When One of Two Joint Owners Dies, Does the Development Agreement cum Power of Attorney in Favour of a Developer Automatically Stand Revoked?

Suppose two joint owners of a plot execute a development agreement cum general power of attorney in favour of a developer, granting him authority to obtain approvals, construct, and sell units. Midway through the project, one of the two principals passes away. The question that frequently arises before courts is: does the instrument get automatically revoked, or does it remain alive?

The short answer, drawn from judicial precedent, is that automatic revocation is not the default rule. Whether the power survives depends on the construction of the instrument, the intention of the parties, and whether the power is coupled with an interest.

The Baseline Rule: Agency Ends on Death of the Principal

Under the general law of agency codified in the Indian Contract Act, 1872, an agency ordinarily terminates upon the death of the principal. The Powers of Attorney Act, 1882, through Section 3, protects an agent who acts in good faith without knowledge of the principal's death — but only until such knowledge. As one judgment explains:

Section 3 does not enable the agent to continue to act on the strength of such power after the principal has died and the agent has knowledge of the same. 1993 0 Supreme(Cal) 415

So, in the case of a sole principal, death of that principal terminates the authority, and the developer cannot proceed on the strength of the power after learning of the death.

Death of One of Several Joint Principals: The Critical Distinction

The situation changes materially where the power was executed jointly by more than one principal. The leading authority is Re Sital Prosad and others, Insolvents, Badrinarain Agarwalla vs. Raja Brijnarain Roy (1916), where the Calcutta High Court held that whether the power of attorney comes to an end by the death of one principal depends on the construction of its terms, the position of the parties, and the property affected

K. A. Meeran Mohideen VS Sheik Amjad - Current Civil Cases (2024)

The Supreme Court of India in M. Ponnuswami Pillai vs. Chidambaram Chettiar followed this view, holding that a power of attorney executed by two members of a joint Hindu family was not terminated by the death of one executant, since the whole interest devolved on the survivor and the authority to the agent contained in the power of attorney remained unaffected by the death of one of the principals

K. A. Meeran Mohideen VS Sheik Amjad - Current Civil Cases (2024)

A Division Bench has recently reiterated the position in Periammal vs. Ramesh (A.S.No.307 of 2011, decided 16.11.2022):

No law extinguishes or terminates the Power of Attorney Deed executed by several persons on the death of one of the co-executants.

K. A. Meeran Mohideen VS Sheik Amjad - Current Civil Cases (2024)

However, there is an important qualification noted in the case law: where the principals have specific, independent interests — for example, two joint owners with clearly demarcated shares executing a power for sale — the power may stand terminated only in respect of the share of the deceased principal, while remaining alive for the surviving principal 2024 0 Supreme(Mad) 2141. Where the property is held as an undivided joint holding with no individual demarcation, courts have favoured survival of the instrument as a whole.

Why Development Agreements cum GPA Usually Survive

In the real estate context, courts have recognised that a power of attorney granted to a developer under a development agreement is ordinarily not a bare agency. A development agreement that requires the developer to fund construction and promises the developer a share in the constructed premises, together with a proportionate share of land, gives the developer an interest in the subject matter of the agency2014 0 Supreme(Cal) 66.

This triggers Section 202 of the Indian Contract Act, 1872 — the doctrine of agency coupled with interest. Where the agent has an interest in the property, the authority cannot be revoked to the prejudice of that interest, whether by the principal's act or, by extension, through unilateral steps by the principals' side. Courts have held that a principal cannot terminate such an agency where the agent has an interest in the subject property and no express termination clause exists 2022 0 Supreme(Telangana) 483 and 2022 Supreme(Online)(Tel) 5986. Further, unilateral cancellation of a development agreement cum GPA by one party, to the detriment of others, has been held impermissible where the agreement is comprehensive and binding on all parties 2022 0 Supreme(Telangana) 483.

Recent decisions have also confirmed that where a power is irrevocable and coupled with interest and has not been expressly terminated, it remains operational even after disputes and notices of cancellation 2025 0 Supreme(Mad) 5663. The validity of an irrevocable joint power of attorney after the death of one co-owner was framed as a substantial question of law in another matter, underscoring that termination is not automatic and must be tested against the instrument's terms 2019 0 Supreme(Guj) 186.

Drafting Safeguards That Strengthen Survival

Practically, developers and joint owners can reinforce the survival of the instrument by including:

• An irrevocability clause stating that the GPA shall remain in force during the term of the agreement and until the development and conveyances are completed 2025 0 Supreme(Kar) 2435.
• A clause permitting the developer to act notwithstanding the death of any owner, with powers exercisable by the developer for the benefit of all owners and their heirs.
• Clear demarcation (or deliberate non-demarcation) of shares so the joint grant is read as one composite authority.
• A provision binding the legal heirs of the deceased owner to the agreement, since the heirs step into the deceased's share but remain bound by the development scheme.

It should be remembered that a GPA or agreement to sell does not itself transfer title — ownership passes only through a registered conveyance under Section 54 of the Transfer of Property Act 2026 Supreme(Online)(Tel) 21523. The GPA's role is to enable performance of the development scheme, not to substitute for a sale deed.

Key Takeaways

• Death of a sole principal terminates the power of attorney, subject to the agent's lack of knowledge under Section 3 of the Powers of Attorney Act, 1882.
• Death of one of two joint principals does not automatically revoke the instrument; survival depends on construction and the parties' intention

  K. A. Meeran Mohideen VS Sheik Amjad - Current Civil Cases (2024)

  2024 0 Supreme(Mad) 2141.
• Where shares are specific and demarcated, the power may terminate only as to the deceased owner's share.
• Development agreements cum GPA typically confer an interest on the developer, attracting Section 202 and making the agency irrevocable coupled with interest2014 0 Supreme(Cal) 66 and 2025 0 Supreme(Mad) 5663.
• The deceased owner's legal heirs generally remain bound by the development scheme, subject to their succession rights.

The exact outcome in any given case will turn on the drafting of the instrument and the facts, and parties should seek case-specific advice from a qualified advocate before acting on or against a power of attorney in these circumstances.