# [1958] 1 S.C.R. 1384

- **Citation:** [1958] 1 S.C.R. 1384
- **Court:** Supreme Court of India
- **Decided:** 1958
- **Case number:** Civil Appeal No. 197 of 1956
- **Bench:** Bhagwati, J. L. Kapur, Gajendragadkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1958-1-s-c-r-1384-1423
- **Pages:** 11

## Headnote

Evidence-Deed of gift-Donor adjudged insolwnt-Offici.:JI
Assignee challenging giftt-lf donees ~ntitled to lead evidence
showing gift to be transfer for consideration-Whether Official
Assignee representative in interest of i~olvent-Evidenct Act,
.s. 92.-Presidency-towns Insolvency Act (Ill of 1909), s. 55.
One D executed, on May 22, 1950, a deed of gift in favour of
the appellants, his wife and sons.
Upon the application of his
creditors D was adjudged an insolvent on August 21, 1951 and
his esUjte vested in the respondent. On September 26, 1951, the
respondent took out a notice of motion under s. 5 5 of the Presidency-tOJ''IlS Insolvency Act for a declaration that the dced of
gift was void.
In reply the appellants pleaded that the transaction, though it purported to be a gift, was in reality a transfer
for valuable. consideration.
The respondent objected that th<>
evidence which the appellants sought to lead in support of their
plea was inadmissible under s. 92 of the Indian Evidence Act:
Held, that s. 92 of the Evidence Act was not applicable to
the proceedings and the appellants were entitled to lead evidence
in support of the plea raised by them.
Section 92 is only applicable to cases as between parties to an instrument or their
representatives in interest.
Where, however the dispute is
between a stranger to an instrument and a party to it or his
representative in interest, s. 92 is inapplicable, and both tlte
stranger and the party or his representative are at liberty to lead
evidence of oral agreement notwithstanding the fact that such
evidence if believed, may contradict, vary, add to or subtract
from its terms.
In the present case, though the appellants were
the representatives in interest of the insolvent the respondent,
when he made the petition under s. 5 5 of the Presidency-towns
Insolvency Act, was not acting as a representative in interest of
the insolvent, and, therefore, the proceedings were not between
the parties to the instrument or their representatives in .interest.

## Text

19S8
February 20.
1384
SUPREME COURT REPORTS
BAI HIRA DEVI AND OTHERS
v.
[1958]
THE OFFICIAL ASSIGNEE OF BOMBAY
(BHAGWATI, J. L. KAPUR and GAJENDRAGADKAR JJ.)
Evidence-Deed of gift-Donor adjudged insolwnt-Offici.:JI
Assignee challenging giftt-lf donees ~ntitled to lead evidence
showing gift to be transfer for consideration-Whether Official
Assignee representative in interest of i~olvent-Evidenct Act,
.s. 92.-Presidency-towns Insolvency Act (Ill of 1909), s. 55.
One D executed, on May 22, 1950, a deed of gift in favour of
the appellants, his wife and sons.
Upon the application of his
creditors D was adjudged an insolvent on August 21, 1951 and
his esUjte vested in the respondent. On September 26, 1951, the
respondent took out a notice of motion under s. 5 5 of the Presidency-tOJ''IlS Insolvency Act for a declaration that the dced of
gift was void.
In reply the appellants pleaded that the transaction, though it purported to be a gift, was in reality a transfer
for valuable. consideration.
The respondent objected that th<>
evidence which the appellants sought to lead in support of their
plea was inadmissible under s. 92 of the Indian Evidence Act:
Held, that s. 92 of the Evidence Act was not applicable to
the proceedings and the appellants were entitled to lead evidence
in support of the plea raised by them.
Section 92 is only applicable to cases as between parties to an instrument or their
representatives in interest.
Where, however the dispute is
between a stranger to an instrument and a party to it or his
representative in interest, s. 92 is inapplicable, and both tlte
stranger and the party or his representative are at liberty to lead
evidence of oral agreement notwithstanding the fact that such
evidence if believed, may contradict, vary, add to or subtract
from its terms.
In the present case, though the appellants were
the representatives in interest of the insolvent the respondent,
when he made the petition under s. 5 5 of the Presidency-towns
Insolvency Act, was not acting as a representative in interest of
the insolvent, and, therefore, the proceedings were not between
the parties to the instrument or their representatives in .interest.
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
197 of 1956.
Appeal from the judgment and order dated August
6, 1954, of the Bombay High Court in Appeal No. 30
of 1954, arising out of the judgment and order dated
January 28, 1954, of the said High Court in Insolvency
No. 74 of 1951.
S.C.R.
SUPREME COURT REPORTS
1385
M. C. SetalVad, Attorney-General for India, S. N.
1958
Andley and J. B. Dadachanji, for the appellants.
Bal Hira Devi
Purshottam Tricumdas and I. N. Shroff, for the
and Others
respondent.
v.
1958 February 20. The following Judgment of the
The Officialb .
Court was delivered by
'
Assignee of Bom a}
GAJENDRAGADK.AR J .-This appeal by special leave Gajendragadkar I.
arises from the notice of motion taken out by the respondent official assignee under s. SS of the Presidencytowns Insolvency Act against the appellants for a
declaration that a deed of gift executed by the insol:·
vent Daulatram Hukamchand on May 22, 1950, in
favour of the appellants was void. It appears that
some creditors of Daulatram filed .a petition in the
High Court of Judicature at Bombay, Insolvency
Case No. 74 of 1951, for an order that the said
Daulatram be adjudged insolvent as he ·had given
notice of suspension of payment of the debts on
August 2, 1951. Daulatram
was adjudicated insolvent on August 21, 1951, with the result that the
estate of the insolvent vested in the respondent under
s. 17 of the Act. On September 26, 1951, the respondent took out the present notice of motion. The
impugned deed of gift has been executed
by· the
insolvent in favour of his wife and three sons who are
the appellants before us. In reply to the notice of
motion appellants 1 to 3 filed a Joint affidavit setting
out the facts and circumstances under which the said
deed of gift had been executed by the insolvent in
their favour. In substance, the appellants' case was
· that, though the document purported to be a gift, it
was really a transaction supported by valuable consideration and as such it did not fall within • the
mischief of s. 55 of the Act. At the hearing . of this
notice of motion before Mr. Justice Coyajee, when the
appellants sought to lead e~idence in support of this
plea, the respondent objected and urged that the
evidence which the appellants wanted to lead was
inadmissible under s. 92 of the Indian Evidence Act.
The learned Judge, however, overruled the respondent's objection and allowed the appellants to lead
M2SC/61 X-3
1386
SUPREME COURT REPORTS
[1958}
19ss
their evidence. In the end the learned Judge
did
not accept the appellants' contention and, by his
Bal Hira Dei·i judgment delivered on January 28, 1954, he granted
and Others
the declaration claimed by the respondent under s. 55
The ~ffecial
of the Act.
Aisignee of Bombay
Against this judgment and order the appellants
-
preferred an appeal (No. 30 of 1954) which was heard
GaJmdro¥cdkarJ. by Chagla C. J. and Shah J. The learned Judges
took the view that Mr. Justice Coyajee had erred in
law in allowing oral evidence· to be led by the appel·
!ants in support of their plea that the transaction
evidenced by the deed of gift was in reality a transfer
for consideration. The learned Judges held that the
gift in question had been executed by the donor in
favour of the donees out of natural love and affection
and that, under s. 92, it was not open to the appellants to lead evidence to show that the transaction was
supported not by the consideration of natural love
and affection but by another kind of valuable consideration. On this view of the matter the learned
Judges did not think it necessary to consider the
oral evidence actually led by the appellants and decide
whether Mr. Justice Coyajee was right or not in rejecting the said evidence on the merits. That is how the
appeal preferred by the appellants was dismissed on
August 6, 1954. On September 23, 1954 the application made by the appellants for a certificate was rejected
by the High Court at Bombay; but special leave was
granted to the appefiants by this Court on November
3, 1954, and that is how the appeal has come before
us for final disposal.
The principal point which arises in this appeal is
whether the appellants were entitled to lead oral
evidence with a view to show the real nature of the
impugned transaction. In deciding this question, it
would be necessary to consider the true scope and
effect.of SS. 91 and 92 of the Evidence Act.
Chapter VI of the Evidence Act which begins with
s. 91 deals with the exclusion of oral by documentary
evidence. Section 91 provides that, "when the terms of
a contract, or of a grant, or of any other disposition of
property, have been reduced to the form of a document,
S.C.R.
SUPREME COURT REPORTS
1387
and in all cases in which any matter is required
t9ss
by law. ·to be reduced to the form of a document, no
evidence shall be oiven in proof of the terms of such
Bai Hira Devi
c,.
and OlherJ
contract, grant or other disposition of property, or of
v
such matter, except the document itself, or secondary
TM Official
evidence of its contents. in cases in which secondary A1111111e of Bombay
evidence is admissible under the provisions herein-
-
before contained." The normal rule is that the con- GaJendrqadkar 1.
tents 9f a document must be proved
by primary
evidence which is the document itself in original.
Section 91 is based on what is sometimes described as
the "best evidence rule". The best evidence about
the contents of a document is the document itself and .
it is the production of the document that is required
by s. 91 in proof of its contents. In a sens~. the rule
enunciated by
s~ 91 can be said to be an exclusive rule
inasmuch as it excludes the admission of oral evidence
for proving the contents of the document except in ·
cases where secondary evidence is allowed to be led
under the relevant provisions of the Evidence Act.
Section 92 excludes the evidence of oral agreements
and it applies to cases where the terms of contracts,
grants or other dispositions of property have been
proved by the production of the relevant documents
themselves under s. 91; in other words, it is after the
document has been produeed to prove its terms under
s. 91 that the provisions of s. 92 come into operation
for the purpose of excfoding evidence of any oral
agreement or statement, for the purpose of contradicting, varying, adding to or subtracting from its terms.
The application of this rule is limited to cases as
between parties to the instrument or their representa·
.tives-in-interest. There are six provisos to this section
with which we are not concerned in the present
appeal. It would be noticed that ss. 91 and 92 in
effect supplement each other. Section 91 would be
frustrated without the aid of s. 92 and s. 92 would be
inoperative without the aid of s. 91. Since s. 92
excludes the admission of oral evidence for the purpose
of contradicting, varying, adding'to or subtracting
from the terms of the document properly proved·
1388
SUPREME COURT REPORTS
(1958]
1958
under s. 91, it may be said that it makes the proof of
the document conclusive of its contents. Like s. 91,
Bai Hira Devi
s. 92 also can be said to be based on the best evidence
and Others
v.
rule. The two sections, however, differ in some material
The Official
particulars. Section 91 applies to all documents,
A<signu of Bombay whether they purport to dispose of nghts or not,
. . --
whereas s. 92 applies to documents which can be desc,.,.ndraKasikar J. cribed as dispositive. Section 91 applies to documents
which are both bilateral and unilateral, unlike s. 92
the application of which is confined only to bilateral
documents. Section 91 lays down the rule of universal
application and is not confined to the executant or
executants of the documents.
Section 92, on the other
hand, applies only between the parties to the instrument or their representatives-in-interest. There is no
doubt that s. 92 does not apply to strangers who are
not bound or affected by the terms of the document.
Persons other than those who are parties to the
document are not precluded from giving extrinsic
evidence to contradict, vary, add to or subtract from
the .terms of the document. It is only where a
question
ari~es about the effect of the document as
between · the parties or their representatives-in-interest
that the rule enunciated by s. 92 about the exclusion
of oral agreement can be invoked. This position is
made absolutely clear by the provisions of s. 99 itself.
Section 99 provides that "persons who are not
parties to a document or their representatives-inmterest, may give evidence of any facts tending to
&how
contemporaneous
agreement
varying
the
terms of the document". Though it is only variation
which is specifically mentioned in s. 99, there can be
no doubt that the third party's right to lead evidence
which is recognised by s. 99 w<111ld include a right
to lead evidence not only to vary the terms of the
document, but to contradict the said terms or to add
to or subtract from them .. If that be the true position,
before considedng the effect of the provisions of
s. 92 in regard to the appellants' right to lead oral
evidence, it would be necessary to examine whether
s. 92 applies at all to the present proceedings between
the official assignee who is the respondent and the
S.C.R.
SUPREME COURT REPORTS
1389
donees from the insolvent who are the
appellants
1958
before us.
Bai Hira Devi
Does the official assignee represent the insolvent,
and Others
and can he be described as the representative-inv.
interest of the insolvent,
when he
moves
the
The Official
Insolvency Court under s. 55 of the Presidency-towns Assignee of Bombay
Insolvency Act ? It is true that, under s. 17 of the 0 . ndr-dk
J
Act, on the making of an order of adjudication, the
a,e
aga ar ·
property of the insolvent wherever situate vests in
the official assignee and becomes divisible among his
creditors; but the property in respect of which a
declaration is claimed by the official assignee under
s. 55 has already gone out of the estate of the insolvent, and it canriot be said to vest in the official
assignee as a result of the order of adjudication itself.
Besides, when the official assignee makes the petition
under s. 55 he does so obviously and solely for the
benefit of the creditors. An insolvent himself has,
and can possibly have, no right to challenge the
transfer effected by him. In this respect the official
assignee has a higher title than the insolvent and,
when, under s. 55, h1;; challenges any transfer made by
the insolvent, he acts not for the insolvent or on his
behalf, but in the interest of the whole ·body of the
insolvent's creditors. In theory and on principle, as
soon as an order of adjudication is made, all procee<lings in regard to the estate of the insolvent come
under the control of the Insolvency Court. It may
be said that the official assignee in whom the estate
of the insolvent vests is to guard not
~:mly the
interests of the creditors of the insolvent but also
"public morality and the interest which every member of the public has in the observance of commercial
morality" (1).
There is no doubt that it is the· Insolvency Court alone which has jurisdiction to annul
the insolvent's transactions, whether the case is
governed by the Presidency-towns Insolvency Act or
by the Provincial Insolvency Act; and so
the proceedings taken· under s. 55 cannot be deemed to be proceedings taken for and on behalf of the insolvent at all.
(1) "The Law of Insolvency in India"-By Rt. Hon. Sir D. F. Mulla,
Kt.-2nd"1!.d., p. 23 1.
1390
SUPREME COURT REPORTS
[1958]
1958
The provisions of s. · 55 themselves support the
same conclusion. Under s. 55, any transfer of pro·
Bai Hira Devi perty not being a transfer made before and in consiand Othm
deration of marriage or made in favour of a purchaser
Th• ~ffelal
or encumbrancer
in good faith
and for valuable
A•signee of Bombay consideration
shall, if the transferor is adjudged
insolvent within two years of the date of transfer, be
Gajendra1adkar J. void against the official assignee. This section, like
s. 53-A of the Provincial Insolvency Act, makes the
impugned transfers voidable at the instance of the
official assignee or the receiver. The transfers in
question are not declared void as between the parties
themselves; they are avoided by the official assignee
or the receiver and their avoidance is intended to
ensure for the benefit of the whole body of the
creditors of the insolvent. The relevant sections of
the two Insolvency Acts in effect require the
Insol·
vency Courts to set aside the impugned transactions
in
exercise of the Insolvency Courts' exclusive
jurisdiction in that behalf. The obvious object of
these provisions is to bring back to the insolvent's
estate, property which has left the estate by the
impugned act of the insolvent himself and make the
said property available for distribution amongst his
creditors. It would, therefore, be impossible to hold
that, when the official assignee makes a petition under
~-
55 of the Act, he is acting as a representative-in·
interest of the insolvent.
In this connection it would be relevant to remem·
ber that, in cases governed by the Presidency-towns
Insolvency Act, the practice in Calcutta and Bombay
consistently allows a creditor who has proved his debt
to file a petition to set aside the transfer under
s. 55 of the Act if he shows that the official assignee,
on being tendered a reasonable indemnity has un·
reasonably refused to make an application. Similarly,
under s. 54-A of the Provincial Insolvency Act, a
creditor himself can make the application if the
receiver refuses to take any action. Now, if an
application is made by a creditor for setting aside a
voluntary transfer effected by the insolvent, there can
be no doubt that the creditor is not the representative-
S.C.R.
SUPREME COURT REPORTS
1391
in-interest of the insolvent
and the creditor would
t9ss
obviously not be affected by the provisions of
s. 92 of the Indian Evidence Act. It would really· ·be
Bal Hira D.i•i
and Others
anomalous · if s.
92 were to apply to proceedings
v.
instituted by the official assignee under s. 55 though
The Official
the said section cannot and would not apply to similar Assignee of Bombay
proceedings instituted by a creditor, Having regard to
-
the object with which s. 55 has been enacted, the Gajendragadkar J.
nature of the proceedings taken under it, and the nature
and effect of the final order which is contemplated
under it, it is clear that, like the creditor who may
apply, the official assignee also cannot be said to be
the representative-in-interest of the insolvent in these
proceedings. If that be the true position, s. 92 cannot
apply to the present proceedings between the respondent and the appellants; and so there can be no doubt
that the respondent would not be precluded from
leading evidence of an oral agreement for the purpose
of contradicting, varying, adding to or subtracting
from the terms of the impugned document.
The question raised by Shri Purushottam which
still remains to be considered js whether the appellants who undoubtedly are the representatives-ininterest of the insolvent can avoid the application of
s. 92. In our opinion, the answer to this question
must be in favour of the appellants. It is urged
before us by Shri Purushottam that the scheme of
the relevant provisions of Ch. VI of the Indian
Evidence Act is inconsistent with the appellants'
contention that they can lead oral evidence about the
alleged agreement which may tend to change the character of the transaction itself. Shri Purushottam bases
his argument mainly on the provisions of s. 91 read
withs. 99 of the Act. He contends thats. 91 requires
the production and proof of the document itself for
the purpose of proving the contents of the document;
and by necessary implication all evidence about any
oral agreement which may affect the terms of the
document is excluded by s. 91 itself. We are not
impressed by this argument. As we have already
observed, ss. 91 and 92 really supplement each other.
It is because s. 91 by itself wquld not have excluded
1392
SUPREME COURT REPORTS
[1958)
1958
evidence of oral agreements which may tend to vary
the terms of the document that s.
92 has been
Bai Biro De>'i
enacted; and if s. 92 does not apply in the present
and Others
case, there is no other section in the Evidence Act
The ~ffecial
which can be said to exclude evidence of the a&r~e
Assignee of Bombayment set up by the appellants. What s. 91 proh1b1ts
is the admission of oral evidence to prove the contents
Gajendragadkcr J. of the document. In the present case, the terms of
the document are proved by the production of the
document itself. Whether
or not the said terms
could be varied by proof of an oral agreement is a
.matter which is not covered by s. 91 at all. That is
the subject-matter of s. 92; and so, if s. 92 does not
apply, there is no reason to exclude evidence about an
oral agreement solely on the ground that if believed
the said evidc;_nce may vary the terms of the transaction. Shri Purushottam also relied upon the provisions of s. 99.
His argument is that it is only presons
who are not parties to a document or their representatives-in-interest who ;ire allowed by s.
99 to give
·evidence of facts tending to show a contemporaneous
agreement varying the terms of the document. Jn
other words, the effect
of · s. 99 is not only to
allow strangers to lead
such evidence, but to
prohibit
parties or their representatives-in-interest
from leading such evidence independently of the
provisions of s. 92 of the Evidence Act. We do not
read s .. 99 as laying down any such prohibition by
necessary implication. As a matter of fact, from the
terms of s. 92 itself, it is clear that strangers to the
document are outside the scope ofs. 92; buts. 99 has
presumably been enacted to clarify the same position.
It would be unreasonable, we think, to hold that s. 99
was intended not only to clarify the position with
regard to the strangers to the document, but also to lay
down. a rule of exclusion of oral evidence by implies.
tion in respect of the parties to the document or their
representatives-in-interest. Jn our opinion, the true
position is that, if the terms of any transfer reduced
to writing are in dispute between a stranger to a document and a party to it or his representatjve-ininterest, the restriction imposed by s. 92 in regard to
S.C.R.
SUPREME COURT REPORTS
1393
the exclusion of evidence of oral agreement is in1958
applicable; and both the stranger to the document
and the party to the document or his representativeBai Hira Devi
and Others
ii:-interest are at liberty ·to lead evidence of oral
,,
agreement notwithstanding the fact that such eviThe Offecial
dence, if believed, may contradict, vary, add to or Assignee of Bombay
subtract from its terms. The rule of exclusion enunciated bys. 92 applies to both parties to the document GajendragqdkarJ.
and is based on the doctrine of mutuality. It .would
be inequitable and unfair to enforce that rule against
a party to a document or his representative-in-interest
in the case of a dispute between tfie said party or his
representative-in-interest on the one hand and the
stranger on the other. In dealing with this point we
may incidentally refer to · the relevant statement of
the law by Phipson in his treatise on "Evidence" :
"Where ·the transaction has been reduced into
writing merely by agreement of the parties",
it is
observed,
"extrinsic evidence to contradict or vary
the writing is excluded only in proceedings between
such parties or their privies, and not in those between
strangers, or a party and a stranger; since strangers
cannot be precluded from proving the truth by the
ignorance, carelessness, or fraud of the· parties (R. v.
Cheadle, 3 B. and Ad. 833); nor, in proceedings be-
. tween a party and a stranger, will the former be estopped since there would be no mutuality"(1):
The result is that s. 92 is wholly inapplicable to the
present proceedings and so the appellants are entitled
to lead evidence in support of the plea raised by
them. It appears that the attention of the learned
Judges who heard the appeal in the High Court at
Bombay was not drawn to this aspect of the matter.
That is why they proceeded to deal with the question
about the admissibility of oral evidence led 'by the
appellants on the assumption that s. 92 applied~
We must accordingly set aside the decree pass~d by
the court of appeal in the High Court at Bombay and
send the appeal back to that Court for disposal on the
merits in accordance with law. In the circumstances
(i) Phipson on Evidence-,-9th Ed., p. 602.
1958
Bui Hfra Devi
and Others
"·
The Official
Assignee of Bt'1nbay
Gajendragadkar J.
1958
February 20.
1394
SUPREME COURT REPORTS
[1958]
of this case, we think that the fair order as to
costs of this appeal would be that the costs should
abide the final result in the appeal before the High
Ccurt at Bombay.
Appeal allowed.
Case remanded.
KANAIYALAL CHANDULAL MONIM
v.
INDUMATI T. POTDAR AND ANOTHER
(B. P. SINHA, JAFER IMAM SUBBA RAO JJ.)
Municipal Law-Water Supply-Landlord withholding essential supply-Tenant not in enjoyment after enactment-Conviction
of landlord-Legality-Bombay Rents Hotel and Lodging House
Rates Control Act (Bom. LVll of 1947), s. 24.
Section 24( 1) of the Bombay Rents Hotel and Lodging House
Rates Control Act, 1947, provides: "No landlord either himse![
or through any person acting or purporting to act on his behalf
shall without just or sufficient cause cut off or withhold any
essential supply or service enjoyed by the tenant in respect of the
premises let to him."
By Explanation II : "For the purposes of
this section, withholding any essential supply or service shall
include acts or omissions attributable to the landlord on account
of which the essential supply or service is cut off by the local
authority or any other competent autliority."
The appeallant was prosecuted under s. 24 of the Bombay
Rents Hotel and Lodging House Rates Control Act, 1947, on J
complaint by the tenant, the first respondent, on June 14, 1954,
for having refused or neglected to have water connection made
for the premises.
The water supply to the premises was cut off
by the Municipality in 1947 due to the default in payment of the
municipal taxes by the predecessor-in~title of the appellant, but
the tenants, including the first -respondent, continued in occupation of the premises without having the use of municipal wator
s11pply.
It was contended for the appellant that his conviction
was invalid because ( 1) he was not liable for the default made
by his predecessor-in-title, and (2) in any case, s. 24 was not
applicable inasmuch as the supply of municipal water was not
en joyed by the first respondent when the Act came into force :