As per Contract Act, if principal wants to revoke agent’s authority then there ought to be an act or conduct which implies that agency is withdrawn, shouldbecome known to agent & third parties: Supreme Court upholds implied revocation of power of attorney
Justices CT Ravikumar & SVN Bhatti [09-07-2024]

Read Order: THANKAMMA GEORGE v. LILLY THOMAS AND ANOTHER [SC- CA NO. 6495 OF 2023]

LE Correspondent

New Delhi, July 10, 2024: The Supreme Court has allowed an appeal by Thankamma George and upheld the implied revocation of a power of attorney executed in favour of her sister Lilly Thomas. The case pertains to a property dispute between two sisters.

“In the absence of a particular mode suggested 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unequivocally communicates to the parties i.e., to be affected by such revocation, that the agent’s authority has been withdrawn,” observed a Division Bench of Justice CT Ravikumar and Justice SVN Bhatti.

Thankamma George, the appellant, had purchased a property jointly with her sister Lilly Thomas in 1991. In 2003, Thankamma executed a power of attorney in favour of Lilly authorizing her to deal with the property, as Thankamma was working abroad. However, in 2008, Thankamma joined Lilly in executing a sale deed for part of the property to a third party. Subsequently, Lilly, acting on the earlier power of attorney, sold Thankamma's share in the remaining property to her own husband.

Thankamma filed a suit claiming that her act of joining the 2008 sale deed amounted to implied revocation of the power of attorney given to Lilly earlier. The trial court decreed the suit in Thankamma's favour. However, the Kerala High Court reversed this judgement on appeal by Lilly.

Allowing Thankamma's appeal against the High Court order, the Supreme Court held that Thankamma's conduct in independently dealing with the property in 2008, with the knowledge of Lilly and her husband, amounted to an implied revocation of the power of attorney under Section 207 of the Indian Contract Act. The Top Court noted that revocation of an agent's authority can be express or implied from the words and conduct of the principal which are inconsistent with continuance of the agency. For the revocation to be effective, it must be communicated to the agent and known to third parties who deal with the agent.

Applying these principles, the Supreme Court concluded that Lilly could not have validly sold Thankamma's share to her husband in April 2008, as the power of attorney stood impliedly revoked by Thankamma's conduct in January 2008. The sale deed was therefore void. The Supreme Court restored the decree of the trial court, while giving the parties an option to arrivearrive at a consensus on the current market value of the said property.