The Parol Evidence Rule in India: An Analysis of Section 92 of the Indian Evidence Act, 1872

Introduction

Section 92 of the Indian Evidence Act, 1872 (hereinafter "the Act"), stands as a cornerstone of the law of evidence, embodying the parol evidence rule. This rule dictates that when the terms of a contract, grant, or other disposition of property have been reduced to writing, extrinsic oral evidence seeking to contradict, vary, add to, or subtract from its terms is generally inadmissible as between the parties to the instrument or their representatives in interest. The primary objective of this provision is to uphold the sanctity and finality of written instruments, ensuring certainty in contractual and property-related dealings by preventing parties from later attempting to alter the solemnly recorded terms through less reliable oral testimonies (Nikita P Patel v. Darpan Hareshkumar Shah, RERA, 2022). This article undertakes a comprehensive analysis of Section 92, examining its core principles, scope, the crucial exceptions carved out by its six provisos, and its interpretation through judicial pronouncements, drawing significantly from the provided reference materials.

The Core Principle of Section 92: Exclusion of Oral Evidence

Section 92, as explicitly stated in several judicial decisions (Ramachandran v. Y. Theva Nesom Ammal, Madras High Court, 2003; Om Prakash v. Iocl Officers Welfare Society, Delhi High Court, 2019), provides:

"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."

This provision operates to exclude oral evidence that seeks to alter the substantive terms of a written document once its existence and contents have been established under Section 91 of the Act.

Relationship with Section 91

Section 92 is supplementary to Section 91 of the Act (Heirs Of Late Jatashanker Fulchand Mehta And Others v. Heirs Of Late Mavji Trikam And Another, Gujarat High Court, 1968). Section 91, often termed the "best evidence rule," mandates that when the terms of a contract, grant, or other disposition of property, or any matter required by law to be reduced to writing, are in question, the document itself (or secondary evidence of its contents where admissible) must be produced to prove those terms (Om Prakash v. Iocl Officers Welfare Society, Delhi High Court, 2019). Once the document's terms are so proved, Section 92 comes into play to bar extrinsic oral evidence that would alter those proven terms (Bai Hira Devi And Others v. Official Assignee Of Bombay, Supreme Court Of India, 1958). While Section 91 applies to all documents, whether dispositive or not, and to both bilateral and unilateral documents, Section 92 is primarily concerned with dispositive documents and is confined to bilateral instruments (Bai Hira Devi And Others v. Official Assignee Of Bombay, 1958; Shiva Nath Prasad v. State Of West Bengal & Ors., Calcutta High Court, 2005).

Rationale for the Rule

The rationale underpinning Section 92 is the presumption that when parties deliberately reduce their agreement to writing, they intend that writing to be the final and complete repository of their intentions. Allowing subsequent oral evidence to vary these terms would undermine the certainty and reliability of written instruments, potentially opening floodgates to litigation based on unreliable memories or fabricated assertions (Nikita P Patel v. Darpan Hareshkumar Shah, RERA, 2022). As observed, "when persons express their agreements in writing, it is for the express purpose of getting rid of any indefiniteness and to put their ideas in such shape that there can be no misunderstanding... written contracts presume deliberation on the part of the contracting parties and it is natural that they should be treated with careful consideration by the courts" (Nikita P Patel v. Darpan Hareshkumar Shah, RERA, 2022).

Scope and Applicability of Section 92

Binding Nature: Parties and Their Representatives

A critical aspect of Section 92 is its limited applicability: the bar on oral evidence operates "as between the parties to any such instrument or their representatives in interest" (Bai Hira Devi And Others v. Official Assignee Of Bombay, 1958; Shiva Nath Prasad v. State Of West Bengal & Ors., Calcutta High Court, 2005). This means that the rule primarily governs disputes between the original contracting parties or those who derive their interest from them.

The "Stranger to the Document" Exception (Section 99)

Section 92 does not apply to strangers to the document. Section 99 of the Act explicitly permits persons who are not parties to a document, or their representatives in interest, to give evidence of any facts tending to show a contemporaneous agreement varying the terms of the document (Bai Hira Devi And Others v. Official Assignee Of Bombay, 1958). Thus, a third party whose rights are affected by a document can adduce oral evidence to show its true nature, even if it contradicts the written terms (Shiva Nath Prasad v. State Of West Bengal & Ors., Calcutta High Court, 2005; Raghunath Tewari v. Budhoo Ram Tewari, Allahabad High Court, 1931). The Supreme Court in Bai Hira Devi And Others v. Official Assignee Of Bombay (1958) clarified that the Official Assignee, when seeking to declare a deed void under insolvency law for the benefit of creditors, is not acting as a representative in interest of the insolvent in a manner that would bind him by the restrictions of Section 92.

Nature of Documents: Bilateral Instruments

Judicial interpretation suggests that Section 92 primarily applies to bilateral documents, i.e., those embodying a transaction between two or more parties. It has been observed that Section 92 "deals with bilateral documents only reduced to writing either by consent of parties or by requirements of law. It does not apply to unilateral documents, such as, power-of-attorney, Wills etc." (Shiva Nath Prasad v. State Of West Bengal & Ors., Calcutta High Court, 2005).

Navigating the Exceptions: The Provisos to Section 92

Section 92 is not absolute; it is qualified by six provisos that permit the admission of oral evidence in specific circumstances. These provisos are crucial as they provide avenues to establish facts that, while extrinsic to the document, are relevant to its validity, interpretation, or mode of operation.

Proviso (1): Vitiating Factors and the True Nature of Transactions

Proviso (1) allows proof of any 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 due execution, want of capacity in any contracting party, want or failure of consideration, or mistake in fact or law.

This proviso is frequently invoked to argue that a document, though ostensibly valid, is a "sham" and not intended to be acted upon, or that its true nature is different from what it purports to be. For instance, in Ishwar Dass Jain (Dead) Through Lrs. v. Sohan Lal (Dead) By Lrs. (2000 SCC 1 434), the Supreme Court, citing Gangabai v. Chhabubai ((1982) 1 SCC 4), acknowledged that oral evidence is admissible to demonstrate that a document was never intended to operate as an agreement, thereby negating its legality. Similarly, in Roop Kumar v. Mohan Thedani (2003 SCC 6 595), the Court reiterated that if a party intends to prove that a written document is a sham or does not reflect the true intention, oral evidence is permissible under this proviso. The Patna High Court in Ramdip Sharma And Others v. Baldeo Singh (1977) held that oral evidence was admissible under proviso (1) to show that documents purporting to be sale deeds were, in fact, deeds of exchange, thereby addressing the true nature of the documents. However, the burden of proving such vitiating factors or the sham nature of a document lies heavily on the party asserting it (Heirs Of Late Jatashanker Fulchand Mehta And Others v. Heirs Of Late Mavji Trikam And Another, Gujarat High Court, 1968).

Proviso (2): Consistent Collateral Oral Agreements on Silent Matters

Proviso (2) permits proof of 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. The conditions for admissibility under this proviso are that the agreement must be truly collateral, the document must be silent on that specific matter, and the oral agreement must not be inconsistent with the terms of the written document (Heirs Of Late Jatashanker Fulchand Mehta And Others v. Heirs Of Late Mavji Trikam And Another, Gujarat High Court, 1968).

Proviso (3): Conditions Precedent

Proviso (3) allows proof of 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. This means oral evidence can be given to show that the written agreement was not to become effective until a certain condition was fulfilled (Bhogi Ram v. Kishori Lal, Allahabad High Court, 1928).

Proviso (4): Distinct Subsequent Oral Agreement to Rescind or Modify

Proviso (4) states: "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 the registration of documents" (Ramachandran v. Y. Theva Nesom Ammal, Madras High Court, 2003).

This proviso is of paramount importance. While it allows for proof of subsequent oral agreements to rescind or modify a contract, it carves out a significant exception: such oral agreements are inadmissible if the original contract (i) is required by law to be in writing, or (ii) has been registered. The Supreme Court in S. Saktivel (Dead) By Lrs. v. M. Venugopal Pillai And Others (2000 SCC 7 104) firmly held that a registered settlement deed cannot be modified by a subsequent oral agreement. The Court reasoned that if a document is registered, any modifications to it must also be in writing and registered, if required. Similarly, the Allahabad High Court in Collector Of Etah v. Kishori Lal (1930 SCC ONLINE ALL 156) ruled that an oral agreement to vary the terms of a registered mortgage deed was inadmissible under this proviso. The Madras High Court in Muthukumaraswami Mudaliar v. Govinda Padayachi And Ors. (1931) reiterated this strict stance for registered mortgage contracts.

However, a distinction has been drawn between an oral agreement to *modify* a registered document (which is barred) and an oral agreement or transaction that operates as a *satisfaction or discharge* of the obligations under it. In (Dondapati) Lakshminarasimha Rao v. (Gundabatula) Raghavamma (1935 SCC ONLINE MAD 441), the Madras High Court held that an oral agreement whereby possession of land was given for a period in full satisfaction of a mortgage debt was admissible, as it related to the discharge of the obligation, not a modification of the mortgage terms prohibited by proviso (4).

Proviso (5): Usage or Custom

Proviso (5) permits proof of any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract.

Proviso (6): Interpretation and Latent Ambiguities

Proviso (6) allows any fact to be proved which shows in what manner the language of a document is related to existing facts. This proviso is often invoked to admit extrinsic evidence for the purpose of interpreting the terms of a document, especially in cases of latent ambiguity (i.e., where the language appears clear on its face but becomes ambiguous when applied to existing facts). The Andhra Pradesh High Court in Sait Bolumal Dharmdas Firm v. Gollapudi Venkatachelapathi Rao (1959) discussed the scope of this proviso.

However, this proviso cannot be used to contradict clear and unambiguous terms. As held in Velappa Gounder v. S. Bomma Pandithan (Madras High Court, 1973), if the meaning of the words is clear and unequivocal, it is not permissible to lead parole evidence to show that the document was not really what it purported to be, as this would render Section 92 otiose. This proviso operates within the sphere defined by Sections 94 (exclusion of evidence against application of document to existing facts) and 95 (evidence as to document unmeaning in reference to existing facts) of the Act. The court in P. Veerasamy & Others v. V. Soundararajan (Madras High Court, 2014) noted that "Notwithstanding the provisions of Section 92 of the Evidence Act, the court is bound to examine the surrounding circumstances to find out the true nature of transaction," suggesting a broader interpretative role for surrounding circumstances, likely when the document's language itself necessitates such inquiry. In Juran Mandal And Ors. v. Ram Mandal And Ors. (Calcutta High Court, 1927), the court considered the intention behind mentioning a monetary value for rent payable in paddy in a kabuliyat, suggesting it was for stamp duty purposes and not to alter the nature of the rent, thereby interpreting the document in light of its purpose and context.

Judicial Precedents: Illuminating the Application of Section 92

The Indian judiciary has extensively interpreted Section 92 and its provisos, shaping its practical application.

Sanctity of Written Terms v. True Intent

Courts consistently uphold the primary rule of excluding oral evidence that directly contradicts, varies, adds to, or subtracts from the terms of a written agreement. For example, in Namburi Venkata Kristnayya . v. Karnedan Kothari . (Madras High Court, 1935), an executant of a promissory note was not allowed to lead oral evidence to prove he was merely a surety, as this would vary the unconditional undertaking apparent on the face of the note. Similarly, in Parmeshwari Das v. Lachhman Prasad (Allahabad High Court, 1930), an oral agreement imposing a condition on a promissory note payable on demand was held inadmissible. However, courts also strive to ascertain the true intent, especially when allegations under Proviso (1) are made. It is important to distinguish situations where Section 92 is not attracted at all, for instance, where the dispute is about the factum or failure of consideration rather than varying the terms of the promise itself (Harbans Dube v. Sita Ram And Anr., Allahabad High Court, 1933).

The Challenge of "Sham" Documents

The exception for "sham" documents under Proviso (1) is significant. As affirmed in Roop Kumar v. Mohan Thedani (2003 SCC 6 595) and Ishwar Dass Jain v. Sohan Lal (2000 SCC 1 434), oral evidence can be adduced to show that a document was never intended to be operative and was merely a facade. However, the burden of proof is high, and courts require cogent evidence to disregard a formally executed written instrument.

Registered Instruments and the Bar on Oral Modification

The judiciary has been particularly strict regarding the prohibition on oral modification of registered documents or documents required by law to be in writing, as mandated by Proviso (4). The decision in S. Saktivel v. M. Venugopal Pillai (2000 SCC 7 104) is a leading authority on this point, emphasizing that the integrity of registered instruments cannot be undermined by subsequent oral arrangements. The presumption in favour of registered instruments is strong (Nikita P Patel v. Darpan Hareshkumar Shah, RERA, 2022).

Evidentiary Issues in Specific Contexts

The application of Section 92 can be nuanced in specific legal contexts. For example, in insolvency proceedings, as seen in Bai Hira Devi v. Official Assignee Of Bombay (1958), the Official Assignee, acting for creditors, may not be bound by the limitations of Section 92 when challenging a transaction by the insolvent, as they are considered strangers to the instrument in that capacity.

Conclusion

Section 92 of the Indian Evidence Act, 1872, plays a vital role in maintaining the certainty and solemnity of written agreements and dispositions of property. By generally excluding extrinsic oral evidence to vary the terms of such documents, it promotes commercial stability and discourages litigation based on shifting oral accounts. However, the section is not an inflexible bar. Its six provisos provide necessary exceptions, allowing courts to admit oral evidence in circumstances involving fraud, mistake, sham transactions, collateral agreements, conditions precedent, subsequent modifications (with significant limitations for registered or statutorily written documents), custom, or for the proper interpretation of ambiguous language. The extensive body of case law, including the authorities discussed herein, demonstrates a continuous judicial effort to balance the need for documentary certainty with the imperative of preventing injustice and uncovering the true nature of transactions. A thorough understanding of Section 92 and its judicial interpretation remains indispensable for legal practitioners and scholars in India.