n

        Question 17.
        \nWhat is Promissory Note and parties thereto? What are essentials of a Promissory Note? Draft a specimen promissory note. (Aug 2021, 6 marks)
        \nAnswer:
        \nPromissory note
        \nPromissory note is one of the negotiable instruments recognized under the Negotiable Instruments Act, 1881. A \u201cpromissory note\u201d is defined under Section 4 of the Negotiable Instruments Act, 1881 as \u201can instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument\u201d.<\/p>\n

        Parties to the Promissory note<\/p>\n

          \n
        1. Maker<\/li>\n
        2. Payee<\/li>\n
        3. Holder<\/li>\n<\/ol>\n

          Essentials of a Promissory Note
          \nTo be a promissory note, an instrument must possess the following essentials:
          \n(a) It must be in writing. An oral promise to pay will not do.
          \n(b) It must contain an express promise or clear undertaking to pay.
          \n(c) The promise or undertaking to pay must be unconditional. A promise to pay \u201cwhen able\u201d, or \u201cas soon as possible\u201d, or \u201cafter your marriage to D\u201d, is conditional.
          \n(d) The maker must sign the promissory note in token of an undertaking to pay to the payee or his order.
          \n(e) The maker must be a certain person, i.e., the note must show clearly who is the person engaging himself to pay.<\/p>\n

          Promissory Note Payable on Demand
          \nOn Demand we, A.B., aged about ………………… years, son of Shri ……………………. Resident of ……………………. AND C.D., aged about …………… Years, son of Shri ……………….. Resident of ………………….. jointly and severally promise to pay to E.F., aged about ………………. years, son of Shri ……………… resident of ………………….. or order the sum of Rupees …………………<\/p>\n

          (\u20b9 ……………..) only, with interest at the rate of ……………….. % per annum until repayment for value received. DATED AND DELIVERED at …………………………. this the …………………… day of ………………….. 2020.
          \nSd. A.B.
          \nSd. C.D.<\/p>\n

          \"Drafting<\/p>\n

          Question 18.
          \n\u201cFamily arrangements are governed by a special equitable principles peculiar to themselves”. Comment in light of Kale v. Dy. \u2018Director of Consolidation, AIR 1976 SC 807and.elucidate the essentials for a family settlement? When a family settlement can be enforced? (Aug 2021, 6 marks)
          \nAnswer:
          \nThe principles, which apply to the case of ordinary compromise between strangers, do not equally apply to the case of compromises in the nature of family arrangements. Family arrangements are governed by a special equity peculiar to themselves, and will be enforced if honestly made, although they have not been meant as a compromise, but have proceeded from an error of all parties, originating in mistake or ignorance of fact as to what their rights actually are, or of the points on which their rights actually depend.<\/p>\n

          In Kale v. Dy. Director of Consolidation, AIR 1976 SC 807 the Supreme Court has laid down the following propositions to put the binding effect and the essentials of a family settlement in a concretised form:<\/p>\n

          (1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family.
          \n(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence.
          \n(3) The family arrangement may be even oral in which case no registration is necessary.<\/p>\n

          \"Drafting<\/p>\n

          (4) It is well-settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the Court for making necessary mutation. In such a case, the memorandum itself does not create or extinguish any rights in immovable properties and, therefore, does not fall within the mischief of Section 17 (2) (sic) (Section 17 (1) (b)) of the Registration Act and is, therefore, not compulsorily registrable.<\/p>\n

          (5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest or even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties of the settlement has no title but, under the arrangement, the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the Courts will find no difficulty in giving assent to the same.<\/p>\n

          (6) Even in bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable, the family arrangement is final and binding on the parties to the settlement.<\/p>\n

          The fifth proposition quoted above clearly contemplates that even if a party to the settlement had no title but, under the arrangement, the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the Courts will find no difficulty in giving assent to the same. [CIT v. R. Ponnammal, (1987) 164 ITR 706 (Mad)].<\/p>\n

          Family Arrangement when enforceable?
          \nNo doubt, a family arrangement, which is for the benefit of the family generally, can be enforced in a court of law. But before the court would do so, it must be shown that there was an occasion for effecting a family arrangement and that it was acted upon. [Lakshmi Perumallu v. Krishnavenarnma, AIR 1965 SC 825 :1965 (1) SCR 261.]<\/p>\n

          \"Drafting<\/p>\n

          Question 19.
          \nDraft a specimen irrevocable power of attorney to be executed by a borrower company in favour of a lender company. Assume facts. If required. (June 2022, 6 marks)<\/p>\n

          Question 20.
          \nABC Corporation (Pvt.) Ltd. incorporated under the Companies Act, 2013, purchased a five-room double- storey flat in XYZ locality of Chennai for providing company accommodation to its Company Secretary on the first floor and company guest house on the ground floor. For facilitating its registration, the Chairman-cum CEO (CCEO), executed the following special Power of Attorney: (Dec 2014)<\/p>\n

          \u201cBy this Power of Attorney, IXXX, the Chairman of the ABC Corporation Ltd. do hereby appoint and authorise CD, an MBA, LLB and ACS – to be my agent and attorney for the purpose of executing registration of our company flat address: (XXXY, XYZ locality of Chennai) purchased by us for \u20b9 80 lakh only from KLN Builders (Pvt.) Ltd., on this …………………….. Day of September, 2014.<\/p>\n

          To: All concerned authorities.<\/p>\n

          Sd\/-XXX
          \nCCEO\u201d<\/p>\n

          Upon presentment, the Sub-Registrar, Chennai refused its bearer, CD, to allow him to complete the registration procedure, holding the Power of Attorney to be void.<\/p>\n

          Answer the following:
          \n(i) Is the Sub-Registrar\u2019s refusal legally tenable?
          \n(ii) If not, in what form or manner should the Power of Attorney be framed?
          \n(iii) How is it to be executed?
          \n(iv) Will it make any difference if the CCEO is a married woman aged 45 years? (4 marks each)
          \nAnswer:
          \n(i) The due execution of documents is important to create legal binding agreements. This is particularly so for the execution of a deed, which has strict requirements to ensure that it is valid and enforceable. Further, when a document is to be registered with Sub-Registrar the execution must strictly comply with certain requirements otherwise the document will not be accepted.<\/p>\n

          A power of attorney executed for the purpose of a specific act is called a \u201cspecial power of attorney\u201d<\/p>\n

          As per Section 22(2) of the Companies Act, 2013, \u201ccompany may, by writing under its common seal, authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India\u201d.<\/p>\n

          Thus, a power of attorney by a Company must be:<\/p>\n

            \n
          • Under common seal of the company<\/li>\n
          • Executed in the specific manner where Company will be the principal<\/li>\n<\/ul>\n

            Thus, the refusal by Sub-Registrar is legally tenable as the special power of attorney is not in the prescribed manner.<\/p>\n

            \"Drafting<\/p>\n

            (ii) Special power-of-attorney to be filed with the Sub-Registrar, to authorise the Company Secretary to execute registration of flat.<\/p>\n

            BY THIS POWER OF ATTORNEY IXXX, the Chairman of the ABC Corporation (Pvt.) Ltd. of etc., do hereby appoint CD of, etc., my attorney for me and on my behalf to appear for and represent me before the Sub-Registrar of ………………………. of all times as may be necessary and to present before him for registration the ………………… deed dated the ……………………. day of …………………. made between, etc., to admit the execution of the said deed by me (if necessary to admit the receipt of consideration), to do any act, deed or thing as may be necessary to complete the registration of the said deed in the manner required by law and when it has been returned to him after being duly registered, to give proper receipt and discharge for the same.<\/p>\n

            And I, the said XXX, the Chairman of the ABC Corporation (Pvt.) Ltd., do hereby agree and declare that all acts, deeds and things done, executed or performed by the said CD shall be valid and binding on me to all intents and purposes as if done by me personally which I undertake to ratify and confirm whenever required.<\/p>\n

            Signed, sealed and delivered
            \nWitnesses<\/p>\n

            XXX, the Chairman of the ABC Corporation Ltd.<\/p>\n

            (iii) A power of attorney can be executed by any person, who can enter into a contract i.e. a person of sound mind who has attained majority. A power of attorney can be executed only in favour of a major. While functioning as an attorney the donee is acting as an agent of the donor i.e. the executor of the power of attorney, who is the principal. Thus, in such cases there is relationship of agent and principal and such relationship can be entered into by majors and not by minors.<\/p>\n

            \"Drafting<\/p>\n

            Section 2 of the Powers-of-Attorney Act, 1882 in its operative part provides that the donee of a power of attorney may execute or do any assurance, instrument or thing in his own name and signature and an instrument or thing so executed or done shall be as effectual in law as if it had been executed or done \u201cby the done of the power in the name and with the signature and seal of the donor thereof\u201d. Simply stated, the section provides that the signature of the agent will be deemed to be the signature of the principal.<\/p>\n

            Company being an artificial person can act through agents i.e. its officers. Powers are delegated by companies to the agents through Board resolutions or through powers of attorney. Delegation of powers through a power of attorney is resorted to in view of the fact that it will be very easy to prove the execution thereof. However, in the cases of a resolution it would be necessary to produce the Minutes Books etc. to prove the passing of the resolution of delegation of the powers. Further, Section 22(2) of the Companies Act, 2013 provides the manner of execution of the power of attorney.<\/p>\n

            (iv) CCEO being a married woman aged 45 will not make any difference as the power of attorney is executed in the capacity of Chairman-cum- CEO of the Company ABC Corporation Ltd. (Pvt.) Ltd. and not in the capacity of individual. Further, even if the same would have been executed in individual capacity there would have been no effect as Section 5 of the Powers-of-Attorney Act, 1882, relating to married women\u2019s power to execute a power of attorney provides that a married woman of full age shall, by virtue of this Act, have power, as if she were unmarried, by a non-testamentary instrument, to appoint an attorney on her behalf, for the purpose of executing any non-testamentary instrument or doing any other act which she might herself execute or do; and the provisions of this Act relating to instruments creating powers-of-attorney, shall apply thereto.<\/p>\n

            \"Drafting<\/p>\n

            Question 21.
            \n\u2018B\u2019 has filed a title suit against \u2018A\u2019 in the Court of City Civil Judge (S. D.) as a long-cause suit. Pending its hearing, \u2018B\u2019 executed a power of attorney in favour of \u2018D\u2019 and got it registered. Later on, without consulting \u2018D’, \u2018B\u2019 signed a compromise deed with \u2018A\u2019. \u2018D\u2019 challenged the compromise as it was entered into without informing him or obtaining his consent; and so it prejudiced his rights. Would \u2018D\u2019 succeed? Cite case law. (June 2015, 6 marks)
            \nAnswer:
            \nIn the present case \u2018B\u2019 is principal and \u2018D\u2019 is attorney D being an attorney cannot claim and independent capacity in the proceedings. When the principal B signed compromise petition, in the law it amounts to implied revocation of power of attorney in favour of D vide illustration to Section 207 of the Indian Contract Act, 1872. The principal B is not bound to consult his attorney D before singing a compromise petition.<\/p>\n

            The above case is similar to the case of Deb Ratan Biswas & Other v. Anand Moyi Devi & Other, AIR 2011 SC page 1653 and the Hon\u2019ble Supreme Court held that it is well settled that even after execution of a power of attorney the principal can act independently and does not have to take the consent of attorney. The attorney is after all only agent of the principal. Even after executing a power of attorney the principal can act on his own.<\/p>\n

            \"Drafting<\/p>\n

            Question 22.
            \nExcellent Corporation Ltd. incorporated under the Companies Act, 2013 purchased an independent house comprising two floors in Gurgaon in the state of Haryana for a sum of \u20b9 3.5 crore for providing company accommodation to Dinesh, Company Secretary on the first floor and it was decided that the company shall have its guest house at ground floor. (Dec 2015)<\/p>\n

            For facilitating its registration, Mrs. Kiran, the Chairman-cum-Managing Director executed the following special power of attorney:<\/p>\n

            \u201cBy this power of attorney, I, Kiran, Chairman, Excellent Corporation Ltd., do hereby appoint and authorise Dinesh to be my agent and authority for the purposes of executing registration of the property purchased by the company from Antarctic Builders Ltd. on this 15th<\/sup> day of September, 2015.<\/p>\n

            For and on behalf of Excellent Corporation Ltd.
            \nSd\/- Kiran
            \nChairman<\/p>\n

            On presentation of this document, the Registrar refused to complete the registration procedure stating that the power of attorney is void.<\/p>\n

            In light of the above answer the following:
            \n(i) Is the action of the Registrar legally tenable? State reasons. (2 marks)
            \n(ii) Draft a power of attorney as you would have been the Company Secretary. (4 marks)
            \n(iii) Property registration charges are 8% for a man and 6% for a woman.
            \nWill you advise that the power of attorney be executed in favour of Mrs. Kiran to derive this benefit? (2 marks)
            \nAnswer:
            \n(i) The due execution of documents is important to create legal binding documents. This is particularly so for the execution of a deed, which has strict requirements to ensure that it is valid and enforceable. Further, when a document is to be registered with the Registrar, the execution must strictly comply with certain requirements otherwise the document will not be accepted.<\/p>\n

            \"Drafting<\/p>\n

            In the present case a specific Power of Attorney is to be executed to attain the purpose of a specific Act.<\/p>\n

            Further as per the provision of Section 22(2) of the Companies Act, 2013 a company may, by writing under its dommon seal, authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India.<\/p>\n

            It may be noted that in case a company does not have a common seal, the authorisation under this sub-section shall be made by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary.<\/p>\n

            A deed signed by such an attorney on behalf of the company and under his seal shall bind the company.<\/p>\n

            Thus, the refusal by Registrar is legally tenable as the specific Power of Attorney is not in the prescribed manner.<\/p>\n

            (ii) SPECIMEN FORMS OF SPECIAL POWER-OF-ATTORNEY Power-of-Attorney to Present Document for Registration
            \nBY THIS POWER OF ATTORNEY I, Kiran, the Chairman-cum- Managing Director of Excellent Corporation Ltd., do hereby appoint Dinesh as agent of Excellent Corporation Ltd. my attorney for me and on my behalf to appear for and represent me before the Sub-Registrar of ………………….. of all times as may be necessary and to present before him for registration the …………………… deed dated the ………………… day of …………………… made between, etc., to admit the execution of the said deed by me(if necessary to admit the receipt of consideration), to do any act, deed or thing as may be necessary to complete the registration of the said deed in the manner required by law and when it has been returned to him after being duly registered, to give proper receipt and discharge for the same.<\/p>\n

            \"Drafting<\/p>\n

            And I, Kiran, do hereby agree and declare that all acts, deeds and things done, executed or performed by Dinesh shall be valid and binding on me to all intents and purposes as if done by me personally which I undertake to ratify and confirm whenever required.<\/p>\n

            Signed, sealed and delivered
            \nWitnesses<\/p>\n

            Kiran
            \nChairman of Excellent Corporation Limited,<\/p>\n

            (iii) Chairman being a female will not make any difference as the property is to be registered in the name of the Company. If the property would have to be registered in the personal capacity of Mrs. Kiran the benefit could have been in the terms of savings in Stamp Duty.<\/p>\n

            As far as issue of Power of Attorney is concerned there is no distinction between man and woman.<\/p>\n

            \"Drafting<\/p>\n

            Question 23.
            \nAnil took a loan of \u20b9 10 lakh from JF Financial Corporation (a registered financial company) for purchasing a one bed room flat on an agreed rate of interest of 16% per annum. Along with agreement papers, a promissory note (P\/N) was signed by Anil which read, \u201cAnil has taken loan of \u20b9 10 lakh from JF Financial Corporation for purchasing a flat and whenever JF Financial Corporation demands its return, Anil shall pay back in ten instalments to them or to bearer of this P\/N\u201d. (Dec 2016)<\/p>\n

            After one year, Anil defaulted in return of loan on demand by JF Financial Corporation. Consequently, a summary suit was instituted by JF Financial Corporation against Anil in the Court of Civil Judge. After scrutiny, the court dismissed the suit holding that the P\/N was void.<\/p>\n

            What drafting precautions ought to have been taken by JF Financial Corporation when Anil was executing the P\/N payable on demand? Cite the relevant case law, if any. (8 marks)
            \nAnswer:
            \nJF Financial Corporation has to consider the following points while drafting Promissory Note:
            \n(a) It must be in writing. An oral promise to pay will not do.
            \n(b) It must contain an express promise or clear undertaking to pay. A promise to pay cannot be inferred. A mere acknowledgement of debt is not sufficient.
            \n(c) The promise or undertaking to pay must be unconditional.
            \n(d) The maker must sign the promissory note in token of an undertaking to pay to the payee or his order.
            \n(e) The maker must be a certain person, i.e., the note must show clearly who is the person engaging himself to pay.<\/p>\n

            (f) The payee must be certain. The promissory note must contain a promise to pay to some person or persons ascertained by name or designation or to their order.<\/p>\n

            (g) The sum payable must be certain and the amount must not be capable of contingent additions or subtractions.<\/p>\n

            (h) Payment must be in legal money of the country.<\/p>\n

            (i) It must be properly stamped in accordance with the provisions of the Indian Stamp Act. Each stamp must be duly cancelled by maker\u2019s signature or initials.<\/p>\n

            (j) It must contain the name of place, number and the date on which it is made. However, their omission will not render the instrument invalid, e.g. if it is undated, it is deemed to be dated on the date of delivery.<\/p>\n

            \"Drafting<\/p>\n

            Question 24.
            \nFrancis, aged 38 years, son of Anthony, Max house, Kunoor, Mysore, now residing at house No. 418, Bapu Bazar, New Delhi, is the Chief Administrative Officer of Standard Medical Laboratories, New Delhi. For the management of his properties at Mysore, he wants to empower Mr. Robert, aged 40 years, son of Josef, a business man, residing at Mary house, Kunoor, Mysore. Draft a General Power of Attorney (GPA). (Dec 2017, 8 marks)
            \nAnswer:
            \nGENERAL POWER OF ATTORNEY<\/p>\n

            KNOW ALL MEN BY THESE PRESENTS THAT I, Francis S\/o. \/ W\/o. aged 38 about years, residing at House No. 418 Bapu Bazar, New Delhi do hereby nominate, appoint constitute and appoint Sri.\/Smt. Mr. Robert S\/o. \/W\/o. aged about 40 years residing at Mary House Kunoor, Mysore, as my true and lawful power of attorney holder to do the following acts, deeds and things on my behalf and in my name in respect of the schedule property. Whereas, the sole and absolute owner in and possession of the schedule property, which is self acquired property.<\/p>\n

            Whereas, I am being unable to maintain manage and look after the affairs of the said property, I hereby appoint the said attorney holder to the following acts, deeds and perform things on my behalf and in my name with entire powers thereon.<\/p>\n

              \n
            1. To appear before the authorities of BDA Corporation, Revenue Office \/ Village Panchayath Office, or any other office pertaining to state or central Government or any other office and to represent in all respect.<\/li>\n
            2. To make payment of taxes, rates, cesses, assessments, to get plan sanction to any competent authority levied by them from time to time on my behalf.<\/li>\n
            3. To appoint advocate\/s, pleader\/s, prosecutor\/s, or any other competent authority for all purpose.<\/li>\n
            4. To file cases either civil or criminal in any competent court\/s and to complete the proceedings.<\/li>\n
            5. To apply and to obtain relevant document in respect of the schedule property on my behalf, and to put up any constructions in the schedule property.<\/li>\n
            6. To sign all documents, papers, agreements, affidavits forms vakalaths, receipts, declarations, etc., and to derive all kind of benefits and profits in respect of the schedule property on my behalf.<\/li>\n
            7. I have not given any power to this attorney holder to alienate property. I hereby agree to ratify and confirm all and what so ever that my said attorney shall lawfully do or cause to be done be virtue of this document.<\/li>\n<\/ol>\n

              \"Drafting<\/p>\n

              SCHEDULE
              \nAll the piece and parcel of immovable property bearing No. ___________
              \nMeasuring ______________
              \nBounded by:-
              \nOn the East:
              \nOn the West:
              \nOn the South:
              \nOn the North :<\/p>\n

              IN WITNESS WHEREOF I the executant above named has signed to this general power of attorney on this _________ clay __________ month ___________ year.
              \nWITNESS:<\/p>\n

              “EXECUTANT<\/p>\n

              \"Drafting<\/p>\n

              Question 25.
              \nA Power of Attorney (POA) is executed in West Bengal and stamped amount of \u20b9 100\/- as per stamp duty of the State, now the POA is to be sent to Bihar, where stamp duty is \u20b9 150\/-. Comment on the validity of POA. (Aug 2021, 4 marks)
              \nAnswer:
              \nThe exact amount of stamp duty on a Power of Attorney (POA) depends upon the State in which the POA is executed. If a POA executed in one state has to be sent to another state where the stamp, duty is higher, for use, then POA should be stamped with the difference in the duty before it is so used.<\/p>\n

              Hence, in this case, the differential stamp duty of Rs.50\/- (i.e.,150-100) is to be paid before its use.<\/p>\n

              Section 35 of the Indian Stamp Act, 1899 provides that an unstamped or inadequately stamped document is inadmissible in evidence.<\/p>\n

              \"Drafting<\/p>\n

              Drafting and Conveyancing Relating to Various Deeds and Documents-II Notes<\/strong><\/p>\n

              Promissory Note
              \nPromissory note is one of the negotiable instruments recognized under the Negotiable Instruments Act, 1881. A \u201cpromissory note\u201d is defined by Section 4 of the Negotiable Instruments Act, 1881 as \u201can instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument\u201d.<\/p>\n

              Essentials of a Promissory Note
              \n(a) It must be in writing. An oral promise to pay will not do.
              \n(b) It must contain an express promise or clear undertaking to pay.
              \n(c) The promise or undertaking to pay must be unconditional.
              \n(d) The maker must sign the promissory note in token of an undertaking
              \nto pay to the payee or his order. *
              \n(e) The maker must be a certain person.
              \n(f) The payee must be certain.
              \n(g) The sum payable must be certain and the amount must not be capable of contingent additions, or subtractions. If A promises to pay \u20b9 100 and all other sums which shall become due to him, the instrument is not a promissory note.
              \n(h) Payment must be in legal money of the country.<\/p>\n

              \"Drafting<\/p>\n

              Deeds of Power of Attorney
              \nA power of attorney executed for the purpose of a specific act is called a \u201cspecial power of attorney\u201d. It is also called a \u201cparticular power of attorney\u201d. A specific act is meant to imply either a specific act or acts related to each other as to form one judicial transaction, such as all the acts necessary to perfect a mortgage or a sale of a particular property. A power of attorney executed for the purpose of generally representing another person, or for performing more than one act, is called a \u2018general power of attorney\u2019.<\/p>\n

              Essentials of Family Settlement<\/p>\n

                \n
              1. The family settlement must be a bona fide one so as to resolve family disputes and rival qlaims by a fair and equitable division or allotment of properties between the various members of the family.<\/li>\n
              2. The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence.<\/li>\n
              3. The family arrangement may be even oral in which case no registration is necessary.<\/li>\n
              4. It is well-settled that registration would be necessary only if the terms of the family arrangement are reduced into writing.<\/li>\n
              5. The members who may be parties to the family arrangement must have some antecedent title, claim or interest or even a possible claim in the property which is acknowledged by the parties to the settlement.<\/li>\n
              6. Even in bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable, the family arrangement is final and binding on the parties to the settlement.<\/li>\n<\/ol>\n

                \"Drafting<\/p>\n

                Hire Purchase Agreements
                \nHire-Purchase agreement to be in writing and signed by parties thereto:<\/p>\n

                  \n
                1. Every hire-purchase agreement shall be:
                  \n(a) in writing, and
                  \n(b) signed by all the parties thereto.<\/li>\n
                2. A hire-purchase agreement shall be void if in respect thereof any of the requirements specified in (1) above has not been complied with.<\/li>\n
                3. Where the hire-purchase is associated with a contract of guarantee, the hire-purchase agreement shall be signed by the surety also, and if the hire-purchase agreement is not so signed, the hire-purchase agreement shall be voidable at the option of the owner.<\/li>\n<\/ol>\n

                  Important Contents of hire-purchase agreements
                  \n1. Every hire-purchase agreement shall state:
                  \n(a) the hire-purchase price of the goods to which the agreement relates;
                  \n(b) the cash price of the goods, that is to say, the price at which the goods may be purchased by hirer for cash;
                  \n(c) the date on which the agreement shall be deemed to have commenced;
                  \n(d) the number of instalments by which the hire-purchase price is to be paid, the amount of each of those instalments, and the date, or the mode of determining the date, upon which it is payable and the person to whom and the place where it is payable; and
                  \n(e) the goods to which the agreement relates, in a manner sufficient to identify them.<\/p>\n

                  2. Where- any part of the hire-purchase price is, or is to be, paid otherwise than in cash or by cheque, the hire purchase agreement shall contain a description of that part of the hire-purchase price.<\/p>\n

                  \"Drafting<\/p>\n

                  3. Where any of the requirements specified in (1) and (2) above has not been complied with, the hirer may institute a suit for getting the hire-purchase agreement rescinded; and the court may, if it is satisfied that the failure to comply with any such requirement has prejudiced the hirer, rescind the agreement on such terms as it thinks just, or pass such other order as it thinks fit in the circumstances of the case.<\/p>\n","protected":false},"excerpt":{"rendered":"

                  Chapter 5 Drafting and Conveyancing Relating to Various Deeds and Documents-II – CS Professional Drafting, Pleadings and Appearances Notes\u00a0is designed strictly as per the latest syllabus and exam pattern. Drafting and Conveyancing Relating to Various Deeds and Documents-II – Drafting, Pleadings and Appearances Study Material Question 1. Write notes on the following : (June 2012,) …<\/p>\n

                  Drafting and Conveyancing Relating to Various Deeds and Documents-II – CS Professional Study Material<\/span> Read More »<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[165],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/21373"}],"collection":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/comments?post=21373"}],"version-history":[{"count":3,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/21373\/revisions"}],"predecessor-version":[{"id":21403,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/21373\/revisions\/21403"}],"wp:attachment":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/media?parent=21373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/categories?post=21373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/tags?post=21373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}