Revocation of Power of Attorney: Judicial Trends
What do you mean by Power of Attorney and what can POA do?
Power of attorney is a concept where a person is allowed by the legislation to exempt his presence in a certain situation and allow a representative on his behalf to act upon. The principal appoints an agent to dispense his responsibility as he has done himself in an ordinary course of action. There are situations where a person cannot act by going personally and the work is urgent, neither the presence can be there nor the work can be delayed and in such circumstances allowing/ authorizing a person/agent on his/her behalf can solve the purpose.
Table of Contents
- What do you mean by Power of Attorney and what can POA do?
- Relevant Acts
- Kinds & essentials of power if attorney
- Cancellation/ revocation of power if attorneycancellation/ revocation
- Revocation when possible
- Seth loon karan sethiya v. Ivan e. John
- Notice of revocation
- Misuse of power of attorney by the agent
- Procedure for revocation of power of attorney
The term ‘Power of Attorney’ describes the power of a person who will act on the behalf of the person who is making the document.
Broadly speaking, there are two laws that governs Power of Attorney:
- Power of Attorney Act 1882
- Indian Contract Act 1862 (Sections 182 to 238)
KINDS & ESSENTIALS OF POWER IF ATTORNEY
There are generally two kinds of power of attorney
- General Power of Attorney
- Special Power of Attorney
General Power of Attorney:- There is wide right given to the attorney. Under this, the attorney is allowed to do all such activities which will conclude to establish the main purpose of power of attorney, but the same is restricted in the means that any of the act which is not a transaction or happening of which will not results into the desired result, will not be considered as an act permitted.
Specific Power of Attorney:- The rights that are given to an attorney are specific in nature and the person is allowed to do a specific act which in itself is the desired outcome. There is/are no other linked targets that have to be achieved. The terms related to the specific activities are mentioned in the power of attorney.
CANCELLATION/ REVOCATION OF POWER IF ATTORNEY CANCELLATION/ REVOCATION
Where in case, the principal is of the view that the person to whom the power attorney is made is misusing his powers, the said document can be revoked by the principal. There are two kinds of revocations
- The one which can be revoked at the will of the principal– Revocable Power of attorney.
- The one which cannot be revokedat the will of the principal – Irrevocable Power of attorney.
REVOCATION WHEN POSSIBLE
Under Section 201 of the Indian Contract Act, a principal can revoke the power of attorney whenever he wishes but subject to certain below said conditions:
- At the wish of the principal.
- When the principal or the holder of the Power of Attorney holder becomes unsound of mind, dies, or becomes insolvent by the court.
- When the Power of Attorney holder renounces his powers.
- When the purpose for which the Power of Attorney was issued gets completed.
- When the power of attorney is expired due to time boundation.
A power of attorney can be deemed to be irrevocable in the following conditions:
- When there is a clause stating that the power of attorney is irrevocable.
- When the Power of Attorney holder, is himself having an interest in the subject matter of the Power of Attorney.
- Where the power of attorney holder has partly completed the act for which Power of Attorney was granted
CASE LAW:- In Seth Loon Karan Sethiya v. Ivan E. John the Hon’ble Supreme Court held that the agency cannot be canceled where the agency is formed in exchange for valuable consideration and the authority granted to the agent is to secure the interests of the agent or security against consideration. Hence, wherein case the agent himself has an interest in the property, the agency cannot be terminated unless there is an express contract for such termination, to the prejudice of the agency holder.
REVOKING POWER OF ATTORNEY
Whenever there is a need of revocation for power of attorney then the proper procedure has to be followed for revocation of POA:
NOTICE OF REVOCATION:
The Notice must be served to other parties to revoke the Power of Attorney. Failure to serve notice before revocation may lead to a claim of damages which the other party might have to pay for his failure of serving notice.
Where the Power of Attorney is jointed executed by several people and the joint execution is made severally then the revocation by one of the principals of the agent is valid.
When it is executed in favor of two or more people and the Power of Attorney is executed in favor of one or more person jointly and anyone of the agents dies, the remaining agents cannot use the Power of Attorney. Where the execution is made jointly and severally, the rest of the agents can exercise the authority granted to them.
MISUSE OF POWER OF ATTORNEY BY THE AGENT
There is a probability that the agent who is authorized to do something will misuse his power and could probably commit fraud or misrepresentation and can go beyond the authority granted of the Power of Attorney. In such cases, where there is fraud committed by the agent, the principal cannot be held liable by the act of the agent.
The irrevocable power of attorney can still be revoked if there is a separate agreement between Principal and Agent that upon commission of any such act which is against the principal or the agent then such irrevocable power of attorney can still be revoked.
PROCEDURE FOR REVOCATION OF POWER OF ATTORNEY
- A power of attorney can be revoked by issuing a letter/ notice of revocation and such letter/notice should have reasons of revocation and the effective date of revocation, and consequences of revocation. The notice shall be duly served on and an advertisement in newspaper can also be given.
- Where POA has been registered before the registrar or the sub-registrar the same can be revoked only by a Deed of Revocation and the same has to be registered. The registered deed should contain the reason for revocation. Publication in a newspaper may also be done after execution of Deed of Revocation.
- The irrevocable power of attorney can be revoked where there is a breach of any or all of the terms and condition of the contract or any other legal act which are against the other party.
- Power of attorney can get automatically revoked in case of death or insolvency or insanity of the principal/executory or the attorneyor where the purpose for which Power of attorney is made is complete.
- Any act which was done by the agent is not in good faith and is unlawful, the principal can issue a public warning and approach the court of law to terminate the power of attorney
The power of attorney is one of the best tools for the old and infirm and also the people who are too busy to be available for executing a transaction. But where comes the right there arises liability as well but not prejudice to the right of the principal. A power of attorney should be carefully drafted which shall include all the terms and conditions. Power of attorney is not only for old and infirm but is used by several companies where their agents represent them in various institutions, courts of law, etc. One should take proper legal guidance from an advocate to save themselves from any future risk.