Supreme Court Judgment: Why in the News?

The Supreme Court has recently held that proviso 6 to Section 92 of the Evidence Act would not apply if a document is straightforward, without any ambiguity in its meaning. This judgement is considered to be quite a landmark judgement in recent times by the apex court. Let us in the article below know the provisions of the Act and the reasons for the changes.

Name of the case:

Mangala Waman Karandikar (D) TR and LRS. vs. Prakash Damodar Ranade . It was listed as the  Civil Appeal No. 10827 of 2010

The Case Facts In Brief: History

1. The case rose due to a contract between the Appellant and the Respondent. In the beginning, the appellant’s husband ran a business of stationery named Karandikar Brothers. He died untimely in 1962. After his death the appellant carried out the business for a while and when she could not lead the life of a business woman she decided to allow the Respondent to run the business for sometime. 
2. This all was entered into an agreement dated February 7th, 1963. The contract was extended again and in the 1980’s the appellant decided that she could run her husband’s business again and was then ready to accept the profession. It was at this time that she issued the Respondent a notice dated 20th December 1980, requesting the premises to be vacated by January 31, 1981.
3. The Respondent replied that the sale of the business was incidental rather the contract was a rent agreement stricto sensu. 
4. The Respondent’s reply aggrieved the Appellant after which she filed a civil suit in 1981 in the court of Joint Civil Judge in Junior Division of Pune. 

The Observation of Supreme Court:

1. The SC said that the contract stated that the parties had intended to transfer the business from the appellant to the respondent during the contract period and was not meant as a lease or license for the respondent to conduct any business. 
2. The respondent said that the meaning of the document must not be culled solely with reference to the language used but extrinsic evidence must be utilized before adducing the proper meaning of the contract. 
3. The respondent wanted the contract to be read as a Leave and License Agreement based on the extrinsic evidence covered under Bombay Rent Act. 
4. The attention of the court was also drawn to the Section 95 of the Indian Evidence Act stating that the documents need to be interpreted having regard to external evidence such as receipts of payment under the contract addressed as rent receipts. 

The Landmark Decision: Details

As per the court, “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. Such interpretation, provided by the High Court, violates basic tenants of legal interpretation. Section 92 specifically prohibits evidence of any oral agreement or statement which would contradict, vary, add to or subtract from its terms. “

The  Bench of Judges also added, “If, as stated by the learned Judge, 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.”

The judges said in a stern tone, “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.”

Indian Evidence Act- Section 95: Details

The Act states clearly– “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.“

Also as per a bench led by Chief Justice of India NV Ramana, “It is manifest from these two sections that it is only in cases where the terms of the document leave the question in doubt, then resort could be had to the proviso. 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.” 

Exclusion of Evidence of Oral Agreement:

When the terms of any contract as such grant or other disposition of property or any matter required by law to be reduced to the form of document have been proved as per the last section, no evidence of the oral agreement would 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: It states that any fact may be proved which shows in what manner the language of the document is related to existing facts.

Read about the top 7 landmark judgments by the Supreme Court here