2000 (8) TMI 1141 - SC - Indian Laws

Summary

Issues:
1. Admissibility of parol evidence to modify terms of a registered settlement deed.

Analysis:
The case involved a dispute over a property settlement deed dated 26.3.1915, where the plaintiff claimed a share under the registered settlement deed, and the defendant-appellant claimed that subsequent oral arrangements modified the terms of the settlement. The trial court allowed oral evidence based on proviso (4) to Section 92 of the Evidence Act, permitting proof of subsequent oral agreements to rescind or modify a contract or disposition of property, except where such document is required to be in writing or is registered. The High Court, however, held that oral evidence cannot be admitted to vary the terms of a registered document. The Division Bench upheld this decision, leading to the current appeal.

The appellant argued that the subsequent oral arrangement did not vary the terms of the settlement deed but only worked out existing rights. The key legal question was whether parol evidence could substantiate oral arrangements rescinding or modifying a written and registered document like the settlement deed. Section 92 of the Evidence Act prohibits oral evidence to contradict, vary, or subtract from the terms of a written document, subject to exceptions in provisos. Proviso (4) allows proof of subsequent oral agreements in certain cases, excluding those where the document must be in writing or is registered.

The Supreme Court analyzed the legal position, emphasizing that if a contract can be oral but is reduced to writing, parties can modify it orally with admissible parol evidence. However, when a document must be in writing by law, any modification or substitution of its terms must also be in writing. The Court noted that the settlement deed in question conferred property rights and was required to be in writing for efficacy. Therefore, the defendant could not use parol evidence to alter the terms of the registered settlement deed.

The appellant's argument that the document was a Will, not a settlement deed, was rejected as both parties and the trial court agreed on its nature. Consequently, the Supreme Court dismissed the appeal, finding no merit in the appellant's contentions. The judgment affirmed that parol evidence cannot be used to modify the terms of a registered settlement deed, emphasizing the importance of written documents in property transactions and the legal restrictions on altering such documents with oral agreements.