When can Power of Attorney be considered revoked? Supreme Court explains

The Supreme Court on Tuesday said that if a principal in a contract chooses to act for themselves and both the agent and the third party are aware of the decision, it would imply a revocation of the Power of Attorney (PoA) favouring the agent [Thankamma George v Lily Thomas & Anr]..A Bench of Justice CT Ravikumar and Justice SVN Bhatti made the observation while dealing with a property dispute between two sisters, one of whom had executed a PoA in favour of the other.The Court explained that the revocation or renunciation of authority can be done by express words or may be implied from the words and conduct of the principal."In a case where the principal chooses to act for himself, particularly to the agent's knowledge and a person to be affected, then it can be held that Section 207 (revocation) of the [Indian Contract] Act is attracted," the Court said..The Court added that in the absence of a particular mode for revocation of the authority of an agent, the manner adopted by the principal to revoke the authority of the agent must be one which clearly and unequivocally communicates to the parties to be affected by such revocation."In the framework of Sections 207 and 208 of the Act, the revocation/renunciation of authority may be made by express words or may be implied from the words and conduct of the principal, viz., which is inconsistent with the continuance of the agency. This is one facet of renunciation or revocation of authority of an agent," the Court said. It further stated that other facet is governed by Section 208 of the Act which provides for the effective time and date of termination of the agent’s authority and third parties."From a plain reading, Section 208 infers and gives effect to revocation upon the twin conditions being satisfied, (i) communication to the agent and (ii) knowledge to a third party i.e., one who deals with or is likely to deal with the agent. Then, the revocation of authority becomes known to the agent and the said third parties. In other words, an idea in the mind of the principal to revoke cannot be construed as implied revocation or renunciation of agency. There ought to be an act or conduct of the principal which implies that the agency is revoked or withdrawn.".In the present case, the appellant Thankamma George (principal) and Lilly Thomas (agent) - who are the sisters - had purchased 11.50 ares of land in 1991. Since Thankamma had been working abroad, she executed a PoA in favour of Lilly in 2003 in relation to the property. In January 2008, contrary to the PoA, Thankamma and Lilly jointly executed a sale deed for a portion of the land in favour of a third party. A total of 8.47 ares was retained after the sale. The present dispute originated a few months later in 2008 when Lilly transferred the land to her husband PM Thomas. Thankamma argued that Lilly could not have taken the decision since the PoA favouring her stood withdrawn when they jointly executed the sale deed in favour of the third party in January 2008..She moved the trial court for a declaration that she is the sole title holder of the suit schedule property and sought recovery of possession from her sister and brother-in-law.Though civil court rejected her claim of sole ownership, it accepted the alternative prayer for partition and decreed the suit accordingly. It also agreed that the PoA favouring Lilly stood revoked.The matter then reached the Kerala High Court which in 2022 held that mere fact of Lilly joining in execution along with Thankamma in executing the sale deed of January 2008 does not amount to implied revocation. Since Lilly's appeal was allowed, Thankamma approached the top court..The major question before the apex court was whether implied revocation of PoA was made out in the present case.The Court found Lilly's husband was one of the witnesses to the sale deed executed by the sisters in January 2008 in deviation of the power granted to Lilly under PoA by ThankammaThere was an explicit conduct by Thankamma to act for herself on the share she holds in the property purchased in 1991, it noted."In Deb Ratan Biswas ..., this Court held that the signing of a compromise by the defendants themselves would amount to implied revocation of power of attorney. In a case where the principal chooses to act for himself, particularly to the agent's knowledge and a person to be affected, then it can be held that Section 207 of the Act is attracted," it said.Thus, the Court said there was no doubt in holding that Thankamma had revoked the authority of Lilly, who also had the knowledge of same."Therefore, the revocation takes effect on 18.01.2008. Ex. A-5 was executed on 16.04.2008. Thus, with the operation of implied revocation of authority, Respondent No. 1 cannot act as an agent of the Appellant and, hence, the sale deed insofar as the Appellant’s share in the suit schedule is held void ab initio," it ruled..Concluding that the High Court judgment is unsustainable, the Court allowed Thankamma's appeal and confirmed the decision of trial court.Considering the relationship between the parties and that a house has been constructed on the land, the Court directed the trial court to explore the possibility of determining the market value of Thankamma's half share in the suit property and subject to her sister and brother-in-law paying the determined value to her towards, pass a final decree. "If the parties do not arrive at a consensus on the current market value, the operative portion in the judgment and decree of the Trial Court could be put to final decree proceedings and execution in accordance with the law. In such an event, the Appellant compensates the Respondents for possessing the constructed area along with her half share in the plaint schedule," the Court ordered..Senior Advocate V Chitambaresh with advocates Vipin Nair, Arindam Ghosh, Karthik Jayashankar, MB Ramya, Mohd Aman Alam, PB Sashaankh, and Govind Venugopal appeared for appellant.Advocates Haris Beeran, Azhar Assees and Radha Shyam Jena appeared for respondent..[Read Judgment]