Validity of Power of Attorney (POA): Death of Principal

One question which may validly arise in the mind of any person in relation to Power of Attorney (POA) is that what shall happen if the person executing POA has died? This is question of more importance for people working particularly in banking industry. There are many transactions in banking sector which is executed by the attorneys on behalf of the principal on the strength of POA on day-to-day basis. In this Article, we have tried to examine the legal aspect of validity of POA, after the death of its principal.

Power of Attorney as an Agency

A power of attorney is a delegation of authority in writing by which one person is empowered to do an act in the name of the other. The person who acts on behalf of another person (the principal) by his authority, express or implied, is called an agent and the relation between him and his principal is called agency.
A power of attorney holder is nothing but an agent as defined in S. 182 of the Indian Contract Act, 1872. The authority of an agent is his power to affect his principal’s position by doing acts on his behalf.

Termination of a Power of Attorney

Generally speaking, a power of attorney can be terminated or cancelled by the principal by revoking his authority or by the power of attorney holder renouncing his authority.

According to S. 201 of the Contract Act, an agency can be terminated by the principal by revoking his authority or by the agent renouncing his authority. S. 201 of the Contract Act also states that an agency terminates, inter alia, by death of principal or agent.

Judicial Pronouncements

Radhabai vs Mongia (AIR 1939 Nag. 274): If the power-of-attorney holder exceeds his limits as per the power granted to him, by the instrument, then the provision of 'indemnity' in case of an act done in good faith does not apply, even if he was unaware of the determination of his power in consequence of revocation of power by or death/insolvency of the principal.

A holder of a power-of-attorney or an agent cannot go beyond the principal [Mahendra Pratap Singh & Anr. v. Smt. Padam Kumari Devi, A.I.R. 1993 All. 143].

Conclusion

According to established case laws read with Section 3 of Power of Attorneys Act 1882 and S. 182, 201 of the Contract Act, due to the demise of the person executing power of attorney, the power of attorney becomes null and void.

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