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Power of Attorney : How It works In Bangladesh

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The law relating to the powers of attorney in Bangladesh is governed by the Power of Attorney Act 2012 and Power of Attorney Rules 2015. A Power of Attorney is an authority given by an instrument by one person, called the principal, authorizing another person called the Attorney or Agent to act on his behalf. The Power of Attorney gives legal authority to the person called Agent or Attorney In fact it empowers the Attorney to take the legal decisions for the Principal. A Power of Attorney can give the agent very wide powers or limited powers. Power of Attorney is frequently used in cases where the principal is ill or he is not available to complete legal transactions on his behalf.

The Power of Attorney can be divided into two types, namely, General Power of Attorney and Special Power of Attorney.  A power of attorney executed for the purpose of generally representing another person, or for performing more than one act, is called a ‘general power of attorney’.  A general power of attorney grants an attorney practically unfettered powers of decision making, from settling disputes to buying a new property, everything. A power of attorney executed for the purpose of a specific act is called a “special power of attorney”. It is also called a “particular power of attorney”. Special Power of Attorney narrows what choices the agent can make. For example, creating a special power of attorney might only grant a business partner the ability to use certain assets to care for your business in the event you become debilitated.

Revocable and Irrevocable Power of Attorney

A power of attorney executed in favour of a person can always, at the discretion of the principal thereof, be revoked. The attorney of a power of attorney is an agent of the principal. If an attorney himself has an interest in the matters covered by the power of attorney, which forms the subject matter hereof, the power of attorney in the absence of express contract cannot be terminated to the prejudice of such interest. In other words, agency coupled with interest cannot be terminated without the consent of the other party (Section 202 of the Contract Act, 1872). Therefore, a power of attorney executed, in which the attorney himself has an interest, is irrevocable. Such irrevocable powers of attorney are executed in favour of the financial institutions by a company that offers financial assistance to the latter. Irrevocable Power of Attorney denotes those powers of attorneys, which relate to selling, buying, mortgaging or transferring of immovable properties. A power of attorney given to a Land Developer against monetary consideration/benefit will also be treated as an Irrevocable Power of Attorney. An irrevocable Power of Attorney must be registered under section 52A of Registration Act 1908 to be legally enforceable. In every Irrevocable Power of Attorney, there must be mention about the time validity of this power of attorney.

Execution of Foreign Power of Attorney

Power of Attorney Act 2012 has also created a scope for individuals residing outside Bangladesh to execute power of attorney. This Power of Attorney has to be executed and signed in the presence of the appropriate officer; which in the context of individuals residing outside of Bangladesh is the concerned officer of the Bangladesh Consulate/mission in that country.

The executed power of attorney will thereafter be sent to Bangladesh. Within two months of reaching Bangladesh, it must be submitted to the Ministry of Foreign Affairs for its attestation and then duly stamped within three months. In cases where the power of attorney is required to be registered, it shall be submitted to the concerned sub-registry office within four months from the date on which the power of attorney was received in Bangladesh.

While creating a Power of Attorney Deed, one needs to be particularly mindful of certain requirements. Firstly, to attach recent passport size photographs of both donor and donee with the power of attorney and it has to be attested by putting signature and/or thumb impression on it, to attach National ID Card of both the parties, to be very specific about the power granted and the time duration of it and shall be executed in non-judicial stamp papers of appropriate value.

Who can Execute Power of Attorney

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 the relationship of agent and principal and such a relationship can be entered into by majors and not by minors. In addition to that, the Power of Attorney Act 2012 expressly lists out all the scenarios where the power of attorney cannot be provided to individuals. Such limitations include the execution of the will, execution of power pertaining to adoption, execution of gifts and trust instruments.

Authentication of Power of Attorney

A power of attorney need not be attested or registered. 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, Bangladesh Consul or Vice-Consul or representatives of the Government. If a power of attorney is so authenticated courts shall presume the execution of the power of attorney. Under Section 85 of the 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, Bangladesh Consul or Vice-Consul or representative of the Government, was so executed and authenticated. Under Section 57(6) and (7) of that Act, the seals of Notary Public are taken judicial notice of.

Under Section 32(c) of the Registration Act, 1908, a power of attorney can be granted to an agent to present a document for registration; but, under Section 33(1) of that Act, only certain powers of attorney are recognised. But 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 jurisdiction the principal resides. But a power of attorney empowering an agent to execute a deed conveying the property in 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.

Duration of Power of Attorney

Unless expressly or impliedly limited for a particular period, a general power of attorney will continue to be in force until expressly revoked or determined by the death of either party. In the case of a company, the power of attorney executed by the directors ceases to be operative as soon as an order for winding up is made as the directors cease to function. A special power of attorney to do an act is determined when the act is done. In case it is desired that the power should continue for a particular period or until a certain event happens, an express provision to that effect should be made in the deed itself.

Power of Attorney by a Company

A 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. In the case 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, under Section 128 of the Companies Act, 1956, a company may, by writing under its Common Seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place either in or outside Bangladesh, and a deed signed by an attorney on behalf of a company and under his seal where sealing is required shall bind the company and have the same effect as if it were under its Common Seal. In any event, a power of attorney, in the case of a company, be executed in conformity with the articles of association.

As we have seen that companies act through agents, powers to the agents of a company i.e. officers of the company, are delegated through powers of attorney. Generally, detailed power of attorney is executed in favour of the managing director or chief executive of the company delegating to him all the powers which under the Companies Act, 1956, directors of a company can delegate/sub-delegate. In regard to routine matters like the execution of excise documents and execution of various deeds and documents in connection therewith, the powers relating to court cases are delegated to various officers of the company.

Letters of authority

Letters of authority are 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, filling complaint/suit/case to the concerned authority etc. on behalf of companies or corporate bodies. By and large, the law relating to the powers of attorney will apply to letters of authority.

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Md. Mamonor Rashid
Mr. Md. Mamonor Rashid served as theEditor of Law & Rights of the Diplomat Gazette. Besides he is an Advocate, Supreme Court of Bangladesh and a Legal Researcher with an unyielding affluence of know-how in different legal arenas spotlighting on international commercial arbitration, commercial disputes, company laws, Tax Laws, VAT laws, Labor and Employment Laws , Real Estate & Land related matters . He is also recognized for his research experiences. Mr. Rashid has co-authored three books on International Law and Commercial Arbitration and written 100 + (Hundred) articles on the various legal issues published in scholarly Law Journals and Daily Newspapers. He is a Young Professional Member of HKIAC Hong Kong, SIAC Singapore, and LCIA London.
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