Whether Court should interpret an agreement made between two individuals or entities like a statute?

 Coming now to the last submission of Mr. Anturkar, it is clear

that the agreement between the sugar factory and the union did

acknowledge that considering the financial circumstances of the sugar factory, it was problematic for the factory to implement the agreement according permanent status to the complainants immediately; it provided for implementation by the management by written orders as soon as possible and, at any rate, before 24 November 2015. This does not comprehend a resolution on the part of the board of directors of the sugar factory for implementing the agreement. What the agreement envisages is a written order of the management for implementing the agreement. This written order admittedly was passed on 5 November 2015, that is to say, before the last date of implementation, i.e. 30 November 2015. Mr. Anturkar tried to show some other provisions of the agreement in support of his contention that the word 'management' used in clause-7 of the agreement comprehends the board of directors of the sugar factory and not its executive authority. An agreement made between two individuals or entities cannot be construed like a statute. The meaning to be accorded to individual terms and conditions of the agreement has to be from a common sense and business point of view. When the agreement requires a written order of the management of the factory for its implementation, the written order passed by the Managing Director could very well be subsumed within it. In any event, assessment of this issue by the industrial court cannot be termed as unreasonable or perverse on the basis of submissions advanced by Mr. Anbturkar. 

{Para 11}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO.10372 OF 2018

Shri Bhogawati Sahakari Sakhar  Karkhana, Vs  Shri Ananda Ishwara Kumbhar

CORAM : S.C. GUPTE, J.

DATE : 9 JANUARY 2020

Citation: 2020 (6) MHLJ 493

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Supreme Court: Determination of lease U/S 111(d) of transfer of property Act-Doctrine of merger

 Learned Counsel for the writ Petitioner relying on provisions of Section 111 of the Transfer of Property Act, 1882 contends that leasehold rights have been merged in the lessor since when lessor's interest coalesces with lessee's interest, the principle of merger comes into play. He has placed reliance on judgment of this Court in T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors. MANU/SC/0263/2003 : (2003) 5 SCC 150 and Pramod Kumar Jaiswal and Ors. v. Bibi Husn Bano and Ors. MANU/SC/0346/2005 : (2005) 5 SCC 492. This Court in T. Lakshmipathi (supra) had examined the doctrine of merger as contained in Section 111(d). In Paragraph Nos. 14 to 17, following was laid down:

14. The common-law doctrine of merger is statutorily embodied in the Transfer of Property Act, 1882. Section 111(d) provides:

111. Determination of lease.--A lease of immovable property, determines--

* **

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right;

* * *"

A bare reading of the doctrine of merger, as statutorily recognized in India, contemplates (i) coalescence of the interest of the lessee and the interest of the lessor, (ii) in the whole of the property, (iii) at the same time, (iv) in one person, and (v) in the same right. There must be a complete union of the whole interests of the lessor and the lessee so as to enable the lesser interest of the lessee sinking into the larger interest of the lessor in the reversion.

15. In Badri Narain Jha v. Rameshwar Dayal Singh MANU/SC/0054/1951 : AIR 1951 SC 186, it was held by this Court that if the lessor purchases the lessee's interest, the lease no doubt is extinguished as the same man cannot at the same time be both a landlord and a tenant, but there is no extinction of the lease if one of the several lessees purchased only a part of the lessor's interest. In such a case the leasehold and the reversion cannot be said to coincide.

16. In Sk. Faqir Bakhsh v. Murli Dhar MANU/PR/0179/1931 : AIR 1931 PC 63, the Plaintiff was holding on lease a portion of the entire property. Subsequently, the Plaintiff and the Defendant became pro indiviso joint proprietors of the property by purchasing shares from the earlier owners. The lease was subsisting when the shares were bought by the parties. In a suit for accounts filed by the Plaintiff it was held that the Plaintiff's rights under lease of a part do not merge in his rights as joint proprietor of the whole of the property as between the parties the Plaintiff held a valid and subsisting lease.

17. A Division Bench of the Patna High Court in Parmeshwar Singh v. Sureba Kuer MANU/BH/0096/1925 : AIR 1925 Pat 530, held that Section 111(d) applies only to a case where the interests of the lessee and of the lessor in the whole of the property become vested at the same time in one person in the same right. Merger is largely a question of intention, dependent on circumstances, and the courts will presume against it when it operates to the disadvantage of a party, as was held by this Court in Nalakath Sainuddin v. Koorikadan Sulaiman, MANU/SC/0564/2002 : (2002) 6 SCC 1 (SCC para 20)."

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1533 and 1534 of 2019

Decided On: 12.02.2019

Delhi Development Authority  Vs.  Karamdeep Finance & Investment (I) Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

Ashok Bhushan and K.M. Joseph, JJ.

Citation: MANU/SC/0183/2019,(2020) 4 SCC 136

Author: Ashok Bhushan, J.

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Landmark Judgment of supreme court on interpretation of implied terms in contract

 We now proceed to apply the aforesaid principles which have evolved for interpreting the terms of a commercial contract in question. Parties indulging in commerce act in a commercial sense. It is this ground rule which is the basis of The Moorcock test of giving ‘business efficacy’ to the transaction, as must have been intended at all events by both business parties. The development of law saw the ‘five condition test’ for an implied condition to be read into the contract including the ‘business efficacy’ test. It also sought to incorporate ‘The Officious Bystander Test’ [Shirlaw v. Southern Foundries (supra)]. This test has been set out in B.P. Refinery (Westernport) Proprietary Limited v. The President Councillors and Ratepayers of the Shire of Hastings (supra) requiring the requisite conditions to be satisfied: (1) reasonable and equitable; (2) necessary to give business efficacy to the contract; (3) it goes without saying, i.e., The Officious Bystander Test; (4) capable of clear expression; and (5) must not contradict any express term of the contract. The same penta-principles find reference also in Investors Compensation Scheme Ltd. v. West Bromwich Building Society (supra) and Attorney General of Belize v. Belize Telecom Ltd. (supra). Needless to say that the application of these principles would not be to substitute this Court's own view of the presumed understanding of commercial terms by the parties if the terms are explicit in their expression. The explicit terms of a contract are always the final word with regards to the intention of the parties. The multi-clause contract inter se the parties has, thus, to be understood and interpreted in a manner that any view, on a particular clause of the contract, should not do violence to another part of the contract.

 We may, however, in the end, extend a word of caution. It should certainly not be an endeavour of commercial courts to look to implied terms of contract. In the current day and age, making of contracts is a matter of high technical expertise with legal brains from all sides involved in the process of drafting a contract. It is even preceded by opportunities of seeking clarifications and doubts so that the parties know what they are getting into. Thus, normally a contract should be read as it reads, as per its express terms. The implied terms is a concept, which is necessitated only when the Penta-test referred to aforesaid comes into play. There has to be a strict necessity for it. In the present case, we have really only read the contract in the manner it reads. We have not really read into it any ‘implied term’ but from the collection of clauses, come to a conclusion as to what the contract says. The formula for energy charges, to our mind, was quite clear. We have only expounded it in accordance to its natural grammatical contour, keeping in mind the nature of the contract.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

(Before Rohinton Fali Nariman and Sanjay Kishan Kaul, JJ.)

Nabha Power Limited (NPL) .

v.

Punjab State Power Corporation Limited (PSPCL) & Anr. 

Civil Appeal No. 179 of 2017

Decided on October 5, 2017

Citation:2017 SCC OnLine SC 1239

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Leading judgment on interpretation of documents

In Deo v. Rias (1832) 8 Bing, 178, Tindal, C.J. held that "we are to look at the words of the instrument and to the acts of the parties to ascertain what their intention was; if the words of the instrument be ambiguous, we may call in the aid of the acts done under it as a clue to the intention of the parties. In Chapman v. Bluck (1838) 4 Ring, 187, Park J. held that the intention of the parties may be collected from the language of the instrument and may be elucidated by the conduct they have pursued. Odgers in his Construction of Deeds and Statutes, 5th Edn. by Dworkin at p. 53 stated that in the case of an ambiguity, judicial notice will be taken of the way in which the parties themselves have interpreted their rights and duties under the document. 

In that case the question was "who was the real purchaser of the goods in question". Gajendragadar, J. (as he then was) speaking for the court held that the appellant acted on account of the disclosed partner and as such he was not entitled to sue. It was also further held that whether the contract was entered on behalf of the principal recital in the relevant document could provide the necessary clue. The letters and the confirmation slips were held to be read in the light of the bought and sold notes and the conduct of the parties was presumed to be consistent with them. The signature or how the parties described themselves was held to be not relevant.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5432 of 1992

Decided On: 18.12.1992

 American Express Bank Ltd.

Vs.

 Calcutta Steel Co. and Ors.

Coram:

A.M. Ahmadi, M.M. Punchhi and K. Ramaswamy, JJ.

Citation:(1993) 2 SCC199

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When registered sale deed should not be treated as nominal?

The deed of sale being a registered one and apparently containing stipulations of transfer of right, title and interest by the vendor in favour of the vendee, the onus of proof was upon the defendant to show that the said deed was, in fact, not executed or otherwise does not reflect the true nature of transaction.

A document, as is well known, must be construed in its entirety. Reading the said in its entirety, there cannot be any doubt whatsoever that it was a deed of sale. It satisfies all the requirements of a conveyance of sale as envisaged under Section 54 of the Transfer of Property Act.

In Bishwanath Prasad Singh v. Rajendra Prasad& Anr. [(2006) 4 SCC 432], this Court held :

"16. A deed as is well known must be construed having regard to the language used therein. We have noticed hereinbefore that by reason of the said deed of sale, the right, title and interest of the respondents herein was conveyed absolutely in favour of the appellant. The sale deed does not recite any other transaction of advance of any sum by the appellant to the respondents which was entered into by and between the parties. In fact, the recitals made in the sale deed categorically show that the respondents expressed their intention to convey the property to the appellant herein as they had incurred debts by taking loans from various other creditors.

 It will bear repetition to state that with a view to ascertain the nature of a transaction the document has to be read as a whole. A sentence used or a term used may not be determinative of the real nature of transaction."
 The document in question was not only a registered one but also the title deeds in respect of the properties have also been handed over. Symbolical possession if not actual physical possession, thus, must be held to have been handed over. It was acted upon. Appellants started paying rent in respect of the said property. No objection thereto has been raised by the respondent.
If the sum of Rs.50,000/- was the amount of loan wherefor the deed of sale was executed by way of security, having regard to his admission that the firm is an income-tax payee and maintains books of account in regular course of business, failure on his part to produce any documentary evidence merited drawing of an adverse inference.
Right of possession over a property is a facet of title. As soon as a deed of sale is registered, the title passes to the vendee. The vendor, in terms of the stipulations made in the deed of sale, is bound to deliver possession of the property sold. If he does not do so, he makes him liable for damages. 
If the appellant was able to prove that the deed of sale was duly executed and it was neither a sham transaction nor represented a transaction of different character, a suit for recovery of possession was maintainable. A heavy onus lay on the respondent to show that apparent state of affairs was not the real state of affairs.
A heavy burden of proof lay upon the defendant to show that the transaction was a sham one. It was not a case where the parties did not intend to enter into any transaction at all. Admittedly, a transaction had taken place. Only the nature of transaction was in issue. A distinction must be borne in mind in regard to the nominal nature of a transaction which is no transaction in the eye of law at all and the nature and character of a transaction as reflected in a deed of conveyance. The construction of the deed clearly shows that it was a deed of sale. The stipulation with regard to payment of compensation in the event appellants are dispossessed was by way of an indemnity and did not affect the real nature of transaction.
Reportable

Supreme Court of India

Vimal Chand Ghevarchand Jain & Ors vs Ramakant Eknath Jajoo on 23 March, 2009

Bench: S.B. Sinha, Mukundakam Sharma

Citation:2009(5)MHLJ 597

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When guarantee deed would be read against creditor bank who drafted it ?

 The decision in Sita Ram Gupta v. Punjab National Bank (2008) 5 SCC
711 is of no advantage to the Appellant Bank. That decision concerns the
possibility of a guarantor revoking his continuing guarantee, with the objective
of escaping his liability. This is not the case before us inasmuch as the defence
of Respondent Nos. 2 to 4 is that they had agreed to stand surety only for
transactions after 30.8.1974. Our attention was also drawn to B. G. Vasantha v.
Corporation Bank, Mangalore (2005) 10 SCC 215 as also M.S. Anirudhan v.
Thomco’s Bank Ltd. AIR 1963 SC 746 but these decisions do not call for a
detailed analysis. It is the Appellant Bank which drafted the Guarantee Deed,
and in case of doubt, the document would be read against it. This is the contra
proferentem rule, which is of a vintage which brooks no contradiction.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVILAPPELLATE JURISDICTION
CIVIL APPEAL No. 3654 OF 2006
CENTRAL BANK OF INDIA
Vs.
VIRUDHUNAGAR STEEL ROLLING MILLS
LTD. & ORS.
Dated:December 29, 2015.
Citation:(2015) 16 SCC207

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Whether it is permissible to give effect to a document against a person not party to it?

There is no dispute that by the settlement deed dated 27.8.1981, late Shri B.P. Sandy had given House No. 23 admeasuring 2413 Sq. Ft. to the daughter – respondent no.1 and House No. 22 admeasuring 730 Sq. Ft. to the son – appellant. None of the attesting witnesses to these documents had been examined by either of the parties, to ascertain whether late B.P. Sandy, father of the parties, had expressed any intention in respect of the properties before them. Ex.A-6 dated 28.10.1983 a unregistered document is subsequent to Exs.A1 & A2, by which the father had expressed his will that House No. 23 should be given to the son – appellant. The appellant has examined one of the attesting witnesses Shri A. Bernard but the High Court came to the right conclusion that as the respondent no.1 was not a party to the document, it has no effect, whatsoever in law, on the case.

REPORTABLE

Supreme Court of India

Joseph Johan Peter Sandy vs Veronica Thomas Rajkumar & Anr on 12 March, 2013

Bench: B.S. Chauhan, Fakkir Mohamed Kalifulla

CIVIL APPEAL NOs. 2178-2179 OF 2004

Citation:(2013) 3 SCC 801

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Supreme Court : Party who propounds the document will have to prove it

The trial court had analyzed the evidence properly and had dismissed the suit by giving cogent reasons. The first appellate court reversed it by wrongly placing onus on the defendants. Its observation that when the execution of an unregistered document put forth by the plaintiff was denied by the defendants, it was for the defendants to establish that the document was forged or concocted, is not sound proposition. The first appellate court proceeded on the basis that it is for the party who asserts something to prove that thing; and as the defendants alleged that the agreement was forged, it was for them to prove it. But the first appellate court lost sight of the fact that the party who propounds the document will have to prove it. In this case plaintiffs came to court alleging that the first defendant had executed an agreement of sale in favour. The first defendant having denied it, the burden was on the plaintiff to prove that the first defendant had executed the agreement and not on the first defendant to prove the negative. The issues also placed the burden on the plaintiff to prove the document to be true. No doubt, the plaintiff attempted to discharge his burden by examining himself as also scribe and one of the attesting witnesses. But the various circumstances enumerated by the trial court and High Court referred to earlier, when taken together, rightly create a doubt about the genuineness of the agreement and dislodge the effect of the evidence of PW 1 to 3. We are therefore of the view that the decision of the High Court, reversing the decision of the first appellate court, does not call for interference.

Supreme Court of India

Thiruvengada Pillai vs Navaneethammal & Anr on 19 February, 2008

Bench: R. V. Raveendran, P.Sathasivam

           CASE NO.:
Writ Petition (civil)  290 of 2001

Citation:2008SAR(CIVIL)286

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Golden rules for interpretation of deeds

Before I venture to discuss the precedential law cited at the

Bar, I would like to recount and restate certain basic principles regarding

the interpretation of deeds. First and foremost principle is that whenever a

document is couched in a language which is clear and definite and no

doubt arises in its application to the facts, there is no need to resort to the

rules of interpretation. Rules of interpretation of deeds are intended to

ascertain, to the extent possible, the exact meaning of a document which is

not clear and definite. Many a time, language proved to be an imperfect

vehicle for expressing thought and intention. The rules of interpretation or

canons of constructions are the products of real life experiences of Judges

and Jurists. Prime purpose of interpretation of a document is to ascertain

the intention of the parties manifested at the time when the document was

executed. To ascertain the intention of the parties, the document must be

considered as a whole. It is from the whole of the document, coupled with

the surrounding circumstances, that the general intention of the party or
parties is to be ascertained. Attempt must be made to gather the intention

of the parties from the exact words used in the deed. When the words

used in a deed are in their literal meaning unambiguous and when such

meaning is not excluded from the context and is sensible with respect to

the parties at the time of executing the deed, such literal meaning must be

taken. Where, the words used in a deed, if taken in its literal sense lead to

absurdity and inconsistency, then an interpretation to avoid that absurdity

and inconsistency should be made. It is also a settled principle that when

the intention of the maker or makers of a deed cannot be given effect to in

its full extent, effect is to be given to it as far as possible. Where the

intentions are sufficiently clear from the deed itself, mis-recital in some part

of the deed cannot vitiate it. Anything expressly mentioned in the deed

excludes another view impliedly possible.

       13.     As far as possible, effect is to be given to all words used in a

document. This is yet another important principle in the interpretation of

deeds. A document should be construed in its entirety. Further, if possible,

it should be construed so as to give effect to every word employed therein.

The court is not at liberty to discard a word, if some meaning can be

ascribed to it. Normally, the words employed in a deed should be taken in

its ordinary sense, unless there are indications to do otherwise. It is also

an important rule that plain words should be given plain meaning.

       14.     The Supreme Court in Sant Ram v. Rajinder Lal (AIR 1978

SC 1601) enunciated certain principles regarding the interpretation of a

lease deed.     His Lordship V.R.Krishna Iyer, J., speaking for the three

Judges bench, quoting with approval from " Lux Gentium Lex - Then and

Now, 1799" held as follows:

                     "Two   rules  must    be  remembered         while

             interpreting deeds and statutes. The first one is:

             "in drafting it is not enough to gain a degree of

             precision which a person reading in good faith can

             understand, but it is necessary to attain if possible to

             a degree to precision which a person reading in bad

             faith cannot misunderstand." The second one is more

             important for the Third World countries. Statutory

             construction, so long as law is at the service of life,

             cannot be divorced from the social setting................"

Apex Court in Provash Chandra Dalui v. Biswanath Banerjee (1989

Supp (1) SCC 487) laid down the following proposition:

                       "'Ex  praecedentibus    et  consequentibus

               optima fit interpretatio'. The best interpretation is

               made from the context. Every contract is to be

               construed with reference to its object and the whole

               of its terms. The whole context must be considered

               to ascertain the intention of the parties. It is an

               accepted principle of construction that the sense

               and meaning of the parties in any particular part of

               instrument may be collected 'ex antecedentibus et

               consequentibus;' every part of it may be brought

               into action in order to collect from the whole one

               uniform and consistent sense, if that is possible. As

               Lord Davey said in N. E. Railway Co. v. Hastings:

               "......the deed must be read as a whole in order to

               ascertain the true meaning of its several clauses,
               and ....... the words of each clause should be so

               interpreted as to bring them into harmony with the

               other provisions of the deed if that interpretation

               does no violence to the meaning of which they are

               naturally susceptible......"
                In construing a contract the court must look at the

               words used in the contract unless they are such

               that one may suspect that they do not convey the

               intention correctly. If the words are clear, there is

               very little the court can do about it. In the

               construction of a written instrument it is legitimate in

               order to ascertain the true meaning of the words

               used and if that be doubtful it is legitimate to have

               regard to the circumstances surrounding their

               creation and the subject matter to which it was
               designed and intended they should apply."

IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                                         PRESENT:

                           MR. JUSTICE A.HARIPRASAD

                WEDNESDAY, THE 7TH DAY OF OCTOBER 2015
                                                RSA.No. 282 of 2015 ()
                                               

   M/S. INDIRA MOTOR SERVICE Vs  PANAKKAT NAZARUDDIN

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Golden Rules for interpretation of document

 In C.Cheriathan vs. P. Narayanan Embranthiri 4
, the
principle relating to interpreting of document as to whether
the sale is mortgage by conditional sale or sale with a
condition to repurchase was discussed, and this Court held as
under:
“12. A document, as is well known, must be read
in its entirety. When character of a document is in
question, although the heading thereof would not be
conclusive, it plays a significant role. Intention of
the parties must be gathered from the document
itself but therefor circumstances attending thereto
would also be relevant; particularly when the
relationship between the parties is in question. For
the said purpose, it is essential that all parts of the
deed should be read in their entirety”.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4683 OF 2016
(Arising out of S.L.P. (Civil) No. 9513 of 2013)
 Patel Ravjibhai Bhulabhai (D) Thr. LRS. …..Appellants
Versus
 Rahemanbhai M. Shaikh (D) Thr. LRS. & Ors. .….Respondents
Dated;May 02, 2016.
Prafulla C. Pant, J.

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Golden rules for interpretation of employment bond

The true rule of construction is that when a covenant or agreement is impeached on the ground that it is in restraint of trade, the duty of the Court is, first to interpret the covenant or agreement itself, and to ascertain according to the ordinary rules of construction what is the fair meaning of the parties. If there is an ambiguity it must receive a narrower construction than the wider. In Mills v. Dunham, L.R. [1891] 1 Ch. 576, Kay, LJ. observed:

"If there is any ambiguity in a stipulation between employer and employee imposing a restriction on the latter, it ought to receive the narrower construction rather than the wider-the employed ought to have the benefit of the doubt. It would not be following out that principle correctly to give the stipulation a wide construction so as to make it illegal and thus set the employed free from all restraint. It is also a settled canon of construction that where a clause is ambiguous a construction which will make it valid is to be preferred to one which will make it void."

The restraint may not be greater than necessary to protect the employer, nor unduly harsh and oppressive to the employee. 

Supreme Court of India

Superintendence Company Of India ... vs Krishan Murgai on 9 May, 1980

Equivalent citations: 1980 AIR 1717, 1980 SCR (3)1278,
BENCH:

TULZAPURKAR, V.D.UNTWALIA, N.L.SEN, A.P. (J)

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Leading Supreme court Judgment on family settlement

Before dealing with the respective contentions put forward by the parties, we would like to discuss in general the effect and value of family arrangements entered into between the parties with a view to resolving disputes once for all. By virtue of a family settlement or arrangement members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, settle and resolve their conflicting claims or disputed titles once for all in order to buy peace of mind and bring about complete harmony and goodwill in the family. The family arrangements are governed by a special equity peculiar to themselves and would be enforced if honestly made. In this connection, Kerr in his valuable treatise "Kerr on Fraud" at p. 364 makes the following pertinent observations regarding the nature of the family arrangement which may be extracted thus;

"The principles which apply to the case of ordinary compromise between strangers, do not equally apply to the case of compromises in the nature of family arrangements. Family arrangements are governed by a special equity peculiar to themselves, and will be enforced if honesty made, although they have not been meant as a compromise, but have proceeded from an error of all parties, originating in mistake or ignorance of fact as to that their rights actually are, or of the points On which their rights actually depend."

The object of the arrangement is to protect the family from long drawn litigation or perpetual strifes which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family. Today when we are striving to build up an egalitarian society and are trying for a complete reconstruction of the society, to maintain and uphold the unity and homogeneity of the family which ultimately results in the unification of the society and, therefore, of the entire country, is the prime need of the hour. A family arrangement by which the property is equitably divided between the various contenders so as to achieve an equal distribution of wealth instead of concentrating the same in the hands of a few is undoubtedly a milestone in the administrating of social justice. That is why the term "family" has to be understood in a wider sense so as to include within its fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have a spes successions so that future disputes are sealed for ever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the larger interest of the country. The Courts have, therefore, leaned in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the Courts find that the family arrangement suffers from a legal lacuna or a formal defect the rule of estoppel is pressed into service and is applied to shut out plea of the person who being a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he has himself enjoyed some material benefits. The law in England on this point is almost the same. In Halsbury's Laws of England, Vol. 17, Third Edition, at pp. 215-216, the following apt observations regarding the essentials of the family settlement and the principles governing the existence of the same are made:

"A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving-its honour.

The agreement may be implied from a long course. Of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term "family arrangement" is applied.

Family arrangements are governed by principles which are not applicable to dealings between strangers. The court, when deciding the rights of parties under family arrangements or claims to upset such arrangements, considers what in the broadest view of the matter is most for the interest of families, and has regard to considerations which in dealing with transactions between persons not members of the same family, would not be taken into account. Matters which would be fatal to the validity of similar transactions between strangers are not objections- to the binding effect of family arrangements".

In other words to put the binding effect and the essentials of a family settlement in a concretised form, the matter may be reduced into the form of the following propositions:

(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;

(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence:

(3) The family arrangement may be even oral in which case no registration is necessary; (4) It is well-settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum pre pared after the family arrangement had already been made either for the purpose of the record or for in formation of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of s. 17(2) of the Registration Act and is, therefore, not compulsorily registrable;

(5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property 'It which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole 9 owner, then the antecedent title must be assumed and the family arrangement will be upheld and the Courts will find no difficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement.

Supreme Court of India

Kale & Others vs Deputy Director Of Consolidation ... on 21 January, 1976

Equivalent citations: 1976 AIR 807, 1976 SCR (2) 202,(1976)3SCC119

Hon'ble Judges/Coram:
R.S. Sarkaria, S. Murtaza Fazal Ali and V.R. Krishna Iyer, JJ.

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What are the rules for the interpretation of a will if there is an inconsistency between the earlier and latter part of the will?

To the extent that it is legally possible, effect should be given to every disposition contained in the Will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy so that effect could be given as far as possible to every testamentary intention contained in the Will.

In Kalvelikkal Ambunhi v. H. Ganesh Bhandary (AIR 1995 SC 2491), it was observed that a Will may contain several clauses and the latter clause may be inconsistent with the earlier clause. In such a situation, the last intention of the testator is given effect to and it is on this basis that the latter clause is held to prevail over the earlier clause. As observed in Hammond v. Treharne, (1938 (3) All ER

308), if in a Will there are two inconsistent provisions, latter shall prevail over the earlier clause. This is regulated by the well-known maxim "cum duo inter se pugantia reperiuntur in testamenta ultimum ratum est". This principle is also contained in Section 88 of the Act which together with its illustrations, provides as under:

"88. The last of two inconsistent clauses prevails.

- Where two clauses of gifts in a Will are irreconcilable, so that they cannot possibly stand together, the last shall prevail.

Illustrations

(i) the testator by the first clause of his Will leaves his estate of Ramnagar to "A", and by the last clause of his Will leaves it to "B" and not to A". B will have it.

(ii) if a man, at the commencement of his Will gives his house to A and at the close of it directs that his house shall be sold and the proceeds invested for the benefit of B, the latter disposition will prevail.

This rule of interpretation can be invoked if different clauses cannot be reconciled. (See Rameshwar v. Balraj, AIR 1935 PC 187). It is to be noted that rules of interpretation of Will are different from rules which govern interpretation of other documents like sale deed, or a gift deed, or a mortgage deed or, for that matter, any other instrument by which interest in immovable property is created. While in these documents, if there is any inconsistency between the earlier or the subsequent part or specific clauses, inter se contained therein, the earlier part will prevail over the latter as against the rule of interpretation applicable to a Will under which the subsequent part, clause or portion prevails over the earlier part on the principle that in the matter of Will the testator can always change his mind and create another interest in place of the bequest already made in the earlier part or on an earlier occasion. Undoubtedly, it is the last Will which prevails.

Supreme Court of India

Uma Devi Nambiar & Ors vs T.C. Sidhan (Dead) on 11 December, 2003

Bench: Doraiswamy Raju, Arijit Pasayat

Citation; AIR2004SC1772, (2004)2SCC321

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Whether any document can be interpreted on the basis of conduct of party even though there is no recital to that effect in the deed?

 Further, the argument that possession of the property was delivered immediately after the deed was executed also cannot be a ground to hold that mortgagee was in possession of the land in question as per the deed as there is no recital in the deed which delivers possession of the land to the mortgagee under the deed. In the case of Ramkishorelal & Anr. v. Kamal Narayan[3], it was held that the course of conduct of the parties is of no relevance for the construction of a document which is in itself, unambiguous. In the present case, the mortgage deed is unambiguous and it is patently clear that the mortgagor did not intend to deliver possession of the mortgaged property as he has clearly mentioned that he is paying interest but there is no delivery of possession of land as per the deed.

Supreme Court of India

Mathai Mathai vs Joseph Mary @ Marykkutty Jopseph & ... on 25 April, 2014

Bench: Gyan Sudha Misra, V. Gopala Gowda

Citation;(2015) 5 SCC 622

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Whether unambiguous document can be interpreted on the basis of course of conduct of parties?

Further, the mortgagor has agreed to pay interest at the rate of ‘half chakram per year for every hundred’ towards repayment of the loan amount and this is detailed in the mortgage deed itself and hence we can infer that there was no intention on the part of the parties to allow the mortgagee to appropriate the rents and profits accruing out of the mortgaged property. It is also stated in the mortgage deed that, on payment of the principal, this mortgage deed will be redeemed, and if the principal and interest are not repaid, then it was agreed ‘to realize it charged upon the security property and on me’, meaning the mortgagor. Thus, it is very clear that the mortgage deed only purports to be that of a simple mortgage. Merely the fact that the mortgagee herein happened to be in possession of the mortgaged property will not make it sufficient to rule that he/she was a mortgagee in possession under the deed. Further, the argument that possession of the property was delivered immediately after the deed was executed also cannot be a ground to hold that mortgagee was in possession of the land in question as per the deed as there is no recital in the deed which delivers possession of the land to the mortgagee under the deed. In the case of Ramkishorelal & Anr. v. Kamal Narayan[3], it was held that the course of conduct of the parties is of no relevance for the construction of a document which is in itself, unambiguous. In the present case, the mortgage deed is unambiguous and it is patently clear that the mortgagor did not intend to deliver possession of the mortgaged property as he has clearly mentioned that he is paying interest but there is no delivery of possession of land as per the deed.

Supreme Court of India

Mathai Mathai vs Joseph Mary @ Marykkutty Jopseph & ... on 25 April, 2014

Bench: Gyan Sudha Misra, V. Gopala Gowda

Citation;(2015) 5 SCC622

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Whether court can supply a word while interpreting a deed which is not used by author of document?

 In the case of “Mula Sahakari Sakhar Karkhana
Ltd.”(supra), the Hon'ble Apex Court has held that a document,
as is well known, must primarily be construed on the basis of the
terms and conditions contained therein and that it is also trite
that while construing a document the Court shall not supply any
words which the author thereof did not use. It has been further
held that surrounding circumstances are relevant for construction
of a document only if any ambiguity exists therein and not other
wise. Therefore, it is evident from the above provisions of law that
nothing can be added to the Deed of Partition by way of oral
evidence. The said document at Exhibit PW1/A-colly speaks for
itself. No doubt, there were no survey numbers as mentioned in

paragraph 2A, at the time of said Deed of Partition. But the said
Deed of Partition, in itself, does not show that the property was
divided into various plots, of various dimensions, lying at
particular places, and that some such plots were allotted to the
plaintiffs and some to the defendants. In the circumstances
above, the first substantial question of law gets answered in the
negative, since truely, the said Escritura de Divisao (Deed of
Partition) at Exhibit PW1/A-colly is merely a declaratory
document.
IN THE HIGH COURT OF BOMBAY AT GOA
SECOND APPEAL NO. 57 of 2004
 Mr. Lateran Max Francisco Vaz,

Versus
 Mrs. Volvetta Gomes,




CORAM :- U. V. BAKRE, J.

Pronounced on : 13 th June, 2014 .
Citation; 2015(3) ALLMR594 Goa high court

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Whether a person can accept benefit under an instrument and repudiate its other provisions?

It is, I think, a well-settled principle that a person who accepts a benefit under an instrument must accept it in its entirety. He cannot accept the benefit and repudiate its other provisions. Thisis a very old principle, enunciated by Lord Cairns L.C., in Codrington v Codrington [1875] LR 7 HL 854 thus:

Where a deed or will professes to make a general disposition of property for the benefit of a person named in it, such person cannot accept a benefit under the instrument without at the same time confirming to all its provisions, and renouncing every right inconsistent with them.

16. His acceptance of the benefit is a renunciation of every right inconsistent with the provisions of that instrument. This is a rule based on the well-known principle of approbation and reprobation. No one may affirm and disaffirm the same transaction, i.e., affirming it to the extent of the benefit received and disavowing it to the extent that it prejudices. In a very large number of decisions it has been held that a person cannot take under and against the same instrument.¹ In Ramakottayya v. Viraraghavayya² Coutts Trotter, CJ observed that the principle is often put in another form: a person cannot approbate and reprobate the same transaction. As the Supreme Court held in Beepathumma, the principle is:

That he who accepts a benefit under a deed or will or other instrument must adopt the whole contents of that instrument, must conform to all its provisions and renounce all rights that are inconsistent with it.

17. Faced with legacies and bequests, the Defendants have a choice. They may elect to receive those legacies and bequests, in which case they cannot assail the document under which they do so. In other words, on their acceptance of those legacies, they make an election and renounce all rights inconsistent with those legacies. On the other hand, it is, and was, always open to them to renounce the legacies and continue their challenge to the Will. But what no Defendant can do is to simultaneously accept a legacy that only accrues as such and challenge the testamentary instrument by which he or she receives it. The only exception to this is where the amount or item received would come to the recipient even on intestacy, or is less than what he or she might receive if the challenge to the will succeeds. It is only in that situation that no question of an election would arise. Where, however, the recipient takes a specific legacy and that legacy or bequest is not one that would follow on intestacy, the recipient cannot, having accepted the legacy, impugn or impeach the document under which it is made.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
TESTAMENTARY & INTESTATE JURISDICTION
TESTAMENTARY SUIT NO. 90 OF 2000
IN
TESTAMENTARY PETITION NO. 317 OF 1999

Mr. Mirzban Darabshaw Surti Vs  Mr. Cedric Vaz


Dated : 16th December 2014

CORAM ;G S Patel
Citation;2015(2)MHLJ 184

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Basic Principles for interpretation of any deed

It may be true that level of a document is not decisive. A true nature of transaction must be determined having regard to the intention of the parties as well as the circumstances attributing thereto as also the wordings used in the document in question.

Supreme Court of India

Umabai & Anr vs Nilkanth Dhondiba Chavan (Dead) ... on 13 April, 2005

Citation;2005(4)MhLj306, 2005(4)MhLJ306(SC), (2005)4MLJ24(SC), (2005)141PLR341, 2005 99 RD338, 2005 2 RD338, (2005)6SCC243,

Bench: H Sema, S Sinha

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