How to Cancel a Fraudulent Power of Attorney in Pakistan

A Power of Attorney (POA), commonly called Mukhtar Nama,
authorizes another person (the attorney or agent) to act on behalf of the
principal. Problems arise when a Power of Attorney is forged, obtained
through fraud or coercion, used after its authority has ended, or used
beyond the powers actually granted.

If a fraudulent or improperly used Power of Attorney affects your property
or legal rights, prompt action may be necessary. Depending on the facts,
the remedies may include revocation, cancellation, declaration,
injunction, recovery of possession and criminal proceedings.

What Is a Power of Attorney?

A Power of Attorney is an authority given by one person, known as the
principal, to another person, known as the
agent or attorney, to perform specified acts on the
principal’s behalf.

The scope of the attorney’s authority depends primarily on the wording of
the document and the applicable law. An attorney cannot automatically do
anything with the principal’s property merely because a Power of Attorney
exists.

When Can a Power of Attorney Become a Legal Problem?

A POA may require legal action where, for example:

• The document itself is alleged to be forged.
• The principal’s signature or thumb impression was obtained fraudulently.
• The document was obtained through coercion or undue influence.
• The attorney acted outside the authority granted by the principal.
• The authority had already been revoked or terminated.
• The attorney allegedly misused the authority for personal benefit.
• A sale, transfer or mutation was carried out on the basis of the disputed POA.

Immediate Steps After Discovering Fraud or Misuse

Delay can make a property dispute more complicated, particularly if a
subsequent transaction or mutation has already taken place. Consider taking
the following steps promptly.

1. Obtain Certified Copies of Relevant Documents

Obtain copies of relevant records, such as:

• The Power of Attorney
• Registration record, if the POA was registered
• Sale deed or transfer document executed through the POA
• Mutation and revenue records
• Current Fard or other applicable property record
• Housing society or development authority records
• Correspondence and notices concerning the transaction

2. Determine Whether the POA Should Be Revoked or Challenged

A distinction should be made between an ordinary revocable agency and an
agency in which the agent has an interest in the subject matter.
Section 201 of the Contract Act, 1872 recognizes revocation
by the principal as one mode of termination of agency.

However, Section 202 provides special protection where the
agent has an interest in the property forming the subject matter of the
agency. Therefore, calling every POA “revocable at any time” would be
legally inaccurate.

3. Execute a Revocation or Cancellation Document Where Appropriate

Where the principal is legally entitled to revoke the authority, a formal
revocation/cancellation of the Power of Attorney should
be prepared according to the applicable registration and documentation
requirements.

If the original POA was registered, obtain legal advice about the proper
registration and intimation procedure applicable to the relevant
Sub-Registrar’s office. The precise administrative procedure can vary
depending on the document, property and jurisdiction.

4. Give Notice to the Attorney

The principal should communicate the revocation to the attorney and preserve
proof of service. Section 206 of the Contract Act, 1872
provides that reasonable notice of revocation or renunciation should be
given; otherwise, the resulting damage may have legal consequences.

Notice may be served through an appropriate legally recognized method,
depending on the circumstances. Keep the receipt, acknowledgment or other
evidence of delivery.

5. Notify Relevant Institutions

Where the POA concerns property, provide appropriate written intimation to
relevant institutions, which may include:

• Sub-Registrar
• Revenue authorities
• Housing society
• Development authority
• Bank or financial institution
• Other institution holding or processing the relevant property record

The purpose is to place the relevant institution on notice and reduce the
risk of further unauthorized dealings. Such intimation does not by itself
replace a court decree where judicial cancellation or declaration is
required.

6. Consider a Public Notice

Depending on the circumstances, a lawyer may recommend publication of a
public notice stating that the authority has been revoked or that the
principal disputes the validity or use of the POA.

A newspaper notice can provide additional evidence of communication, but it
should not be treated as a substitute for statutory requirements, service
on relevant parties, registration requirements or court proceedings.

Civil Court Remedies

Where the validity of a Power of Attorney or a transaction executed through
it is disputed, judicial relief may be necessary.

Cancellation of an Instrument – Section 39

Section 39 of the Specific Relief Act, 1877 provides a
remedy where a written instrument is void or voidable and the person
affected has reasonable apprehension that leaving the instrument
outstanding may cause serious injury. The court may adjudge the instrument
void or voidable and order it to be delivered up and cancelled.

Where a registered instrument is cancelled by decree, the Act provides for
communication of the decree to the relevant registration officer so that
the cancellation can be noted in the registration record.

Declaration

A party may also require declaratory relief concerning a legal right or
status. Section 42 of the Specific Relief Act, 1877
governs declaratory decrees. The precise relief should be framed according
to the facts and the other remedies available.

A bare declaration may not be sufficient where the plaintiff is able to
seek further relief but omits to do so. Therefore, a civil suit should be
carefully drafted to include all necessary reliefs.

Cancellation of Subsequent Transactions

If a disputed POA has already been used to execute a sale deed, transfer
document or other instrument, the case may require relief concerning those
subsequent instruments as well.

The appropriate relief depends on the transaction, the parties involved,
registration status, possession and the legal basis on which the document
is challenged.

Injunction to Protect the Property

If there is a genuine risk that the property may be sold, transferred,
encumbered or otherwise dealt with while the dispute is pending, the
affected party may seek appropriate temporary or permanent
injunctive relief from the competent court.

An application for urgent interim relief should explain the immediate risk
and be supported by the available documentary evidence.

If the Property Has Already Been Transferred

If the attorney has already executed a sale deed, gift, transfer or
mutation, merely revoking the POA may not resolve the entire dispute.

Depending on the facts, the principal may need to challenge the subsequent
transaction and seek appropriate declaratory, cancellation, possession and
injunctive relief.

The position can become more complicated where the property has passed to
another purchaser or subsequent transferee. The rights and defences of
those parties must be examined separately.

Limitation Period

Limitation should be checked immediately rather than assuming that every
fraud case automatically receives the same limitation period.

Article 91 of the Limitation Act, 1908 prescribes three
years for a suit to cancel or set aside an instrument not otherwise
provided for, running from when the facts entitling the plaintiff to
cancellation or setting aside become known.

Article 92 separately provides three years for a suit to
declare the forgery of an instrument issued or registered, running from
when the issue or registration becomes known to the plaintiff.

The correct limitation article depends on the relief and facts of the case.
Therefore, a person discovering a fraudulent POA should obtain legal advice
without delay.

Criminal Remedies for Forgery or Fraud

Where the evidence indicates forgery, fraudulent use of documents or
another criminal offence, criminal proceedings may also be relevant.

The Pakistan Penal Code contains offences concerning forgery and the use of
forged documents. For example, Section 463 defines
forgery, while Section 468 concerns forgery for the
purpose of cheating and Section 471 concerns using a
forged document as genuine when the required knowledge or reason to believe
exists.

The exact offences depend on what was allegedly done, how the document was
created or used, and the evidence available.

A criminal complaint or FIR, where legally appropriate, is separate from
the civil proceedings. Criminal proceedings do not automatically cancel a
registered property transaction; appropriate civil relief may still be
required.

Special Situations

Irrevocable Power of Attorney

The word “irrevocable” does not by itself answer every
legal question concerning a POA. Where the agent has an interest in the
subject matter, Section 202 of the Contract Act may become particularly
relevant.

At the same time, an allegation of fraud, forgery, lack of authority or
misuse must be examined according to the actual document and circumstances.

Power of Attorney Executed Abroad

Where the principal is outside Pakistan, the applicable Pakistani
diplomatic/consular attestation requirements, registration requirements and
property-record procedures should be checked before executing a revocation
document.

The procedure can depend on the country where the document is executed and
the Pakistani authority with which it must ultimately be used or registered.

Death of the Principal

As a general rule, agency terminates on the death or insanity of the
principal or agent under Section 201 of the Contract Act, subject to the
statutory exception concerning an agency coupled with an interest under
Section 202.

Section 208 also deals with when termination of an agent’s authority takes
effect as against the agent and third persons. Therefore, transactions
occurring around the time of death should be examined carefully rather than
assuming that every post-death transaction is automatically resolved by a
simple cancellation notice.

Attorney Dealing With the Principal’s Property

Whether an attorney can sell property to himself, a relative or an
associated person depends on the wording and scope of the authority, the
circumstances of the transaction, applicable agency principles and the
evidence of the principal’s consent.

A general statement that every transaction between an attorney and a
related person is automatically void would therefore be unsafe. Such
transactions should be examined on their specific facts.

Evidence to Preserve

• Original Power of Attorney, where available
• Certified copy of the registered POA
• CNIC and identity documents relevant to the transaction
• Property ownership documents
• Sale deeds and transfer documents
• Mutation and revenue records
• Signatures and thumb-impression records where relevant
• Banking records
• Messages, emails and correspondence
• Witness information
• Evidence showing when the alleged fraud was discovered
• Proof of notices and revocation

Practical Steps to Protect Your Property

1. Obtain the latest property record.
2. Obtain certified copies of the disputed POA and related transactions.
3. Have the POA examined by a property/civil lawyer.
4. Determine whether revocation, cancellation or declaratory relief is required.
5. Notify the attorney and relevant institutions where appropriate.
6. Consider urgent interim injunctive relief if further transfer is threatened.
7. Preserve evidence of the alleged fraud and the date of discovery.
8. Consider criminal proceedings where the evidence supports a criminal offence.
9. Do not delay because limitation issues may arise.

Common Mistakes to Avoid

• Waiting until the property has been transferred multiple times
• Relying only on an oral warning to the attorney
• Assuming that a newspaper notice alone cancels a registered instrument
• Ignoring the applicable limitation period
• Failing to obtain certified property records
• Assuming that filing an FIR automatically cancels the civil transaction
• Using force instead of obtaining lawful court relief
• Assuming that every “irrevocable” POA is automatically valid or automatically invalid

Conclusion

A fraudulent or improperly used Power of Attorney can create serious
property and legal problems. The appropriate response depends on whether
the document is forged, obtained through fraud, validly revoked, used
beyond its authority, or connected with an agency coupled with an interest.

Depending on the circumstances, the principal may need a combination of
revocation, civil cancellation or declaration, injunction,
property-record action and criminal proceedings.

Because limitation, registration, agency and property laws can interact,
early examination of the original documents and current property record is
important.

Legal Disclaimer: This article provides general legal
information for public awareness and is not a substitute for advice from a
qualified lawyer. The appropriate remedy depends on the wording of the Power
of Attorney, its registration status, the property record, the transactions
carried out under it, the parties involved and the applicable limitation
period. Laws and procedures may also vary according to jurisdiction.