ARE WITNESSES TO CONTRACTS MANDATORY?

In drafting commercial contracts or agreements, it is common practice to include a section for 2 (two) witnesses to attest the document below the signature block containing signatures of the parties to the document, which brings to light the question – is it a legal requirement to have witnesses attest all contracts or agreements?

To answer the same, it is important to analyze provisions under relevant statutes governing contracts and commercial agreements in India, and the decisions passed by the courts, in this regard.

While the Indian Contract Act, 1872 (“Contract Act”) provides the essentials of a valid contract, it does not mandate the attestation of contracts by witnesses[1]. Section 3 of the Transfer of Property Act, 1882 (“ToP Act”), defines the term ‘attested’ “in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument…”

Moreover, the Indian Evidence Act, 1872 (“Evidence Act”) provides that for proof of execution of documents which are required by law to be attested[2], at least 1 (one) attesting witness is to be called upon to prove the execution of the concerned document. However, this stipulation is restricted only to documents which are “required by law to be attested”. Clarity in this regard was afforded by the 69th Report of the Fifth Law Commission of India published in May, 1977 (“Report”), which stated that only few documents are required to be attested mandatorily by law, such as[3]:

• wills, as provided under Sections 57, 58 and 63 of the Indian Succession Act 1925 (“Succession Act”);
• mortgages for Rs. 100 (Rupees One Hundred only) or more, as provided under Sections 58 and 59 of ToP Act; and
• gifts of immovable property, as provided under Sections 123 and 124 of the ToP Act.

Tatva Legal, Hyderabad has an experienced team of corporate lawyers who, amongst other services, advise on a wide range of issues in relation to general corporate advisory including drafting, reviewing and advising on transaction documents.

Essentially, when an agreement or a contract is being executed, a witness is brought to physically observe the parties signing such agreement / contract. The presence of witnesses is required, to be able to confirm the identity of the parties signing the document and to ensure that no forgery took place. Further, Section 68 of the Succession Act states that, with respect to a will, a witness would not be disqualified merely by reason of having an interest in the subject matter or the benefits from the will, however a witness, preferably, should be a neutral third-party, present at the time of execution of the concerned document.

It is true that every document does not mandatorily require a witness’ signature, this does not mean that the documents not requiring attestation under the relevant statute cannot have a witness signature, instead the validity of attestation in such documents is not required to be verified by a court of law. However, having a witness as part of the document only helps reinforce the authenticity of that document, by providing an additional layer of security, in case the contract is ever to be questioned in court, then such witness(es) may be called upon by the court to verify the execution of such a contract.

The position of witnesses attesting contracts and agreements, and its validity has been dealt with by Indian courts on various occasions. The following judgments summarize the position of the various courts with respect to mandatory attestation of a legal document:

• In Chandra Kala and Ors. vs. Ram Pyari and Ors.[4], where attestation by witness to the agreement was said to be improper, the Rajasthan High Court held that, “An agreement to sell is a contract simplicitor and presence of attesting witnesses is not mandatory.”
• In Asudamal vs. Kisanrao and Ors.[5], the Bombay High Court while discussing the requirements of witnesses under the provisions of the Contract Act held that,

“None of the provision of the Indian Contract Act state that in order to prove an agreement it is necessary to examine the attesting witnesses. Only under the provision of the Indian Succession Act, for proving a will, examination of attesting witness is essential. Thus, only where there is a specific provision made in the Act requiring that the document is to be attested then in such cases the examination of the attesting witnesses is necessary as laid down in Section 68 of the Indian Evidence Act.”

• In Krishnan vs. Backiam & Anr.[6], the Supreme Court of India (“SC”) observed that,

"The law does not require attestation of sale deed as a compulsory one. Section 54 and 59 of Transfer of Properties do not speak about compulsory attestation. When law does not require compulsory attestation of a document, such unattested document may be proved as per the provisions of Indian Evidence Act. Section 68 of Indian Evidence Act has no application for sale deed. Section 68 of the Indian Evidence Act is applicable only to the cases where the documents are required to be attested in law."

From the above judgments, it is clear that that the courts in India have consistently held that witnesses are not required to attest, and nor is the validity of such attestation verified in every type of contract, but only on those documents which statutorily require attestation or witnesses such as last wills and testaments as per the Succession Act, amongst others.

Further, the SC in Hemkunwar Bai vs. Sumer Singh and Ors[7] held that despite the fact witnesses to documents such as sale deeds and wills need not necessarily know the contents of such documents, such documents shall still be valid in the eyes of the law.

In conclusion, although it is not legally required for all contracts or agreements to have witnesses, including them in commercial contracts is considered a good practice that makes contractual parties more accountable by preventing them from refuting any valid claims made by any other party / opposite party (be it in court, or otherwise), with respect to such documents.

The views and opinions expressed in this article belong solely to the author and do not reflect the position of Tatva Legal, Hyderabad.

[1] Section 10, Indian Contract Act, 1872

[2] Section 68, Indian Evidence Act, 1872

[3] Paragraph 32.7 of the 69th Report of the Fifth Law Commission of India, 1977

[4] S.B. Civil First Appeal No. 18/1988

[5] 2004 (2) BomCR 361

[6] (2007) 12 SCC 190

[7] Civil Appeal No. 8827/2011