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Proviso to Section 92 and 95 of Indian Evidence Act applicable only when terms of document leave the question in doubt: Supreme Court

When the terms of the contract is clear and straightforward there is no necessity for looking into the extrinsic evidence, when doing so will only vitiate the legal interpretation. This judgment was passed in the case of Mangala Waman Kaeandikar (D) TR. LRS. Vs. Prakash Damodar Ranade [C. A. No. 10827/2010] by a Double Bench consisting of Hon’ble The Chief Justice and Hon’ble Shri Justice Surya Kant.

The present arose based on a contract between the Appellant and the Respondent. Before the appellant’s husband passed away he was running business in the name of “Karandikar Brothers” and after his death appellant ran the business. When she was not able to do the same after sometime she let the respondent take care of it. Later they entered into a contract which was being extended from time to time. In the year 1980 she served a notice to the respondent to vacate the premises by 31.01.1981. The respondent claimed that the contract was a rent agreement in strict sense. Aggrieved by the same the appellant filed a civil suit before the court of Joint Civil Judge.

The trial court gave a judgment in favour of the appellant and held that the agreement was to create a sale of business. The trial Court ordered the respondent to hand over the suit property to appellant. On Appeal before the High Court of Bombay, it was held that the respondent entered into a license agreement under section 15A of the Bombay Rent Act. The appellant thus preferred an appeal before the Supreme Court. The appellant contended that the order of High Court erred in appreciating the language of contract. The Respondents supported the judgments and contended that there is a presence of extrinsic evidence to prove that contract was a license to use the shop.

After hearing both the parties, the Hon’ble Supreme Court opined that the contractual interpretation depends on the intentions expressed by the parties and bringing out the true meaning is the iterative process for the courts. While dredging out the intention of the parties it held that there was a clear transfer of business from the appellant to the respondent and it was meant neither as lease nor as a license. As per section 92 and 95 of the Indian evidence act, only in cases where the terms of document cause a doubt will one resort to the proviso. In cases where it is simple and clear the proviso would not apply.

Relying on the case of Rohitash Kumar vs. Om Prakash Sharma [2013 11 SCC 451], the court held that if the interpretation of the High court is taken, then there would violate the basic tenants of legal interpretation and enlarge the scope of proviso beyond section. Further it held that section 92 explicitly prohibits any oral evidence which would contradict, vary, add to or subtract the terms. It also went on to hold that the ambit of section 95 is not appreciated by the High Court, by which the court only appreciated the evidence which amounts to the breach of contract and not the ambiguous language of the contract.

Based on the above observations the Hon’ble Supreme Court held that, “the impugned order of the High Court cannot be sustained and is accordingly set aside. The decree of the trial court is restored.”

Click here for the Judgment.

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