Development agreement and irrevocable poa
Querist :
Anonymous
(Querist) 21 September 2011
This query is : Resolved
Developer did not pay last 15% installment of consideration mentioned in registered Development Agreement
Landlord cancelled Development Agreement and Irrevocable PoA by 2 newspaper notice and regd AD letter
Developer says this cancellation is not sufficient and wants both parties to sign a cancellation in registrar office and is asking for more money than he actually paid Landlord.
Landlord is ready to pay back only the amount of consideration (plus interest) actually paid by Developer
Developer is squatting on property and Landlord cannot enjoy same
How can Landlord remove Developer from Property?
Ganesh Chavan
(Expert) 21 September 2011
If the Power of attorney is executed for consideration in respect of property it cannot be unilaterally revoked, prejudicial to the interest of the agent/developer (See Sec.202 of Indian Contract Act, 1872).
ajay sethi
(Expert) 21 September 2011
yes it is well settled law that irrevocable power of attorney is coupled with interest it cannot be revoked .
you ought to have moved court calling upon developer to pay the last installment of 15%/ what are the terms of development agreement ? does it mention that in event of failure of developer to pay full amount agreeement can be cancelled?
Guest
(Expert) 21 September 2011
The term irrevocable, itself by its nature, has a substantial effect and cannot be cancelled merey by notification in newspapers or by delivering a registered notice. I agree with the opinion of the experts.
Shastri J.K.
(Expert) 21 September 2011
I agree with the opinion of experts.
Querist :
Anonymous
(Querist) 21 September 2011
I am sorry but your advice is not logical because Developer is now demanding twice the market price of property to vacate.
Since Amicable cancellation is not possible then what is Landlord to do?
I suggest that Irrevocable means it cannot be revoked singly; and it is to be cancelled alongwith the contract.
Registrar Cancellation is only possible if both parties amicably sign the deed of cancellation;
But in this case where Developer is not cooperating, what choice does the Landlord have besides issuing a letter cancelling DA and PoA.
Experts kindly comment at length.
Guest
(Expert) 21 September 2011
Your remarks, "your advice is not logical" do not seem to have been addressed to some particular expert.
It seems, you don't consider opinion of any of the experts as logical, while almost every expert tried to give their reply logical on the face of the facts narrated by you about cancellation of the agreement and irrevocable POA.
If you don't find logic in any of the replies, better give some valid reason for that, as merely stating that "the Developer is now demanding twice the market price of property to vacate" is not a valid reason to discard any opinion as illogical.
I am sure none of the experts has any authority to compel the developer to return the land by agreeing on your terms when he is holding an irrevocable POA and agreement.
So, the solution lies only if both the parties agree to some mutually agreed terms.
Querist :
Anonymous
(Querist) 22 September 2011
The point that I found "not logical" is the advice of expert ajay sethi:
"yes it is well settled law that irrevocable power of attorney is coupled with interest it cannot be revoked."
so the Developer has no motivation to pay the full consideration promised and he can yet demand any sum to vacate the property, and in effect he becomes the owner.
if the Development Agreement is a contract then both sides must perform as promised otherwise the contract does not stand.
the way i see it:
the developer did not pay as promised so the Landlord should have the right to unilaterally cancel the Development Agreement.
on the other hand if the developer had paid in full then only it is logical that a registered mutual cancellation would be the only way out.
please feel free to correct my thinking
