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Revoking a power of attorney (POA)

While some powers are revocable, others are not
A power of attorney (POA) is a document of agency where the principal appoints an agent to do and execute certain deeds on his behalf. A POA is any instrument empowering a person to act for and in the name of the person executing it. It includes an instrument by which a person is authorised to appear on behalf of any party in the proceedings before any authority. The Indian Stamps Act defines POA as 'any instrument empowering any specified person to act for and in the name of the person executing it'.

Revocation of a POA is as important as delegation of the power itself. Otherwise, it might be to the prejudice of the parties themselves. In deciding whether the agency can be revoked or not, two conflicting interests are to be reconciled and a suitable middle way is to be formed so that none of the parties suffer unjustly. The interests of the person who has delegated the power should be in conflict with those of the person to whom the power was given.

A POA is automatically terminated if either one of the parties to the instrument dies, the principal goes bankrupt, or any specific condition in the instrument is breached. Generally, in case the power given was one coupled with interest, it cannot be withdrawn. Section 202 of the Indian Contracts Act contains some relevant provisions. Accordingly, if an agent has an interest in the property that forms the subject matter of the agency created via the POA, the agency cannot be terminated to the prejudice of such an interest. Also where an agency is created for valuable consideration and authority is given to effect a security, the authority cannot be revoked. The POA is irrevocable if it creates an agency coupled with interest, unless there is an express stipulation to the contrary.

Where the authority of an agent is given for the purpose of effecting any security or for protecting any interest of the agent, it is irrevocable during the subsistence of such security.

The mere fact that a power is declared in the instrument granting it to be irrevocable does not make it so. Irrevocability requires something further. If on a construction of the document and in the light of the facts, the document does not prima facie satisfy the condition for the creation of a power coupled with interest, merely because the document itself describes the agency to be irrevocable, does not make it so. The interest which an agent gets in the property must be simultaneous with the power given to him in order to give him a power coupled with an interest. If the interest created in the agent is the result or proceeds arising after the exercise of the power, the agency is revocable and cannot be said to be an irrevocable agency.

If a document creates a power coupled with interest it is irrevocable in law. Still, the parities can by agreement make it revocable. If the power is irrevocable, the parties are nevertheless free to make it revocable by an express stipulation to the contrary. However, in cases where it is revocable it cannot be made irrevocable merely by writing so in the agreement.

Whether a given power is coupled with interest or not depends on the facts of the case and the wording of the instrument itself.

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