If an irrecoverable GPA is issued by Principal to an attorney (Also one of the Legal Heirs of his properties) for transactions on his properties 1-10. The nature of the property is self acquired. While principal is alive, Lets say 1-5 were commercially sold. 1. After the death of the principal does the attorney still holds the right to carry transactions on the remaining properties (6-10) or right comes back equally to all legal heirs? 2. As per the notification bearing 3047/07/259 dated 23 feb 2007, Govt of INDIA has issued a clarification that Irrecoverable GPA is valid on death of donor/Principal yet it is to the discretion of sub registrar. In practical world how is it inferred/works?
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Power of attorney ceases on death of principal unless it is coupled with consideration
2) power of attorney coupled with interest is irrevecoable
3) section 202 of contract act lays down rule that authority coupled with interest is irrevocable
4)attorney would have right to carry on transactions in respect of other properties if POA is coupled with consideration
Hi
First and foremost we need to see the contents of the Power of Attorney to understand the following
a) Whether the POA was revocable or irrevocable &
b) Whether the POA was issued in lieu of a consideration.
Our response to your query 1 and 2 is only for informative purposes by perusing the following:
a) Power of Attorney act and
b) Law of contracts.
The law in general as applicable to a power of attorney ( not being a irrevocable power of attorney or not being a irrevocable power of attorney issued for a consideration) is as follows:
a) Under Sec. 1A of the Powers of Attorney Act, 1882 ('POA Act') and section 201 of the Indian Contract Act 1872 :
After the death of the principal, the Power of Attorney automatically expires. So the power of attorney holder does not have any more right to carry the transactions on remaining properties. The Properties numbering from 6-10 will revert equally to all of the legal heirs of the principal .
II Query on notification bearing 3047/07/259 dated 23 feb 2007 pertaining to POA:
The government has subsequent to the above notification has clarified in many instances that in the case of an irrevocable power of attorney for valuable consideration as expressly mentioned therein and or a power of attorney executed along with a development agreement/ agreement for sale/sale deed is irrevocable and is valid upon death of donor (unless declared invalid/ terminated by the court ) in accordance to Section 202 of the Indian Contract Act 1872.
In circumstances where a power of attorney is given for valuable consideration and expressed to be irrevocable, or is given to secure the interest of the donee in the subject matter property, then, so long as the donee has that interest, the power is irrevocable. However without authority being coupled with interest just by declaring the power to be irrevocable does not make it irrevocable.
Section 202 of the Indian Contract Act, 1872 enumerates that "where the agent himself has an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract be terminated to the prejudice of such interest.
Leading case laws on applicability of Section 202 of indian contract act are as follows:
1) In the case of Seth Loon Karan Sethiya vs. Ivan E. John , the Supreme Court of India, held: It is settled law that where the agency is created for valuable consideration and authority is given to effectuate a security or to secure interest of the agent, the authority cannot be revoked.
2) Similarly, the Delhi High Court in the case of Shri Ram Murti Singh Sisodia vs. Shri Pratap Singh Sisodia and Ors, , held: The object of giving validity to a power of attorney given for consideration even after death of the executants is to ensure that entitlement under such power of attorney remains because the same is not a regular or a routine power of attorney but the same had elements of a commercial transaction which cannot be allowed to be frustrated on account of death of the executant of the power of attorney.
Hope this helps.
1. After the death of the principal, the power of attorney deed automatically stands revoked and the agent has no power to continue with that anymore.
Any action done by the agent after that shall be invalid and unlawful.
The remaining properties shall devolve on the legal heirs of the deceased principal.
2. The irrevocable power of attorney when clubbed with the interest of the power holder then it is valid to that extent alone even after the death of the principal and not beyond that.
You may go through the order properly and also the notification validity and the relevance it carries to the different circumstances.
The GPA is valid only till the date of death of the father, as the Power of Attorney is only a agent and once the Principal dies along then with the death the agent's power also ends. However, when the power of attorney is coupled with interest or is made irrevocable, it will be valid even if the principal dies.
