General Power Of Attorney Executed Jointly By More Than One Principal Doesn't Automatically Terminate On Death Of One Principal: Madras HC
The Madras High Court has ruled that when a general power of attorney is executed jointly by more than one principal, the death of one principal would not automatically terminate the agency.
Asnwering a reference, the bench of Justice R Subramanian and Justice R Sakthivel held that the question of termination would depend upon the facts and circumstances of each case and would depend upon the intention of the parties at the time of execution of the power of attorney.
“We will have to necessarily reach the conclusion that a power of attorney deed executed by several persons, which cannot be said to be coupled with interest, is not automatically terminated on the death of one of the principals. The question of termination would necessarily depend on the facts and circumstances of each case,” the court observed.
The court observed that if the intention was to continue the power even after death, the agency would continue will the object sought to be achieved is complete and if there was a specific interest in the agency, the agency would be terminated in respect of the principal who dies.
“If it is shown that the intention of the parties was that the power was to continue even after death of one of the executants as laid down by the Calcutta High Court in Re Sital Prosad's (supra) and this Court in Garapati Venkanna's case, (supra), the agency will continue till the object sought to be achieved is complete..If it is shown that the principals had specific interest, independent of each other, like two joint owners executing a power for sale of the property, if their share is specific, the power will stand terminated in respect of the joint owner who dies,” the court said.
The court added that if the power of attorney is coupled with interest, it would be governed by Section 202 of the Indian Contract Act and would not be terminated upon the death of one of the principals even with reference to his interest.
The court was hearing an appeal on reference wherein a question was put forward as to whether the general power of attorney executed jointly by more than one principal will survive after the death of one of the principals and if so, under what circumstances? The reference was made by the single judge since the point of law was little nebulous and required clarification.
The court noted that the Indian Contracts Act did not deal with a situation where there were multiple principals and one of them died or became insane. Thus, the court decided to rely upon precedents to clarify the legal position. The court noted that the Calcutta High Court in the case of Re Sital Prasad and others, Insolvents, Badrinarain Agarwalla vs. Raja Brijnarain Roy and another (1916) and the Madras High Court in the case of M.Ponnuswami Pillai and another vs. Chidambaram Chettiar and others (1917) concluded that a power of attorney executed jointly would not terminate upon the death of a principal.
The court also traced the legal position in the United States and the United Kingdom and concluded that the nature of the contract would have to be looked into to ascertain whether the contract will be valid and binding on the surviving partner.
Thus, the court answered the reference accordingly.
Amicus Curiae: Mr.Srinath Sridevan, Senior Counsel
Counsel for the Respondent: Mr.V.Raghavachari, Senior Counsel for M/s.V.Srimathi
Citation: 2024 LiveLaw (Mad) 385
Case Title: K.A.Meeran Mohideen v Sheik Amjad and others
Case No: S.A.No.1391 of 2002