ARTICLE
16 January 2023

Without Prejudice Correspondence: Intend, Ambit And Evidentiary Value Thereof

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Clasis Law

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The provenance of ‘Without Prejudice' correspondences under Indian Law can be traced back to the provisions under Section 23 of the Indian Evidence Act, 1872 ("Evidence Act").
India Litigation, Mediation & Arbitration
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The provenance of 'Without Prejudice' correspondences under Indian Law can be traced back to the provisions under Section 23 of the Indian Evidence Act, 1872 ("Evidence Act"). Relevantly, the said precept excludes the admission of parties in civil cases in the instances; where either such admission is made upon an express condition that the evidence of it is not to be given, or under circumstances from which it may be inferred by Court that the parties agreed that evidence of such admission, should not be given. Notably, Lord Justice Balcome in Rush & Tompkins Ltd. v. Greater London Council and Another1, while, inter alia, iterating the scope and objective of 'without prejudice' correspondence(s), observed, "rule which gives the protection of privilege to 'without prejudice' correspondence 'depends partly on public policy, namely the need to facilitate compromise, and partly on 'implied agreement'" Corresponding, the Hon'ble Allahabad High Court in Shibcharan Das v. Gulabchand Chhotey Lal2, while explicating the import of such correspondences, observed, "[n]egotiations were being conducted with a view to settlement, and that being so we are bound to hold that these negotiations were being conducted "without prejudice." In such circumstances it is not open for one of the parties to give evidence of an admission made by another..." Similarly, quite earlier, Oudh Judicial Commissioner's Court3, while confronted with a corresponding issue, inter alia, noted, "Parties are often willing to make admissions for the purpose of effecting a compromise, to which it would be unfair to hold them if the compromise falls through.." Clearly, the premise and inherent aspiration behind according such to the correspondences titled/ marked; 'without prejudice' is to facilitate compromise between parties, warranting that such correspondences would subsequently be not used against the interest of either of the parties, except to the extent prescribed/ permissible under law.

Markedly, in order to appreciate the precise connotation of words, 'without prejudice', the Hon'ble Supreme Court in Supdt. (Tech I) Central Excise v. Pratap Rai4, palpably referred to the definition of the said words, under various law dictionaries. In particular, reference was made to definition of these words under the Black's Law Dictionary, inter alia, to the effect, "Where an offer or admission is made 'without prejudice', or a motion is denied or a bill in equity dismissed 'without prejudice', it is meant as a declaration that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except in so far as may be expressly conceded or decided...". Similarly, while referring to Wharton's Law Lexicon, the Hon'ble Court, noted, "rule is that nothing written or said 'without prejudice' can be considered at the trial without the consent of both parties—not even by a Judge in determining whether or not there is good cause for depriving a successful litigant of costs." Concomitantly, while interpreting and conferring another connotation to the said words, as used under judicial orders, the Hon'ble Apex Court, in the instant case, observed, "the implication of the term "without prejudice" means (1) that the cause or the matter has not been decided on merits, (2) that fresh proceedings according to law were not barred."

Quite understandably, 'without prejudice' correspondences are excluded from their deployment and usage as evidence between the parties to such communications. However, it needs to be appreciated that such party unanimity and privilege, vouchsafed under Section 23 of the Evidence Act, is not an unqualified concession. In fact, the said provision, itself carves out an exception to the general rule of exclusion of without prejudice correspondences, in the instances where any barrister, pleader, attorney or vakil may compelled to give evidence of any matter, as per the provisions under Section 1265 of the said enactment. Markedly, the Hon'ble Apex Court in Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd.6, dealing with the use of the expression, 'without prejudice' in communication exchange noted that mere such deployment, "in our opinion, by itself was not sufficient and would not curtail the right of the insured to which it was otherwise entitled to. The expression "without prejudice" may have to be construed in the context in which it is used." In fact, the Hon'ble Court, in the instant case, noted with approval, extract from Phipson on Evidence7, inter alia, to the effect, "Correspondence will only be protected by without prejudice privilege if it is written for the purpose of a genuine attempt to compromise a dispute between the parties. It is not a precondition that the correspondence bears the heading without prejudice. If it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of those negotiations will, as a general rule, not be admissible." As a corollary, it is quite understandable that in the instances, where despite the use of the words, 'without prejudice', the negotiations were not for the purpose of a genuine attempt to settle the dispute, the privilege accorded under Section 23 of Evidence Act, would not be applicable. Further, another instance where such privilege may be validly waived off, as quoted with approval by the Hon'ble Supreme Court in the instance case, is where both the parties to such correspondence mutually concur to said waiver. Needless to accentuate that the import of usage of such words have to be interpreted based on all facts and circumstances regulating/ leading to the designation of correspondence, 'without prejudice'. Corresponding no general rule of interpretation can be ordained under all circumstance. Quite understandably, it seems to be the appreciation of this postulate/ logic that the Hon'ble Supreme Court in NTPC Ltd. v. Reshmi Constructions, Builders & Contractors8 observed, "[e]ven correspondences marked as "without prejudice" may have to be interpreted differently in different situations."

Conclusively, Section 23 of the Evidence Act and in particular, 'without prejudice' rule carves out a remarkable exception to the rule regarding admissibility and relevance of admitted correspondences as evidence. Undoubtedly, considering the latitude and justification behind creation of exception under law, it becomes an unwavering responsibility of the Courts to segregate such correspondences, exchanged in furtherance of genuine endeavor to amicably resolve disputes, in contradistinction, to correspondences though so christened, however, are nothing more than a mere ruse. At the same time, Courts are obligated to be cognizant and willing to determine the mutual intent of parties to said correspondences to determine whether a waiver thereof was, in fact, intended by any/ either of such parties. Undoubtedly, though, this obligation may appear to be quite onerous, however, is a significant tread board in furtherance of dispute resolution and eventually, triumph of justice.

Footnotes

1. (1988) 1 All ER 549

2. 1935 SCC OnLine All 290

3. Kuar Nageshar Sahai v. Shiam Bahadur, 1922 SCC OnLine Oudh JC

4. (1978) 3 SCC 113

5. "Provided that nothing in this section shall protect from disclosure-(1) any such communication made in furtherance of any illegal purpose; (2) any fact observed by any barrister, pleader, attorney or vakil, in the course of his employment as such, showing that any crime or fraud has been committed since the commencement of his employment. It is immaterial whether the attention of such barrister, pleader, attorney or vakil was or was not directed to such fact by or on behalf of his client."

6. (2006) 12 SCC 673

7. 16th Edn., pp. 655-57

8. (2004) 2 SCC 663

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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