Gift Through a General Power of Attorney

Question: How can a gift be made through a general power of attorney? Please explain in detail.

Answer: To help you understand a gift made through a general power of attorney, I would first like to explain to you the concept of a gift in relation to immovable property. Set aside the idea of a general power of attorney or a special power of attorney for a moment — when can the actual person himself take hold [of the process]?

1. He must be the owner of that property.
2. He is making the gift for some reason — that reason could be love and affection, it could be gratitude for services rendered, it could be any reason — but that reason, especially for a gift, must be purely personal to him, with no interest of any kind involved in it.
3. He must offer the gift to the one receiving it — saying, I am gifting this to you.
4. The one to whom the gift is being made must immediately accept that offer.
5. Possession of that immovable property must be handed over immediately by the owner to the one to whom the gift is made.

These are the five steps involved in a gift. Now, first of all, an attorney under a general power of attorney cannot make a gift to anyone on his own — I have already told you in a lecture that no attorney under a general power of attorney can transfer property to their own blood relation unless he takes permission from the principal. A was made attorney; B wants A to sell that property to his own son — A cannot sell the property unless B, the principal, gives permission, [saying] sir, I am going to sell this property to my own son, I give permission — or unless the power of attorney itself mentions that yes, he may sell to his own sons, his own daughters, his own wife, his own blood relations. Similarly, the elements of a gift that I mentioned to you earlier — a general power of attorney cannot fulfil these on its own.

The feelings, in the context of which, in the light of which, a person gifts his property to someone — those feelings cannot belong to an attorney under a general or special power of attorney. To fulfil those elements, it is very necessary for the principal to personally, actively participate. It is necessary to obtain it in writing from the principal; it is necessary to have a memorandum of gift. The duty of a general power-of-attorney holder extends only this far: A gave B a general power of attorney; A gifted that property to C, and a memorandum of gift was written. Now A directs B, who is the attorney, that I have made this gift, I have completed these elements of the gift, now you use this gift as the attorney [to complete the formalities].

What actually happens? What happens is that a general power of attorney came in, and what did the holder do? He later made his son the general attorney; the son gifted it in the grandson's name — when the son gifted it in the grandson's name, these elements were not present in it, the principal's own action was not present at all, the principal's offer, examining the principal's feelings — that was not present. Now, in this context, in these facts and circumstances, courts say that this is a wide-ranging transaction, this is not a proper transaction, because the elements of a gift are not fulfilled — the feelings the power-of-attorney holder is displaying are not connected to the principal. If that chain is not formed, then whatever the power-of-attorney holder did regarding the gift is void, and courts declare it a broad, entirely baseless transaction — and for students of law, to understand its guidelines, I will give you two judgments:
1. MLD page 2030, Peshawar High Court, 2017.
2. MLD page 845, Lahore High Court Lahore, 2017.

In these, all the details, all the feelings, the entire procedure have been discussed in detail — so if someone is appointed as a general attorney and he gifts the property, not only can the principal challenge it, but in the event of the principal's death, the principal's heirs can also challenge it.