MANGALA WAMAN KARANDIKAR (D) TR. LRS versus PRAKASH DAMODAR RANADE

Citation: [2021] 5 S.C.R. 232 · Decided: 07-05-2021 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 5 S.C.R.
   [2021] 5 S.C.R. 232
MANGALA WAMAN KARANDIKAR (D) TR. LRS.
v.
PRAKASH DAMODAR RANADE
(Civil Appeal No. 10827 of  2010)
MAY 07, 2021
[N.V. RAMANA, CJI., SURYA KANT AND
ANIRUDDHA BOSE, JJ.]
Interpretation of documents: Contractual interpretation – It
depends upon the intentions expressed by parties.
Evidence Act, 1872: s.92 – Contract between parties – Reading
of the contract showed that the appellant had intended to transfer
business to respondent during the contractual period and the
agreement was not meant as a lease or license for the respondent to
conduct business – Respondent contended that the meaning of the
document should not be culled solely with reference to the language
used in the document, rather extrinsic evidence needs to be utilized
before adducing proper meaning to the contract – Such contention
is not accepted – s.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 s.92 – It could not be postulated that the
legislature intended to nullify the object of s.92 by enacting
exceptions to that section – Once the recitals and the contract were
accepted, the respondent could not have adduced contrary extrinsic
parole evidence, unless he portrayed ambiguity in the language –
The evidence pointed that the license was created for continuation
of existing business, rather than license/lease of shop premises –
Once it is determined that the impugned agreement was a license
for continuing existing business, Bombay Rent Act does not cover
such arrangements – The jurisdiction of the trial court is accordingly
not ousted – Rent Control and eviction.
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Allowing the appeal, the Court
HELD: 1. Unlike a statutory interpretation, which is even
more difficult due to assimilation of individual intention of law
makers, contractual interpretation depends on the intentions
expressed by the parties and dredging out the true meaning is
an ‘iterative process’ for the Courts. In any case, the first tool
for interpreting, whether it be a law or contract is to read the
same. [Para 9][239-B-C]
2. 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 may not be out of context to
state that the development of rules of contractual interpretation
has been gradual and has taken place over century. [Para 10]
[239-C-E]
3.1 It is clear from the reading of the contract that the parties
had intended to transfer business from appellant to respondent
during the contractual period. This agreement was not meant as
a lease or license for the respondent to conduct business.
However, the respondent contends that the meaning of the
document should not be culled solely with reference to the
language used in the document, rather extrinsic evidence needs
to be utilized before adducing proper meaning to the contract. In
this regard he submits that on consideration of all the extrinsic
evidence, the contract should be read as a leave and license
agreement, which is covered under the Bombay Rent Act. He
draws his support from Section 95 of the Indian evidence Act to
state that the document needs to be interpreted having regard
to external evidence such as receipts of payment under the
contract addressed as rent receipts etc. It is manifest from Section
92 and Section 95 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.
[Paras 11, 14][239-E-G; 240-A, H; 241-A]
3.2 Section 92 specifically prohibits evidence of any oral
agreement or statement which would contradict, vary, add to or
MANGALA WAMAN KARANDIKAR (D) TR. LRS. v.
PRAKASH DAMODAR RANADE
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subtract from its terms. If oral evidence could be 

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