Holding

The 1967 agreement is a licensor‑licensee ‘conducting’ arrangement, not a lease, and therefore the plaintiff is not a deemed tenant under Section 15A.

Summary

The plaintiff, a hotel operator, entered into a 1967 agreement with the owner (defendant) described as an “agreement for conducting” the hotel business, wherein the plaintiff paid a monthly royalty and was responsible for expenses, while the owner retained ownership. After the owner served notice to vacate, the plaintiff sued for a declaration that he was a deemed tenant under Section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act and sought a restraining order. The trial court held the plaintiff was a licensee and deemed tenant, but the appellate bench and High Court reversed, interpreting the agreement as a conduct‑business arrangement, not a lease, relying on the written terms and the bar on oral evidence under Sections 91 and 92 of the Evidence Act. The Supreme Court examined the construction principles, emphasizing the literal rule and the limited exceptions to admit oral evidence, and concluded that the agreement clearly created a licensor‑licensee relationship, not a tenancy, and that the plaintiff could not claim protection under Section 15A. Consequently, the Court dismissed the appeal, upholding the High Court’s order and awarding costs to the defendant.

Issues considered

Whether the 1967 agreement constitutes a lease granting the plaintiff deemed tenancy under Section 15A of the Bombay Rents Act or merely a licence/conducting agreement.
Whether oral evidence can be admitted to interpret the written agreement under Sections 91 and 92 of the Evidence Act, 1872.
Whether the plaintiff is entitled to protection as a deemed tenant under the Bombay Rents, Hotel and Lodging House Rates Control Act.
How the agreement should be interpreted under the literal, golden, and purposive rules of construction.

Legislation cited

Bombay Rents, Hotel and Lodging House Rates Control Act, 1947s. 15A, s. 28
Bombay Sales Tax Act, 1959
Code of Civil Procedure, 1908s. Order 6 Rule 16
Evidence Act, 1872s. 91, s. 92
Transfer of Property Act, 1882s. 108

Headnote

Issue for Consideration Issue arose as regards the correctness of the order passed by the High Court in revision application confirming the judgment of the appellate bench whereby decree of the trial court was reversed; and whether the ‘agreement parties was in nature of licensor and licensee of the suit premises or merely for conducting the hotel business of the first defendant by the plaintiff. Headnotes Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 – ss.15A, 28 – Evidence Act, 1972 – ss.91, 92 –

Subjects

Agreement for conducting hotel businessLeave and licenseBar on adducing oral evidenceRegistration certificateDeemed tenancyRoyalty receiptsRules of constructionLiteral rule of constructionGolden rule of constructionUnnecessary and frivolous pleadingsMeandering pleadingsAI generated pleadingsComputer generated pleadingsOral evidenceOwnership and possessionConstruction of the ContractConstruction of a deedAmbiguity in the deedLengthy pleadings and judgmentsNeed for brief and precise pleadings

Judgment

[2025] 5 S.C.R. 58 : 2025 INSC 466

Annaya Kocha Shetty (Dead) through LRs
v.
Laxmibai Narayan Satose since Deceased
through LRs & Others
(Civil Appeal No. 84 of 2019)
08 April 2025
[Pankaj Mithal and S.V.N. Bhatti,* JJ.]

Issue for Consideration
Issue arose as regards the correctness of the order passed by
the High Court in revision application confirming the judgment
of the appellate bench whereby decree of the trial court was
reversed; and whether the ‘agreement of conducting’ between
parties was in nature of licensor and licensee of the suit premises
or merely for conducting the hotel business of the first defendant
by the plaintiff.

Headnotes
Bombay Rents, Hotel and Lodging House Rates Control Act,
1947 – ss.15A, 28 – Evidence Act, 1972 – ss.91, 92 – Plaintiff
and the first defendant-owner of the property, entered into an
agreement styled for conducting hotel business on the said
property – Subsequently, first defendant served notice to the
plaintiff to vacate and hand over the business – Plaintiff filed
suit for declaration that plaintiff is the deemed tenant, and a
restraint order against the defendants from interfering with or
dispossessing the plaintiff from the plaint schedule which was
allowed – Appellate court set aside the decree passed by the
trial court, and the High Court upheld the same – Correctness:
Held: Agreement is one for conducting the business of the first
defendant – Oral evidence is excluded from consideration as
none of the exceptions is attracted – Plaintiff adduced oral and
documentary evidence either to dilute the obligation/standing of
the plaintiff in the agreement, or to claim the status of a deemed
tenants – On facts, the photocopy of the registration certificate
would not change the status of the plaintiff from the conductor of
the business to a sub-tenant and, by operation of law, a deemed

* Author
[2025] 5 S.C.R. 59

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

tenant – Receipts evidencing payment of royalty would militate
against the status of deemed tenancy claimed by the plaintiff –
Unless and until the case falls under one or the other exceptions
enabling receipt of oral evidence on a written document, the court
is precluded from entertaining oral evidence – Document or deed
interpreted in a particular case is not relied upon, but the subject
deed is construed on well-established principles – Law recognises
both ownership and possession of an owner of a property – Lease
recognises the outcome of a rightful separation of ownership and
possession between lessor and lessee – Admittedly, defendant no. 1
is in possession of the property from defendant no. 2 – Agreement
of conducting business does not deal with the possession so
enjoyed by defendant no. 1 in favour of the plaintiff – Absence of
such a crucial clause in the agreement is a vital circumstance in
construing the subject matter of the said agreement – Thus, what
has been entrusted is to run the business in the plaint schedule but
not occupying the plaint schedule under leave and licence – Terms
of the agreement are clear that the entrustment to the plaintiff is
the ownership of the hotel business of the first defendant and not
the tenancy right of the first defendant in favour of the plaintiff –
View taken by the first appellate court and the impugned order of
the High Court, upheld. [Paras 18.1, 18.2, 22, 23, 24]

Deeds and documents – Rules of construction – Construction
of the Contract:
Held: Contract is first constructed in its plain, ordinary and literal
meaning, which is known as the literal rule of construction – If
there is an absurdity created by literally reading the contract, a
shift from literal rule may be allowed which is called the golden
rule of construction – Contract may be purposively constructed
in light of its object and context to determine the purpose of the
contract – This approach must be used cautiously – Furthermore,
the construction of a deed is generally speaking, a matter of law –
However, when there is an ambiguity in the deed, determining its
meaning is a mixed question of fact and law – This concept is
encapsulated by ss.91 and 92 of the 1872 Act – Evidence Act,
1872 – ss.91 and 92. [Paras 17.1-17.3, 18]
Code of Civil Procedure, 1908 – Ord.6 r.16 – Pleadings – Lengthy
pleadings and judgments – AI/computer-generated statements –
Meandering pleadings lead to discursive judgments – Need for
brief and precise pleadings – Elucidated. [Para 3]
60 [2025] 5 S.C.R.

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Case Law Cited
Shakuntala Shukla v. State of Uttar Pradesh [2021] 6 SCR 87 :
(2021) 20 SCC 818; Provash Chandra Dalui and Another v.
Biswanath Banerjee and Another [1989] 2 SCR 401 : (1989) Supp.
1 SCC 487; Chandavarka Sita Ratna Rao v. Ashalata S. Guaram
[1986] 3 SCR 866 : (1986) 4 SCC 447; Varisalli Mohd. Ilias v.
Abdul Sattar Gulam Hussain (1991) Mah LJ 1523; Mangala Vaman
Karandikar vs. Prakash Damodar Ranadeon [2021] 5 SCR 232 :
(2021) 6 SCC 139; TN Electricity Board v. N. Raju Reddiar [1996]
Supp. 1 SCR 739 : AIR (1996) SC 2025; Tyagaraja Mudaliyar and
Another v. Vedathanni (1936) AIR PC 70 – referred to.

Books and Periodicals Cited
Scalia & B. Garner, Making Your Case: The Art of Persuading
Judges, pp. 81 (2008) Ch-35; Halsbury, 4th Edn. Vol. 12,
1461 – referred to.

List of Acts
Bombay Rents, Hotel and Lodging House Rates Control Act, 1947;
Code of Civil Procedure, 1908; Evidence Act, 1872; Bombay Sales
Tax Act, 1959; Transfer of Property Act, 1882.

List of Keywords
Agreement for conducting hotel business; Leave and license;
Bar on adducing oral evidence; Registration certificate; Deemed
tenancy; Royalty receipts; Rules of construction; Literal rule
of construction; Golden rule of construction; Unnecessary and
frivolous pleadings; Meandering pleadings; AI generated pleadings;
Computer generated pleadings; Oral evidence; Registration
certificate; Ownership and possession; Construction of the Contract;
Literal rule of construction; Construction of a deed; Ambiguity in
the deed; Lengthy pleadings and judgments; Need for brief and
precise pleadings.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 84 of 2019
From the Judgment and Order dated 16.07.2018 of the High Court
of Judicature at Bombay in CRA No. 247 of 2016
[2025] 5 S.C.R. 61

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

Appearances for Parties
Advs. for the Appellants:
B.H. Marlapalle, Sr. Adv., Kunal Cheema, Raghav Deshpande.
Advs. for the Respondents:
Vinay Navare, Sr. Adv., Chinmoy Khaladkar, Abhinay, Ms. Parul
Khurana, Rohan Batra, Rishabh Bhargava, Aman Vachher,
Yadunath Chaudhary, Dhiraj, M/S. Vachher And Agrud, M/S.
P.B.A. Legal.

Judgment / Order of the Supreme Court

Judgment

S.V.N. Bhatti, J.

1. The Civil Appeal arises from the Order dated 16.07.2018 in Civil
Revision Application No. 247 of 2016 in the High Court of Judicature
at Bombay (“Impugned Order”), confirming the Judgment dated
17.08.2015 in appeal No. 547 of 2004 of the appellate bench . The
Judgment dated 17.08.2015 reversed the judgment and decree
dated 20/22.03.2004 in R.A.D. Suit No. 1860 of 1997 before the
Small Causes Court at Mumbai. The LRs of the plaintiff are appellant
nos. 1.1 to 1.4 in the Civil Appeal.
2. The plaintiff filed the suit for declaration that the plaintiff is the deemed
tenant/protected licensee of the first defendant in terms of section
15A of the Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947, as enforced from 01.02.1973 (“Bombay Rent Act”), for
shop nos. 5 and 6, Shri Samarthashraya Vishranti Graha, Nanabhai
Court, Dr. Babasahib Ambdedkar Marg, Hindmata Junction, Dadar,
Bombay-400014 (for short, ‘the Plaint Schedule’). The plaintiff also
prayed for a restraint order against the defendants from interfering
with or dispossessing the plaintiff from the Plaint Schedule. The suit
was filed against Laxmibai Narayan Satose/defendant no.1, and
M.S. Nanabhoy/defendant no.2. The plaintiff pleads that the first
defendant is the landlady, and through her, the plaintiff claims a right
of declaration as noted above. Admittedly, the second defendant is
the owner of the Plaint Schedule. The Plaint Schedule was under a
lease with the husband of the first defendant, and after the original
tenant’s demise, the first defendant continued as lessee of the Plaint
62 [2025] 5 S.C.R.

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Schedule. The first defendant was running a hotel under the name
and style of “Shri Samarthashraya Vishranti Graha” (“the Hotel”). The
first defendant, after the demise of her husband, ran the business
for some time. But she was unable to run it successfully, so she
allowed her brother ‘Namdev Morye’, to continue running the Hotel.
The said arrangement did not prove to be advantageous to the first
defendant. With this background, the plaintiff claims to have stepped
in the Plaint Schedule and that, on 16.08.1967, an agreement styled
for conducting hotel business was entered into between the plaintiff
and the first defendant. The said arrangement was continued under
subsequent agreements between the plaintiff and the first defendant.
On 28.02.1997, the first defendant served notice to the plaintiff to
vacate and hand over the business being run in the Plaint Schedule.
With the above development, the plaintiff filed the suit for the reliefs
noted above.
3. The averments in the plaint are elaborate; commensurate to the
detailed plaint, the written statement is equally elaborate. To wit,
the plaint runs into eight pages, and the written statement is sixteen
pages long. The resultant consequence is that, in the trial, much
oral evidence is brought on record, resulting in a lengthy judgment
by the trial court. The judgment of the appellate bench is equally
lengthy, even though the core issue for consideration could have
been captured in a nutshell by the appellate bench. A judgment
should be coherent, systematic, and logically organised. It should
enable the reader to trace the facts to a logical conclusion on the
basis of legal principles.1 Lately, this Court has been experiencing
meandering pleadings irrespective of the nature of the dispute. We
are reminded of Abraham Lincoln’s ode to a lawyer friend – “[h]e
can compress the most words into the smallest ideas of any man I
ever met.” Such lengthy pleadings would even upset Polonius from
Shakespeare’s Hamlet. Every word that is not a help is a hindrance
because it distracts. A reader who realizes that a brief is wordy will
skim it; one who finds a brief terse and concise will read every word.2
The parties to a suit ought not to compel the court to exercise its
jurisdiction under Order 6 Rule 16 of the Code of Civil Procedure,
1908 and strike out unnecessary or frivolous pleadings. The effort

1 Shakuntala Shukla v. State of Uttar Pradesh (2021) 20 SCC 818
2 Scalia & B. Garner, Making Your Case: The Art of Persuading Judges, pp. 81 (2008) Ch-35.
[2025] 5 S.C.R. 63

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

of pleading and evidence should be to be concise to the cause and
must not confuse the cause. The lengthy pleadings and avoidable
evidence are well within the scrutiny of trial courts, and, at the right
stage, must be regulated within four corners of the law. Such an
approach by trial courts would like a stitch in time, save nine. Long
and drawn-out pleadings will run the risk of having a cascading effect
on the appellate and revisional courts. Meandering pleadings will land
up with laden weight in SLPs, making the narrative difficult. The time
has come for courts to invoke the jurisdiction under Order 6 Rule
16 and make litigation workable. Courts are also confronted with
AI-generated or computer-generated statements. While technology
is useful in enhancing efficiency and efficacy, the placid pleadings
will disorient the cause in a case. It is time that the approach to
pleadings is re-invented and re-introduced to be brief and precise.
Having remarked on the need for brevity, we have a task on hand
to deliver a brief judgment.
4. The solace to this Court in deciding the Civil Appeal is that all the
learned Counsel appearing for the parties have presented the core
of controversy alone for adjudication in the Civil Appeal. The prelude
to the plaintiff’s narrative is needed in as much as meandering
pleadings lead to discursive judgments.
5. The plaintiff was in the business of conducting hotels in Mumbai. On
mutually agreed terms and conditions, the first defendant granted a
leave and license of the suit premises to augment her income. In
unequivocal terms, the plaint refers to the prohibition of law prevailing
then, and that the deed was devised to circumvent such prohibition.
Therefore, it is alleged that the agreement dated 16.08.1967 is
captioned as an ‘agreement of conducting’, and the parties are referred
to as owner and conductor. The agreement dated 16.08.1967 is one
in the nature of the licensor and licensee of the premises of the Plaint
Schedule, but not a mere agreement for conducting the hotel business
of the first defendant by the plaintiff. The arrangement initially lasted
for eleven months and has been extended from time to time. The
Plaint Schedule falls within section 28 of the Bombay Rent Act. Section
15A has been inserted into the Bombay Rent Act vide amendment of
1963, which was later enforced from 01.02.1973, whereunder deemed
tenancy and consequent protection to the tenant has been granted by
the legislature. The plaintiff, by the existing arrangement of leave and
license with the first defendant, is a deemed tenant and hence prayed
for the reliefs referred to above. The first defendant contested the suit
64 [2025] 5 S.C.R.

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and denied the existence of a landlord-tenant relationship between
the plaintiff and the defendant. The agreement dated 16.08.1967, in
letter and spirit, was entered into between the first defendant and the
plaintiff for the conduct of hotel business being carried on by the first
defendant. The agreement dated 16.08.1967 is a contemporaneous
document evidencing the agreement between the parties, and the
clauses have been appropriately incorporated and adhered to by the
parties till the present suit was filed. By serving the notice to hand
over the business, the first defendant terminated the arrangement.
Section 15A of the Bombay Rent Act is not attracted to the subject
arrangement, and the plaintiff cannot claim the status of a deemed
tenant of the Plaint Schedule.
6. The trial court answered the substantial issues in favour of the
plaintiff and against the first defendant. The gist of the reasoning and
findings is that the plaintiff is a licensee and not a mere conductor
of the business of the first defendant. The trial court held that it
depends on the nature and quality of the plaintiff’s occupation of the
suit premises and not on the mere nomenclature of the agreement
dated 16.08.1967. The trial court, while referring to various clauses
of the agreement dated 16.08.1967, held that:
6.1 Clause I of this agreement denotes that the owner has granted
the plaintiff leave and licence to use and occupy the hotel
premises.
6.2 Clause III of the agreement indicates that in consideration of
the leave and licence, the conductor shall pay the owner for
the first 5 periods each of 11 months royalty at the rate of Rs.
1000/- per month before the 5th of subsequent months.
6.3 Clauses I and III of the agreement clearly show that in
consideration of Rs. 1000/- per month, defendant no. 1 granted
leave and licence in favour of the plaintiff to use and occupy
the hotel premises.
6.4 Clause IV of the said agreement fastens liability upon the plaintiff
to bear and pay regularly all the electric bills, water charges,
workman wage, license fee, etc. The trial court held that if it
were defendant no. 1, who was running the business, she would
have been expected to bear all these charges.
6.5 Clause VI of the agreement shifts the risk to bear all the costs
regarding the business on the plaintiff.
[2025] 5 S.C.R. 65

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

6.6 Clause VII imposes restrictions on the plaintiff to use the suit
premises for carrying on hotel business only and not to change
the nature of the business. Hence, no running business was
given to him.
6.7 Clause XIV of this agreement makes the plaintiff fully responsible
for paying the workers their wages and exempts defendant no.
1 regarding the same. None of the servants initially employed
by the deceased defendant no. 1 were there after the execution
of the said agreement.
6.8 The trial court was of the view that all the various clauses of the
agreement indicate that the deceased defendant no. 1 did not
retain any dominant control in the hotel business being run by
the plaintiff in the suit premises. Hence, if the plaintiff carried on
the business, defendant no. 1 ought not to have discontinued
paying sales tax. Merely mentioning the word “royalty” in receipts
is not sufficient to conclude that there was an agreement of
conducting the Hotel between the parties. Considering the
nature of exclusive use, occupation, and possession of the
plaintiff with respect to the suit premises from 1967 to date,
the nomenclature of the agreement has no wider significance
in determining the relationship.
6.9 Relying on oral evidence, the trial court notes that the law in
force at the time did not allow for a tenant-landlord arrangement
in the factual matrix at hand. Consequently, the agreement dated
16.08.1967 was styled as an agreement of conducting, but the
contents pointed towards an agreement of leave and license.
This is also buttressed, the trial court held, by the fact that the
plaintiff was paying rent of Rs. 1000/- per month. The trial court
held that the evidence of the witnesses deserves to be relied
upon, especially because during cross-examination, the said
oral and documentary evidence was not seriously challenged.
Thus, it was held that the plaintiff is a deemed tenant under
section 15A of the Act.
7. The appellate bench examined and interpreted the agreement dated
16.08.1967 in its entirety and reversed the judgement and decree
of the trial court. The appellate bench examined the scope and
object of sections 91 and 92 of the Evidence Act, 1872 and the bar
on parties to an agreement to adduce oral evidence contrary to the
66 [2025] 5 S.C.R.

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clauses in a written agreement. The appellate bench held that the
contemporaneous agreement through which the plaintiff secured
permission to enter into the Plaint Schedule is a plain agreement
to conduct the business of the first defendant and not a leave and
license of premises in favour of the plaintiff. The appellate bench
found that the trial court failed to interpret relevant clauses in the
agreement that pointed to the arrangement as one of leave and
license. The appellate bench appreciated the consideration received
by the first defendant between March 1967 and September 1973,
i.e., 99 receipts evidencing receipt and payment of royalty for
conducting the business. The appellate bench heavily relied on these
royalty receipts as evidence supporting the existence of conducting
agreements for running the hotel business rather than a simple
leave and license arrangement. Further, it pointed out that the trial
court should have carefully considered the tenor of these receipts.
The consistent payment of royalties every month indicated that the
arrangement was merely to conduct a business and not to be a
licensee of the Plaint Schedule. Electricity bills, sales tax registration,
BMC permission, etc., were part of the evidence considered by the
appellate bench in assessing the nature of the plaintiff’s occupation
and business operations. By relying on the applicable clauses in the
agreement dated 16.08.1967 and the contemporaneous situation,
the agreement was styled as an agreement for conducting business.
The appeal of defendant no.1 was hence allowed.
8. Aggrieved by the reversal of the trial court order by the appellate
bench, the plaintiff filed Civil Revision Application No. 247 of 2016.
The High Court, through the Impugned Order, confirmed the view
of the appellate bench. It was held by the High Court that sections
91 and 115 of the Evidence Act, 1872 point to the finding that the
Plaint Schedule was given for running the Hotel on a conducting
basis and not on a leave and license basis.
9. The High Court held that the intention of defendant no. 1 and her
LRs was to give the hotel business on a conducting basis to the
plaintiff and that there was no intention to execute a leave and license
agreement regarding the said premises. The Impugned Order looked
into the agreement dated 16.08.1967 in detail and stated that –
• The “recital” notes the conducting basis nature of the agreement.
• Clause III refers to the payment of royalty at Rs. 1000 pm.
[2025] 5 S.C.R. 67

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

• Clause IV requires the plaintiff to incur and pay electricity charges.
• Clause V requires the rent of the premises to be borne by
defendant no. 1 to the landlord defendant no. 2.
• Clause VII and X point towards conducting of the hotel business.
• Utensils and furniture were annexed.
10. The High Court held that all the subsequent agreements formed a
part of the conducting agreements. Moreover, the plaintiff cannot
deny the execution of the conducting agreement on the premise
that he was not well-conversant with the English language. Thus,
the High Court held that the appellate bench was correct in noting
that the agreement was for the conduct of business.
11. Shri B.H. Marlapalle, learned Senior Counsel, placed reliance on the
reasoning adopted by the trial court and contrasted the interpretation
adopted by the appellate bench and High Court, on a plain reading
of agreement dated 16.08.1967, as erroneous. It is argued that the
nomenclature of a deed is not the determinative circumstance of the
status, rights, duties, or obligations undertaken by the parties to a
deed. From the evidence on record, with considerable force, it is
argued that the entrustment of the Plaint Schedule to the plaintiff is
not that of an ongoing business, but that of a lessee-licensee. The
agreement must be understood in its letter and spirit, as well as the
right with which the plaintiff is enjoying the Plaint Schedule. The
learned Senior Counsel places reliance on Provash Chandra Dalui
and another v. Biswanath Banerjee and another3 for the proposition
that the best interpretation of the contract is to be made from the
context, and it is to be construed with reference to its object and the
whole of its terms. Further, he relies on Chandavarka Sita Ratna Rao
v. Ashalata S. Guaram4 to interpret Section 15A of the Bombay Rent
Act to contend that a valid pre-1973 license converts the plaintiff into
a tenant entitled for protection under the Bombay Rent Act.
12. The learned Senior Counsel fairly argues that the standing of the
plaintiff is dependent on the interpretation of the agreement dated
16.08.1967 and also the subsequent documents evidencing the

3 (1989) Supp. 1 SCC 487
4 (1986) 4 SCC 447
68 [2025] 5 S.C.R.

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nature of enjoyment of the plaintiff. He relies on the test in Varisalli
Mohd. Ilias v. Abdul Sattar Gulam Hussain5 for determining whether
under an agreement, leave and license are created or authorised to
conduct business to interpret the subject agreement, and the decision
in all fours is applicable to the facts of the case.
13. Mr. Chinmoy Khaladkar, learned Counsel appearing for defendant
no. 1, argues that the plaintiff, both in law and fact, is estopped from
resiling from the clauses under the agreement dated 16.08.1967. It
is axiomatic and not disputed by defendant no. 1 that a deed is not
constructed by the nomenclature of the document but by the text and
the tenor of all the clauses governing the relationship between the
parties. By relying on Provash Chandra Dalui (supra), he commends
this Court to interpret the suit agreement. Sections 91 and 92 of the
Evidence Act, 1872 are attracted to the case on hand and do not
fall within any of the exceptions for adducing oral evidence, either
contrary to the agreed clauses or to explain the clauses agreed to
between the parties. He has invited our attention to the agreement
in its entirety, particularly the preface determining the standing of
the plaintiff as conductor and the first defendant as owner of the
business. The agreement deals with conveying authority to the
plaintiff. Defendant no. 1, under the agreement, declares to have
been carrying on the business of hotel and tea catering and desired
to give the right to conduct the business in favour of the plaintiff.
Clause 1 further reinforces the relationship. Clauses 7, 8, 10, 12, 14,
15, and 16 abundantly make it plain and clear that considering the
contemporaneous circumstances in 1967, the plaintiff could deal with
the business being run by the first defendant, and not the occupancy
right of the Plaint Schedule. The certificate of registration under the
Bombay Sales Tax Act, 1959, is rightly excluded by the appellate and
revisional courts. Further, the photocopy of the certificate cannot be
relied upon in evidence for any purpose. To appreciate the crux of
the agreement dated 16.08.1967, the schedule of items entrusted
to the plaintiff for running the business would be important.
13.1 Mr. Chinmoy Khaladkar also relies on Mangala Vaman Karandikar
vs. Prakash Damodar Ranadeon6 to delineate the scope and ambit

5 (1991) Mah LJ 1523
6 (2021) 6 SCC 139
[2025] 5 S.C.R. 69

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

of sections 91 and 92 of the Evidence Act, 1872. According to him,
the Three-Judge Bench judgement in Mangala Vaman Karandikar
(supra) squarely governs the situation, and oral evidence ought
not to be examined to interpret the agreement dated 16.08.1967
and the subsequent agreements.
14. Shri Vinay Navare, learned Senior Counsel, appears for respondent
no. 3, a subsequent purchaser from defendant no. 2, and supports
the plaintiff. The arguments of Shri Vinay Navare are not adverted to
as the second defendant did not participate before the trial court or
the appellate bench. In the subject Civil Appeal, we are not enquiring
into or adverting to the stance of respondent no. 3 vis-à-vis the other
parties to the litigation. The available contentions of respondent no.
3 are left open for consideration in an appropriate proceeding.
15. We have taken note of the arguments addressed by the learned
Counsel appearing for the parties.
16. The circumstances dealing with the dispute between the parties are
stated in required detail in the preceding paragraphs. At the outset,
let us refer to the ratio of this Court in Provash Chandra Dalui (supra)
on the construction of the basic agreement between the plaintiff and
the defendant. This Court held that the court must look at the words
used in the contract unless they are such that one may suspect that
they do not covey the intention correctly. If the words are clear, there
is very little the court can do about it. In constructing a deed, looking
at the surrounding circumstances and subject matter is legitimate
only if the words used are doubtful.
17. The guide to the construction of deeds and tools adopted can broadly
be summarised as follows:
17.1 The contract is first constructed in its plain, ordinary and literal
meaning. This is also known as the literal rule of construction.
17.2 If there is an absurdity created by literally reading the contract,
a shift from literal rule may be allowed. This construction is
generally called the golden rule of construction.
17.3 Lastly, the contract may be purposively constructed in light of
its object and context to determine the purpose of the contract.
This approach must be used cautiously.
18. The construction of a deed is “generally speaking, a matter of law.”
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However, when there is an ambiguity in the deed, determining
its meaning is a mixed question of fact and law.7 This concept is
encapsulated by sections 91 and 92 of the Evidence Act, 1872.
18.1 Section 91 of the Evidence Act, 1872 denotes that a deed
constitutes the primary evidence of the terms to which the
parties are to adhere. Whereas section 92 of the Evidence
Act, 1872 forbids any contradictions or variations in a written
document by extrinsic evidence.8 However, there are exceptions
outlined in the proviso to section 92, that allow variations from
this general rule:
“92. Exclusion of evidence of oral agreement. –
“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;
Proviso (1): 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:
Proviso (2): 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,
may be proved. In considering whether or not this
proviso applies, the Court shall have regard to the
degree of formality of the document:

7 Halsbury, 4th Edn. Vol. 12 ¶1461.
8 TN Electricity Board v. N. Raju Reddiar, AIR (1996) SC 2025 at 2027.
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Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

Proviso (3): 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, may be
proved.
Proviso (4): 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.
Proviso (5): Any usage or custom by which incidents
not expressly mentioned in any contract are usually
annexed to contracts of that description, may be
proved; Provided that the annexing of such incident
would not be repugnant to, or inconsistent with the
express terms of the contract:
Proviso (6): Any fact may be proved which shows in
what manner the language of a document is related
to existing facts.”
(Emphasis supplied)

18.2 The subtle distinction in the point of law, as carved out by the
provisos, is that the evidence to vary the terms of an agreement
in writing is not admissible, but evidence to show that there is
no agreement in the first place is admissible.9 Thus, unless the
grounds fall within the provisos read with the illustrations to
section 92, there is a bar on adducing oral evidence.
19. Now, we excerpt and construe the relevant clauses of the agreement
dated 16.08.1967:

9 Tyagaraja Mudaliyar and another v. Vedathanni (1936) AIR PC 70.
72 [2025] 5 S.C.R.

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“THIS AGREEMENT made at Bombay this 16th day of
August 1967 BETWEEN SMT. LAXMIBAI NARAYAN
SATOSE, a Hindu adult inhabitant of Bombay, hereinafter
referred to as the “Owner” of the One Part (which expression
shall mean and include her heirs, administrators, legal
representatives and assigns unless repugnant to the context
herein contained) AMD SHRI ANNAYA SHETTY, also a
Hindu inhabitant of Bombay hereinafter referred to as the
“Conductor” of the Other Part (which expression shall mean
and include his heir, administrators and legal representatives
unless repugnant to the context herein contained.
WHEREAS THE Owner above named is the Owner
and sole proprietor of a Hotel Business known as “Shri
Samarthashraya Vishranti Graya” at 225, Nanabhai Court,
Dr. Ambedkar Road, at Shop Nos. 5 and 6 on the ground
floor bearing C.S. No. 11/26 Dadar, Naigaum.
AND WHEREAS the said Owner has been carrying on the
business of Hotel and tea catering in the said premises.
AND WHEREAS the Owner is desirous of giving the said
business on conducting basis and the Conductor has
agreed to take upon certain terms and conditions.
AND WHEREAS it is considered desirable to reduce the
terms and conditions into writing.

NOW THIS AGREEMENT WITNESSETH AS UNDER:
1. That the Owner does hereby give to the Conductor
and the Conductor doth hereby take accordingly for
conducting the said business concerned viz. the said
Hotel business of the Owner carried on under the name
and style of “Shri Samarthashraya Vishranti Graha”
at the above said premises and for the purpose of
carrying on the said business, the said Hotel premises
and to use fittings and fixtures and furniture and
other accessories (more particularly described in the
Schedule annexed herto under) for the period and
upon the terms and conditions herein after contained.
2. xxx xxx xxx
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Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

3. In consideration of the leave and license the
Conductor shall pay to the owner for the first five
periods each of eleven months Royalty at the rate
of Rs. 1000/- (Rupees One Thousand only) every
month on or before the 5th of the subsequent month.
The Conductor agrees that for the sixth, seventh and
eighth period of eleven months each, the Conductor
agrees that for the sixth, seventh and eighth period of
eleven months each, the Conductor shall pay to ‘the
Owner a higher amount of Royalty per month (i.e.
Rs. 1100/- per month) (Rupees One Thousand One
Hundred per month) at the time of the renewal of this.
4. xxx xxx xxx
5. xxx xxx xxx
6. xxx xxx xxx
7. That the Conductor shall use the said premises for
carrying on Hotel business only of the Owner as
aforesaid and he shall not change the name and the
nature of the business.
8. That the Conductor shall carry on and conduct the said
business entrusted to him, himself and he shall not give
the same to anybody else for conducting or otherwise.
9. That the Conductor shall observe and perform all
the rules and regulations and bye laws imposed by
the local and Government authorities for doing the
business of the like nature and he shall keep the
owner indemnified against any action or penalties
that might be imposed for breach thereof.
10. It is further agreed by the Conductor that he shall use
the furniture fixtures and the business accessories as
set out in the Schedule herein under annexed with true
and proper are and caution and on the termination
of this agreement he shall hand over the possession
of the along with the premises to the owner in the
same condition.
11. xxx xxx xxx
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12. That on termination of this agreement by efflux of time
or on earlier determination thereof, the Conductor
shall quit and cease to use and occupy said premises
and/or carry on and conduct the said business of the
Owner and the Conductor shall hand over complete
charge of the business to the owner peacefully and
without delay and demur.
13. xxx xxx xxx
14. It is further agreed by the Conductor that he shall be
fully responsible to the workers employed by him for
paying their wages and the Owner is not responsible
for the same AND on the date of the commencement
of this agreement there was no worker in the said
concern employed by the owner.
15. It is further agreed that if the Conductor does not
desire to run and conduct the said hotel business,
the Conductor shall serve on the owner a notice to
that effect of one month and on the expiration of
the said notice period of one month the Owner shall
assume the charge and take possession of the said
hotel immediately.
16. The Conductor hereby agrees to allow the owner to
visit or inspect the Hotel premises at all reasonable
times without any obstruction.”
(Emphasis supplied)

20. The plaintiff, contrary to the clauses under which the plaintiff has taken
over the Hotel run in the Plaint Schedule, pleads the relationship
of tenant/subtenant as having been given under leave and license.
21. The construction of the excerpted clauses can be summed up thus:
a. The nomenclature is an agreement of conducting.
b. The parties to the agreement are referred to as owner and
conductor.
c. The parties agree on the ownership of the hotel business known
as ‘Shri Samarthashraya Vishranti Graha.’
[2025] 5 S.C.R. 75

Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

d. The owner has been carrying on the hotel business in the
Plaint Schedule.
e. The owner desires to give the business on a conducting basis,
and the conductor has agreed to take the business upon the
terms and conditions set out therein. Clause 1 specifically refers
to the owner giving to the conductor, and the conductor agreeing
to take for conducting the business. That is, the said hotel
business of the owner carried on under the name and style of
Shri Samarthashraya Vishranti Graha at the aforesaid premises.
The owner thus granted to the conductor to use and occupy the
said hotel premises – including fittings, fixtures, furniture, etc.
f. The consideration is stated as royalty for conducting the
business.
g. The conductor is obligated to carry on the Hotel business only
of the owner.
h. The conductor carries on and conducts the business entrusted
to him and is barred from entrusting it to a third person for
conducting the business otherwise.
i. The conductor is allowed to use the utensils and fixtures, and is
obligated to return them upon the termination of the agreement.
j. The conductor is obligated to hand over the complete charge
of the business to the owner if the relationship is terminated
either by termination or efflux of time.
k. The conductor obligates himself to be fully responsible to the
workers and the salaries payable to them.
l. The conductor severs the relationship of running the business
by serving a month’s notice to the owner.
m. The owner is allowed to visit or inspect the Hotel at all times
without obstruction.
22. The plaintiff and the first defendant entered into the agreement dated
16.08.1967, and the contemporaneous document reproduces or
reflects the subject matter of the agreement, terms and conditions
agreed between the parties, rights, and limitations on the owner
and the conductor. The plaintiff has taken over the business under
the agreement dated 16.08.1967. With a few minor variations, the
76 [2025] 5 S.C.R.

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agreements referred to above have been entered into, and the plaintiff
asserts a change of status only when a notice is served to hand
over the business by the first defendant. The plain interpretation of
the agreement dated 16.08.1967 discloses that the parties to the
agreement, briefly stated, were contemplating dealing with a business
and have entered into an agreement for conducting the business.
The argument of the plaintiff, by looking at the nomenclature, is that
the standing of the plaintiff as interpreted by the appellate bench
and the High Court is erroneous. By looking at the deed, we have
no hesitation in holding that the agreement is one for conducting
the business of the first defendant. We are excluding oral evidence
from consideration as none of the exceptions is attracted.
23. The plaintiff adduced oral and documentary evidence either to
dilute the obligation/standing of the plaintiff in the agreement dated
16.08.1967, or to claim the status of a deemed tenant. The first
and foremost document relied on is the registration certificate under
the Bombay Sales Tax Act, 1959. The plaintiff, as conductor of the
business, has assumed the responsibility for the incidences of running
the business. This includes payment of sales tax as well. Including
the subject business in the dealership of the plaintiff would not
materially alter the position under the agreement dated 16.08.1967.
Further, a photocopy of the registration certificate is exhibited before
this Court. We are convinced that, in the facts and circumstances
of the case, the said photocopy of the registration certificate will not
change the status of the plaintiff from the conductor of the business
to a sub-tenant and, by operation of law, a deemed tenant. Similarly,
the receipts evidencing payment of royalty would militate against the
status of deemed tenancy claimed by the plaintiff. As noted earlier,
sections 91 and 92 are substantive provisions under the Evidence
Act, 1872. Unless and until the case falls under one or the other
exceptions enabling receipt of oral evidence on a written document,
the court is precluded from entertaining oral evidence. The document
or deed interpreted in a particular case is not relied upon, but the
subject deed is construed on well-established principles. The law
recognises both ownership and possession of an owner of a property.
A lease recognises the outcome of a rightful separation of ownership
and possession between lessor and lessee. Section 108 of The
Transfer of Property Act, 1882 deals with the rights of the lessor
and lessee. Under the said section, one of the conditions is that
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Annaya Kocha Shetty (Dead) through LRs v.
Laxmibai Narayan Satose since Deceased through LRs & Others

the lessor is bound by lessee’s request to put lessee in possession
of the property. In the case on hand, admittedly, defendant no. 1 is
in possession of the property from defendant no. 2. Whereas the
Agreement of Conducting business does not deal with the possession
so enjoyed by defendant no. 1 in favour of the plaintiff. The absence
of such a crucial clause in the agreement dated 16.08.1967 is a vital
circumstance in construing the subject matter of the said agreement.
This is an added circumstance to hold that what has been entrusted
is to run the business in the plaint schedule but not occupying
the plaint schedule under leave and licence. In the case on hand,
the terms of the agreement dated 16.08.1967 are clear that the
entrustment to the plaintiff is the ownership of the hotel business of
the first defendant and not the tenancy right of the first defendant
in favour of the plaintiff.
24. From the above perspective and for the reasons stated supra, we
are in agreement with the view taken by the first appellate court
and the Impugned Order of the High Court. The Civil Appeal fails
and is accordingly dismissed with costs quantified at Rs. 1,00,000/-
payable to defendant no. 1. Pending applications, if any, shall stand
disposed of.

Result of the case: Appeal dismissed.

†
Headnotes prepared by: Nidhi Jain