A Power of Attorney (PoA) is a lawful document that grants someone the power to represent another individual in financial, legal, or personal affairs. Defined by the Power of Attorney Act of 1882, it is an instrument authorising a designated person (agent) to act on behalf of and in the name of the individual establishing it (principal). The agent, also referred to as the attorney-in-fact or PoA holder, holds authority. Continue reading to understand the process of revoking a PoA.
Power of Attorney (PoA): Types
Power of Attorney (PoA) is of two types in India, as outlined below:
- General power of attorney: This type provides the agent with the authority to act on behalf of the principal in all matters permitted by law. The agent may be empowered to handle various tasks, including representing the principal in court disputes, selling property, signing cheques, purchasing stocks, leasing property, appointing caretakers for assets and more.
- Specific power of attorney: This variant grants the agent authority over a specific subject or matter on behalf of the principal. For instance, a specific PoA may restrict the agent to only collect rents from a property. In such cases, the agent is not permitted to sell the property or extend its rental duration. An agent holding a specific PoA is confined to decisions related to the specific matter and cannot overstep into general legal matters.
When can you revoke Power of Attorney (PoA)?
While the laws and contracts governing PoA in India do not specify rules for revocation, the courts have established certain situations in which general or specific PoA can be cancelled or revoked. Some of the methods for revoking PoA include:
Acts of the principal
- The principal can revoke the PoA at his own discretion by expressly revoking the authority.
- Termination may occur when the purpose for which the PoA was granted has been fulfilled.
- Revocation is possible if the agent becomes insolvent or is deemed of unsound mind.
Breach of contract
The principal has the right to revoke a PoA in instances of gross mismanagement by the agent, breaches of contract terms, or actions beyond the scope of granted powers. Even in the case of an irrevocable PoA, revocation is possible by issuing a notice in the event of serious breaches. If necessary, the principal can seek the intervention of the appropriate jurisdiction’s court to revoke an irrevocable PoA.
When can’t you revoke Power of Attorney (PoA)?
If the agent holds an interest in the subject matter of the PoA, the revocation of PoA is not possible without the consent of the agent. Section 202 of the Indian Contract Act stipulates that if the agent acquires an interest in the subject matter of the PoA, the principal is prohibited from revoking the PoA, as it would be detrimental to the agent’s interests.
How can Power of Attorney (PoA) be revoked?
The process for revoking or cancelling a PoA involves the following steps:
- Drafting a deed/notice of revocation: The principal must create a deed or notice of revocation outlining the reasons for revoking the PoA, the effective date, and the consequences of the revocation.
- Serving the deed/notice to the agent: The deed or notice of revocation should be duly served upon the agent to initiate the revocation procedure.
- Publication in a newspaper: To inform individuals with whom the agent is interacting on behalf of the principal, the deed or notice of revocation should be published in a local or national newspaper.
- Registration of cancellation deed: The same authority that registered the original PoA must register the cancellation deed of the PoA.
- Informing the agent: A copy of the cancellation deed should be sent to the agent to notify them of the registration of the revocation.
- Public announcement: A publication of the registered cancellation deed should be made in a newspaper to inform public that the agent’s powers have been revoked.
- Notifying interacting parties: Copies of the cancellation deed should be sent to individuals with whom the agent has been conducting business on behalf of the principal, instructing them to cease any further dealings with the agent.
- Automatic revocation: The PoA automatically gets cancelled or revoked in the event of the principal’s or agent’s death, insanity, insolvency, or when the primary purpose of the PoA has been fulfilled.
FAQs
Can I revoke a Power of Attorney (PoA) anytime I want?
Yes, generally, the principal has the authority to revoke a PoA at his discretion. However, certain conditions or circumstances, such as the agent having an interest in the subject matter, may restrict the revocation without the agent's consent.
What is the first step in revoking a Power of Attorney?
The initial step involves drafting a deed or notice of revocation. This document should specify the reasons for revocation, the effective date, and the potential consequences of the action.
Is it necessary to inform the agent about the revocation?
Yes, it is crucial to serve the deed or notice of revocation to the agent. Proper communication is essential to initiate the revocation process and keep all parties informed.
Are there legal formalities for revoking a Power of Attorney?
Yes, the cancellation deed of the PoA must be registered with the same authority that registered the original PoA. Additionally, a publication in a newspaper is often required to inform the public and those dealing with the agent.
Can a Power of Attorney be automatically revoked?
Yes, a PoA can be automatically revoked in certain circumstances such as the death, insanity, or insolvency of the principal or agent. Additionally, if the primary purpose for which the PoA was granted has been fulfilled, it may be considered automatically revoked.
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