• Conditional POA is valid or not

Sir ji

Mr A took loan from Mr B and mortgaged his Plot to Mr B but mortgage deed was not registered 

But after the mortgage period is over, Mr A failed to repay loan to Mr B

Hence Mr A agreed to make “Agreement to Sale” in favour of Mr B and requested to Mr B to wait for further 06 months, to which Mr B Agreed 
that if Mr A cannot repay loan in further 06 Months then the Plot will be 
of Mr B but if Mr A pays the loan amount then Mr B will cancel the 
“Agreement to Sale” 

Mr B Agreed to above but Mr B says that again after 06 Months he 
does not want to undergo all these exercises if Mr A fails to pay loan
 
Therefore Mr B asked that Mr A must immediately give him POA to 
register the said Plot in the case if Me A fails to pay loan amount in 
06 Months, to which Mr. A agreed. 

Query 

Should Mr A has to make separate MOU with Mr B containing above 
condition of 06 Months and then POA to register the Agreements to 
Sale 

OR 

Can Mr. A puts these words in POA that “in the case If I (Mr. A) 
cannot pay loan amount of “X” to Mr B then ,,,,," as explained below :- 

AND WHEREAS,…. I appoint, nominate and constitute Mr. B having his 
r/address at ____________. as my true and lawful attorney to do 
comprehensively the following acts, deeds, things and matters pertaining
to the said Plot in the case If I (Mr. A) cannot repay loan amount of “X” 
to Mr B on or before [deleted], for me and on my behalf, that is to say:-

to register “Agreements to Sale” ……………… executed by me ……

to present, lodge ………………...

to appear before any court …………..


Please guide 
HARIOM
Asked 4 years ago in Property Law
Religion: Hindu

3 answers received in 30 minutes.

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7 Answers

1. Yes you can have a conditional POA with the trigger event mentioned in the PoA itself

2. No need for a separate MOU

3. This is to ensure that if B tries to use the POA for registering the sale deed before the agreed period of 6 months, then the registration department will refuse to register the sale deed, since the power of attorney would itself not have come into life

4. So it's a good idea to have the trigger event or condition as to when the PoA would become operational, in the PoA itself

5. I do not see any legal restriction for the same in my view

Yusuf Rampurawala
Advocate, Mumbai
6881 Answers
79 Consultations

5.0 on 5.0

The registered sale agreement along with the registered power of attorney deed which is coupled with interest is very much valid in law.

POA deed is not a loan agreement and no such things can be incorporated in POA deed as desired by you, first of all understand that the power of attorney is a representative of the principal and whatever he does is on behalf of the executor, therefore there arises no necessity for a mention about the loan existing between the principal and the agent.

T Kalaiselvan
Advocate, Vellore
78089 Answers
1543 Consultations

5.0 on 5.0

Dear Sir,

Please see the recent law.

======================================================================================

No property sale on power of attorney: Supreme Court

======================================================================================

Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.

In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovableproperty sales is not a valid form of transfer of property.

A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds.

"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA.

The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

1) MOU can be entered into giving A 6 months to make payment

2) it can be mentioned that in case payment not made same deed would be registered in favour of B

Ajay Sethi
Advocate, Mumbai
87932 Answers
6207 Consultations

5.0 on 5.0

Yes a springing or a conditional power of attorney can be created as POA is valid contract under the Indian Contract Act and on putting up a condition on happening of the a condition the power of attorney can grant the rights on behalf of the principle.

The thing is it should be drafted properly and securely otherwise attorney holder or principle can take undue advantage out of it as cancellation clause and the amount should be specifically mentioned along with the payment terms how payment shall be made. So that condition should be followed strictly.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1) Ask to Mr. B to sign a Promissory notes against the amount given because till date the time has been lapsed and its running late without registering the POA.

2) Or get POA registered on Mr.B name in conditional format.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

Dear Client,

Entering into Mortgage Deed, will give u more clear title. Above language is not valid in POA but deed only. MOU is fine but its registration is requisite otherwise not admissible in evidence if matter reached to court.

Read sec 58 (c) Transfer of property Act.

https://www.advocatekhoj.com/library/bareacts/transferofproperty/58.php?Title=Transfer%20of%20Property%20Act,%201882&STitle=Mortgage,%20mortgagor%20mortgagee%20mortgage-money%20and%20not;mortgaged%20defined

Registered agreement to sale also valid, even if not registered, specific performance of un registered agreement is permissible.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

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