How To Cancel a Power of Attorney In India?

A Power of Attorney (POA) is a legal document granting one person (the agent or attorney-in-fact) the authority to act on behalf of another (the principal) in legal or financial matters. In India, the process to cancel or cancel a power of attorney involves a specific set of procedures to ensure that the revocation is legally binding and effective.

Drafting a Deed of Revocation

To cancel a Power of Attorney, the principal must draft a deed of revocation. This document is a formal declaration of the principal’s intent to cancel the powers previously granted to the agent. The deed of revocation must clearly specify which power of attorney is being cancelled and the reasons for revocation. Here are the steps to draft this deed:

1. Detailing the power of attorney: The deed should provide a detailed description of the power of attorney, including the date of execution, the name of the agent and the specific powers granted.
2. Reasons for Revocation: The reasons for revocation must be clearly stated. Common reasons include the completion of the task for which the power of attorney was granted, mismanagement by the agent or a change in the principal’s circumstances.
3. Effective Date: The deed should specify the date on which the revocation is effective.
4. Consequences of Revocation: The principal should outline the consequences of the revocation to inform the agent and third parties of the change in authority.

Circumstances for Cancelling a Power of Attorney

While the Indian legal system does not provide explicit statutory rules for cancelling a power of attorney, various court rulings have established certain circumstances under which a power of attorney can be cancelled. These include:

Acts of the Principal

• Express Revocation: The principal can cancel the power of attorney at any time through express revocation.
  • Completion of Purpose: If the purpose of the power of attorney has been fulfilled, it can be cancelled.
  • Insolvency or Unsound Mind of Agent: If the agent becomes insolvent or of unsound mind, the power of attorney can be cancelled.

Breach of Contract

• The principal can cancel the power of attorney in cases of gross mismanagement or breach of the contract terms by the agent. Even an irrevocable power of attorney can be cancelled if the agent acts beyond the scope of their powers or violates the terms of the agreement. In such cases, the principal may need to approach a court for revocation.

Circumstances Where Power of Attorney cannot be Revoked

Under Section 202 of the Indian Contract Act, a power of attorney cannot be cancelled if the agent has an interest in the subject matter of the power of attorney. This means that if cancelling the power of attorney would harm the agent’s interests in the subject matter, the principal cannot cancel it without the agent’s consent.

Process of Cancellation of Power of Attorney

The process of cancelling a power of attorney involves several steps to ensure that the revocation is legally binding and effectively communicated to all relevant parties:

1. Draft the Deed of Revocation: The principal must draft a deed or notice of revocation, detailing the reasons for revocation, the effective date and the consequences.
2. Serve the Notice: The deed of revocation must be duly served to the agent, informing them of the principal’s intention to cancel the power of attorney.
3. Public Notice: The revocation should be published in a local or national newspaper to inform third parties who might be dealing with the agent on behalf of the principal.
4. Register the Revocation: The cancellation deed must be registered with the same authority that registered the original power of attorney. This step is important for the revocation to be legally recognised.
5. Inform Relevant Parties: Copies of the registered cancellation deed should be sent to the agent and all relevant parties with whom the agent has been interacting on behalf of the principal. This step ensures that all parties are aware of the revocation and cease any dealings with the agent.
6. Public Announcement: A public announcement of the registered cancellation deed should be made to inform the general public that the agent’s authority has been cancelled.

Automatic Revocation

A power of attorney can also be automatically cancelled under certain conditions, such as:

• Death of the Principal or Agent: The power of attorney is automatically cancelled upon the death of either the principal or the agent.
• Insanity or Insolvency: The power of attorney is cancelled if the principal or agent becomes insane or insolvent.
• Completion of Purpose: If the primary purpose of the power of attorney has been accomplished, the power of attorney is automatically cancelled.

Legal Considerations and Court Involvement

In some cases, especially where there is a dispute regarding the revocation of a power of attorney, legal intervention may be required. The principal can approach the court to obtain an order for revocation if the agent refuses to acknowledge the revocation or continues to act on behalf of the principal despite the revocation notice. The court can provide a binding resolution to ensure the revocation is enforced.

Conclusion

Cancelling a Power of Attorney in India involves a structured process to ensure that the revocation is clear, legally binding and effectively communicated to all relevant parties. By drafting a deed of revocation, serving notice to the agent, publishing the revocation in a newspaper, registering the revocation with the appropriate authority and informing all relevant parties, the principal can ensure that the power of attorney is effectively cancelled.

Understanding the circumstances under which a power of attorney can and cannot be cancelled, as well as the automatic revocation conditions, is important for both principals and agents to navigate the legal landscape of power of attorney in India effectively.