MANGALA WAMAN KARANDIKAR (D) TRHOUGH LRS V PRAKASH DAMODAAR RANADE  

CITATION	2021 SCC OnLine SC 235
DATE OF JUDGMENT	7th May 2021
COURT	Supreme Court of India
APPELLANT	Mangala Waman Karandikar
RESPONDENT	Prakash Damodaar Ranade
BENCH	Aniruddha Bose, Surya Kant, N.V. Ramana

INTRODUCTION 

The aforementioned case is particularly concerned with reading and interpreting a contractual agreement. This case highlights how a simple plain line in a contract can be interpreted and comprehended in different ways by different people from the same filed which leads to a huge difference in the lives of the people between whom the contract was.  Apart from interpreting the contract that was formed, a lot of other provisions such as Section 92 and Section 95 Indian Evidence Act, Bombay Rent Act and determining jurisdiction of a particular court also played an act in reaching a decision for this case. 

The case revolves around a contract which was formed between two parties which was left to the court to resolve if the contract meant to simply transfer business from the appellant to the respondent or it was a lease or license for the shop premises. The appellant used to run a stationary shop which she gave to the respondent as she couldn’t run it anymore due to the death of her husband and thus formed an agreement and let the respondent run the shop for some time.  Every body of Indian judiciary has seen this case and had interpreted it in different way and announced a different verdict each time. As usual and as per law the verdict announced by the Supreme Court was deemed to be final and binding which was also similar to the judgement passed by the Trial Court of Pune. 

FACTS OF THE CASE 

1.  The appellant in this case is representing her deceased husband who used to carry on a stationary shop under the name of ‘Karandikar Brothers’ which was transferred to the respondent after his death  by an agreement formed between the appellant and the respondent.
2. In the agreement it was clearly stated that the business of the shop will be conducted by him for a period of two years for which he will also pay a royalty of 90 rupess every month to the appellant. The contract got extended time and again but one day in the 1980’s when the appellant asked him to vacate the shop he refused.
3. The appellant filed a civil suit under the civil judge in Trial Court of Pune. The decision here was announced in the favour of the appellant as the contract/ agreement was just transaction for sale of business and not the rent of aforementioned premises.
4. The trial court then ordered the respondent to hand in over the property to the appellant. The respondent was aggrieved with such said decision and hence filed an appeal under Additional District Judge, Pune. The appeal got dismissed so he filed another one under High Court of Bombay.
5. High Court allowed the appeal and rejected and disregarded the judgement given by the trial court and observed that it was a license agreement which is covered under Section 15 A of the Bombay Rent Act and thus the trial court didn’t have any jurisdiction too. They interpreted the document and mentioned that the parties had agreed to the transfer of premises to the respondent.
6.  Aggrieved with the decision and findings of the High Court of Bombay, the appellant filed the appeal in the Supreme Court.
7. The Supreme Court gave the final verdict which was in side of the appellant. The Supreme Court held that the high court erred in interpreting the terms of the contract which  just meant to transfer the business and not lease the property. It was also observed that the jurisdiction of trial court is right.

ISSUES OF THE CASE 

1. Whether the agreement of 7th February, 1963 was a license to conduct a business in the premises or was a license to run the existing business which was being run by the respondents in the suit premises.
2.  Does the document create an interest in the premises or in the business?

CONTENTION OF THE APPELLANT 

1. The counsel for the appellant contented that the sole burden to prove that the contract was a license was on the respondent and as he has failed to do so the contract has much more importance now and can be relied upon.
2. The counsel also urged the court to look at the intention of the deceased behind the contract which is to just transfer the business to the respondent for a period of time. There was no intention to create leave and license in respect of the suit premises.
3. They threw light on the fact that the defendant was just taking benefit of the word ‘rent’ that was written in the contract but it actually was written just to recover royalty and not the rent.
4. They also submitted before the Supreme Court that the High Court has erred in appreciating and interpreting the language of the contract which clearly points towards the intention of the parties to transfer the business.
5. At last, they also stated before the court that the Bombay Rent Act doesn’t apply in this case because they had already inferred that the agreement was just a license for continuing existing business thus, restoring the jurisdiction of the Trial Court.

CONTENTIONS OF THE RESPONDENT 

1. The defendant contented that the plaintiff never had a stationary shop but it was a grocery shop. After the demise of the appellant’s husband the shop was lying closed so in 1963 when the defendant approached the plaintiff, she gave over the suit shop as a license to him.
2. The counsel also submitted before the court that initially the defendant was just a licensee to the agreement but due the amendment in Bombay Rent Act and virtue of addition of Section 15 (A), all the licensees have become tenants.
3. The counsel urged the court to note that there is extrinsic evidence to which proves that the contract is a license to use the shop , which is determined by the Bombay Rent Act, thus invalidating the jurisdiction of the Trial Court.
4. The defendant stated that the contract shouldn’t be solely relied upon, other extrinsic evidence like the payment receipts of the rent should be taken into consideration as evidence as mentioned in Section 92 of the Indian Evidence Act. The contract should be considered as a leave and license agreement as covered in the Bombay Rent Act.
5. The counsel once again placed emphasis on payment receipts which clearly mention the word ‘rent’ but due to the ambiguous language of the contract, reliance couldn’t be placed upon such evidence.

JUDGEMENT OF THE CASE 

The matter was first heard by the Trial Court of Pune which ruled in favour of the plaintiff, the shop owner. However, the defendant- respondent was dissatisfied with the judgement so he appealed before the Additional Sessions Judge. The first time his appeal got rejected which made him do a second appeal before the Bombay High Court. The high court ruled in favour of the defendant by invalidating the jurisdiction of the trial court and adding new interpretation to the agreement. This time, the appellant was aggrieved with the ruling so she filed the matter in the Supreme Court of India. The Supreme Court ruled gave its judgement in the favour of the appellant and observed that the High Court has erred in interpreting the terms and language of the agreement. The Supreme Court sided with the judgement of the Trial Court. 

A civil suit was filed before the Civil Judge, Pune, who held the case in favour of the appellant. He stated that the terms of contract clearly mention that the purpose of the agreement was a transaction for sale of business and not the shop. It had been contented by the respondent that the shop was a grocery shop which was negative by the language written in the agreement itself. Additionally, the defendant contented that there has been no mention of the word premises and the word royalty doesn’t mean to take rent for the shop. After taking all these statements into consideration, the judge ordered the respondent to give back the property to the appellant.

Aggrieved by the decision of the Trial court, the respondent filed an appeal before the Bombay high Court which then heard the matter. The findings of the High Court were quite different from the trial court. They not only completely reversed the decision of the trial court but also invalidated its jurisdiction. The High Court stated that as they entered into a license agreement, provisions of the Bombay Rent Act will apply which should not be tried by the Trial Court. 

Dissatisfied by the same, the appellant here in filed the appeal before the Supreme Court. The judge noticed and mentioned that the High Court had clearly failed in appreciating and interpreting the language of the contract as the intention to continue the existing business is clearly visible. The jurisdiction of the trial court was replaced and its judgement was restored, setting aside the judgement of the High Court.

ANALYSIS

The case threw light on the importance of interpretation of agreements and judgements by courts. It is established that one simple line may be interpreted in different ways by different people as everyone looks at it in their own way. In this case also it is to be noted that a simple line menat two different things, license to carry on business or license to take the shop. It was left for the courts to decide and decipher the true meaning of the lines written in agreement in accordance with the line of trade as understood by the parties. 

The case traversed all the three bodies of the judiciary which highlights how each body is independent of each other and doesn’t get influenced by the decisions of the other court. Judges in each court interpret the terms in their own unique way which has the power to turn the whole case in favour of one person and against the other. 

The judges took help of contractual interpretation in which the agreement is interpreted by keeping in mind the intention of the parties. Section 95 of the Indian Evidence Act states 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, but in this case it was held that due to the ambiguous language of the contract it is not possible to place reliance on extrinsic evidence. 

CONCLUSION 

The case is an example of a case where the judgement of high court was set aside and the judgement of a lower court was taken into account. This shows that if someone is dissatisfied with the judgement they can appeal to the higher court and they may get a decision of their choice. This case also helps us to understand the art of interpretation of documents and agreements in law instead of just simply reading them. The case highlights the importance of having a judge’s wit and intelligence and ability to interpret the document to reach a decision on the matter placed before him.

In this particular case, the appellant won the case at last, as mentioned in the judgement of the Supreme Court. It was finally declared that the agreement didn’t intent to sell the property or create a leave and license agreement, but the agreement just mentioned the continuing of the existing business by the respondent. 

REFERNCES 

•  SCC online
• https://indiankanoon.org/doc/17601633/

This Article is written by Anshika Agarwal student of Vivekananda Institute of Professional Studies, Delhi, Intern at Legal Vidhiya.

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