How To Cancel A Power Of Attorney In India?

Introduction: What exactly is a Power of Attorney?

If for any reason, an individual is unable to execute a document by himself, he can allow a third party to sign the document on his behalf through the means of granting the third party, Power of Attorney. It is subject to the Power of Attorney Act of 1882 and other legislations in India.

A Power of attorney can be:

• General Power of Attorney: When the principal grants the Power of attorney holder all the power required to achieve the purposes for which such Power of Attorney is granted.
• Special Power of Attorney: When the principal authorizes the Power of Attorney holder to exercise only those powers as specified in the Power of Attorney deed.

Types Of Power of Attorney: A View on Revocation

A power of attorney, depending on the terms of the deed signed, can be described as –

• Revocable: The Power of attorney can be revoked by the wishes of the principal.
• Irrevocable: The Power of Attorney isn’t revocable by the will of the principal.

– Revocable Power of Attorney

In general, the principal has the power to end the Power of Attorney at any time he wishes to do so. The requirements for revocation include ( in accordance with Section 201 of the Indian Contract Act, 1872):

1. If the principal cancels the Power of Attorney granted to the agent.
2. If either the principal or the holder of the Power of Attorney gets mentally incapacitated, dies, or becomes unsound of mind, then they are declared insolvent by the court.
3. Also, If the holder of the Power of Attorney abdicates his authority.
4. If the company for which the Power of Attorney was granted gets successfully completed.

Power of Attorney may also be cancelled if there is an implied revocation of Power of Attorney or, in the event of time-barred agency, the term of the Power of Attorney expires.

– Irrevocable Power of Attorney

A power of attorney can contain a clause that states that such power of attorney is irrevocable.

A power of attorney cannot be considered irrevocable just because it states in the clauses of the deed executed for grant of such Power of Attorney of it being irrevocable. This Power of Attorney may be terminated by the person who issued it or by the Power of attorney holder by following the procedure according to law.

In the event of revocation of an Irrevocable Power of Attorney, the Principal is required to publish an announcement in local newspapers. Without this, the revocation is null and void.

In the following instances, the principal is not able to cancel the Power of Attorney:

1. In the event that the holder of the Power of attorney, i.e., the agent himself, is interested in the subject matter of the power of attorney. To revoke the power of Attorney that falls under this category, the consent of the power of Attorney holder is mandatory.
2. When the agent has only partially performed the act for which the Power of Attorney has been granted, he will not be deprived of the right for the act which he already exercised. 

Section 220 of the Indian Contract Act and Revocation of Power of Attorney

In accordance with this section, the power of attorney cannot be terminated by the principal without the permission of the agent if the agent is interested in the subject matter of the Power of Attorney. Furthermore, a Power of Attorney cannot be revoked even after the death or insanity of the principal.

Revoking Power of Attorney

A few of the most important facts to consider regarding the revocation of a Power of Attorney are:

1. Notice:

In the event of an express revocation of Power of Attorney, whoever, whether the agent or the principal, wants to terminate that Power of Attorney must give reasonable notice to another party prior to the cancellation. In the event of not doing this, all costs of the damages incurred based on this failure by the other party to whom such notice was due will be compensated by the party who did not fulfill its obligation to issue the notice. The reasonability of the notice varies from one case to the next, according to the terms of the deed.

An implied revocation doesn’t need prior notice.

2. Unregistered Power of Attorney vis-a-vis Registered Power of Attorney:

A Power of Attorney may be registered or unregistered. The process for revocation of each is distinct, as described below:

• Registered:

A registered Power of Attorney can only be terminated through a registered deed.

• Unregistered:

An Unregistered Power of Attorney may be cancelled through an unregistered instrument of cancellation. In addition, it is mandatory to publish an announcement about the cancellation in local newspapers; in the absence of that, the cancellation will be null and void.

1. When the Power of attorney is executed jointly:

In the event that the Power of attorney is signed jointly by multiple individuals, it isn’t legally valid for one of the principals to carry out the cancellation of the agent without the consent of the other principals. 

2. When the Power of Attorney is executed in favour of two or more persons:

If the power of attorney is executed jointly in favor of one or more persons, but one of the agents passes away, then the remaining agents can’t use the Power of Attorney. But, if the execution is done jointly and severally, then the remaining agents can legitimately exercise the power granted to them by the Power of Attorney.

3. Power of Attorney given by a firm:

If a firm grants Power of Attorney to an agent, then such power of attorney is revoked automatically at the time of dissolution of the company.

Misuse of Power of Attorney by the Agent

It could be possible that the person to whom the power of attorney is granted uses this authorization to commit fraud or make false representations. If such fraud or misrepresentation falls within the limits of the authority provided to him, the principal shall be held liable. However, if it falls outside the boundaries of the authority granted by the Power of Attorney, he shall be held solely liable for such fraud/misrepresentation. The principal isn’t responsible for any act of the agent that is beyond the authority given to the agent. 

Therefore, a principal cannot be held liable for fraud/misrepresentation by the agent if it is outside the limits of the authority provided by the Power of Attorney; he may not need to revoke it.

Conclusion

The main purpose of a Power of Attorney is to allow the principal to carry out his duties without physically being present at the location where the work needs to be carried out. It is the right of the principal to cancel a power of attorney to prevent any harm to his interest caused by the agent. Although revocation is possible in the majority of cases, there are some exceptions to it. Before granting or accepting the power of attorney, the principal or the agent must be aware of these conditions.