Skip to main content

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 Generally, in case the power given was one coupled with interest, it cannot be withdrawn.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.

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now