Our Ref: LJ/PJ/12/2005

Dated: December 15, 2005

Mr. A

Senior Assistant Vice President

Bank 1

Principal Branch

45, Dilkusha Commercial Area


Dear Sir,


We refer to your letter dated 21.11.2005 and our opinion dated 09.12.2004 on the above subject.

We have perused the contents of your letter dated 21.11.2005.

It appears that Mr. M and Mr. N appointed Company 1  (Attorney) vide IGPA dated 14.07.2003 as their true and lawful attorney empowering the attorney inter alia to mortgage and sell the land, but no provision has been incorporated entitling sub-delegation of the power under that IGPA.

It further appears that the Attorney has mortgaged the land with the Bank and also executed an IGPA in favour of the Bank to sell the mortgaged property.

Now the Bank has sought our opinion as to whether the above IGPA executed by the Attorney in favour of the Bank is valid, if not what would be the Bank’s best course of action.

Our opinion:

We are of the view that  as the IGPA  is executed  by the Attorney without any  express authority from the  other Landlords/Principal, this  IGPA cannot  bind the Landlords/Principal. Hence, the Bank may face legal  complication  in the event the Bank in future intends to sell the mortgaged property on the strength of this IGPA.

However,  by virtue of  section  196 of the  Contract Act 1872, if  the Landowners ratify such unauthorised  act of the Attorney then the IGPA may bind the  Landowners and  shall  then be deemed as if the Attorney had been performed by his authority.

We  therefore enclosed herewith a draft Letter of Confirmation/Ratification to be issued by the  other Landowners ratifying the unauthorised act of the Attorney. Such Letter of Ratification  is  advised to be executed before a Notary Public.

Should you have any further query, do not hesitate to contact the undersigned.

Thanking you

Yours faithfully