The ability to execute a Gift or Hiba through a Power of Attorney (PoA) is a nuanced legal matter, subject to stringent rules and principles.
For the benefit of our potential and current Clients we have done below a legal analysis about how a gift can or cannot be made using a PoA (based on current judicial precedents).
1. Can You Make a Gift Through a PoA?
Yes, Under Strict Conditions:
- Explicit Authority:
The PoA must explicitly authorise the attorney to make a gift. This authority must be clearly stated in the document and must specify the donee. For instance, in Rashida v. Ghous-ud-Din (2016 CLC 533), the court held that without a specific and exhaustive clause, the PoA does not include the power to make a gift. - Principal’s Intention:
The gift must align with the principal’s explicit instructions and intentions. The attorney must act as a mere agent facilitating the formalities. In 2021 SCMR 1298 (Ijaz Bashir Qureshi v. Shams-un-Nisa Qureshi), the court emphasised that the principal must personally authorise the transaction. - Love and Affection:
Gifts based on love and affection cannot be presumed or conveyed through an attorney unless explicitly permitted by the principal. For instance, in Mukhtar Ahmad v. Muhammad Ameen (2017 MLD 845), the court highlighted that sentiments of love and affection must be proved through unimpeachable evidence. - Compliance with Islamic Law:
The three essential ingredients of a valid gift under Islamic law—offer (Ijab), acceptance (Qubool), and delivery of possession (Qabza)—must be fulfilled. The attorney must ensure that these elements are satisfied, as noted in 2022 CLC 1973 (Muhammad Hussain v. Muhammad Ali). - No Conflict of Interest:
The attorney cannot execute a gift for personal benefit or to a close relative unless explicitly authorised by the principal. In 2022 SCMR 1262 (Syed Atif Raza Shah v. Syed Fida Hussain Shah), the court invalidated a gift made by an attorney to his son, citing misuse of authority. - Registration Requirements:
For immovable property, the gift deed must be registered, and the attorney must comply with the formalities prescribed under the law, including appearing before the Registrar.
2. When Can You Not Make a Gift Through a PoA?
Key Restrictions:
- Absence of Explicit Authority:
If the PoA does not specifically authorise the attorney to make a gift, the transaction is invalid. This principle was reiterated in 2021 SCMR 1298 and 2016 PLD 287 (Mst. Budhai v. Ghulam Mustafa). - Personal Interest of the Attorney:
An attorney cannot gift the property to themselves or their relatives without prior approval from the principal. In 2022 SCMR 1262, the court struck down such a transaction due to a conflict of interest. - Deviation from Principal’s Instructions:
If the attorney acts beyond the scope of the PoA or contrary to the principal’s directions, the gift is void. For instance, in 2021 SCMR 772 (Bashir Ahmad Anjum v. Muhammad Raffique), the court invalidated a gift that deprived heirs of their inheritance rights. - Lack of Valid Consent:
Gifts executed under duress, fraud, or without the free consent of the principal are void. In Mst. Akhtar Sultana v. Major Retd. Muzaffar Khan Malik (2021 PLD 715), the court held that the lack of valid consent rendered the gift invalid. - Non-Compliance with Gift Formalities:
If the essential ingredients of a gift—offer, acceptance, and delivery of possession—are not satisfied, the transaction is void. In 2010 YLR 454 (Ghulam Mustafa v. Ghulam Muhammad), the court emphasised the need for these elements. - Suspicious Circumstances:
If the transaction appears fraudulent, arbitrary, or unfair, it may be challenged. In 2016 PLD 587 (Mst. Bashir Begum v. Sardara), the court invalidated a gift made under suspicious circumstances. - Revocation of the PoA:
If the PoA has been revoked before the gift is executed, the attorney’s actions are invalid. In Muhammad Iqbal v. Mehmood Hasan (2016 MLD 1243), the court held that any transaction executed after revocation is unlawful. - Inheritance Rights Violation:
A gift that seeks to deprive legal heirs of their inheritance without lawful justification is invalid, as seen in 2022 SCMR 64 (Mst. Parveen v. Muhammad Pervaiz).
3. Procedural Safeguards for Executing a Gift Through a PoA
- Drafting the PoA:
Ensure that the PoA explicitly authorises the attorney to make gifts and specifies the terms, beneficiaries, and conditions. - Documenting the Gift:
Prepare a comprehensive gift deed, detailing the offer, acceptance, and delivery of possession. Ensure it aligns with Islamic law and statutory requirements. - Registration:
Register the gift deed to provide legal authenticity and mitigate future disputes. - Independent Witnesses:
Ensure the presence of independent witnesses during the execution of the gift to substantiate its validity. - Principal’s Participation:
If feasible, involve the principal directly in the transaction to avoid allegations of fraud or misuse of authority.
4. Legal Risks and Remedies
- Challenge by Heirs or Third Parties:
Gifts executed through a PoA are prone to legal challenges, particularly by legal heirs. Courts have consistently invalidated gifts that contravene inheritance laws or fiduciary duties. - Fraud or Misrepresentation:
Gifts made under fraudulent circumstances or through misrepresentation can be declared void ab initio. The aggrieved party may seek remedies, including cancellation of the gift deed and damages. - Burden of Proof:
The attorney must demonstrate the validity of the gift and their authority under the PoA. Failure to do so can result in legal and financial liabilities.
While a gift can be executed through a PoA under specific conditions, it is fraught with legal complexities and risks. The key lies in strict adherence to the principal’s intentions, explicit authority in the PoA, and compliance with the formalities of Islamic law and statutory requirements. Courts are vigilant in scrutinising such transactions to prevent misuse, ensuring fairness, and upholding the rights of all stakeholders.
The Q and A below thoroughly explore the legal, procedural, and evidentiary nuances surrounding the use of PoAs for gifting immovable property.
Q1: Can an attorney execute a gift (HIBA) on behalf of the principal under a General Power of Attorney?
Answer:
No, an attorney cannot execute a valid gift (HIBA) on behalf of the principal under a General Power of Attorney (GPA) unless explicitly authorised. As established in Ijaz Bashir Qureshi v. Shams-un-Nisa Qureshi (2021 SCMR 1298), a gift must originate from the principal/donor as a personal action. The attorney may facilitate the formalities of a gift, such as the registration or attestation of a gift deed, but the essential elements—offer, acceptance, and delivery of possession—must be made and performed by the principal. Any transfer made solely by the attorney is invalid.
Q2: What are the essential ingredients of a valid gift under Islamic law?
Answer:
A valid gift under Islamic law requires the following three elements:
Offer (Ijab): A clear declaration by the donor expressing the intent to gift the property.
Acceptance (Qubool): An unambiguous acceptance of the gift by the donee.
Delivery of possession (Taqabbuz): The actual transfer of possession of the property to the donee. These elements must be proven with cogent evidence, as reiterated in Mst. Akhtar Sultana v. Major Retd. Muzaffar Khan Malik (2021 PLD 715). The absence of any of these elements renders the gift invalid.
Q3: Can a Power of Attorney include an implied power to execute a gift?
Answer:
No, a PoA cannot include an implied power to execute a gift. Specific authority must be explicitly granted in the PoA document. In Nasrullah Khan v. Mst. Khairunnisa (2020 SCMR 2101), the Supreme Court held that a PoA must be strictly construed and any act not explicitly authorised, such as gifting property, is beyond the attorney’s lawful authority. Gifting property involves personal discretion, which cannot be presumed from general terms in the PoA.
Q4: If an attorney executes a gift deed without the principal’s explicit authority, is the transfer valid?
Answer:
No, such a transfer is invalid. In Mst. Naila Kausar v. Sardar Muhammad Bakhsh (2016 SCMR 1781), the court ruled that an attorney must have express instructions from the principal to effectuate a gift. If the attorney acts independently or without the principal’s explicit permission, the transfer lacks legal validity and can be challenged.
Q5: Can a principal challenge a gift made by their attorney?
Answer:
Yes, a principal can challenge such a gift. As per Muhammad Rashid v. Akhter Ali Khan (2017 MLD 2030), a gift executed by an attorney without explicit permission or against the principal’s interests can be repudiated. The principal retains the right to nullify transactions where the attorney exceeds their authority.
Q6: What evidentiary requirements must a donee satisfy to uphold a gift executed through a PoA?
Answer:
The donee must demonstrate:
That the attorney was explicitly authorised to execute the gift on behalf of the principal.
That the essential ingredients of a valid gift—offer, acceptance, and delivery of possession—were satisfied.
That the principal’s consent was obtained and properly documented. In Shehzad Nawaz v. Mst. Raaj Begum (2024 YLR 1238), failure to prove these elements resulted in the invalidation of the gift.
Q7: What is the significance of love and affection in a gift transaction facilitated through a PoA?
Answer:
Love and affection are essential considerations for a valid gift but cannot be conveyed by an attorney on behalf of the principal. In Mukhtar Ahmad v. Muhammad Ameen (2017 MLD 845), the court emphasised that sentiments of love and affection are personal and cannot be assumed or expressed through an attorney.
Q8: How does the revocation of a PoA affect a previously executed gift?
Answer:
If a PoA is revoked before the execution of a gift, any subsequent gift transaction becomes invalid. In Muhammad Iqbal v. Mehmood Hasan (2016 MLD 1243), the court declared that a gift made after the revocation of a PoA was unlawful, as the attorney lacked the authority to act on behalf of the principal.
Q9: Can an attorney gift property to themselves or their close relatives?
Answer:
No, an attorney cannot gift property to themselves or their relatives without explicit approval from the principal. In Syed Atif Raza Shah v. Syed Fida Hussain Shah (2022 SCMR 1262), the Supreme Court held that such actions constitute a conflict of interest and amount to a misuse of authority.
Q10: What is the role of the court when the validity of a gift through a PoA is challenged?
Answer:
The court evaluates:
The language and scope of the PoA.
Whether the attorney had explicit authority to make the gift.
Evidence of the principal’s consent and the satisfaction of the three elements of a valid gift. As seen in Bashir Ahmad Anjum v. Muhammad Raffique (2021 SCMR 772), courts rigorously examine the authenticity and authority underpinning such transactions to ensure compliance with legal and procedural standards.
Q11: Is the presence of independent witnesses necessary for a valid gift executed through a PoA?
Answer:
Yes, independent witnesses are critical in establishing the validity of a gift transaction. In Mst. Akhtar Sultana v. Major Retd. Muzaffar Khan Malik (2021 PLD 715), the absence of credible witnesses to corroborate the execution of a gift deed undermined the claim of a valid gift. The court ruled that independent testimony substantiating the offer, acceptance, and transfer of possession is essential, especially in contentious cases.
Q12: Can a gift mutation be considered valid in the absence of the principal’s physical presence?
Answer:
No, a gift mutation executed in the absence of the principal is generally invalid. In Nasrullah Khan v. Mst. Khairunnisa (2020 SCMR 2101), the court held that a principal must personally participate in the transaction, or their explicit consent must be clearly documented. Mutations carried out solely by an attorney, without proper authorisation or physical involvement of the principal, lack legal standing.
Q13: How does the burden of proof shift in disputes over gifts executed through a PoA?
Answer:
When a gift executed through a PoA is challenged, the burden of proof initially lies with the challenger to present prima facie evidence of irregularity or fraud. Once this threshold is met, the burden shifts to the donee or attorney to demonstrate that:
The PoA explicitly authorised the gift.
The essential elements of the gift were satisfied. This principle was affirmed in Shahzad Adil v. Qamar-un-Nisa (2018 YLRN 145).
Q14: Can an attorney execute a gift deed based on implied familial trust or presumed authority?
Answer:
No, presumed authority or familial trust does not justify the execution of a gift deed. As clarified in Muhammad Rashid v. Akhter Ali Khan (2017 MLD 2030), an attorney must rely strictly on the powers conferred by the PoA. Any action beyond these explicit terms, including the execution of a gift deed, is unauthorised and invalid.
Q15: Does the death of the principal invalidate a gift made through a PoA?
Answer:
Yes, the death of the principal terminates the PoA and any powers conferred under it. A gift executed by the attorney after the principal’s death is void ab initio. In Mst. Budhai v. Ghulam Mustafa (2016 PLD 287), the court held that the attorney’s actions following the principal’s demise, including the execution of a gift, were legally ineffective.
Q16: What happens if a PoA is revoked after the attorney initiates a gift transaction but before its completion?
Answer:
If a PoA is revoked before the completion of a gift transaction, the transaction becomes void. In Muhammad Iqbal v. Mehmood Hasan (2016 MLD 1243), the court ruled that the revocation of a PoA precludes the attorney from carrying out any further actions on behalf of the principal, including formalising a gift.
Q17: Is a gift executed through an irrevocable PoA treated differently?
Answer:
An irrevocable PoA may provide broader powers to the attorney, but the execution of a gift still requires explicit authorisation. In Bashir Ahmad Anjum v. Muhammad Raffique (2021 SCMR 772), the court emphasised that even with an irrevocable PoA, the donor’s specific consent for the gift must be established. Irrevocability pertains to the PoA’s durability, not the scope of authority.
Q18: What is the evidentiary value of a registered PoA in gift disputes?
Answer:
A registered PoA carries a presumption of validity under the law. However, this presumption is rebuttable, particularly if allegations of fraud or overreach are raised. In Al-Haj Sheikh Abdul Hafeez v. Suhail Zaman (2020 PLD 208), the court noted that while registration adds authenticity, it does not override the necessity of proving the principal’s explicit consent and adherence to gift formalities.
Q19: Can the principal’s silence over a disputed gift imply consent?
Answer:
No, silence cannot be construed as consent, especially when the principal’s rights are compromised. In Mrs. Khalida Azhar v. Viqar Rustam Bakhshi (2018 SCMR 30), the court observed that the principal’s inaction or delayed response does not automatically validate a gift executed by an attorney without clear authorisation.
Q20: What role does fraudulent intent play in the invalidation of a gift executed through a PoA?
Answer:
Fraudulent intent by the attorney undermines the validity of the gift. In Syed Atif Raza Shah v. Syed Fida Hussain Shah (2022 SCMR 1262), the court invalidated a gift where the attorney acted dishonestly, concealing material facts and acting against the principal’s interests. Fraud vitiates even otherwise solemn transactions.
Q21: Can a gift be executed through a PoA for the benefit of someone not specified in the PoA?
Answer:
No, the attorney cannot exercise discretion to select beneficiaries not explicitly named in the PoA. In Abdullah v. Bashir Ahmad (2014 CLC 513), the court held that an attorney must adhere to the donor’s specific instructions regarding the gift’s intended recipient.
Q22: Is a gift executed through an oral PoA valid under Islamic law?
Answer:
While Islamic law permits oral PoAs, the validity of any gift executed through such an arrangement depends on strong evidence of the principal’s intent and compliance with the gift’s essential elements. In Zia-ur-Rehman v. Hafeez-ur-Rehman (2010 YLR 2790), the court required corroborative evidence to uphold an oral PoA’s authority in facilitating a gift.
Q23: Does the existence of familial ties between the attorney and donee affect the validity of a gift?
Answer:
Familial ties alone do not validate a gift executed by an attorney. In Ameer Ahmad v. Mst. Fatima (2017 CLC 1109), the court ruled that an attorney cannot gift property to close relatives unless explicitly authorised, as such actions often raise suspicions of conflict of interest.
Q24: How does the doctrine of undue influence apply to gifts executed through a PoA?
Answer:
The doctrine of undue influence invalidates gifts where the attorney exploits their position to the principal’s detriment. In Mst. Tajrian v. Zarshaid Khan (2016 YLR 1883), the court found that undue influence by the attorney invalidated the gift transaction, especially when the principal’s capacity was compromised.
Q25: Can the court presume that a gift executed through a PoA was made in good faith?
Answer:
No, the court does not automatically presume good faith. Each transaction is subject to scrutiny for adherence to legal requirements, as demonstrated in Sardara v. Bashir Begum (2016 PLD 587). The burden of proving good faith rests on the donee and attorney.
Q26: Can a gift executed through a PoA be challenged on the grounds of public policy?
Answer:
Yes, a gift executed through a PoA can be challenged if it contravenes public policy, such as attempts to deprive legal heirs of their rightful inheritance. In Mst. Parveen (Deceased) v. Muhammad Pervaiz (2022 SCMR 64), the court set aside a gift mutation intended to deprive female heirs of their inheritance, deeming it contrary to Islamic principles of justice and equity.
Q27: What happens if the donee fails to prove the delivery of possession in a gift executed through a PoA?
Answer:
The absence of proof regarding the delivery of possession invalidates the gift. In Ghulam Mustafa v. Ghulam Muhammad (2010 YLR 454), the court emphasised that possession is a critical component of a valid gift under Islamic law. If possession is not transferred or proved, the transaction is void.
Q28: Can a principal ratify a gift executed by an attorney after its execution?
Answer:
Yes, a principal can ratify a gift post-execution, but such ratification must be unequivocal and documented. In Ijaz Bashir Qureshi v. Shams-un-Nisa Qureshi (2021 SCMR 1298), the court highlighted that ratification validates the transaction retroactively, provided it is explicit and aligns with the principal’s intent.
Q29: What is the effect of a fraudulent power of attorney on a gift transaction?
Answer:
A fraudulent PoA renders the gift transaction void ab initio. In Al-Haj Sheikh Abdul Hafeez v. Suhail Zaman (2020 CLD 505), the court ruled that when a PoA is proven to be forged, all subsequent actions based on it, including gifts, are legally null and void.
Q30: How does the principle of Marz-ul-Maut (deathbed gifts) apply to gifts executed through a PoA?
Answer:
The doctrine of Marz-ul-Maut requires heightened scrutiny for gifts executed by or on behalf of a terminally ill principal. In Mst. Asiya Bibi v. Muhammad Yousaf (2017 CLCN 41), the court held that gifts made under such circumstances must be accompanied by clear evidence of the principal’s free will and mental competence.
Q31: Can a gift executed through a PoA be challenged based on a conflict of interest?
Answer:
Yes, gifts involving a conflict of interest are invalid. In Syed Atif Raza Shah v. Syed Fida Hussain Shah (2022 SCMR 1262), the attorney gifted the property to his son without the principal’s consent, creating a conflict of interest that led to the transaction being nullified.
Q32: What is the role of the Sub-Registrar in validating a gift executed through a PoA?
Answer:
The Sub-Registrar’s role is to ensure compliance with legal formalities, including verifying the authenticity of the PoA and the donor’s consent. In Muhammad Iqbal v. Mehmood Hasan (2016 MLD 1243), the court held that a failure by the Sub-Registrar to confirm these elements undermines the transaction’s validity.
Q33: How does the principle of fiduciary duty apply to gifts executed through a PoA?
Answer:
Attorneys owe a fiduciary duty to act solely in the principal’s best interests. In Muhammad Hussain v. Muhammad Ali (2022 CLC 1973), the attorney’s failure to secure the principal’s explicit consent for a gift breached fiduciary duty, rendering the transaction invalid.
Q34: Can oral evidence be admitted to establish the validity of a gift executed through a PoA?
Answer:
Oral evidence is admissible but must be corroborated by credible documentation. In Mst. Shahnaz Begum v. Zeeshan Ali Shah (2011 PLD 218), the court emphasised that oral testimony must meet stringent standards to support a gift claim, particularly when the documentation is deficient.
Q35: Does the principal’s mental capacity at the time of executing a PoA affect subsequent gifts?
Answer:
Yes, the principal’s mental capacity is crucial. In Mst. Tajrian v. Zarshaid Khan (2016 YLR 1883), the court held that gifts executed through a PoA are invalid if the principal lacked the mental competence to understand the nature and implications of their actions at the time of granting the PoA.
Q36: Can a third party challenge a gift executed through a PoA?
Answer:
Yes, third parties with a legitimate interest, such as legal heirs, can challenge the validity of a gift. In Mst. Naila Kausar v. Sardar Muhammad Bakhsh (2016 SCMR 1781), heirs successfully contested a gift that deprived them of their rightful inheritance.
Q37: Does the attorney’s personal relationship with the principal affect the validity of a gift?
Answer:
Personal relationships may introduce suspicion, but they do not automatically invalidate a gift. In Mst. Shamim Akhtar v. Mohammad Ashraf (2016 MLD 454), the court evaluated whether the transaction aligned with the principal’s intent and the PoA’s terms, rather than focusing solely on the relationship.
Q38: Can an attorney delegate their power to execute a gift?
Answer:
No, delegation of powers by an attorney is generally impermissible unless explicitly authorised in the PoA. In Muhammad Iqbal v. Mehmood Hasan (2016 MLD 1243), the court clarified that an attorney cannot transfer their authority without the principal’s express consent.
Q39: What is the significance of registration in gifts executed through a PoA?
Answer:
Registration provides prima facie evidence of authenticity but does not cure deficiencies in authority or compliance with gift formalities. In Mst. Akhtar Sultana v. Major Retd. Muzaffar Khan Malik (2021 PLD 715), the court noted that registration alone cannot validate an otherwise unlawful gift.
Q40: Can a principal revoke a gift executed through a PoA?
Answer:
Yes, a principal can revoke a gift if it is proven that the attorney exceeded their authority or acted fraudulently. In Mst. Budhai v. Ghulam Mustafa (2016 PLD 287), the court upheld the principal’s right to nullify an unauthorised gift.
Q41: How does inheritance law impact gifts executed through a PoA?
Answer:
Inheritance laws impose limits on gifting to ensure that legal heirs are not unlawfully deprived of their shares. In Bashir Ahmad Anjum v. Muhammad Raffique (2021 SCMR 772), the court invalidated a gift that contravened the heirs’ inheritance rights.
Q42: Can possession alone validate a gift executed through a PoA?
Answer:
No, possession alone is insufficient without evidence of a valid offer, acceptance, and compliance with the PoA’s terms. In Ghulam Mustafa v. Ghulam Muhammad (2010 YLR 454), the court held that possession must be accompanied by other essential elements.
Q43: Does the nature of the property affect the validity of a gift executed through a PoA?
Answer:
Yes, gifts involving immovable property require stricter adherence to legal and procedural requirements. In Muhammad Rashid v. Akhter Ali Khan (2017 MLD 2030), the court noted that gifts of immovable property demand clear documentation and compliance with statutory provisions.
Q44: Can the lapse of time validate a gift executed through a PoA?
Answer:
No, the lapse of time does not cure deficiencies or legal invalidities in a gift. In Mst. Naila Kausar v. Sardar Muhammad Bakhsh (2016 SCMR 1781), the court held that fraudulent transactions remain void regardless of how much time has passed.
Q45: Can a court infer consent from the principal’s inaction?
Answer:
No, consent must be explicit and documented. In Ijaz Bashir Qureshi v. Shams-un-Nisa Qureshi (2021 SCMR 1298), the court rejected the argument that the principal’s inaction implied consent to a gift executed by the attorney.
Q46: What is the effect of joint attorneys acting without mutual consent?
Answer:
Joint attorneys must act together unless the PoA specifies otherwise. In Ameer Ahmad v. Mst. Fatima (2017 CLC 1109), the court held that unilateral actions by one attorney are invalid if the PoA requires joint execution.
Q47: Can an attorney execute a gift for personal benefit?
Answer:
No, such actions violate fiduciary duties and are presumptively invalid. In Syed Atif Raza Shah v. Syed Fida Hussain Shah (2022 SCMR 1262), the court ruled that self-dealing by an attorney breaches the principal-agent relationship.
Q48: Is a gift executed through a PoA valid if the attorney is unaware of its revocation?
Answer:
No, revocation of a PoA invalidates subsequent actions by the attorney, regardless of their knowledge. In Muhammad Iqbal v. Mehmood Hasan (2016 MLD 1243), the court held that revocation supersedes any authority conferred by the PoA.
Q49: What happens if an attorney misuses their authority to execute a gift?
Answer:
The gift is invalid, and the principal may seek legal remedies, including cancellation and restitution. In Syed Atif Raza Shah v. Syed Fida Hussain Shah (2022 SCMR 1262), the court invalidated a gift made for the attorney’s benefit without the principal’s approval.
Q50: What remedies are available if a gift executed through a PoA is found invalid?
Answer:
The principal may seek cancellation of the transaction, restitution, and damages. In Bashir Ahmad Anjum v. Muhammad Raffique (2021 SCMR 772), the court awarded damages to the principal for losses incurred due to an unauthorised gift.
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