Mere use of word "irrevocable" in a power of attorney will not make power of attorney "irrevocable"
Sri Udaya Holla next contended that the use of the word "irrevocable" with reference to the power of attorney implied an equitable assignment of the rents in favour of the bank and entitled the bank to receive the rents to the exclusion of others. The mere use of the word "irrevocable" in a power of attorney will not make the power of attorney "irrevocable" unless the terms thereof disclose that it created or recognised an agency coupled with interest in favour of the agent. For example, a power of attorney simpliciter, which merely authorises an agent, to do certain acts, in the name of or on behalf of the executant can be revoked or cancelled by the executant at any time, in spite of the instrument stating that the power of attorney is irrevocable. On the other hand, a power of attorney executed in favour of an agent, recording or recognising an interest of the agent/attorney, in the property which is the subject-matter of the agency, cannot be revoked or terminated, even if the instrument does not state specifically that it is irrevocable, as then, it would be a power coupled with an interest (see section 202 of the Contract Act, 1872). In this context, reference may be made to the following passage from the decision of the Andhra Pradesh High Court in M. John Kotaiah v. A. Divakar, :
"From the passages quoted above, it is clear that if on a construction of the power of attorney and in the light of the facts and circumstances obtaining in the case, the document does not prima facie satisfy the requirements for the creation of a power coupled with interest, then merely because the document itself describes the agency to be an irrevocable one, it does not become an irrecoverable agency. The Indian Contract Act also provides that in cases where the period of agency is prescribed and the agency is not, in law irrevocable, then the agent may have a cause of action against the principal for other remedies, in case the agency is revoked within the period. But that does not mean that an agency described as being irrevocable is to be treated as an irrevocable (one) if, in law, it does not satisfy the requirements of an irrevocable power of attorney".
