Mangala Waman Karandikar (D) tr. L.Rs. Vs. Prakash Damodar Ranade - (Supreme Court) (07 May 2021)

Proviso 6 to Section 92 of Evidence Act is not applicable if the document is without any ambiguity

MANU/SC/0343/2021

Civil

Present appeal is filed against the judgment of the Bombay High Court, in Second Appeal, wherein the second appeal was allowed in favour of the Respondent and the decree in favour of the Appellant herein was set aside. The counsel for the Appellant contended that, the impugned order of the High Court erred in appreciating the language of the contract, which clearly points towards the intention of the parties to create a license for continuing existing business, which was run by late husband of the Appellant.

It is usual that, businessmen often do not sit over nitty-gritty in a contract. In a document, the language used by the parties may have more than one meaning. It is ultimately the responsibility of the Courts to decipher the meaning of the words used in a contract, having regards to a meaning reasonable in the line of trade as understood by parties.

It is manifest from Sections 92 and 95 of Evidence Act 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. Section 95 only builds on the proviso 6 of Section 92 of Evidence Act. 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 of Evidence Act specifically prohibits evidence of any oral agreement or statement which would contradict, vary, add to or subtract from its terms.

In line with the law laid down, it is clear 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 High Court erred in appreciating the ambit of Section 95 of Evidence Act, 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. If the meaning provided by the High Court is accepted, then it would amount to Courts substituting the bargain by the parties. The impugned order of the High Court cannot be sustained, and is accordingly, set aside. The decree of the trial court is restored. The appeal is allowed.

Tags : AGREEMENT LICENSE BUSINESS