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Mangala Waman Karandikar (D)TR LRS v/sPrakash Damodar Ranad

Sections 92 and 95, which deal with the exclusion of evidence of oral agreements and evidence as to prove the meaning of the existing facts respectively, were underlined in the Supreme Court's recent decision in the matter of Mangala Waman Karandikar (D) TR. LRS v. Prakash Damodar Ranad (2021). The Supreme Court recently overturned the High Court's use of Section 95 of the Indian Evidence Act because there was no ambiguity in the text of the settlement reached between the two disputing parties.

Case Law Analysis:
Mangala Waman Karandikar (D) TR. LRS. V. Prakash Damodar Ranad (2021)
Civil Appeal No. 10827 Of 2010
Decided On: 7th May 2021
Bench: Hon'ble Chief Justice N.V. Ramana, Justice Surya Kant, Justice Aniruddha Bose

Facts of the Case
  • Based on the agreement between the petitioner and respondent, the current case was created. Prior to his death, the petitioner's spouse operated a company under the name "Karandikar Siblings," and after his death, she continued the operation.
  • Unfortunately, he passed away in 1962. After his demise, the appellant ran the company for a while, but when she was unable to continue running a successful business, she made the decision to temporarily hand over control to the Respondent.
  • They entered a contract later. All of this was agreed to in an agreement dated February 7, 1963. The agreement was renewed, and in the 1980s the appellant thought she could once more manage her husband's firm. At that point, she was prepared to enter the workforce.
  • She gave the respondent notice to vacate the property by January 31st, 1981 in the year 1980.
  • The respondent claimed that the contract was legally speaking a rent arrangement. Distressed by a similar situation, the appealing party filed a civil lawsuit before the Joint Civil Judge's court.
  • The trial court rendered a decision in the petitioner's favor and determined that the agreement's purpose was to increase business sales. The Trial Court ordered the respondent to give the petitioner the suit property. The Bombay High Court ruled in an appeal that the respondent entered into a license agreement in accordance with section 15A of the Bombay Rent Act.

Issues Raised in the Case:
Issue framed by the court is - Whether the ambiguous or unclear document will trigger the proviso to Sections 92 and 95 of the Indian Evidence Act 1872?

Provisions Used in the Case:
  • Section 92 of Indian Evidence Act 1872: Section 92 of the Act talks about exclusion of evidence of oral agreement. No evidence of an oral agreement would be admitted 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 once the terms of any contract, as well as any grant or other disposition of property, have been proven.

    Proviso 6: It declares that any fact may be proven, demonstrating how the language of the document is connected to facts.
  • Section 95 of Indian Evidence Act 1872: The Act expressly provides: "evidence that a document is meaningless in light of the facts. Evidence may be presented to demonstrate that a document's plain-speaking language was utilized in a peculiar way when it lacks meaning when compared to known facts.

Contentions of the Parties:
Appellant: This appeal was filed in response to the Bombay High Court's decision in Second Appeal No. 537 of 1991, which permitted the second appeal in favor of the respondent and reversed the judgement that favored the appellant.

The appellant's attorney argued that the impugned ruling of the High Court erred in its interpretation of the contract's language, which plainly indicates that the parties intended to create a license for carrying on the appellant's late husband's business.

According to the respondent's attorney, there is extrinsic evidence that supports the ruling and demonstrates that the agreement between the parties was a license to use the business, which is protected by the Bombay Rent Act. Considering this, he concurs with the contested order's assertion that the Trail Court lacked original jurisdiction.

  • When the High Court's decision was appealed, the Supreme Court ruled that it was clear from reading the contract that the parties had anticipated moving the business from the appellant to the respondent and that neither rent nor a license for the respondent to run the business was implied.
  • The Supreme Court further ruled that because the document was unambiguous about its significance, reliance on provisions 6 of Sections 92 and 95 was not necessary in this case.
  • According to a bench of the Indian Supreme Court, Section 95 goes beyond Proviso 6 of Section 92. The bench stated, "In any instance, the Proviso doesn't matter when an archive is clear and offers no problem in reading it.
  • Evidence of any oral agreement that would repudiate, differ from, add to, or take away from its provisions is prohibited under Section 92 of the Evidence Act. It would add up to agreeing with the authorities to provide evidence to negate or alter those terms if oral proof could be obtained to demonstrate that the conditions of the record were different from those expressed in that.
  • The High Court verdict was overturned by the Supreme Court, and the trial court order that instructed the respondent to turn over the property to the petitioner was reinstated.

In this case Supreme Court overturned the decision of the High Court and reinstated the trial court's ruling that had instructed the respondent to turn over the property to the petitioner. The Hon'ble Supreme Court announced its opinion after hearing from both sides that the interpretation of a contract depends on the intentions indicated by the parties and that determining the meaning intended by the parties requires an iterative process on the part of the courts.

While examining the parties' intentions, it was determined that there had been a clear transfer of business from the appellant to the respondent and that neither a lease nor a license had been intended. Only when the document's terms raise a doubt may one use the proviso, in accordance with sections 92 and 95 of the Indian Evidence Act. The condition wouldn't apply in situations where it's straightforward and uncomplicated.

By citing the case of Rohitash Kumar v. Om Prakash Sharma the court determined that if the high court's interpretation were followed, it would violate the fundamental principles of legal interpretation and expand the proviso's scope beyond section.

Additionally, it was determined that Section 92 expressly forbids any oral testimony that would contradict, change, increase, or decrease the terms. It continued to say that the high court didn't understand the scope of section 95 since it only considered the evidence that supported a claim of contract breach, not the vague language of the agreement.

In my opinion the judgment given by Hon'ble Supreme Court was quite justified.

End Notes:
  • Indian Evidence Act 1872 § 92, No. 1, Act of Parliament (1872) India
  • Indian Evidence Act 1872 § 95, No. 1, Act of Parliament (1872) India
  • Rohitash Kumar v. Om Prakash Sharma, AIR 2003 SC 30

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