Literal Meaning
The words of deeds are accepted more strongly against the person offering them.
Explanation & Origin
Latin: a principle of construction whereby if words of a contract are ambiguous, of two equally possible meanings, they should be interpreted against the author, drafter or writer of the contract and not against the other party.
It is a general rule , that the words in a deed are to be construed most strongly contra proferentem , regard being had , however , to the apparent intention of the parties , as collected from the whole context of the instrument.
As observed by Mr.Justice Blackstone , the principle of self-preservation will make men sufficiently careful not to prejudice their own interest by too extensive meaning of their words , and hereby all manner of deceit in any grant is avoided ; for men would always affect ambiguous and intricate expression , provided they were afterwards at liberty to put their own construction upon them.
The words of charters are to be received more strongly against the grantor.
Verba Chartarum Fortius Accipiuntur Contra proferentem is a legal maxim, used in India, with the following meaning: The words of deeds are to be interpreted more strongly against him who uses them.
Illustration
A tenant for life leases to another for life , without specifying for whose life , this shall be taken to be lease for the lessor’s own life ; for this is the greatest estate which it is in his power to grant. And as a general rule , it appears clear that , if a doubt arises as to the construction of a lease between the lessor and the leasee , the lease must be construed most beneficially for the latter.
Case Reference
Rashtriya Ispat Nigam Ltd vs M/S Dewan Chand Ram Saran [(2012) 5 SCC 306]
In this case it was held that it is a well-known principle of construction of a contract that if the terms applied by one party are unclear, an interpretation against that party is preferred (verba chartarum fortius accipiuntur contra proferentem).” Based on this paragraph, it was submitted that the arbitrator was bound to follow the principle of contra proferentem in the present case. It was contended that since the propounder of the contract was the petitioner in case of vagueness, the rule of contra proferentem will have to be applied in interpreting the present contract. Therefore, the liability to pay service tax was on the appellant as the assessee, and it could not be contended that under Clause 9.3 that liability was accepted by the respondent. The judgment in Bank of India (supra) was also pressed into service to submit that clause 9.3 and the contract must be read as a whole, and an attempt should be made to harmonise the provisions.
Lakshmi Insurance Co. Ltd. vs Bibi Padma Wati [AIR 1961 P H 253]
In this case the rule of construction against the insurer and favourable to the insured, stems from what otherwise is called, the rule of contra proferentem, which is based on the maxim, Verba chartarum fortius accipiuntur contra proferentem. It means, that the words of deeds are to be taken most strongly against the party, employing them. What is meant is, that if the words of an instrument or of a grant are of doubtful import, then, that construction shall be placed upon them which is most favourable to the holder of the instrument or the grantee.
M/S. Gamma Investments vs National Insurance Company Ltd. [23th January 2009]
In this case it was held that if there is any doubt or ambiguity in a clause of the insurance contract, the Rule of Verba Chartarum Fortius Contra Proferentem applies. The contract was drafted by the defendant and in case of ambiguity and doubt in any clause the said clause is to be interpreted to the advantage and benefit of the insured. SEBI guidelines and affect of failure to comply with the same are not mentioned in the contract of insurance. They cannot be incorporated and read into the said contract. Even there is a doubt as to whether or not ―norms and procedure‖ includes SEBI guidelines benefit has to be given to the insured.
Edited by Vigneshwar Ramasubramania
Approved & Published – Sakshi Raje
