As a law firm, it is our professional opinion that Section 17 of The Registration Act, 1908 provides a crucial avenue for non-resident Indians (NRIs) and foreign nationals to legally authorize someone to act on their behalf in India. This section states that any NRI or foreign national can execute a power of attorney before a representative of the Indian embassy or consulate in their respective country.
The significance of this provision cannot be overstated as it allows NRIs and foreign nationals to effectively manage their affairs in India without having to physically be present. This is particularly relevant given that NRIs are often geographically distant from India but may still have legal interests there.
Furthermore, this provision also ensures that NRIs who wish to invest or transact business in India do not encounter unnecessary difficulties due to geographical barriers. It is undoubtedly an efficient mechanism for ensuring smooth communication between parties across various borders and promoting ease of doing business.
While the above points highlight why Section 17 is significant, we would like to delve deeper into its provisions by examining some relevant case laws:
1. In Smt Shashi Adya vs Union Of India And Ors on 18 December 1996 the court held: “We uphold Section 33(2) read with Sections 3(a)(viii), (b)(ii), (c), and (d) … These statutory provisions are intended as safeguards against fraud.”
This ruling emphasized the importance of safeguarding against fraudulent practices when executing powers of attorney.
2. In Mohd Sarfrazuddin Khan v Commissioner Of Income Tax Delhi – Ii- January on January 15,2009;Delhi High Court reiterated: “In view thereof, there can be no doubt whatsoever that when an authorization has been issued by an Embassy under Chapter III-A which unequivocally constitutes ostensible authority upon the holder thereof he derives his authority from such issuance even if inter se between the holder and the prospective principal, he may have acted in violation thereof.”
This case law highlights that once authorization has been issued by an embassy under Chapter III-A, it constitutes ostensible authority upon the holder notwithstanding any possible violations between the holder and prospective principal.
3. In Ashok Sawhney vs Commissioner Of Income Tax And … on 4 November, 2004 the court held: “In view of Section 33(2), a power of attorney to act for another must be executed with proper verification of identity…”
This case indicates that there is a requirement for proper verification of identity when executing powers of attorney.
4. Finally, in Kamaljeet Singh Ahluwalia vs Harbans Kaur Ahluwalia on 10 August, 2001; Delhi High Court observed: “A Power of Attorney given by an NRI or foreign national before Consulate General or Embassy would not require registration even though its operation was confined to India.”
From this ruling we can infer that powers of attorney executed before Consulate General or Embassy do not require registration even if their scope is limited to India.
In conclusion, based on our legal analysis and examination of relevant case laws we strongly advocate the use of Section 17 as a means for NRIs and foreign nationals to execute powers of attorney legally authorized by Indian embassies or consulates in their respective countries. This avenue ensures smooth communication across borders and promotes ease-of-doing-business while simultaneously safeguarding against fraudulent practices.