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"16. We are not impressed by the submission of Mr. Roy Chowdhury that a so-called irrevocable Power-of-Attorney cannot be revoked in any circumstances. By virtue of such Power-of-Attorney if an owner of the building gives agency to a person to act on his behalf, the contract by itself is determinable at any point of time. The concept of irrevocable Power-of- Attorney thereby conferring agency for all time to come is unknown in jurisprudence unless such power is coupled with an interest, meaning thereby, the conferment of power to do some act conveyed to an agent along with an interest in the subject-matter of the power. When such power coupled with an interest is given, the holder of such power does not hold the same for the benefit of the principal but for his own benefit and for the above reason, such authority is not recognised as true "agency power" and is termed as "proprietary power". In the case before us, no such "propriety power" has been given to the developer. Section 202 of the Contract Act recognises such propriety power and as provided in section 203 thereof, except in the cases covered by section 202, all other agencies are revocable at the instance of the principal. After going through the Power-of-Attorney involved herein, we find that such agency was given only to give effect to the earlier agreement for development of the immoveable property which by itself does not create any interest over the property in view of the provisions contained in section 54 of the Transfer of Property Act."

In the judgment reported at AIR 1964 Allahabad 441 (Loon Karan Sethiya v. Ivan E. John), a bank's debtor made an agreement under which the debtor executed a power of attorney authorising the bank to execute a decree obtained by the debtor against a third person and credit the realisation to the debtor's bank account. The revocation of the power of attorney was found to be invalid in view of Section 202 of the Contract Act. The judgment is an illustration of how the rule as recognised in Section 202 of the Contract Act applies but throws no light on a development agreement of the kind that is the subject-matter of the four sets of proceedings in which the reference has been made. The Allahabad Division Bench judgment was affirmed in the Supreme Court judgment which has also been cited and which is found to be equally inapposite in the present context.

To begin with, Section 202 of the Contract Act, in the context of a power of attorney executed by an owner in favour of a developer pursuant to a development agreement, has to be reconciled with Section 54 of the Transfer of Property Act; particularly, as at least two of the judgments cited speak of a power of attorney executed in pursuance of a development agreement creating an agency coupled with an interest in favour of the developer-agent. Indian law does not recognise the equitable title to land of a person who has entered into an agreement to purchase the same. Thus, the final paragraph of Section 54 clarifies that an agreement for sale of an immovable property does not, of itself, create any interest in or charge on such land. Section 202 of the Contract Act, on the other hand, recognises an interest in the property which forms the subject-matter of the agency. The word "property" in Section 202 of the Contract Act would not mean the same "property" in the final paragraph of Section 54 of the Transfer of Property Act. In an agreement for sale of a land, the property is the land itself. In a power of attorney executed in pursuance of a development agreement of the kind that is referred to herein, the property which forms the subject-matter of the agency is not necessarily the part of the land that is envisaged to be transferred to the developer; it is the project itself.

In the context of the interest of the agent that is protected under Section 202 of the Contract Act, the authority of the principal has to be regarded as a kind of security for the agent. It must also be appreciated that the mere use of the word "irrevocable" in a power of attorney would not make it irrevocable unless it creates the kind of interest that is envisaged in Section 202 of the Contract Act. It is also the nature of the interest that has to be discerned; for instance, the prospect of remuneration to the agent arising from the agency may not constitute such an interest as would prevent the termination of the agency. The authority must be seen to have been given with the object of protecting or securing the interest of the agent; and it may not be sufficient if it does so incidentally. (Pollock & Mulla on Indian Contract and Specific Relief Acts; 12th Ed.) Section 201 of the Contract Act provides, inter alia, for the termination of an agency by the principal by revoking of the authority of the agent. The pre- conditions to the exercise of the power to revoke the authority of the agent and the effect of such termination are recognised in some of the subsequent provisions of the Contract Act. The general rule is that the principal may revoke the authority of the agent; the exceptions to the rule are provided in the statute. But when an agent has not exercised the authority to bind the principal and the revocation of the agency is contested on the basis of Section 202 or 204 of the Contract Act, it must be appreciated that such provisions are to protect the agent and if the prejudice suffered or likely to be suffered is offset by any act or deed, the revocation cannot be resisted. The point is best made with the help of the illustrations in Section 202 and Section 204 of the Contract Act. According to Illustration (a) under Section 202 of the Contract Act, if A gives authority to B to sell his land, and to pay himself out of the proceeds, the debts due to him from A, then A cannot revoke the authority. But it cannot be said that if A makes over the debts due to B prior to or simultaneously with the revocation of the authority, the revocation would still be bad. The same analogy can be carried to Illustration