AIR 2004 SC 1330
Para 32: Even correspondences marked as without prejudice may have to be
interpreted differently in different situations.
Para 33: What would be the effect of
without prejudice offer has been considered in Cutts V/s. Head and Another
wherein Oliver L.J. speaking for the court of appeals held:
"In the
end, I think that the question of what meaning is given to the words
"without prejudice" is a matter of interpretation which is capable of
variation according to usage in the profession. It seems to be that, no issue
of public policy being involved, it would be wrong to say that the words were
given a meaning in 1889 which is immutable ever after, bearing in mind that the
precise question with which we are concerned in this case did not arise in
Walker V/s. Wilsher, 23 Q.B.D. 335, and the court did not deal with it. I think
that the wide body of practice which undoubtedly exists must be treated as
indicating that the meaning to be given to the words is altered if the offer
contains the reservation relating to the use of the offer in relation to
costs."
Para 34: Yet again in Rush & Tompkins
Ltd. v. Greater London Council and Another :
"The 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' as Parker LJ stated in South Shropshire DC
V/s. Amos [1987] 1 All ER 340 at 343, [1986] 1 WLR 1271 at 1277. The nature of
the implied agreement must depend on the meaning which is conventionally
attached to the phrase 'without prejudice'. The classic definition of the
phrase is contained in the Judgement of Lindley LJ in Walker v. Wilsher (1889)
23 QBD 335 at 337: 'What is the meaning
of the words "without prejudice"? I think they mean without prejudice
to the position of the writer of the letter if the terms he proposes are not
accepted. If the terms proposed in the letter are accepted a complete
contract is established, and the letter, although written without prejudice,
operates to alter the old state of things and to establish a new one.' Although
this definition was not necessary for the facts of that particular case and was
therefore strictly obiter, it was expressly approved by this court in Tomlin v
Standard Telephones and Cables Ltd. [1969] 3 All ER 201 at 204, 205, [1969] 1
WLR 1378 at 1383, 1385 per Danckwerts LJ and Ormrod J. (Although he dissented
in the result, on this point Ormrod J agreed with the majority.) The definition
was further cited with approval by both Oliver and Fox LJJ in this court in
Cutts V/s. Head [1984] 1 All ER 597 at 603, 610, [1984] Ch. 290 at 303, 313. In
our judgment, it may be taken as an accurate statement of the meaning of
without prejudice', if that phrase be used without (anything) more. It is open
to the parties to the correspondence to give the phrase a somewhat different
meaning, e.g. where they reserve the right to bring an offer made 'without
prejudice' to the attention of the court on the question of costs if the offer
be not accepted but subject to any such modification as may be agreed between
the parties, that is the meaning of the phrase. In particular, subject to any
such modification, the parties must be taken to have intended and agreed that the
privilege will cease if and when the negotiations 'without prejudice' come to
fruition in a concluded agreement."
Para 35: Meaning of the words "without
prejudice" come up for consideration before this Court in Superintendent
(Tech. I) Central Excise, I.D.D. Jabalpur and Others V/s. Pratap Rai wherein it
has been held:
"The
appellate collector has clearly used the words "without prejudice"
which also indicate that the order of the collector was not final and
irrevocable. The term "without
prejudice" has been defined in Black's Law Dictionary as follows: Where an
offer or admission is made 'without prejudice', or a motion is defined 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.
See, also 'Dismissal Without Prejudice'. Similarly, in Wharton's Law Lexicon
the author while interpreting the term 'without prejudice' observed as follows:
The words import an understanding that if the negotiation fails, nothing that
has passed shall be taken advantage of thereafter; so, if a defendant offers,
'without prejudice', to pay half the claim, the plaintiff must not only rely on
the offer as an admission of his having a right to some payment (?). The 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. The word is also frequently used without the foregoing implications in
statutes and inter partes to exclude or save transactions, acts and rights from
the consequences of a stated proposition and so as to mean 'not affecting',
'saving' or 'excepting'. In short, therefore, 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."
Para 36: The appellant in its letter dated
20th December, 1990 has used the term 'without prejudice'. It has explained the
situation under which the amount under the 'No Demand Certificate' had to be
signed. The question may have to be considered from that angle. Furthermore,
the question as to whether the respondent has waived its contractual right to
receive the amount or is otherwise estopped from pleading otherwise, will
itself be a fact which has to be determined by the arbitral tribunal.
Sandeep Jalan
Advocate
https://vakeelkanumber.com/
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