Report No. 185

Section 92

The section deals with 'exclusion of evidence of oral agreement'. Apart from the main part, it contains provisos (1) to (6). Below the section, ten illustrations (a) to (j) are there.

In as much as the 69th Report has proposed some amendments to Section 92, we deem it necessary to extract Section 92. It reads as follows:

"92. 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 substracting from, its terms.

Proviso (1.- Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration, or mistake in fact or law.

Proviso (2.- The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document.

Proviso (3.- The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.

Proviso (4.- The existence of any distinct subsequent oral agreement to rescind or modify any such contact, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents.

Proviso (5.- Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved.

Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract.

Proviso (6.- Any fact may be proved which shows in what manner the language of a document is related to existing facts."

(There are ten illustrations (a) to (j) below Section 92).

Under Section 91, when the terms of any transaction have been reduced to writing, they must be proved by the production of the document unless grounds are made out for reception of secondary evidence. In other words 'no substitution' of the terms of a transaction is permitted under Section 91. Under Section 92, no variation of the terms shall be allowed. Thus Section 92 is a logical corollary to Section 91.

The application of Section 92 is confined to the parties to the document unlike Section 91 which is applicable to all persons whether they are parties to the document or not.

There is again vast case law under Section 92. Sarkar (Evidence, 15th Ed., 1999) deals with Section 92 from pages 1309 to 1405 (nearly 96 pages). There are number of judgments of the Privy Council, Supreme Court and High Court judgments on various aspects of Section 92.

The 69th Report considered that the main part of the section requires some re-drafting. It also dealt with the aspect as to the difference between the earlier part and the latter part of the main section, namely that the earlier part refers to 'contracts, grant or other disposition of property' which are between one or more parties; and the prohibition that no evidence of any oral agreement or statement at variance with the document refers to transactions, between parties to any such instrument or their representative.

One view is that the latter part is also confined to bilateral documents and does not apply to unilateral documents such as (i) confessional statement of the accused (ii) statements of witnesses (iii) other court proceedings (apart from decrees); and (iv) resolutions of companies when required to be in writing (see para 43.19 of 69th Report). (So far as variation of a decree is concerned, the 69th Report stated in para 43.22 that this is a matter of procedure and not of evidence. A decree cannot be varied by parties privately except through the court. So far as executing Court is concerned, Order 21 Rule 2 of the Code of Civil Procedure, 1908, states very clearly, the procedure for recognition of variations. Hence, decrees need not be protected by Section 92).

So far as unilateral documents of the type referred to above, it is obvious that Section 92 does not apply and hence oral evidence to vary the document is permissible. Such a view, according to the 69th Report, cannot be accepted and may be corrected by stating that the prohibition against adding oral evidence to vary a document should extend even to unilateral documents.

The 69th Report referred to conflicting views of various High Courts and finally to the observations of the Supreme Court in Bai Hira Bai Devi v. Official Assignee, Bombay: AIR 1958 SC 448. In that case the Official Assignee moved the Insolvency Court under Section 55 of the Presidency Towns Insolvency Act, for a declaration that a deed of gift executed by the insolvent in favour of his wife and sons (appellants) was void, as one without consideration.

It was held that it was open to the appellants (the wife and sons) to lead oral evidence to show that the transactions evidenced by the deed was, in reality, not a 'gift' but a 'transfer for consideration' and that as the dispute did not arise between parties to the transaction but arose between the wife and sons of the transferor and a third party, (the Official Assignee) oral evidence was admissible to show that the deed was not a gift but one for consideration and therefore a transfer for consideration.

In that event, it would be a valid document which could not be avoided by the Official Assignee. In that context, the Supreme Court said that the prohibition in the latter part of Section 92 was confined to issues between the parties to the document or their representatives and not if the issue as to varying the terms of the document arose between a party to the document and a non-party. It also referred to Section 99 of the Evidence Act which expressly enables persons not parties to the document to give evidence varying the terms of document.

The 69th Report does not suggest that the effect of the above judgment in Bai Hira Bai has to be corrected. It refers to that judgment only to show that, according to the Supreme Court, both the first and latter part of Section 92 apply to transactions between parties to the document. From that it follows that Section 92, as it stands now, does not apply to unilateral documents such as (i) confessions of the accused (ii) statements of witnesses, and (iii) Court proceedings (other than decrees or judgments), (iv) resolutions of companies when required to be in writing.

It is obvious that such documents, though unilateral, cannot be allowed to be varied or modified by oral evidence. Sarkar points out (15th Ed., 1999, pages 1312 and 1316) that for example, as the section now stands, the facts stated in a 'deposition' can be allowed to be contradicted by oral evidence because Section 92 applies only as between parties to a document.

The author says that the 'rules as to admissibility of extrinsic evidence to contradict depositions, appears to be otherwise in England. There, the same rule of exclusion of extrinsic evidence applies to the statutory deposition of a witness in a civil or criminal proceeding, and the statutory examination of a prisoner, neither of which can be contradicted or varied by extrinsic evidence (Phipson 11th Ed. p 788)".

In the 15th Ed. of Phipson (see para 42.17) it is stated that the 'same rule applies to the statutory deposition of a witness in a civil or criminal proceeding which cannot be contradicted, or varied by extrinsic evidence. (Of course, a view was expressed that parol evidence to add something to a deposition could be permissible) (see Leach v. Simpson: 5 M&W. 309); (Sidney Bolsom Investment Trust Ltd. v. E. Karmios & Co.Ltd. 1956(1) QB 529 (although it would not be possible to give extrinsic evidence by way of addition or contradiction when the deposition is used in the absence of the witness, since the statutory conditions as to admissibility are not fulfilled). Some views are also expressed in para 42.04 in regard to deposition that they could be varied by leading oral evidence (Leach v. Simpson: 5 M&W 309).

(A) Therefore, in the light of the above discussion, the main part of Section 92 requires (a) some redrafting so far as bilateral transactions are concerned and (b) provision to prohibit oral evidence to vary unilateral transactions are concerned, must be inserted. This is precisely what was recommended in para 43.18 and para 43.20 of the 69th Report.

In the main part of Section 92, it was recommended, that it be split up as follows into Section 92(1)(a) and (b) in regard to documents 'between parties', clause (a) referring to contract, grant or other disposition of property and clause (b) referring to documents in which the matter required by law to be reduced to the form of a document is recorded. Section 92(2) is to be added to cover matters required to be reduced to the form of a document and not constituting a transaction between two or more parties'.

We recommend the format proposed in para 43.18 of the 69th Report regarding the amendment in the opening paragraph of section 92. We further recommend that for exclusion of oral evidence in the case of certain unilateral documents, besides the format of provision given in para 43.20 of the 69th report, the following words should be added "such as confessions of the accused, statements of witnesses, court proceedings other than judgments, decrees or orders, resolution of a company required to be in writing". But instead of bringing it in subsection (2) of section 92 as proposed in the 69th report (para 43.20), we recommend that this should be brought out in a new section 92A.

We recommend the following draft of amendment in the opening paragraph of section 92 and insertion of a new section 92A :-

"92 When the terms of any such contract, grant or other disposition of property as is referred to in section 91 or any matter required by law to be reduced to the form of a document and constituting a transaction between two or more parties, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted-

(a) as between the parties to any such contract, grant or other disposition of property or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, the terms of the document, or

(b) as between the parties to such transaction, or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from the terms of the document in which the matter required by law to be reduced to the form of a document is recorded, as the case may be.

92A. Exclusion of oral evidence in the case of certain unilateral documents.- When any matter required by law to be reduced to the form of a document, and not constituting a transaction between parties, such as a confession of an accused, the statement of a witness, a court proceeding (other than judgments, decree or order), a resolution of a company required to be in writing, has been so reduced to writing and proved according to section 91, no evidence of any oral statement shall be admitted for the purpose of contradicting, varying, adding to, or subtracting from the contents of the document."

(B) We shall next deal with the six provisos to Section 92. The 69th Report divides the discussion here into (a) the first five provisos and (b) the sixth proviso. For convenience, we shall follow the same method.

(a) First five provisos to Section 92

Provide (1): So far as the first proviso is concerned, this proviso permits proof of a fact which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of execution, want of capacity and any contracting party, want or failure of consideration, or mistake of law or fact. Illustration (e) is in point.

So far as mistakes are concerned, Section 31 of the Specific Relief Act, 1877 or now Section 26 of the Specific Relief Act, 1963 also permits mistakes to be corrected by way of 'rectification'. The proviso is, however, not limited in its application to suits for rectification of instruments (Mahendra v. Jogendra: 2 CWN 260; Rajaram v. Manik: AIR 1952 Nag. 90). In fact, mistake of fact can be pleaded in defence also.

Unilateral mistake (not amounting to fraud, legal or equi ) is not a ground for rectification and does not, therefore, if proved, entitle the party alleging it to a decree or order rectifying or cancelling the document (United State v. Motor Trucks Ltd. 1924 A.C. 200). But when a mistake is common to all parties, evidence would be admissible, under proviso (1), to found a claim for the rectification of the document (Janardan v. Venkatesh: AIR 1939 Bom 149).

Mistake as to identity of a person, would fall under the sixth proviso. For misdescription of property, separate provision has been made in sections 95, 97.

Where either mutual mistake or fraud is alleged oral evidence as a general rule, will be received. See also Rikhiram v. Ghasiram AIR 1978 M.P. 189.

We do not, however, suggest any amendment in proviso (1).

Proviso (2): Under this proviso, the existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document.

Illustrations (f), (g), (h) are in point. The word 'may' shows the Court has a discretion.

We do not propose any amendment to proviso (2).

Proviso (3): It says that the existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.

This proviso is illustrated by illustration (b) and (j).

We do not propose any amendment to proviso (3).

Proviso (4): It says that the existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to registration of documents.

We do not propose any amendment to this proviso.

Proviso (5): It says that any usage or custom by which incidents not expressly mentioned in any contract are annexed to contracts of that description, may be proved. This proviso states that such 'incident' should not be repugnant to the express terms of the contract.

The rule under this proviso applies generally to mercantile transactions and is not exclusively confined to mercantile transactions.

Incidents annexed to a contract by usage or custom mean what things are customarily treated as incidental and accessorial to oral evidence and such evidence is permitted to prove that such incidents are treated as part of the same transaction.

We do not propose any amendment to proviso (5).

Proviso (6): This provision says that any fact may be proved which shows in what manner the language of a document is related to existing facts.

In fact, sections 93 to 98 deal with special situations though they too deal with similar issues. This proviso (6) indeed refers to a principle of interpretation of contracts.

In the 69th Report, this proviso (6) was considered in some detail, but ultimately, it was stated (see para 43.33) that even the proviso does not require any amendment.

The point discussed was that in some judgments of High Courts it was pointed out that the section was somewhat vague (Martand v. Amritrao, per Macleod CJ in AIR 1925 Bom 501. But the Commission observed that the section could have been clearer and, in fact, such a criticism applies to several other provisions of the Act too.

It was observed that in spite of the above comment about proviso (6), it was not difficult to perceive the principle behind it, namely that, oral evidence is permissible "to show the connection between the words of an instrument and external reality and to ascertain the identity or extent of the subjects referred to in the document'. The surrounding circumstances which the Court could look into were described as a 'lamp' by Goodeve (Evidence p. 386, cited by Woodroffe) (69th Report, para 43.33).

Sarkar says (15th Ed., 1999 page 1395) that while the object of admissibility of the evidence of surrounding circumstances is to ascertain the real intention of parties, the said intention must be gathered from the plain language of the document as explained by extrinsic evidence. But, at the same time, no evidence of any intention inconsistent with the plain meaning will be admitted. "This rule of interpretation is not so easy as it may appear, and it is not possible to define its precise limits in view of the ever changing facts involved in every cases." It appears that Macleod CJ said in another case Ganpathrao v. Bapu Tukaram AIR 1920 Bom 143 that proviso (6) was 'the despair of judges and the joy of lawyers'.

In Raj Kumar v. State of H.P. AIR 1990 SC 1833, the Supreme Court observed thad if the language employed is ambiguous and admits of a variety of meanings, the 6th proviso could be invoked. The object of admitting oral evidence of the circumstances is to assist the Court to get at the real intention of the parties and thereby overcome the difficulty caused by the ambiguity. In such a case, the subsequent conduct of the parties may furnish evidence to clear the blurred area and to ascertain the real intention of the parties.

The principle of the section has been applied to wills also.

After considering all aspects relating to proviso (6), we are also of the view that the proviso be left as it is.

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