P. Madhusudhan Rao vs Lt. Col.Ravi Manan, and Another [Civil Revision Petition No. 4515 of 2014]: Andhra Pradesh High Court
Essential principles governing interpretation of documents/contracts
25. The dictionary meaning of the word interpretation
is expound the meaning of, bring out the meaning of. But what does the words
meaning mean? Does it mean (i) the literal meaning of the words used or does it
mean (ii) the meaning the writer of the words had in his mind, i.e., his
intention? Whether it means (i) or (ii) , the process would be that in the case
of (ii) intention has to be ascertained by reference to the words used to
express it. Unexpressed intention has not to be considered, but courts can
consider presumed intention while interpreting a document. Thus, the modern law
can be said to be that the purpose of interpretation is two-fold: (i) to
ascertain the intention as expressed in the words, i.e., to consider what has
actually been said; (ii) to consider what the parties intended to have said or
ought to have said but did not, either because they never visualized such a
state of circumstances arising or for any other reason. The task of
interpretation would be easy if it were just to discover the intention of the
parties as expressed in words. But the task of the court is to ascertain what
the parties would have said or what they would have intended if the point had
been considered by them at that time. The task involves a guessing game, which
in legal terminology is called presumed intention. Any attempt to interpret the
terms of document based on presumed intention is described as Courts
endeavouring to achieve what the devil failed to do as devil does not know the
intention of a man.
26. It is clear that the Court has to ascertain the
intention of the parties based on the language used in the document. Time and
again, the Court have laid down certain principles to interpret any document or
clauses therein. In fact there are no statutory rules to interpret any
document. But based on the settled principles, the Courts are interpreting the
documents and any conditions contained therein. Rules of interpretation are
mere working rules or as guidelines and are not binding on the Courts of law.
Yet, they have some sanctity as they have been deduced from judicial decision
over the years. It is found listed in Odgers Construction of Deeds and
Statutes, used the listed rules by the Courts and they have acquired
respectability. The Supreme Court in Delhi Development Authority v.
Durga Chand has also noticed Odgers Rules and quoted them with
approval and as the observation of the Supreme Court have the force of law of
the land, it may be taken Odgers Rules (known as golden rules of
interpretation) have been judicially recognized and may be adopted as Rules for
interpretation of the documents in India. These Rules are listed hereunder:
1. The meaning of the document or of a particular
part of it is therefore to be sought for in the document itself.
2. The intention may prevail over the words used
3. words are to be taken in their literal meaning
4. literal meaning depends on the circumstances of
the parties
5. When is extrinsic evidence admissible to translate
the language?
6. Technical legal terms will have their legal
meaning.
7. Therefore the deed is to be construed as a whole.
Apart from the said seven rules listed by Odger, it would be convenient to list
the following rules for the sake of convenience are called additional rules and
given number in continuation:
8. Same words to be given the same meaning in the
same contract.
9. Harmonious construction must be placed on the
contract as far as possible. However, in case of conflict between earlier or
later clauses in a contract, later clauses are to be preferred to the earlier;
while in a will, earlier clause is to be preferred to the later.
10. Contra Proferendum Rule-If two interpretations
are possible, the one favourable to the party who has drafted the contract and
the other against him, the interpretation against that party has to be
preferred.
11. If two interpretation of a contract are possible
the one which helps to make the contract operative to be preferred to the other
which tends to make it inoperative
12. In case of conflict between printed clauses and
typed clauses, type clauses are to be preferred. Similarly, in conflict between
printed and hand written clauses, hand written clauses are to be preferred and
in the event of conflict between typed and hand written clauses, the hand
written calluses are to be preferred
13. the special will exclude the general
14. Rule of expression unius est exclusion alterius
15. Rule of noscitus a sociss
16. Ejusdem generic rule will apply both the contract
and statute
17. place of Punctuation in interpretation of
documents
27. From the Rules stated above, when the language
used in a document is unambiguous conveying clear meaning, the Court has to
interpret the document or any condition therein taking into consideration of
the literal meaning of the words in the document. When there is ambiguity, the
intention of the parties has to be looked into. Ordinarily the parties use apt
words to express their intention but often they do not. The cardinal rule again
is that, clear and unambiguous words prevail over the intention. But if the words
used are not clear or ambiguous, intention will prevail. The most essential
thing is to collect the intention of the parties from the expressions they have
used in the deed itself. What if, the intention is so collected will not secure
with the words used. The answer is the intention prevails. Therefore, if the
language used in the document is unambiguous, the words used in the document
itself will prevail but not the intention. Here, there is nothing ambiguous in
clause (viii) of para 3 of the plaint and the parties intended to refer the
agreement to P.Subba Rao only to know the meaning of the terms of the agreement
but not for any other purpose. Therefore, the arbitration clause is limited to
the extent to refer the document/agreement for interpretation and not for
resolving any disputes between the parties. In such a case, the Court need not
look into the intention of the parties in interpreting a particular clause in
the agreement, when the language used in the document is unambiguous and clear.