Case BriefsSupreme Court

Supreme Court: Explaining the scope of Section 92 Proviso (6) of the Evidence Act, 1872, the 3-judge bench of NV Ramana, CJ* and Surya Kant and Aniruddha Bose, JJ has held that the said proviso can be resorted to only in cases where the terms of the document leave the question in doubt.

“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.”

The Court was of the opinion that 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.

Background

Initially Appellant’s husband was running a business of stationary in the name of “Karandikar Brothers” before his untimely demise in the year 1962. After his demise, she continued the business for some time but later decided to let the Respondent run the same for some time.

The terms of the agreement were:

“The stationary shop by name “Karandikar Brothers” belonging to you of the stationary materials which is situated in the premises described in Para 1 (a) above and in which the furniture etc. as described in Para l(b) above belonging to you is existing is being taken by me for conducting by an agreement for a period of two  years beginning from 1st February 1963 to 31st January 1965.

The rent of the shop described in Para 1 (a) above is to be given by you only to the owner and I am not responsible therefor. I am to pay a royalty amount of Rs. 90 /-(Rupees Ninety only) for taking the said shop for conducting, for every month which is to be paid before the 5th day of every month.”

Time after time, the contract was duly extended. In 1980s, desiring to start her husband’s business again, appellant herein issued a notice requesting the Respondent to vacate the suit premises, However, the Respondent replied to the notice claiming that the sale of business was incidental rather the contract was a rent agreement stricto sensu.

The Trial Court while negating the contention of the Respondent, that the shop premises was given to him on license basis.

The Bombay High Court, however, held that:

“Thus, considering the entirety of the case, in my view, both   the   Courts   below   have   incorrectly   interpreted   the document and the surrounding circumstances which, in my view, indicate that the parties had in fact agreed that the premises were transferred to the appellant on a leave and license basis.”

Analysis

Section 95. 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.  Illustration A sells to B, by deed, “my house in Calcutta”. A had no house in Calcutta, but it appears that he had a house at Howrah, of which B had been in possession since the execution of the deed. These facts may be proved to show that the deed related to the house of Howrah.

Section 92. Exclusion of evidence of oral agreement.—

When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall 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).—Any fact may be proved which shows in what manner the language of a document is related to existing facts.

The Court explained that Section 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 Section 92. It could not be postulated that the legislature intended to nullify the object of Section 92 by enacting exceptions to that section.

Considering the facts and materials placed before it, the Court was of the opinion 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 Court, hence, held that the High Court erred in appreciating the ambit of Section 95, 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.

The Court was, hence, of the opinion that if the meaning provided by the High Court is accepted, then it would amount to Courts substituting the bargain by the parties.

“Such interpretation, provided by the High Court violates basic tenants of legal interpretation.”

[Mangala Waman Karandikar v. Prakash Damodar Ranade, 2021 SCC OnLine SC 371 , decided on 07.05.2021]


*Judgment by: CJI NV Ramana

Know Thy Judge| Justice N.V. Ramana

Case BriefsHigh Courts

A very efficacious, substantive and procedural mechanism to facilitate the realisation of deserving and intrinsic value of encumbered estates and other immovable properties – within the annals of the Transfer of Property Act, 1882 — strangely appears very rarely to have been invoked in Courts, which impression is inevitable because the case law on it is scarce, if not, none.

— Kerala High Court

Kerala High Court: Devan Ramachandran, J., addressed matter surrounding Section 57 of the Transfer of Property Act, which has attracted very little or no reported Judgments in India.

Section 57 of the Transfer of Property Act, 1882 enables any party to the sale of immovable property burdened by an encumbrance, to apply to Court for a declaration that the said property is freed from such encumbrance on deposit of sums to be adjudged by it; and for the issuance of a conveyance order or vesting order, proper for giving effect to the sale.

Bench examined the above-stated Section of the TP Act vigilantly from both academic and practical ambit.

Purpose of Section 57 of the TP Act

Intended to assist any party to the sale of immovable property, which is subject to an encumbrance, to fructify the sale for its fair value after receiving in deposit — for payment to the incumbrancer — the capitalised value of the periodical charge, or capital sum charged on the property, together with incidental charges.

Thus, the said Section enables the parties to a sale to invoke the jurisdiction of the Court for the purpose of fulfilling their contracts, notwithstanding the encumbrances on the property.

Section 57 of TP affirmatively provides that on the application of a party to a sale, the Court may, if it thinks fit, direct or allow payment into Court.

This section is intended to facilitate sale out of court, as much as it is for sale by a court or in execution of a decree.

When can Section 57 of TP Act not be applied? | Golden Rule 

In the Madras High Court decision of  Mallikarjuna Sastri v. Narasimha Rao, (1901) ILR 24 Mad 412, held that the said Section,

cannot be applied when it comes to a charge or encumbrance already adjudicated by a court and which has become part of a decree or even in a case of adjustment of a decree out of court.

Facts of the Case

Appellant and Respondents are siblings and their father’s property was partitioned in the year 1980, through a partition deed.

Partition Deed consisted of a covenant that both he and his brother must pay Rs 500 each to their sister within a year, failing which she can recover it, for which the said amounts would stand charged on the respective properties.

Contentions

The Sister, who is also the first respondent in the present matter refused to accept the stated amount when offered by the appellant, due to which he is still obligated and burdened with the same.

Appellant due the stated obligation has been unable to execute the sale deed and in view of the circumstances, he approached the District Court under Section 57 of the TP Act volunteering to deposit the amount of Rs 500 in favour of the first respondent in order to obtain the declaration that the property is free from any encumbrance.

Though, the above-stated application to the District Court was dismissed on grounds of maintainability.

By the present appeal, the appellant has assailed the District Court’s Order.

Developments in the present appeal

Bench in an earlier order had directed the first respondent to file an affidavit stating that she is unwilling to take the money from the appellant with reasons.

The first respondent filed the affidavit stating that she is unwilling to take the said amount but the reasons placed by her were that due to personal issues with appellant along with the said amount not being offered within the stipulated time as stated in the Partition Deed she refused the said amount.

Counsels for Appellant and First Respondent are P. Thomas Geeverghese and Shiju Varghese, respectively.

Decision

On perusal of the facts and circumstances of the matter, Court stated that when the amount of Rs 500 alone stands charged on the property as a capital sum, without any further obligation on the appellant towards interests or other incidental expenses, it is irrefragible that if the appellant pays it to the first respondent or deposits it in the Court, the said encumbrance would stand extinguished.

In the affidavit filed by the first respondent, she only asserted that her refusal for the payment is for personal reasons.

Looking at the above stated, Court determined whether the appellant was justified in invoking Section 57 of the TP Act or not?

Bench stated that in light of the circumstances of the present case, there can be little divergence that the provisions of Section 57 of the TP Act would come to play.

Court noted that the first respondent only says that ‘her conscience is not willing to accept the money’ without showing any cause against its tender or deposit by the appellant.

Hence, in view of the above circumstances, Court finds the decision of District Court erring, since the appellant has clearly averred that he intends to sell his property as per the sale agreement submitted by him.

Since the first respondent failed to show any legally acceptable cause, the appellant is entitled to a declaration under Section 57 of the TP Act.

Therefore, the District Court’s decision is set aside and the appeal is allowed while permitting the appellant to tender the amount of Rs 500 to the first respondent by depositing it in the District Court.

In view of the above, the property will stand free from any charge, created by the Partition Deed. [M.P. Varghese v. Annamma Yacob, 2020 SCC OnLine Ker 3321, decided on 05-08-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for PMLA: The Tribunal chaired by Manmohan Singh, J. set aside an order restraining a woman from sale or transfer of a property, in which she was not claiming any right, title or interest.

The present appeal was filed under Section 26 of Prevention of Money Laundering Act, 2002 against the order passed by the Adjudicating Authority in an Original Application (OA) whereby appellant and her associates had been restrained from sale/ transfer of certain properties. The appellant’s case was that prima facie there was no link or nexus with the accused. Her name had only been mentioned in relation to a property which she had agreed to be purchased from one Nirmala Jain. However, due to certain personal reasons on the seller’s part, the sale could not be consummated. The said OA made no mention of any paper/documents/article or the like which had been seized and which had any connection with the appellant.

Appellant’s sole submission was that no cogent evidence had been provided by the ED to show that it had any link/ nexus with any alleged accused parties. However, despite the same, she had been arrayed as a defendant in the O.A.

The Tribunal noted that in the impugned order, no plea of the appellant had been referred. The appellant was not even claiming any right in the subject property. No prosecution complaint had been filed under Section 8(3)(a) of PMLA and the period of ninety days had already expired. Thus, her name ought to be deleted as the defendant from the O.A. At this juncture, counsel for respondent Atul Tripathi submitted that since the appellant was claiming no right and title in the property, her name may be deleted.

In view of the above, the appeal was allowed.[Alka Pahwa v. Assistant Director Directorate of Enforcement, Chandigarh, 2019 SCC OnLine ATPMLA 10, decided on 28-03-2019]

Case BriefsHigh Courts

Punjab & Haryana High Court: Appellant had prayed before the Bench of Surinder Gupta, J., that the Will made by mother of both the parties was illegal, null and void being obtained by the respondent under undue influence, coercion, misrepresentation and that she was incompetent to make Will of conjoint property.

The Trial Court had upheld the Will executed by the mother and suit of the appellant was dismissed. It was submitted that both the parties had equally contributed to purchase the land though it was purchased on their mother’s name who could not have purchased the land being a household lady. Thus, Will executed by her was illegal being obtained under undue influence, coercion, misrepresentation. Trial Court found the Will to be validly executed and thus under Section 14 of Hindu Succession Act, 1956 the mother was the absolute owner of the suit property and was competent to execute the Will. Statement of account was brought before Court as proof that the appellant had contributed to the sale of the property.

High Court was of the view that even if the financial contribution was done for sale the transaction cannot be said to be Benami transaction. Therefore, the appeal was dismissed and Courts below have not committed any error in stating that Will was valid, registered and rightly executed. [Dharam Singh v. Anil Kumar, 2019 SCC OnLine P&H 428, decided on 23-04-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court: A Single Judge Bench comprising of Amit Rawal, J., allowed a revision petition which was filed against the order whereby an application submitted under Section 8 of the Arbitration and Conciliation Act, 1996 for resolution of dispute was dismissed by the Trial Court.

The facts of the case are such that a suit was filed by respondent seeking permanent injunction on the property in question. In the suit, respondent was aggrieved by the fact that petitioner had cancelled an agreement for sale of property in furtherance of which respondent had already made payments. Petitioner contested the suit by filing an application under Section 8 of the Act stating any dispute which arises between the parties are to be taken to arbitration. This application was dismissed by the trial court as they found no agreement entered into between the parties. Hence, the petitioner approached the High Court.

The High Court was of the view that a stand-alone agreement, an application submitted by the respondent that contained terms and condition would be considered to suggest that the parties were willing to resolve the dispute by way of arbitration. The Court observed that the suit was not maintainable as the matter was to be resolved by way of arbitration by virtue of Section 8 of the Act. Therefore, the impugned order whereby application filed under Section 8 was dismissed was set aside.[IREO Grace Realtech (P) Ltd. v. Neeru Babbar,2018 SCC OnLine P&H 1205, decided on 01-06-2018]