Interpretation of contracts & documents: Whether an agreement styled as one for conducting the business of another person can be interpreted as a leave and license agreement for purposes of the Bombay Rent Act?

The guide to the construction of deeds and tools adopted can broadly be summarised as follows:

(i) The contract is first constructed in its plain, ordinary and literal meaning. This is also known as the literal rule of construction.

(ii) If there is an absurdity created by literally reading the contract, a shift from literal rule may be allowed. This construction is generally called the golden rule of construction.

(iii) Lastly, the contract may be purposively constructed in light of its object and context to determine the purpose of the contract. This approach must be used cautiously.

(iv) The construction of a deed is “generally speaking, a matter of law.” However, when there is an ambiguity in the deed, determining its meaning is a mixed question of fact and law. This concept is encapsulated by sections 91 and 92 of the Evidence Act, 1872.

(v) Section 91 of the Evidence Act, 1872 denotes that a deed constitutes the primary evidence of the terms to which the parties are to adhere. Whereas section 92 of the Evidence Act, 1872 forbids any contradictions or variations in a written document by extrinsic evidence.8 However, there are exceptions outlined in the proviso to section 92, that allow variations from this general rule.

(vi) The subtle distinction in the point of law, as carved out by the provisos, is that the evidence to vary the terms of an agreement in writing is not admissible, but evidence to show that there is no agreement in the first place is admissible. Thus, unless the grounds fall within the provisos read with the illustrations to section 92, there is a bar on adducing oral evidence.

(vii) In Provash Chandra Dalui v. Biswanath Banerjee (1989) Suppl 1 SCC 487 it was held that the court must look at the words used in the contract unless they are such that one may suspect that they do not covey the intention correctly. If the words are clear, there is very little the court can do about it. In constructing a deed, looking at the surrounding circumstances and subject matter is legitimate only if the words used are doubtful.