Supreme Court: Explaining the scope of Section 92 Proviso (6) of the Evidence Act, 1872, the 3-judge bench of NV Ramana, CJ* and Surya Kant and Aniruddha Bose, JJ has held that the said proviso can be resorted to only in cases where the terms of the document leave the question in doubt.
“But when a document is a straightforward one and presents no difficulty in construing it, the proviso does not apply. In this regard, we may state that Section 95 only builds on the proviso 6 of Section 92.”
The Court was of the opinion that if the contrary view is adopted as correct it would render Section 92 of the Evidence Act, otiose and also enlarge the ambit of proviso 6 beyond the main Section itself.
Background
Initially Appellant’s husband was running a business of stationary in the name of “Karandikar Brothers” before his untimely demise in the year 1962. After his demise, she continued the business for some time but later decided to let the Respondent run the same for some time.
The terms of the agreement were:
“The stationary shop by name “Karandikar Brothers” belonging to you of the stationary materials which is situated in the premises described in Para 1 (a) above and in which the furniture etc. as described in Para l(b) above belonging to you is existing is being taken by me for conducting by an agreement for a period of two years beginning from 1st February 1963 to 31st January 1965.
The rent of the shop described in Para 1 (a) above is to be given by you only to the owner and I am not responsible therefor. I am to pay a royalty amount of Rs. 90 /-(Rupees Ninety only) for taking the said shop for conducting, for every month which is to be paid before the 5th day of every month.”
Time after time, the contract was duly extended. In 1980s, desiring to start her husband’s business again, appellant herein issued a notice requesting the Respondent to vacate the suit premises, However, the Respondent replied to the notice claiming that the sale of business was incidental rather the contract was a rent agreement stricto sensu.
The Trial Court while negating the contention of the Respondent, that the shop premises was given to him on license basis.
The Bombay High Court, however, held that:
“Thus, considering the entirety of the case, in my view, both the Courts below have incorrectly interpreted the document and the surrounding circumstances which, in my view, indicate that the parties had in fact agreed that the premises were transferred to the appellant on a leave and license basis.”
Analysis
Section 95. Evidence as to document unmeaning in reference to existing facts.—
When language used in a document is plain in itself, but is unmeaning in reference to existing facts, evidence may be given to show that it was used in a peculiar sense. Illustration A sells to B, by deed, “my house in Calcutta”. A had no house in Calcutta, but it appears that he had a house at Howrah, of which B had been in possession since the execution of the deed. These facts may be proved to show that the deed related to the house of Howrah.
Section 92. Exclusion of evidence of oral agreement.—
When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:…
Proviso (6).—Any fact may be proved which shows in what manner the language of a document is related to existing facts.
The Court explained that Section 92 specifically prohibits evidence of any oral agreement or statement which would contradict, vary, add to or subtract from its terms. If oral evidence could be received to show that the terms of the document were really different from those expressed therein, it would amount to according permission to give evidence to contradict or vary those terms and as such it comes within the inhibitions of Section 92. It could not be postulated that the legislature intended to nullify the object of Section 92 by enacting exceptions to that section.
Considering the facts and materials placed before it, the Court was of the opinion that the contract mandated continuation of the business in the name of ‘Karandikar Brothers’ by paying royalties of Rs. 90 per month.
“Once the parties have accepted the recitals and the contract, the respondent could not have adduced contrary extrinsic parole evidence, unless he portrayed ambiguity in the language. It may not be out of context to note that the extension of the contract was on same conditions.”
The Court, hence, held that the High Court erred in appreciating the ambit of Section 95, which led to consideration of evidence which only indicates breach rather than ambiguity in the language of contract. The evidence also points that the license was created for continuation of existing business, rather than license/lease of shop premises.
The Court was, hence, of the opinion that if the meaning provided by the High Court is accepted, then it would amount to Courts substituting the bargain by the parties.
“Such interpretation, provided by the High Court violates basic tenants of legal interpretation.”
[Mangala Waman Karandikar v. Prakash Damodar Ranade, 2021 SCC OnLine SC 371 , decided on 07.05.2021]
*Judgment by: CJI NV Ramana