Document Fragment View

Matching Fragments

(iii) If the question No. (ii) is answered in affirmative, whether the specific performance has to be ordered subject to any condition?

12. Before we deal with the questions formulated as above, we find it appropriate to first consider the relevant provisions and the position of law. Section 201 of the Contract Act, 1872 provides for termination of agency. For the purpose of the case at hand, only two of the contingencies provided in Section 201 are relevant. One is that the agency can be terminated by the principal by revoking its authority and the other is that the death of the principal. However, Section 202 of the Contract Act provides that, where the agent has an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract be terminated to the prejudice of such interest. The statutory illustrations given under this Section 202 save the situations in which the authority cannot be revoked even in case of death. Section 203 of the Contract Act provides as to when the principal may revoke agent's authorities and accordingly the principal may revoke authority save as is otherwise provided by Section 202, at any time before the authority is exercised so as to bind the principal. Section 204 of the Contract Act provides that the principal cannot revoke the authority given to his agent after the authority has been partly exercised, so far as regards such action/obligation as arise from acts already done by agency. Thus, the termination of an agency by the principal has to be examined in the light of the provisions as aforesaid in the facts of the present case. In this regard, the question arises as to whether the agent, that is the plaintiff-respondent, in the instant case, had any interest in the property which forms the subject-matter of the agency; whether there is an absence of an express contract for termination and what will be effect of the death of the principal on the question of revocation. On behalf of the appellant, the argument was raised that the interest in the subject-matter of the agency should be an interest pertaining to a pre-existing right and not an interest by virtue of the contract and authority itself and that even if the power had been described as irrevocable as per Clause 13 of the POA, Clause 17 of the MO A has to be read as the express term of the contract for the purpose of rescinding the MOA at any time before the plaintiff-respondent could be put into possession of the property and in fact, the plaintiff-respondent has not been put into possession of the property in question.

16. Once we find that it was a case of agency coupled with the interest, and there is total absence of an express contract for the purpose of termination of the agency, the question arises as to what will be the effect of the death of the defendant-appellant and as to whether the agreement can be said to have come to an end or automatically terminated and authority stands revoked by the death of the principal during the pendency of the suit on 1-9-1988.

17. Under Clause 2 of the MOA, the plaintiff-respondent was appointed, constituted and nominated as the true and lawful attorney by the owner, that is the defendant-appellant and on his behalf to do or cause to be done all acts required for the purpose of execution of the said scheme and in regard to the said property. This power of attorney was described to be irrevocable till the whole scheme is carried out. In the POA, after Clause 13 saying that the power of irrevocability till the scheme is finally carried out and executed as per the agreement dated 24th March 1977, the owner, i.e., the defendant-appellant mentioned that he for himself, his heirs, executors and administrators ratifies and confirms and agree to ratify and confirm whatsoever the said attorney or any substitute or substitutes acting under him shall do or purport to do or cause to be done by virtue of this presents. Firstly, by the very nature of the MOA read with POA and the ACD, we find that the parties had agreed for the execution of the scheme for the welfare of the members of the weaker sections. The scheme was required to have a statutory sanction and the carrying out of the scheme could not be intended to cease on account of the unfortunate death of the owner. It appears that no termination can be brought about even on account of the death as is clearly provided in the statutory illustrations given under Section 202 of the Contract Act. In Halsbury's Laws of England, 4th Edition, Vol. 1, at page 524 in para 872, it is mentioned as under:

19. No doubt, in the case of Garapati Venkanna (supra), the Madras High Court had held that, where a power of attorney has been executed by several principals in favour of a person and one of the principals having distinguished interest in subject-matter of power of attorney dies, the death terminates the power of attorney. This view was taken by the Madras High Court because, the Court found that there was no authority coupled with an interest and, therefore, the argument raised on the basis of Section 202 of the Contract Act could not prevail. Here is a case in which we have already held as above that it was a case of an agency coupled with interest. In our opinion, the position of law with reference to Section 202 of the Contract Act is, therefore, very clear that the cases in which the agency is coupled with interest and there is no express contract for termination, there cannot be any termination even by death and, therefore, the factum of death of the principal during the pendency of the suit cannot lead to the termination of the agency. The necessary ingredients required under Section 202 of the Contract Act so as to hold that the agency could not be terminated in the facts of the present case are, therefore, clearly established and we also find that even the factum of death of the principal cannot bring about the termination of the agency.