Irrevocable agency and unpaid purchase money interest depend on legal interest, clear revocation, and possession

A cancellation notice that referred only to one of two distinct powers of attorney was treated as ambiguous and ineffective to revoke both instruments, because extrinsic material could not cure the defect. The note also explains that an agency is irrevocable under section 202 of the Contract Act where the agent has a legally protected interest in the subject-matter; an agreement for sale and a power given for valuable consideration to secure performance created such an interest, making the authority a power coupled with interest. It further states that interest on unpaid purchase money was not payable without delivery of possession or another lawful basis, so the interest direction was deleted.

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Issues: (i) Whether the notice of cancellation validly revoked the powers of attorney executed in favour of the attorney; (ii) whether the agency was irrevocable under section 202 of the Contract Act because the attorney had an interest in the subject-matter of the agency; (iii) whether the respondent was liable to pay interest on the unpaid purchase money.

Issue (i): Whether the notice of cancellation validly revoked the powers of attorney executed in favour of the attorney.

Analysis: The notice referred only to a single power of attorney, although two distinct powers of attorney had been executed for different purposes. Read by itself, the notice was ambiguous and defective. Under the rule excluding extrinsic evidence to supply defects in an ambiguous document, it could not be treated as an effective cancellation of both instruments.

Conclusion: The cancellation notice did not validly revoke both powers of attorney.

Issue (ii): Whether the agency was irrevocable under section 202 of the Contract Act because the attorney had an interest in the subject-matter of the agency.

Analysis: Section 202 protects an agency where the agent has an interest in the property forming the subject-matter of the agency. The term 'interest' was construed broadly to mean a legally protected advantage or benefit, not merely ownership. An agreement for sale created an enforceable right to obtain conveyance and possession, and the attorney, being the nominee and husband of the buyer, shared that interest. The power of attorney was given for valuable consideration and to secure performance of the sale transaction, making it a power coupled with interest and therefore irrevocable to the prejudice of that interest.

Conclusion: The agency was irrevocable and the appellant had no power to revoke it to defeat the respondent's interest.

Issue (iii): Whether the respondent was liable to pay interest on the unpaid purchase money.

Analysis: The governing provision was section 55(4)(b) of the Transfer of Property Act. Interest on unpaid purchase money was payable only where possession had been delivered to the buyer. As possession had not been delivered, and no contractual or statutory basis otherwise existed, no interest could be charged.

Conclusion: The direction to pay interest on the unpaid purchase money was unsustainable and was deleted.

Final Conclusion: The appeal failed, while the cross-objection succeeded to the limited extent of deleting the direction for interest on the unpaid purchase money. The decree enforcing the sale transaction was maintained, with modification on the interest component.

Ratio Decidendi: An agency created for the benefit of the beneficiary of an enforceable sale transaction, and given for valuable consideration to secure performance of that transaction, is a power coupled with interest and cannot be revoked to the prejudice of that interest; interest on unpaid purchase money is payable only when possession has been delivered or there is another lawful basis for charging it.

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