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Chimanram Motilal Vs. Divanchand Govindram - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 64 of 1930 and Suit No. 1271 of 1930
Judge
Reported inAIR1932Bom151; (1932)34BOMLR26
AppellantChimanram Motilal
RespondentDivanchand Govindram
DispositionAppeal dismissed
Excerpt:
.....evidence act only apply when a document on the fact of it contains or appears to contain all the terms of a contract.;under section 92, proviso (1), it is sufficient to prove a mistake induced by innocent misrepresentation.;defendants agreed to purchase bars of silver from plaintiffs through a broker. the contract was entered in the plaintiffs' book as follows : ' sold silver bars sixty to diwanchand govindram ' (defendants) 'deliver-able on may 30, by the hand of dhanasing.' it was signed by the defendants' broker, who did not know the language in which the entry was made, on the innocent misrepresntation of a partner of the plaintiffs that it contained all the terms of the contract between the parties. in a suit on the contract, oral evidence was led to show that the quality of the..........of mr. coltman's argument that you cannot get out of exhibit a without alleging fraud, and that in fact the defendants have got out of exhibit a by alleging fraud. as a matter of fact what is pleaded, not veryartistically i admit, but still i think pleaded, in paragraph 5 of the points of defence, is that there was an innocent misrepresentation, and a mistake induced by innocent misrepresentation is sufficient for the defendants' case. even if the evidence goes further than that plea and suggests fraud, that cannot disentitle the defendants to the relief to which they are entitled on the basis of innocent misrepresentation. mr. coltman says further-i think with truth-that the fact that juthalal represented to dhanasing that exhibit a contained terms as to drawback certificates was not.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an appeal from (sic) Mr. Justice Blackwell. The case took several days (sic) of first instance and it has occupied more than a day (sic) Court, but the dispute is really confined within a small compass (sic) is agreed that on May 25, 1930, a contract was made (sic) which the plaintiffs agreed to sell to the defendants sixty bars (sic) and that that contract was negotiated on behalf of the (sic) by a broker named Dhanasing. There was a note of (sic) contract made in the plaintiffs' Soda book in these terms :- (sic) old silver bars sixty to Diwanchand Govimdram deliverable on (sic) 30, by the hand of Dhanasing', and Dhanasing signed that (sic) in the plaintiffs' book. The defendants' case is that that note does not contain a complete record of the contract. They say that the quality of the silver was to be the highest quality which is known as 999, that the purchase-price was to include the customs duty, and that the plaintiffs were to get Kabul drawback certificates from the Customs. The learned Judge has found as a fact what the contract was. He says :-

I hold that it was a contract for sixty bars of silver expected to arrive on May 30, and deliverable on that day of 999 hall-mark, the price to include customs duty and drawback certificates 60 be furnished by theplaintifis.'

That is to say he finds that the contract was as set up by the defendants, and on that (sic) holds that, inasmuch as the plaintiffs did not fulfil (sic) of the contract in obtaining drawback certificates, the defendants were entitled to repudiate the contract, and he, therefore, dismissed the action which was for damages for breach of the contract.

2. The only point on which any difficulty arose was as to the drawback certificates. There is no question that the silver was in fact 999 hall-mark. It is quite clear on the evidence that the defendants were in fact buying the silver for re-export to Kabul, and it was, therefore, very important for them that drawback certificates should be obtained. There was, as far as I can see, no difficulty in either side obtaining the drawback certificates, but unfortunately each party seems to have thought that the duty of obtaining the certificates rested on the other party, and nothing was, therefore, done until the documents had gone to the customs and it was then too late to obtain the certificates. The learned Judge's finding of fact as to what the contract was has been challenged in this Court, but, apart from the fact that the learned Judge after seeing the witnesses in the box preferred the evidence of the defendants witnesses to that of the plaintiffs, there are three documents which certainly support his finding. Those are Exts. 3, 4, and 6, which are entries made respectively in the books of the broker Dhanasing, in the books of another broker named Biharilal who was interested in the matter, and in the defendants' books. All these three entries which are couched in quite different language refer to the fact as to the silver being bought on Kabul customs and subject to customs, that is to gay, they all support the defendants' case. Of course it is perfectly true that the plaintiffs did not see any of these entries before they were produced in Court and they are not bound by them, but still if the entries are genuine as the learned Judge held that they were, they certainly support the view that the defendants themselves imagined that the contract was such as they have set up.

3. Then the next point taken by the plaintiffs is that, having regard to Section 92 of the Indian Evidence Act, the defendants were not allowed to give any evidence that the contract contained any provisions not included in Exh. A, which is the note in the plaintiff's book signed by Dhanasing. Section 92 has to be read with Section 91, and the effect of the two sections for the purposes of this case seems to me to be as follows. When the terms of a contract have been reduced to the form of a document, only the document can be proved. That is the effect of Section 91, and then Section 92 provides that in such a case 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, and then there are several provisos, of which the first is:-

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.

4. It is, I think, clear that Sections 91 and 92 only apply when the document in question on the face of it contains or appears to contain all the terms of the contract and speaking for myself I entertain great doubt whether a note such as Ex. A written in the plaintiffs' book only and signed only by the defendants' agent is in form a reduction into writing of the whole terms of the contract, because there is nothing in the entry which shows who the vendors are and the entry contains no reference by which the vendors can be ascertained. There is nothing except the fact that the entry is made in a book which belongs to the plaintiffs, and I doubt myself whether that contract could be specifically performed without letting in oral evidence as to who the vendors were. However, that point has not been very fully argued, and before expressing a decided opinion upon it I should desire to consider theanalogy of English cases upon the Statute of Frauds: (see for example, Stokes v. Whicher [1920] 1 Ch. 411 Assuming, however, that Section 92 of the Indian Evidence Act applies, it seems to me that the evidence which the defendants gave can be justified under the first proviso to Section 92 and that was what the learned Judge held. The learned Judge, in dealing with that point, says:-

No fraud is suggested in this case against the plaintiffs but it is alleged that Exhibit A was signed by Dhanasing in the mistaken belief that it contained all the terms, which he says the parties agreed to, and on the representation by Juthalal (one of the partners in the plaintiffs' firm) that it contained all those terms.

5. Now, Mr. Coltman for the appellants objects very strongly to that finding because he says that when we look at the evidence it is clear that that is really a finding of fraud againstJuthalal whatever it may be called-because the evidence of Dhanasing was that he particularly asked whether Exhibit A, which was written in Gujarati, a language he did not understand, contained the terms on which he was insisting, including the term as to obtaining drawback certificates, and that he was told by Juthalal that it did contain those terms. Of course, if Juthalal had deliberately stated that the document which Dhanasing was unable to read contained terms which he knew very well that it did not contain, that would be fraud. But I do not think the learned Judge intended to hold fraud and it is quite possible that the representation of Juthalal was made innocently. He told his munim to write down the terms of the contract and he may somewhat carelessly have said that it contained all the terms imagining that it did so, but without having read it. I confess, however, that I fail to appreciate the force of Mr. Coltman's argument that you cannot get out of Exhibit A without alleging fraud, and that in fact the defendants have got out of Exhibit A by alleging fraud. As a matter of fact what is pleaded, not veryartistically I admit, but still I think pleaded, in paragraph 5 of the points of defence, is that there was an innocent misrepresentation, and a mistake induced by innocent misrepresentation is sufficient for the defendants' case. Even if the evidence goes further than that plea and suggests fraud, that cannot disentitle the defendants to the relief to which they are entitled on the basis of innocent misrepresentation. Mr. Coltman says further-I think with truth-that the fact that Juthalal represented to Dhanasing that Exhibit A contained terms as to drawback certificates was not put to him incross-examination. It is, as I say, pleaded but it was not put to him in cross-examination as it no doubt should have been. But even if we leave out the evidence of misrepresentation it seems to me to make no difference, because the evidence is quite plain that Dhanasing when he signed this document which he could not read did in fact believe that it contained all the terms. Therefore, he executed the document under a mistake as to the subject of the contract, of which evidence could be given under the first proviso to Section 92 of the Indian Evidence Act, and when the true contract is ascertained, I think that the defendants could repudiate the goods under Section 118 of the Indian Contract Act. In my view, therefore, the judgment of the learned Judge was right. But, I think, it is only fair to Juthalal to say that I do not think that the evidence shows fraud. It is quite plain that if Juthalal had appreciated on May 25 that the obligation was on him to get the drawback certificates he could have got them. It would have cost him nothing, and I see no reason whatever for thinking that he had any motive for fraudulently suggesting that the contract contained provisions that the plaintiffs should get drawback certificates. I think, therefore, there is no case of fraud against him. I do not think the learned Judge really intended to hold that there was, although some of the expressions in his judgment do afford some ground for thinking that he did hold fraud. In my view, therefore, the appeal fails and must be dismissed with costs.

Rangnekar, J.

6. The defendants' ease in the suit was that they were justified in cancelling the contract as the plaintiffs failed to obtain Kabul drawback certificates from the Customs and this was a condition precedent to the contract. The plaintiffs denied this and relied on Ex. A, an entry in their Soda book signed by the defendants' broker Dhanasing. The defendants contended that Ex. A did not correctly set out all the terms of the contract, and that it was written in Gujarati character which Dhanasing could not read, and that the latter signed Ex. A on the representation of Juthalal, a partner in the plaintiff firm, that all the terms of the contract were correctly recorded in Ex. A.

7. The learned trial Judge held on the evidence that Dhanasing was ignorant of Gujarati language and that he signed Ex. A on the representation made by Juthalal that it contained all the terms of the contract and under a mistaken belief that it did contain all the terms and that the representation made by Juthalal was in fact incorrect. His finding as to the contract was as follows:-

Accordingly, on the question of what the contract was, I hold that it was acontract for sixty bars of silver expected to arrive on May 30 and deliverable on that day of 999 hall mark, the price to include customs duty and drawback certificates to be furnished by the plaintiffs.

8. From this it will be seen that there were at least two terms agreed upon which do not find a place in Ex. A, one as to the quality of silver, which was admitted by the plaintiffs, and the other as to the term now in issue between the parties. It will also appear that the goods were not ' ready ', as described in Ex. A, but were goods expected to arrive on May 30. This also was admitted by the plaintiffs. I am not, on the evidence, disposed to attach any importance to the terms as to customs duty nor to the fact that Ex. A did not contain the name of the vendors.

9. Mr. Coltman says that the finding amounts to a finding of fraud which was never pleaded. I do not think the defendants alleged any fraud against Juthalal, nor do I think the learned Judge intended to hold or suggest that the representation made by Juthalal was made by him fraudulently. Having regard to the place where the transaction took place and the surrounding situation, it was quite possible that Juthalal honestly believed that he had instructed his Mehta Punjiram to record all the terms agreed uponbetween the parties, and that for some reason or other due to a hurry at the moment or carelessness on the part of Punjiram this important term about the drawback certificates did not find a place in Ex. A.

10. The main contention before us is that the learned Judge erred in allowing the defendants to lead oral evidence to prove the term as to the drawback certificates although it was not mentioned at all in the contract Exhibit A. I may point out at the outset that the evidence which is now objected to was allowed to go in when it was being tendered and it was not until counsel addressed the Court at the end of the hearing that any objection was raised that the evidence was not admissible under Section 92 of the Indian Evidence Act. This, of course, would not prevent the parties from objecting to such evidence if it is inadmissible in law. Now, on the pleadings the case was that Exhibit A did not contain the whole of the contract between the parties, and, secondly,Dhanasing who was ignorant of theGujarati language signed Exhibit A under a mistaken belief that it contained all the terms and owing to the representation made by Juthalal to that effect.

11. It is clear on a true construction of Section 92 read with Section 91 of the Indian Evidence Act that it applies only in cases when a document contains or appears to contain on the face of it all the terms of a contract. Now, the inference whether the writing was or was not intended to contain the whole agreement may be drawn from the document itself as wellas from extrinsic evidence (see Mercantile Bank of Sydney v. Taylor [1893] A.C. 317 and this may appear from direct evidence or from informality of the document. The burden of proving that the writing does not contain the whole of the agreement would of course be on the party setting up that plea.

12. In this case the writing Exhibit A is a note made in the Soda book of the vendors, which cannot be considered to be a formal contract. But assuming itis, the further fact as found by the Judge remains that it was written in Gujarati language which the broker Dhanasing did not know. Undoubtedly, when a party signs a document; he must be taken to know the contents of the document and must be bound by it, and the onus lies heavily on him to prove that there were circumstances under which he signed it in ignorance of what the document actually contained or under a mistaken belief that it contained all the terms of the contract. But I am unable to sea why a party cannot be allowed to prove that when he signed the document he did so on the belief that it contained all the terms agreed upon between him and the opposite party and that such belief was caused by the conduct of the opposite party or by a representation made by him, either fraudulent or innocent.

13. When a person is illiterate or blind, or ignorant of alien or, foreign language of the document, in my opinion, that is a controlling circumstance which the Court has to take into consideration, and the case? of such a person has to be tested by the doctrine of reasonable consequences as applied to the circumstances. In such cases it seems to me that such a person would not be bound by his mere signature to a document unless of course he is negligent. There is no suggestion in this case thatDhanasing was negligent in signing the document. There can be none, because the circumstances show that before signing the document he did all that was possible for him to do. He made all proper inquiries, and after signing the document he made a note of what he believed to be the contract in his own book, and it is quite clear that it cannot be said that he was guilty of any negligence in signing the document. Therefore, I think the case really falls within the principle of the well-known case of Foster v. Mackinnon (1869) L.R. 4 C.P. 704 and the principle tobe applied in this case, in my opinion, is the principle which was laid down in that case. Where a contracting party who cannot read has a written document read over to him and the contract differs from that pretended to be read, the signature on the document is of no force because he never intended to sign and therefore, in contemplation of law, did not sign the document, as his mind did not accompany the signature. In Dagdu v. Bhana I.L.R. (1803) Bom. 420 :6 Bom. L.R. 126 Sir Lawrence Jenkins, after pointing out the effect of a mistake in a written document, emphasised this aspect of the case as follows (p. 427):-

There is another aspect of this case, which has not been presented to us but which we think calls for allusion. The second defendantis illiterate, and it is established that if a man, who cannot read, has a written contract falsely read over to him and the contract written differs from that pretended to be read, the signature of the document is of no force because he never intended to Sign, and therefore in contemplation of law did not sign the document on which the signature is : Foster v. Mackinnon (1869) L.R. 4 C.P. 704 And it is all one in law to read it is other words and to declare the effect thereof in othermanner than is contained in the writing': Thoroughgood's case (1582) 1 Co. Rep. 444

14. I think the present case falls within the principles of Foster v. Mackinnon and Thoroughgood's case, and the learned Judge was right in allowing the oral evidence.

15. Apart from this, in my opinion, the case also falls within proviso (1) of Section 92 of the Indian Evidence Act. That proviso runs as follows :-

Proviso (I).-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 a mistake in fact or law.

16. On the findings of the learned Judge this is a case where oral evidence to show that the obtaining of the drawback certificates was an important term was properly admissible on the ground of a mistake induced by the incorrect representation of Juthalal. Ordinarily a mistake by one party does not affect the rights of the parties which arise from the words used in a writing, but the rule is not one of inflexible application. This is pointed out by Sir Lawrence Jenkins in the case referred to above in these words (p. 425):-

Mistake in expression (it is of that class of mistake alone that we speak in this judgment) implies that the minds of the parties were not at one on that Which is expressed : but it does not follow that in every case where there in fact has been such mistake, there is no contract, Practical inconvenience dictates that men should be held to the external expression of their intentions, unless this be outweighed by other considerations; and to this legal effect is given by the law of evidence, which permits oral proof at variance with documents only in certain cases : in the rest the proof, if it be of mistake, is not received, so that the mistake does not come to light and in a Court of law does not exist.

17. Later on the learned Chief Justice observed as follows (p. 427):-

For the purpose of determining the existence of mistake in a written document oral evidence is admissible when the circumstances are appropriate : see proviso 1 to Section 92 of the Evidence Act. This evidence must be clear, and the Court in weighing it will be entitled to take into consideration defendant No. 1's capacity and all the circumstances as they existed at the date of the sale to plaintiff No. 2.

18. For these reasons I agree that the appeal must be dismissed with costs.


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