Caution To The Courts: Read Contract As It Reads!

1. Introduction

On October 5, 2017 the division bench of Supreme Court ("SC") delivered an important judgment in Nabha Power Ltd. ("NPL") vs. Punjab State Power Corporation Ltd ("PSPCL") and Ors¹ wherein the SC held that while interpreting provisions of an agreement, courts should not endeavor to imply terms into the language of the contract; rather, read the contract as per its express terms. The SC analyzed domestic and international jurisprudence on implied terms in contracts and held that unless the court is satisfied that the implication would necessarily have been in the minds of both the parties, a court cannot imply a term which was not explicitly expressed by the parties.