Sim­plify trans­ac­tions with NRIS

When par­ties across bor­ders are in­volved in real es­tate trans­ac­tions, one can use a sim­ple le­gal in­stru­ment to vest power in an In­dian res­i­dent

HT Estates - - Property Classifieds - Vivek Kohli

Of­ten, high-value trans­ac­tions of trans­fer of im­move­able prop­er­ties lo­cated in In­dia, re­sult in a stale­mate due to one of the par­ties be­ing an NRI/PIO/ for­eign cit­i­zen. No doubt de­vel­op­ments in com­mu­ni­ca­tion tech­nol­ogy are fa­cil­i­tat­ing par­ties to en­gage in cross-bor­der dis­cus­sions and ne­go­ti­a­tions. How­ever, it is sel­dom of help when the party abroad is un­able to visit In­dia at the de­sired time of ex­e­cu­tion of the nec­es­sary le­gal doc­u­ments.

A re­cent case that comes to mind is that of a buyer who had en­tered into an agree­ment to pur­chase im­move­able prop­erty in In­dia with the seller (an NRI). The NRI seller was in In­dia at the time of ex­e­cu­tion of agree­ment to sell in favour of the buyer. It was agreed be­tween the par­ties that the sale deed for the prop­erty would be ex­e­cuted within three months’ time, si­mul­ta­ne­ous to the buyer pay­ing the bal­ance sale con­sid­er­a­tion to the NRI seller. The NRI seller, who was sup­posed to re­turn to In­dia to ex­e­cute the sale deed in favour of the buyer, was, how­ever, un­able to do so within the spec­i­fied three months. The buyer was ready with the pay­ment of bal­ance sale con­sid­er­a­tion and re­peat­edly in­sisted that the seller visit In­dia to ex­e­cute the sale deed and close the trans­ac­tion. The buyer was also per­sis­tent that he would pay the bal­ance sale con­sid­er­a­tion only when the seller vis­ited In­dia in per­son. The deal ul­ti­mately fell through as nei­ther party had con­tem­plated that a power of at­tor­ney in favour of an In­dian res­i­dent, could be ex­e­cuted by the seller while he was abroad. The power of at­tor­ney holder in turn could have fa­cil­i­tated the trans­ac­tion by ex­e­cut­ing the sale deed in In­dia on be­half of the seller, within the time pe­riod of three months. More­over, peo­ple are un­der the im­pres­sion that a power of at­tor­ney ex­e­cuted abroad also re­quires to be reg­is­tered in In­dia, for which the seller’s pres­ence is also re­quired in In­dia.

It is of­ten not prac­ti­cal for par­ties re­sid­ing abroad to in­cur ex­penses to visit In­dia at short no­tice for ex­e­cu­tion of le­gal doc­u­ments. To avoid such a sce­nario, the party res­i­dent in In­dia may re­quest the NRI/PIO abroad to ex­e­cute a power of at­tor­ney in favour of a per­son (called the at­tor­ney) who re­sides in In­dia. If the party re­sid­ing abroad wants to vest broad, sweep­ing pow­ers in the at­tor­ney, he may ex­e­cute a gen­eral power of at­tor­ney in favour of the per­son he has cho­sen to be his at­tor­ney.

On the other hand, if the party re­sid­ing abroad wants to vest a cer­tain, spe­cific power in the at­tor­ney, he may ex­e­cute a spe­cial power of at­tor­ney in favour of the at­tor­ney. The holder of a power of at­tor­ney then has le­gal power to ex­e­cute doc­u­ments and en­ter into agree­ments on be­half. Do­ing so may save con­sid­er­able time and money.

For such a power of at­tor­ney to be bind­ing and recog­nised by law, it should be duly ex­e­cuted be­fore, and at­tested by, the In­dian con­sulate or no­tary pub­lic lo­cated in the coun­try where the NRI/PIO is re­sid­ing, as per the pre­scribed pro­ce­dure.

THINKSTOCK

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