INTRODUCTION

There are certain cases where a person is unable to execute their own documents so in that case, they authorize a third party to execute their documents. The person who gave the third person the authority to execute such documents gave this power through the power of attorney. This power of attorney granted to the third party is regulated by the Power of Attorney Act, 1882. The power of attorney can be of two types – General Power of Attorney or GPA & Special Power of Attorney. In General Power of Attorney or GPA, the principle grants all the powers to the third person for the execution of his documents which are necessary to carry out the Power of Attorney given to him. But in Special Power of Attorney the principle only grants such power to the third party which is mentioned in the Power of Attorney deed.

These powers of attorney given by the principle can be revocable as well as irrevocable in nature. In revocable nature of power of attorney, the principle can terminate the powers from the third party to whom he gave the power of attorney at any time when he wants to withdraw. According to the Section 201 of the Indian Contract Act of 1872, “If the principle revokes his authority or if the agent himselfrenounces his business of agency, or if the business of agency is completed or if either of the principle or agent is of unsound mind or if the principle considers him to be the insolvent.”

In the irrevocable nature of power of attorney, the power of attorney cannot be revoked just because it is mentioned in the deed. The cases where the power of attorney becomes irrevocable are:

According to the section 202 of the Indian Contract Act 1872, where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.
Here, the power of attorney cannot be revoked by the principle without the consent of the agent. In the case of Seth Loon Karan Sethiya v. Ivan E John, it was held by the Supreme court that “The principle cannot revoke the power of attorney of the agent if the agency is created through a valuable consideration. If the agent is having any kind of interest in the subject matter of the power of attorney, the agency cannot be terminated by the principle unless there is consent from the side of the agent.”
In the case of Vishnucharya v. Ramachandra, the court held that “If the agent gets some kind of commission or remuneration, it does not consider him that he is holding couple of interests.”

A general power of attorney coupled with interest/consideration can’t be revoked even after the death of the principal. Also, if the GPA is given without consideration but if it’s prepared on an appropriate stamp paper and is notarized by a notary public then it stands legally valid. Before delving into certain aspects, it’s important to understand the meaning of GPA coupled with interest. It means a power which lies in the hands of attorney not just to handle principal’s property but also any interests which may result from such authority. There are two kinds of GPA, notarized GPA and registered GPA. A notarized GPA means a valid GPA given without consideration and a registered GPA means is a verified document that can be accessed by potential buyers to check for encumbrances. In a notarized GPA, it isn’t sufficient for the purpose of appropriating immovable property in India, only a registered GPA can be considered valid for this purpose. There’s a high chance that the agent misuses the power of attorney on the grounds of fraud or misrepresentation and for that, the principal can’t be held liable through vicarious liability as the agent has exceeded his authority. Even if the act done by the agent is in mala-fide manner then the principal isn’t bound to indemnify him.

In the case of Ghanshyam v. Yogendra Rathi, the court held that “Neither an agreement to sell nor a power of attorney can be construed as a document of titles and will not confer title of the suit property on the buyer or the power of attorney holder.” And if it’s done so then it’s the sole violation of the prevailing statutory law. Also, the Hon’ble Supreme court in the case of State of Rajasthan and Ors. v. Basant Nahata held that “A power of attorney when coupled with interest, it becomes irrevocable.”

Under section 204 of Indian contract Act 1872, it mentions that a principal cannot revoke an agent’s authority if the authority has been partially exercised. Simultaneously, it means a general power of attorney stands irrevocable even if the authority has been partly exercised.

In the case of Hardip Kaur v. Kailash & Anr. “There was an involvement of a dispute concerned property at E-318, East of Kailash, New Delhi, including first, second and terrace floors. The possession was originally allotted to Darshan Kaur, but was later sold to Hardip Kaur in 1973. Later, Hardip Kaur built a three-storey building on it. In the year 1989, Hardip sold the three floors to Mohinder Kaur i.e. the defendant for four lakhs and fifty thousand rupees. It also executed other agreements like agreement to sell, power of attorney and will. In the year 1992, the defendant sold the property to defendant 3 for five lakhs and fifty thousand rupees and also executed the agreement to sell and general power of attorney. Later, the plaintiff argued that she had only sold the first and second floors to defendant and that the terrace construction was unauthorized. She also contended that the GPA and will were rescinded already in the year 1992. The court further laid down three issues regarding the sell of entire property, unauthorized GPA and terrace construction by the defendant was unauthorized. The court in the present case upheld the transactions in favour of defendants and dismissed the appeal filed by the plaintiff, mentioning the irrevocable nature of agreements and validity of the present case.” In other words, the court held that unilateral revocation by principal cannot be revoked.

Also, in the case of Indira Kaur v. Sheo Lal Kapoor, “The plaintiff was the owner of a house which is situated in the Nainital and he executed a sale deed in the year 1967 for rupees 70,000 because of the treatment of the son to the defendant. There was an agreement which allowed the plaintiff to again purchase the property within ten months. The plaintiff’s son died despite the treatment and he tried to communicate with the defendant through telegram, orally, notice to execute the sale deed. The defendant denied that there was an agreement & he maliciously claimed there was no agreement between them. Three issues were laid down before the court regarding time, transaction was a mortgage disguised as a sale and the plaintiff or defendant breached the agreement. The court in the present case held that the transaction was deemed an ostensible sale but intended as a mortgage. Time was not considered of the essence, as it is typically presumed in cases of immovable property transactions. The defendant was found to have breached the agreement by not being willing or present to execute the sale deed, whereas the plaintiff made all possible efforts to comply.

CONCLUSION

To conclude, the Power of attorney will remain valid even if there’s no transfer of property in formal manner and also like if there’s a notarized general power of attorney, it will also remain valid but it’s better to register it for the appropriation of property. There are also many cases where the power of attorney is misused by the agent and isn’t executed in good faith, then in those cases, the principal can’t be held vicariously liable for its agent exceeding its powers under his authority. Section 202 of Indian contract Act provides reference to the power of attorney with consideration can’t be revoked and section 204 of Indian contract act 1872 provides that general power of attorney stands irrevocable even if the authority has been partly exercised.

(Intern Arpeeta & Anusua) Symbiosis Law School  (Nagpur)

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