The Gujarat High Court has ruled that a power of attorney holder cannot execute a gift deed after the death of the person who granted the authority. The Court also clarified that even during the principal's lifetime, a general power of attorney does not automatically authorize an agent to gift property unless such power is expressly mentioned in the document.
Allowing a first appeal, the Division Bench quashed a trial court judgment that had upheld the disputed transaction and declared the registered gift deed void from the very beginning.
Background of the Case
The dispute arose over a property in Vadodara owned by Purshotam Ranchhodbhai Pankhania and his late wife, Ramaben Pankhania. According to the plaintiffs, Harihar Ambalal Patel had been given a general power of attorney to manage certain affairs while they lived abroad.
After Ramaben's death in July 2010, Patel executed a registered gift deed on 5 January 2011 in favour of his son and daughter-in-law. The plaintiffs challenged the transaction, arguing that the authority under the power of attorney had already ended upon Ramaben's death and that the document never permitted execution of a gift deed.
The trial court dismissed the suit, prompting the appeal before the High Court.
Court's Observations
The Bench of Justice Ilesh J. Vora and Justice R. T. Vachhani examined the nature of a power of attorney and held that it creates an agency relationship governed by the Indian Contract Act.
Referring to Section 201 of the Contract Act, the Court observed that the agency automatically comes to an end upon the death of the principal unless it is coupled with an interest. Once the principal dies, the agent loses legal authority to act on that person's behalf.
The Bench observed:
“As soon as the person who executed the power of attorney dies, the right given to the agent comes to an end.”
The Court further held that Section 208 of the Contract Act could not validate the transaction because that provision does not permit an agent to continue exercising powers after the agency has already terminated by operation of law.
No Authority to Execute a Gift
The High Court closely examined the language of both powers of attorney and found that neither document expressly authorized the attorney holder to execute a gift deed.
According to the Bench, powers of attorney must be interpreted strictly. General clauses cannot be used to enlarge specific powers, and any authority to transfer property by way of gift must be clearly provided.
The Bench observed:
“The deeds do not authorize making of a gift.”
The Court concluded that the attorney holder exceeded the authority granted under the documents by executing the gift deed in favour of his own family members.
Court Rejects Other Defences
The respondents argued that the property had been transferred in settlement of financial dealings and that the gift deed had been communicated to the plaintiffs. The Court found no reliable evidence supporting these claims.
It also rejected arguments based on limitation and earlier criminal proceedings, holding that they did not affect the civil dispute concerning the validity of the gift deed.
Decision
Allowing the appeal, the Gujarat High Court set aside the judgment dated 11 September 2019 passed by the 16th Additional Senior Civil Judge, Vadodara.
The Court declared that the registered gift deed dated 5 January 2011 was void from its inception and granted the relief sought by the plaintiffs.
It directed that a decree be drawn accordingly and ordered the records to be returned to the trial court.
Case Details
Case Title: Purshotam Ranchhodbhai Pankhania & Ors. v. Harihar Ambalal Patel & Ors.
Case Number: R/First Appeal No. 259 of 2020
Judges: Justice Ilesh J. Vora and Justice R. T. Vachhani
Decision Date: 15 July 2026
