Law of Evidence

By Nizam Azeez Sait,

MODULE No. 25

This is the 25th Module of the subject ‘Law of Evidence’, which deals with Sections 121 to 123, in Chapter VIII titled “Estoppel” in Part IV titled “Production and Effect of Evidence” of the Bharatiya Sakshya Adhiniyam (Sections 115 to 117of the Evidence Act).

Along with the provisions we will also deal with ‘Issue Estoppel’, ‘Estoppel and Admission’, ‘Estoppel and Acquiescence’, ‘Estoppel and Doctrine of Election’, ‘Estoppel and Waiver’ and ‘Promissory Estoppel’.

MODULE INDEX

1. ESTOPPEL – Introduction

2. Estoppel – Provisions in the Bharatiya Sakshya Adhiniyam /Evidence Act

3. Elements of Estoppel

4. Estoppel on the Ground of Negligence – Requirement

5. Estoppel Against a Tenant, Licensee, Acceptor of a Bill of Exchange and a Bailee
The Tenant Is Not Estopped To Challenge The Derivative Title Of An Assignee Of The Original Landlord

6. Distinction Between Estoppel and Admission

7. Estoppel and Acquiescence
8. Estoppel and Doctrine of Election
9. Estoppel and Waiver
10. Issue Estoppel

11. Promissory Estoppel
a. Promissory Estoppel in Charitable Subscription
b. Promissory Estoppel And Government
c. Different Standards For Individuals and Public Bodies Not Generally Permitted
d. No Estoppel Against the Government in The Exercise of Its Legislative Powers
e. Doctrine Not Generally Applied Against the State In Its Governmental, Public or Sovereign Capacity – Constitution Bench “M Ramanathan Pillai”
f. Motilal Padampat Sugar Mills Co. Ltd – A Progressive – Landmark Judgment – Promissory Estoppel Applies to Government
g. Discordance Between ‘Motilal Padampat Sugar Mills Co. Ltd.’ (Authored by Bhagwati, J and ‘M/s Jit Ram Shiv Kumar’ (Authored by Kailasam, J) – Two Schools of Thought
h. Criticism of ‘Jit Ram’
i. Summing Up of The Guiding Principles of Promissory Estoppel
j. Promissory Estoppel and Principles of legitimate expectation

1. ESTOPPEL – Introduction

The Doctrine of estoppel is a rule of evidence which prevents a person from backing out from or denying the truth of his representations as against a person who in good faith had acted upon it. It prevents blowing hot and cold at the same time or approbate and reprobate, that is a man shall not say one thing at one time and later on say a different thing.

This doctrine protects the innocent from loss and fastens responsibility on the person who induces the other to act upon false premises. The object of the doctrine is to prevent fraud and of taking undue advantage or gain and save one who is misled.

Estoppel has its root in the Latin the maxim, “allegans contraria non est audiendus” which means a person alleging contradictory facts should not be heard

The English case, Pickard v Sears [1837] (112 E.R. 179) is the often quoted foundational case on Estoppel.

In this case, Pickard had a mortgage on a machinery. The machinery was left in the possession of the Mortgagor. Another creditor of the mortgagor got the machinery seized and got it sold to Sears. During the seizure, Pickard made representations to the Court sheriff about the sale of the property but never mentioned about his own mortgage. Pickard then claimed the property or payment of his debt from Sears, the court held that Pickard was estopped from pleading his own mortgage having failed to mention it to the sheriff before the sale.

Lord Chief Justice Denham held:

“Where one by his words or conduct wilfully causes another to believe the existence of a certain state of things and induces him to act on that belief so as to alter his own previous position, the former is concluded from averring against the later a different state of things as existing at the same time.”

2. Estoppel – Provisions in the Bharatiya Sakshya Adhiniyam /Evidence Act

Sections 121 to 123 of the Bharatiya Sakshya Adhiniyam (Sections 115 to 117 of the Evidence Act) deals with Estoppel. Section 121 lays down the rule of Estoppel in general. Sections 122 and 123 relates to specific cases of estoppel against a tenant, licensee, acceptor of a Bill of Exchange and a Bailee.

Sections 121 of the Bharatiya Sakshya Adhiniyam (Section 115 of the Evidence Act) reads as under:

When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.

Illustration.

A intentionally and falsely leads B to believe that certain land belongs to A, and thereby induces B to buy and pay for it. The land afterwards becomes the property of A, and A seeks to set aside the sale on the ground that, at the time of the sale, he had no title. He must not be allowed to prove his want of title.

3. Elements of Estoppel

Before an estoppel can arise, there must be, first, a representation of an existing fact as distinct from a mere promisede futuro made by one party to the other; second, that the other party, believing it, must have been induced to act on the faith of it; and third, that he must have so acted to his determent. Representation may be by declaration, act or omission. (See Dhiyan Singh v Jugal Kisore and Another, AIR 1952 SC 145 (Saiyid Fazl Ali; Vivian Bose, JJ))

This is the rule of estoppel by conduct as distinguished from an estoppel by record which constitutes the bar of ‘res judicata’. (See Sunderbai and Another v Devaji Shanker Deshpande (AIR 1954 SC 82 Mehr Chand Mahajan; N. Chandrasekhara Aiyar; N. H Bhagwati, JJ.)

In Chhaganlal Keshavlal Mehta v. Patel Narandas Haribhai, AIR 1982 SC 121: 1982 (1) SCC 223, the Supreme Court considered the requirements to bring a case within the scope of estoppel as defined in S.115 of Evidence Act (Sections 121 of the Bharatiya Sakshya Adhiniyam). The Court laid down as under:

“(1) There must be a representation by a person or his authorised agent to another in any form, a declaration, act or omission;

 (2) the representation must have been of the existence of a fact and not of promises de futuro or intention which might or might not be enforceable in contract;

 (3) the representation must have been meant to be relied upon;

 (4) there must have been belief on the part of the other party in its truth;

(5) there must have been action on the faith of that declaration, act or omission, that is to say, the declaration, act or omission, must have actually caused another to act on the faith of it, and to alter his former position to his prejudice or detriment;

(6) the misrepresentation or conduct or omission must have been the proximate cause of leading the other party to act to his prejudice;

 (7) the person claiming the benefit of an estoppel must show that he was not aware of the true state of things. If he was aware of the real state of affairs or had means of knowledge, there can be no estoppel;

 (8) only the person to whom representation was made or for whom it was designed can avail himself of it.”

4. Estoppel on the Ground of Negligence – Requirement

In New Marine Coal Co (Bengal) Pvt Ltd v Union of India, AIR 1964 SC 152 (P. B. Gajendragadkar; K. N. Wanchoo; K. C. Das Gupta, JJ), the Supreme Court observed:

In support of a plea of estoppel on the ground of negligence, it must be shown that the party against whom the plea is raised owed a duty to the party who raises the plea. Just as estoppel can be pleaded on the ground of misrepresentation or act or omission, so can estoppel be pleaded on the ground of negligence; but before such a plea can succeed, negligence must be established in this technical sense. As Halsbury has observed,

“before any one can be estopped by a representation inferred from negligent conduct, there must be a duty to use due care towards the party misled, or towards the general public of which he is one”

5. Estoppel Against a Tenant, Licensee, Acceptor of a Bill of Exchange and a Bailee

Sections 122 and 123 of the Bharatiya Sakshya Adhiniyam (Sections 116 and 117 of the Evidence Act) reads as follows:

S. 122. No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy or any time thereafter, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property; and no person who came upon any immovable property by the licence of the person in possession thereof shall be permitted to deny that such person had a title to such possession at the time when such licence was given.

S. 123. No acceptor of a bill of exchange shall be permitted to deny that the drawer had authority to draw such bill or to endorse it; nor shall any bailee or licensee be permitted to deny that his bailor or licensor had, at the time when the bailment or licence commenced, authority to make such bailment or grant such licence.

Explanation 1. —The acceptor of a bill of exchange may deny that the bill was really drawn by the person by whom it purports to have been drawn.

Explanation 2. —If a bailee delivers the goods bailed to a person other than the bailor, he may prove that such person had a right to them as against the bailor.

The principle of estoppel arising from contract of tenancy is based upon the principle of law and justice. By virtue of Sections 122 of the Bharatiya Sakshya Adhiniyam (S.116 of the Indian Evidence Act, 1872), the tenant is estopped from challenging the title of his landlord. The Same principle applies in the case of Bailee, a Licensee and acceptor of a bill of exchange.

In Shri Ram Pasricha v. Jaganath and Others, 1976 (4) SCC 184 : AIR 1976 SC 2335 (Y. V. Chandrachud; *P. K. Goswami; A. C. Gupta, JJ), the Supreme Court observed:

“…the relation between the parties being that of landlord and tenant, only the landlord could terminate the tenancy and institute the suit for eviction. The tenant in such a suit is estopped from questioning the title of the landlord under S.116 of the Evidence Act (Section 122 of the Bharatiya Sakshya Adhiniyam). The tenant cannot deny that the landlord had title to the premises at the commencement of the tenancy. Under the general law, in a suit between landlord and tenant the question of title to the leased property is irrelevant. It is, therefore, inconceivable to throw out the suit on account of non-impleading of other co-owners as such.”

The Supreme Court in Jaspal Kaur Cheema v. Industrial Trade Links and Others, 2017 (8) SCC 592: AIR 2017 SC 3995 (J. Chelameswar; S. Abdul Nazeer, JJ.), observed:

Section 116 (Section 122  of the Bharatiya Sakshya Adhiniyam) deals with estoppel of a tenant founded upon contract between the tenant and his landlord. It enumerates the principle of estoppel which is merely an extension of principle that no person is allowed to approbate and reprobate at the same time. The tenant who has been let into possession cannot deny his landlord’s title.

In Bilas Kunwar v. Desraj Ranjit Singh, 1915 SCC OnLine PC 34 : (1914-15) 42IA 202 : AIR 1915 PC 96, it was held that a tenant who has been let into possession cannot deny his landlord’s title, however, defective it may be, so long as he has not openly restored possession by surrender to his landlord.

The principle of estoppel arising from contract of tenancy is based upon the principle of law and justice that a tenant who could not have got possession but for a contract of tenancy admitting the right of the landlord, should not be allowed to put his landlord in some inequitable situation taking undue advantage of the position that he got and any probable defect in the title of his landlord.

This Court in Bansraj Laltaprasad Mishra v. Stanley Parker Jones, 2006 (3) SCC 91 has enumerated the policy underlying S.116 of the Evidence Act as follows: (SCC p. 96, paras 13-15)

“The underlying policy of S.116 (Section 122 of the Bharatiya Sakshya Adhiniyam) is that where a person has been brought into possession as a tenant by the landlord and if that tenant is permitted to question the title of the landlord at the time of the settlement, then that will give rise to extreme confusion in the matter of relationship of the landlord and tenant and so the equitable principle of estoppel has been incorporated by the legislature in the said section.

The principle of estoppel arising from the contract of tenancy is based upon a healthy and salutary principle of law and justice that a tenant who could not have got possession but for his contract of tenancy admitting the right of the landlord should not be allowed to launch his landlord in some inequitable situation taking undue advantage of the possession that he got and any probable defect in the title of his landlord. It is on account of such a contract of tenancy and as a result of the tenant’s entry into possession on the admission of the landlord’s title that the principle of estoppel is attracted.

S.116 (Section 122 of the Bharatiya Sakshya Adhiniyam) enumerates the principle of estoppel which is merely an extension of the principle that no person is allowed to approbate and reprobate at the same time.”

In  S’. Thangappan v. P. Padmavathy, 1999 (7) SCC 474, the Supreme  Court has held that S.116 (Section 122 of the Bharatiya Sakshya Adhiniyam) puts an embargo on a tenant of an immovable property, during the continuance of his tenancy to deny the title of his landlord at the beginning of his tenancy, however defective the title of such landlord could be.

In Keshar Bai v. Chhunulal, 2014 (11) SCC 438 : 2014 (4) SCC (Civ) 127, the Supreme Court has held that (SCC p. 444, para 16) a tenant is precluded from denying the title of the landlady on the general principle of estoppel between the landlord and the tenant and this principle in its basic foundation, means no more than that under certain circumstances law considers it unjust to allow a person to approbate and reprobate. It was further held that even if a landlady was not entitled to inherit the properties in question, she could still maintain an application for eviction.

In Ram Prasad Pandey v Jagmohan Prasad Shukla, AIR 1977 All. 458, Allahabad High Court observed:

…. the defendant – appellant as a licensee, who had been inducted by the plaintiff alone, could not take advantage of this dispute between the plaintiff and Nokhe Lal. It did not lie in his mouth to deny the title of the plaintiff to eject him when it has been found that it was the plaintiff alone who had inducted the defendant – appellant. Merely, because a third party seeks to raise some controversy about the plaintiff’s title could not entitle a licensee who has been inducted by a licensor to question the title of the licensor. The licensee would be estopped from doing so.

The Tenant Is Not Estopped To Challenge The Derivative Title Of An Assignee Of The Original Landlord

In Subhash Chandra v. Mohammad Sharif, AIR 1990 SC 636: 1990 (1) SCC 252, the Supreme Court observed:

“A tenant already in possession can challenge the plaintiffs claim of derivative title showing that the real owner is somebody else, but this is subject to the rule enunciated by S.116 of the Evidence Act (Section 122 of the Bharatiya Sakshya Adhiniyam). The section does not permit the tenant, during the continuance of the tenancy, to deny that his landlord had at the beginning of the tenancy a title to the property. The rule is not confined in its application to cases where the original landlord brings an action for eviction. A transferee from such a landlord also can claim the benefit, but that will be limited to the question of title of the original landlord at the time when the tenant was let in. So far claim of having derived a good title from the original landlord is concerned, the same does not come under the protection of the doctrine of estoppel, and is vulnerable to a challenge. The tenant is entitled to show that the plaintiff has not as a matter of fact secured a transfer from the original landlord or that the alleged transfer is ineffective for some other valid reason, which renders the transfer to be non – existent in the eye of law……..”

A division bench of the High Court of Kerala in Thomas P.E and Others v Abraham Jose Rocky and Others, 2019 (3) KLT 140, observed:

On a careful reading of S.116 of the Evidence Act (Section 122 of the Bharatiya Sakshya Adhiniyam), it will be clear that what is prohibited therein by a rule of estoppel is to the effect that a tenant shall not dispute title of his landlord at the time of induction. But the provision does not preclude a tenant from disputing the derivative title of a third party, who claims title on the basis of transfer from the inducting landlord. Our view is fortified by a pronouncement by the Apex Court in Subhash Chandra v. Mohammad Sharif.

In Sambhunath Mitra and others v. Khaitan Consultant Ltd. and others, AIR 2005 Cal. 281 it has been held as follows:

“Secondly, it is now settled law that a tenant is estopped from disputing the title of his landlord at the time of induction but he is not precluded from disputing the derivative title of a third party who claims title on the basis of transfer from inducting landlord and even if, the tenant erroneously pays rent to such derivative title – holder, once it is proved that according to the law no title has really been conveyed in favour of such third party. (See Ketu Das v. Surendra Nath Sinha reported in 1903 (7) Cal. WN 596 (DB); Chengtu Sarkar v. Jeheruddin Mondal and others reported in AIR 1926 Cal.720 (DB). The fact that the tenant due to ignorance of law, paid rent to such third party will not stand as estoppel against the tenant from denying the derivative title of the third party and from re – tendering rent to the real landlord. Therefore, the plaintiffs cannot be prevented by the principles of estoppel from disputing the title of the third party even if they erroneously thought that the said third party acquired right to the property and consequently, paid rent.”

Though by virtue of Section 122 of the Bharatiya Sakshya Adhiniyam (S.116 of the Evidence Act), the tenant is estopped from challenging the title of his landlord, yet the tenant is entitled to challenge the derivative title of an assignee of the original landlord of the demised property in an action brought by the assignee against the tenant for his eviction under the Rent laws. However, this right of a tenant is subject to one caveat that the tenant has not attorned to the assignee. If the tenant pays rent to the assignee or otherwise accepts the assignee’s title over the demised property, then it results in creation of the attornment which, in turn, deprives the tenant to challenge the derivative title of the landlord. [See Bismillah De (dead) by Legal Representatives vs. Majeed Shah. 2017 (2) SCC 274 Para 24]

It is equally well – settled law with regard to attornment that it does not create any new tenancy but once the factum of attornment is proved then by virtue of such attornment, the old tenancy continues. (See Uppalapati Veera Venkata Satyanarayanaraju & Anr. Vs. Josyula Hanumayamma & Anr. AIR 1967 SC 174).

6. Distinction Between Estoppel and Admission

An admission ripens into estoppel only when admission in the nature of representation is believed and acted up on to his detriment by the person to whom it is made.

In Treasa Xavier v. Mary Simon and others reported in 2014 (4) KLT 246, a division bench of the High Court of Kerala explained the distinction between Estoppel and Admission. The Court observed:

“There is a clear distinction between estoppel and admission. Estoppels differ from evidence in that estoppels are received as conclusive and preclude all enquiry into the merits of the title, while evidence is merely the medium of establishing facts which do exist or have existed.” (See Corpus Juris Secondum P. 331 Vol.31 2008 Edn). Estoppel creates an absolute bar. But admission is only a piece of evidence to prove a fact and it does not create bar and the party making the admission may always prove that it was erroneous or untrue or mistaken unless it operates as estoppel as provided under Section 31 of the Evidence Act (Sections 25 of the Bharatiya Sakshya Adhiniyam).”  

7. Estoppel and Acquiescence

Acquiescence is knowingly permitting or not raising objection to the infringement of one’s right. Acquiescence may result in loss of legal claim against infringement. In P.S Gopinathan v. State of Kerala and Others, the Supreme referred English judgments and laid down the law as to when a legal right would be deprived by estoppel by Acquiescence. The Court held, thus:

The law of equitable estoppel by acquiescence has been clearly stated by Fry, J. in Wilmott v. Barber, 1880, 15 Ch D 96, 105: 43 LT 95. It has been said therein that the acquiescence which will deprive a man of his legal rights should amount to fraud. A man is not to be deprived of his legal right unless he has acted in such a way as would make it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that description, are stated thus:

(i) The plaintiff (i.e. the party pleading acquiescence) must have made a mistake as to his legal rights;

(ii) The plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of the mistaken belief;

(iii) The defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed with the right claimed by the plaintiff. If he does not know of it, he is in the same position, as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights;

(iv) The defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights; and

(v) The defendant, the possessor of the legal right must have encouraged the plaintiff in his expenditure of money, or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the Court to restrain the possessor of the legal right from exercising it, but nothing short of this will do. These principles were followed and applied in many cases in India.

8. Estoppel and Doctrine of Election

The doctrine of election is a facet of law of estoppel. A party cannot blow hot and blow cold at the same time. Any party which takes advantage of any instrument must accept all that is mentioned in the said document. It would be apposite to refer to the treatise ‘Equity – A course of lectures’ by F.W. Maitland, Cambridge University, 1947, wherein the learned author succinctly described principle of election in the following terms: –

“The doctrine of Election may be thus stated: That he who accepts a benefit under a deed or will or other instrument must adopt the whole contents of that instrument, must conform to all its provisions and renounce all rights that are inconsistent with it….”

In The Rajasthan State Industrial Development and Investment Corporation and Anr. vs. Diamond and Gem Development Corporation Ltd. and Anr, AIR 2013 SC 1241, the Court made an observation that a party cannot be permitted to “blow hot and cold”, “fast and loose” or “approbate and reprobate”. Where one party knowingly accepts the benefits of a contract or conveyance or an order, it is estopped to deny the validity or binding effect on him of such contract or conveyance or order.

This view has been accepted to be the correct view in Karam Kapahi and Ors. vs. Lal Chand Public Charitable Trust and Ors. (2010 (4) SCC 753). The plaintiff having elected to accept the Will of Hari Ram, by filing a suit for eviction of the tenant by claiming that the property had been bequeathed to him by Hari Ram, cannot now turn around and say that the averments made by Hari Ram that the property was his personal property, is incorrect.

9. Estoppel and Waiver

Waiver is an intentional relinquishment of a known right, and that, therefore, unless there is a clear intention to relinquish a right that is fully known to a party, a party cannot be said to waive it. It is also clear that if any element of public interest is involved and a waiver takes place by one of the parties to an agreement, such waiver will not be given effect to if it is contrary to such public interest. This is clear from a reading of the following decisions.

When waiver is spoken of in the realm of contract, S.63 of the Indian Contract Act governs.

In Krishna Bahadur v. Purna Theatre, 2004 (8) SCC 229, as regards the distinction between Waiver and Estoppel, it was held:

“The principle of waiver although is akin to the principle of estoppel; the difference between the two, however, is that whereas estoppel is not a cause of action; it is a rule of evidence; waiver is contractual and may constitute a cause of action; it is an agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration.

A right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being. Statutory right, however, may also be waived by his conduct.” [para 9]

In P. Dasa Muni Reddy v. P. Appa Rao, 1974 (2) SCC 725, the Supreme Court held:

“Waiver is an intentional relinquishment of a known right or advantage, benefit, claim or privilege which except for such waiver the party would have enjoyed. Waiver can also be a voluntary surrender of a right. The doctrine of waiver has been applied in cases where landlords claimed forfeiture of lease or tenancy because of breach of some condition in the contract of tenancy. The doctrine which the courts of law will recognise is a rule of judicial policy that a person will not be allowed to take inconsistent position to gain advantage through the aid of courts. Waiver sometimes partakes of the nature of an election. Waiver is consensual in nature. It implies a meeting of the minds. It is a matter of mutual intention. The doctrine does not depend on misrepresentation. Waiver actually requires two parties, one party waiving and another receiving the benefit of waiver. There can be waiver so intended by one party and so understood by the other. The essential element of waiver is that there must be a voluntary and intentional relinquishment of a right. The voluntary choice is the essence of waiver. There should exist an opportunity for choice between the relinquishment and an enforcement of the right in question. It cannot be held that there has been a waiver of valuable rights where the circumstances show that what was done was involuntary. There can be no waiver of a non – existent right. Similarly, one cannot waive that which is not one’s as a right at the time of waiver. Some mistake or misapprehension as to some facts which constitute the underlying assumption without which parties would not have made the contract may be sufficient to justify the court in saying that there was no consent.” [para 13]

In Lachoo Mal v. Radhey Shyam, 1971 (1) SCC 619, it was held:

“The general principle is that everyone has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be dispensed with without infringing any public right or public policy. Thus the maxim which sanctions the non – observance of the statutory provision is cuilibet licet renuntiare juri pro se introducto. (See Maxwell on Interpretation of Statutes, Eleventh Edn., pp. 375 and 376). If there is any express prohibition against contracting out of a statute in it then no question can arise of anyone entering into a contract which is so prohibited but where there is no such prohibition it will have to be seen whether an Act is intended to have a more extensive operation as a matter of public policy.”

In Indira Bai v. Nand Kishore, 1990 (4) SCC 668, it was held:

“The test to determine the nature of interest, namely, private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved. If the answer is latter then it may be difficult to put estoppel as a defence. But if it is right of party alone then it is capable of being abnegated either in writing or by conduct.”

(See All India Power Engineer Federation and Others v. Sasan Power Ltd. and Others2017 (1) SCC 487)

10. Issue Estoppel

In Fr. Sebastian Vadakkumpadan v. Shine Varghese and others ILR 2018 (2) Ker. 869: 2018 (3) KLT 177 (Antony Dominic, C. J. ; *D. Seshadri Naidu, J.), a division bench of the High Court of Kerala,  considered the scope and ambit of ‘issue estoppel’ and quoted from Halsbury’s Laws of England and other Authorities. The Court observed:

“Issue estoppel is a species of res judicata. It may arise, observes Halsbury’s Laws of England (4th ed., vol. 16, p. 1030, 1530) where a plea of res judicata could not be established because the causes of action are not the same. A party is precluded from contending the contrary of any precise point which, having once been distinctively put in issue, has been solemnly and with certainty determined against him. Even if the objects of the first and second actions are different, the finding on a matter which came directly (not collaterally or incidentally) in issue in the first action, provided it is embodied in a judicial decision that is final, is conclusive in a second action between the same parties and their privies. This principle applies whether the point involved in the earlier decision, and as to which the parties are estopped, is one of fact or one of law, or one of mixed fact and law.

Black’s Law Dictionary, 77th Ed. (defining it under “collateral estoppel” and providing its synonyms: issue preclusion, issue estoppel, direct estoppel, estoppel by judgment, estoppel by record, estoppel by verdict, cause – of – action estoppel, estoppel per rem judication.) puts it more pithily: An affirmative defence barring a party from relitigating an issue determined against that party in an earlier action, even if the second action differs significantly from the first one.

 Lord Diplock, in Mills v. Cooper, 1967 (2) QB 459 has noted that an “issue estoppel is a particular application of the general rule of public policy that there should be finality in litigation. That general rule applies also to criminal proceedings, but in a form modified by the distinctive character of criminal as compared with civil litigation. Here it takes the form of the rule against double jeopardy… .”

 The issue of estoppel stands merged, as observed by the Supreme Court, (State of Jharkhand v. Lalu Prasad Yadav, 2017 (8) SCC 1 : AIR 2017 SC 3389 : 2017 CriLJ 4008) in the principles of Autrefois acquit and Autrefois convict, both of which find enshrined in Art.20(2) and S.300 Cr.PC. Indeed, issue estoppel, a common law doctrine, has been well – entrenched and oft – applied to criminal proceedings. The Courts in India, too, have applied this principle at all levels — Apex to Trial Courts.

In, Ravinder Singh v State of Haryana, AIR 1975 SC 856 (V. R. Krishna Iyer; P. K. Goswami; R. S. Sarkaria,), the Supreme Court observed:

The crux of the principle of issue-estoppel may be stated in the words of Dixon, J. in the King v. Wilkes, 77 CLR 511 at p. 518 as follows:

“Whilst there is not a great deal of authority upon the subject, it appears to me that there is nothing wrong in the view that there is an issue estoppel, if it appears by record of itself or as explained by proper evidence, that the same point was determined in favour of a prisoner in a previous criminal trial which is brought in issue on a second criminal trial of the same prisoner. There must be a prior proceeding determined against the Crown necessarily involving an issue which again arises in a subsequent proceeding by the Crown against the same prisoner.”

 In order to invoke the rule of issue-estoppel not only the parties in the two trials must be the same but also the fact-in-issue proved or not in the earlier trial must be identical with what is sought to be reagitated in the subsequent trial.

….As has been observed by this Court in Manipur Administration v. Thokchom, Bira Singh, 1964 (7) SCR 123 at p. 133 = (AIR 1965 SC 87 at p. 91) “issue-estoppel does not prevent the trial of an offence as does autre fois acquit but only precludes evidence being led to prove a fact in issue as regards which evidence has already been led and a specific finding recorded at an earlier criminal trial before a court of competent jurisdiction”. There is, therefore, no substance in the submission of the learned counsel on the basis of issue-estoppel in this case.

In Ravinder Singh v Sukhbir Singh and Others, AIR 2013 SC 1048: 2013 (9) SCC 245 (Dr. B. S. Chauhan; V. Gopala Gowda, JJ), the Supreme Court observed:

The principle of issue – estoppel is also known as ’cause of action estoppel’ and the same is different from the principle of double jeopardy or; autre fois acquit, as embodied in S.403 CrPC(S.300 in 1973 Code). This principle applies where an issue of fact has been tried by a competent Court on a former occasion, and a finding has been reached in favour of an accused. Such a finding would then constitute an estoppel, or res judicata against the prosecution but would not operate as a bar to the trial and conviction of the accused, for a different or distinct offence. It would only preclude the reception of evidence that will disturb that finding of fact already recorded when the accused is tried subsequently, even for a different offence, which might be permitted by S.403(2) CrPC. Thus, the rule of issue estoppel prevents re – litigation of an issue which has been determined in a criminal trial between the parties. If with respect to an offence, arising out of a transaction, a trial has taken place and the accused has been acquitted, another trial with respect to the offence alleged to arise out of the transaction, which requires the Court to arrive at a conclusion inconsistent with the conclusion reached at the earlier trial, is prohibited by the rule of issue estoppel. In order to invoke the rule of issue estoppel, not only the parties in the two trials should be the same but also, the fact in issue, proved or not, as present in the earlier trial, must be identical to what is sought to be re – agitated in the subsequent trial. If the cause of action was determined to exist, i.e., judgment was given on it, the same is said to be merged in the judgment. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam. (See – Manipur Administration, Manipur v. Thokchom, Bira Singh, AIR 1965 SC 87 : 1965 (1) CriLJ 120; Piara Singh v. State of Punjab, AIR 1969 SC 961 : 1969 (1) SCC 379 : 1969 CriLJ 1435; State of Andhra Pradesh v. Kokkiligada Meeraiah and Another, AIR 1970 SC 771 1969 (1) SCC 161 : 1970 CriLJ 759; Masud Khan v. State of U.P., 1974 (1) SCC 289 : AIR 1974 SC 280; Ravinder Singh v. State of Haryana, AIR 1975 SC 856 : 1975 (3) SCC 742 : 1975 CriLJ 765; Kanhiya Lal Omar v. R.K. Trivedi and Others, AIR 1986 SC 111 : 1985 (4) SCC 628; Bhanu Kumar Jain v. Archana Kumar and Another, 2005 (1) SCC 787 : AIR 2005 SC 626; and Swamy Atmananda and Others v. Sri Ramakrishna Tapovanam and Others, AIR 2005 SC 2392 : 2005 (10) SCC 51.

In Biji Manikoth v. State of Kerala ILR 2017 (4) Ker. 641: 2018 CriLJ 1368, (Sunil Thomas, J), High Court of Kerala, referred to various precedents and summed up the Law relating to issue estoppel thus:

….. the principle of res judicata or issue estoppel in criminal cases operates in a wider field. Proof of an offence may involve proof of several conditions or ingredients. One or more such conditions or ingredients may be common to more than one offence. If in one trial, the existence or otherwise of a particular condition or ingredient has been decided by a Court of competent jurisdiction, the parties in the trial of the other offence or offences cannot assert the existence or otherwise of the ingredient or the condition contrary to the decision in the other trial. It was held to be the result of the extension of the principle of res judicata to criminal cases. It was held that the finding in the earlier trial would constitute estoppel or res judicata against the prosecution, not as a bar to the trial and conviction of the accused for a different or distinct offence, but as a bar precluding the reception of evidence contrary to the finding of fact arrived at in the earlier trial, when the accused is tried subsequently even for a different offence and even though the second trial is not barred under Art.20(2) of the Constitution of India or under S.300 of the Code (Section 337 of the Bharatiya Nagarik Suraksha Sanhita, 2023 ) . It was reiterated that, the plea of res judicata or issue estoppel was entirely different from the plea of double jeopardy or autrefois acquit. It was held that, the plea relates not to the inhibition of trial or conviction, but only relates to the admissibility of the evidence designed to upset a finding of fact recorded by a competent Court on a previous trial. It was asserted that, this broader plea was available to the defence, even when the narrower plea of double jeopardy was not available. Consequently, it was held that when an issue of fact has been tried and decided by a competent Court in a former trial in favour of the accused, it cannot be upset in a subsequent trial, even for a distinct offence.

The above principle was reiterated in K. Karunakaran v. Rajendran, 1985 KHC 82 : 1985 KLT 361 It was held therein that the principle of issue estoppel was based on the ground of public policy. It was different from the principle of double jeopardy or autrefois acquit. The learned Judge referred to the observation in Marz v. The Queen, 96 C.L.R. 62, where the Court had held that “the law which gives effect to issue estoppel is not concerned with the correctness or incorrectness of the finding which amounts to an estoppel, still less with the process of reasoning by which the finding was reached in fact”. It is enough that an issue or issues have been distinctly raised or found. Once that is done, then, so long as the finding stands, if there be any subsequent litigation between the same parties, no allegations legally inconsistent with the finding may be made by one of them against another. This Principle was approved by the Supreme Court in Manipur Administration v. Bira Singh, 1965 KHC 455 : AIR 1965 SC 87 : 1964 (7) SCR 123 : 1965 (1) CriLJ 120.

 In Lalta v. State of U.P., AIR 1970 SC 1381 : 1970 CriLJ 1270, the Apex Court went further and held that, a finding on a fact by a competent Court in an earlier proceeding would operate as estoppel or res judicata against the prosecution, not as a bar to the trial and conviction for a different offence, but as precluding the reception of evidence to disturb that finding of fact, when the accused is tried subsequently even for a different offence which might be permitted by the terms of S.403 (present S.300) of Code of Criminal Procedure( Section 337 the Bharatiya Nagarik Suraksha Sanhita, 2023  ).

 Before the principle of issue estoppel can be applied, the question to be determined is whether in the subsequent case, facts as alleged, and sought to be established by the prosecution would be contrary to the finding given on the basis of those facts in the previous proceedings. It would equally be relevant to find out whether the point of issue between the parties which was adjudicated upon was the same. It has been held that some of the ingredients of principle of res judicata would be common to the principle of issue estoppel as res judicata is itself estoppel by deed. To invoke issue estoppel not only the parties in the two trials must be the same but also the fact in issue proved in the earlier trial must be identical with what is sought to be re – agitated in the subsequent trial, as held in Ravinder Singh v. State of Haryana, 1975 KHC 734 : AIR 1975 SC 856 : 1975 (3) SCC 742 : 1975 SCC (Cri) 202 : 1975 (3) SCR 453 : 1975 CriLJ 765, Manipur Administration v. T. Bira Singh (cited supra), Sankar Mahato v. State of Bihar, 2002 KHC 1313 : AIR 2002 SC 2857 : 2002 (6) SCC 431 : 2002 SCC (Cri) 1346 : 2002 CriLJ 3775 and Chellappan v. State of Kerala, 1994 KHC 349 : 1995 CriLJ 150 : 1994 (2) KLT 346 : 1994 (2) KLJ 277 : ILR 1994 (3) Ker. 723.

The crux of the principle is that, when an issue of fact has been tried by a Criminal Court of competent jurisdiction, such a finding would constitute an estoppel in a subsequent criminal proceeding between parties for a different and distinct offence, not as a bar to the trial, but as precluding the reception of evidence to disturb that finding, though the subsequent trial may be permissible under S.300 Cr.P.C. ( Section 337 the Bharatiya Nagarik Suraksha Sanhita, 2023  )Evidently, the rule of issue estoppel is not the same as the plea of double jeopardy or autrefois convict / acquit, which prevents the trial of any offence. In principle, it only affects the admissibility of evidence, which is designed to upset a finding of fact recorded by a competent Court at a previous trial.  (See also, T. Moosa v. Sub Inspector of Police, 2006 (1) Ker LJ 3349 (Ker.)

11. Promissory Estoppel

The doctrine of promissory estoppel neither belongs to the realm of law of contract nor Estoppel. It has its basis in equity and fairness. Its purpose is to prevent injustice.  It does not fall within the scope and ambit of section 121 of the Bharatiya Sakshya Adhiniyam( Section 115 of the Evidence Act), which lays down a rule of evidence.  There is no statutory definition or any direct provision dealing with Promissory Estoppel. In fact, the Law Commission of India recommended for inserting a provision on Promissory Estoppel in the Indian Contract Act.

For invoking the principle of promissory estoppel there has to be a promise, and on that basis the party concerned must have acted to his/its prejudice/detriment though it is not enforceable as a contract for lack of consideration, it has been recognised in modern times as affording a cause of action to the person to whom the promise is made. The traditional theory was that the Promissory Estoppel can only be a shield and not a sword which means it cannot be the basis for an action or cannot be a cause of action for a claim.

Promissory Estoppel will not apply against a statute. Promissory Estoppel will not also bind a minor.

It is often said that Promissory Estoppel has its genesis laid down in the famous English case Central London Property Trust Ltd v High Trees House Ltd, 1956 (1) All ER 256, (Known as High Trees case), where in Lord Denning observed:

“I prefer to apply the Principle that a promise intended to be binding, intended to be acted on and in fact acted on is binding so far as its terms properly.”

The facts of the High Tree case are as under:

During the war many people left London owing to bombing. Flats were empty. In one block, where the flats were let on 99 years leases at $2,500/- a year, the landlord agreed to reduce it by half and to accept $ 1,250/- a year. When the bombing was over, and the tenants came back, the landlord sought to recover the full rent at $2,500/- a year. Denning, J. held that the landlord could not recover the full amount for the time when the flats were empty. The lease was a lease under seal which according to English Common Law, could not be varied by an agreement by parol, but only by deed. The learned Judge invoked equity to his aid and said that if there has been a variation of a deed by simple contract the Courts may give effect to it. The counsel for the lessee pleaded that the lessor had agreed though without consideration to accept the rent at a reduced rate, and set up a plea of estoppel by way of defence to the claim for arrears of rental calculated at the full rate. Faced with Foakes v. Beer, 1884 (9) AC 605, if the defence was raised as a matter of contract and Jorden v. Money, (1854) 5 HL Cas 185, if it was raised as estoppel, Denning, J. held that the estoppel sustained although based on an assurance as to the future, because the promisor intended to be legally bound and intended his promise to be acted upon, with the result that it was so acted upon.

Though the observations of Denning, J. in High Trees case were in the nature of obiter dicta, the decision is regarded as the starting point of the several shades of opinion regarding the scope of promissory estoppel.

a. Promissory Estoppel in Charitable Subscription

In Kedarnath Bhattacharji v. Gorie Mahomed (1887) ILR 14 Cal 64, a case before the Calcutta High Court, the defendant agreed to pay a subscription for the construction of a building for Howrah Municipality. Relying on the promise of subscription the municipality incurred expenses.  But later the defendant retracted from his promise. The Court allowed the suit and held:

Persons were asked to subscribe, knowing the purpose to which the money was to be applied, and they knew that on the faith of their subscription an obligation was to be incurred to pay the contractor for the work. Under these circumstances, this kind of contract arises. The subscriber by subscribing his name says, in effect, –In consideration of your agreeing to enter into a contract to erect or yourselves erecting this building, I undertake to supply the money to pay for it up to the amount for which I subscribe my name. That is a perfectly valid contract and for good consideration; it contains all the essential elements of a contract which can be enforced in law by the persons to whom the liability is incurred.

b. Promissory Estoppel And Government

In Union of India and Others v. M/s Indo – Afghan Agencies Ltd. (1968 (2) SCR 366), which is one of the earliest judgments of the Supreme Court considering the issue of promissory estoppel. In the said case, the Textile Commissioner published a scheme on 10th October 1962, called the Export Promotion Scheme providing incentives to exporters of woolen goods. The scheme was extended by a Trade Notice dated 1st January 1963, to export of woolen goods to Afghanistan. In pursuance of the said scheme, the exporters were entitled to import raw materials of a total amount equal to 100% of the F.O.B. (freight on board) value of their exports. However, the competent authority issued an Import Entitlement Certificate to Indo – Afghan Agencies Ltd. only in part. The Indo – Afghan Agencies Ltd., therefore, made a representation to the authorities. On failure of the authorities to respond, a petition came to be filed in the High Court of Punjab. The High Court held that the Export Promotion Scheme specifically provided for granting certificates to import materials of the “value equal to 100% of the F.O.B. value of the goods exported”. It was, therefore, held by the High Court that the petitioners therein were entitled to obtain import licenses for an amount equal to 100% of the F.O.B. value. The judgment of the High Court was challenged before the Supreme Court. One of the issues before the Court was with regard to the violation of principles of natural justice. The Court also considered the issue of promissory estoppel. The Court held:

“In these cases it was clearly ruled that where a person has acted upon representations made in an Export Promotion Scheme that import licences upto the value of the goods exported will be issued, and had exported goods, his claim for import licence for the maximum value permissible by the Scheme could not be arbitrarily rejected. Reduction in the amount of import certificate may be justified on the ground of misconduct of the exporter in relation to the goods exported, or on special considerations such as difficult foreign exchange position, or other matters which have a bearing on the general interests of the State. In the present case, the Scheme provides for grant of import entitlement of the value, and not upto the value, of the goods exported. The Textile Commissioner was, therefore, in the ordinary course required to grant import certificate for the full value of the goods exported: he could only reduce that amount after enquiry contemplated by clause 10 of the Scheme…. ”

In, Hero Motocorp Ltd (M/S) v Union of India AIR 2022 SC 5572 : AIROnLine 2022 SC 830 : 2023 (1 ) SCC 386 (B. R. Gavai; B. V. Nagarathna, JJ. ), the Supreme Court observed:

 It could thus be seen that the issue that fell for consideration in the case of M/s Indo – Afghan Agencies Ltd. (supra) was with regard to an arbitrary reduction of the claim of the writ petitioner contrary to the Export Promotion Scheme. The issue as to whether the Legislature by a subsequent enactment was entitled to withdraw the benefit granted under the earlier scheme did not fall for consideration in the said case.

In ‘Hero Motocorp’ Justice B.R Gavai surveyed through many precedents relating to application of the doctrine of Promissory Estoppel, some of which are highlighted here under:

c. Different Standards For Individuals and Public Bodies Not Generally Permitted

The Supreme Court in the case of Century Spinning and Manufacturing Company Ltd. and Another v. The Ulhasnagar Municipal Council and Another (1970 (1) SCC 582) considered the issue wherein the

Municipality had agreed to exempt the appellant therein from payment of octroi duty for 7 years from the date of levy of octroi. However, thereafter, the Municipality sought to levy octroi duty from the appellant therein. The Supreme Court observed thus:

“If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice.”

d. No Estoppel Against the Government in The Exercise of Its Legislative Powers

Another Constitution Bench of the Supreme Court in the case of State of Kerala and Another v. The Gwalior Rayon Silk Manufacturing (WVG). Co. Ltd. Etc. (1973 (2) SCC 713) was considering an issue as to the application of promissory estoppel when a right to compensation for acquisition of forest land as provided in the earlier statute was taken away by a subsequent statute. The Constitution Bench held as under:

“…Government was unable to supply the material and by an agreement undertook not to legislate for the acquisition of private forests for a period of 60 years if the Company purchased forest lands for the purpose of its supply of raw –  materials. Accordingly, the Company purchased 30,000 acres of private forests from the Nilambhuri Kovila Kannan estate for Rs 75 lakhs and, therefore, it was argued that, so far as the Company is concerned, the agreement not to legislate should operate as equitable estoppel against the State. We do not see how an agreement of the Government can preclude legislation on the subject. The High Court has rightly pointed out that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel.”

In Hero Motocorp Ltd (M/S) v Union of India AIR 2022 SC 5572: AIROnLine 2022 SC 830: 2023 (1 ) SCC 386 (B. R. Gavai; B. V. Nagarathna, JJ. ), the question of law was whether the Union of India can be directed to adhere to the representation made by it in the Office Memorandum dated 7th January 2003  even after the enactment of the Central Goods and Services Tax Act, 2017. The Supreme Court reiterated:

It could thus be seen that this Court held that it is presumed that the legislature knows the needs of its people and will balance the present advantages against possible future disadvantages …… Undisputedly, the GST enactment is an enactment validly enacted by the Parliament. ….. when the legislature exercises its powers for the public good, the earlier representation would not operate against the Government as equitable estoppel.

e. Doctrine Not Generally Applied Against the State In Its Governmental, Public or Sovereign Capacity – Constitution Bench “M Ramanathan Pillai”

A Constitution Bench of the Court in the case of M. Ramanatha Pillai v. The State of Kerala and Another (1973 (2) SCC 650) considered the question as to whether estoppel could arise against a State in regard to abolition of posts. The Constitution Bench observed thus:

“ The High Court was correct in holding that no estoppel could arise against the State in regard to abolition of post. The appellant Ramanatha Pillai knew that the post was temporary. In American Jurisprudence 2d at p. 783 para 123 it is stated “Generally, a state is not subject to an estoppel to the same extent as in an individual or a private corporation. Otherwise, it might be rendered helpless to assert its powers in government. Therefore as a general rule the doctrine of estoppel will not be applied against the State in its governmental, public or sovereign capacity. An exception however arises in the application of estoppel to the State where it is necessary to prevent fraud or manifest injustice”. The estoppel alleged by the appellant Ramanatha Pillai was on the ground that he entered into an agreement and thereby changed his position to his detriment. The High Court rightly held that the Courts exclude the operation of the doctrine of estoppel, when it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate.”

A four judge Bench of the Supreme Court in the case of Excise Commissioner, U.P. Allahabad and Others v. Ram Kumar and Others (1976 (3) SCC 540) had considered the issue wherein, at the time of the auction, licenses sold by the Government to vend country liquor exempted the levy of sales tax. However, by a subsequent notification, the sale of country liquor was subjected to the levy of sales tax. This Court specifically rejected the contention that the State was estopped from doing so. The Supreme Court relied on the earlier Constitution Bench judgment in the cases of M. Ramanatha Pillai (supra) and The Gwalior Rayon Silk Manufacturing (WVG). Co. Ltd. Etc. (supra). It held that an assurance given by or on behalf of the Crown by an officer of a government, however high or low in the hierarchy, could not bar the Crown from enforcing a statutory prohibition.

In the case of The Bihar Eastern Gangetic Fishermen Co – operative Society Ltd. v. Sipahi Singh and Others (1977 (4) SCC 145), the State Government had directed that the settlement of the Jalkar would continue with Sipahi Singh for the years 1976-77 and 1977-78. However, on the representation made by the Bihar Eastern Gangetic Fishermen Co – operative Society Ltd., the State Government directed that the settlement of the Jalkar would be with the said Society for the relevant years on certain conditions. Sipahi Singh filed a writ petition which was allowed by the High Court relying on the doctrine of promissory estoppel. The three – judge Bench of the Court, while reversing the judgment of the High Court, observed thus:

“The doctrine of promissory estoppel could also not be pressed into service in the present case, as it is well settled that there cannot be any estoppel against the Government in exercise of its sovereign legislative and executive functions. (See Excise Commissioner, U. P. Allahabad v. Ram Kumar (1976 (3) SCC 540: AIR 1976 SC 2237)).”

The judgment of in M/s Indo – Afghan Agencies Ltd. (supra) was distinguished as under:

“The decision of this Court in Union of India v. Indo – Afghan Agencies Ltd. (AIR 1968 SC 718: 1968 (2) SCR 366 : (1968) 2 SCJ 889) on which strong reliance is placed by Counsel for Respondent 1 is clearly distinguishable. In that case, unlike the present one, the respondents were not seeking to enforce any contractual right. They were merely seeking to enforce compliance with the obligation which was laid upon the Textile Commissioner by the terms of the Export Promotion Scheme providing for grant (by way of incentives to exporters of woollen textiles and goods) of Entitlement Certificate to import raw materials of a total amount equal to 100% of the f.o.b. value of their exports. Their claim was founded upon the equity which arose in their favour as a result of the representation made on behalf of the Government in the aforesaid Scheme, the exports of woollen goods made by them to Afghanistan acting upon the representation and curtailment of the import entitlement by the Textile Commissioner without notice to them”

In this regard, in Hero Motocorp Ltd (M/S) v Union of India AIR 2022 SC 5572: AIROnLine 2022 SC 830 : 2023 (1 ) SCC 386 (B. R. Gavai; B. V. Nagarathna, JJ.), it was observed:

It can thus clearly be seen that the Constitution Bench has approved the statement in American Jurisprudence that the doctrine of estoppel will not be applied against the State in its governmental, public or sovereign capacity. An exception to the application of the said doctrine to the State would, however, arise where it is necessary to prevent fraud or manifest injustice.

f. Motilal Padampat Sugar Mills Co. Ltd – A Progressive – Landmark Judgment – Promissory Estoppel Applies to Government

In Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., 1979 (2) SCC 409, (Bhagwati; Tulzapurkar, JJ). The Supreme Court speaking through justice Bhagwati observed:

It is elementary that in a republic governed by the rule of law, no one, howsoever high or law, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on that same footing as a private individual so far as the obligation of the law concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in manner that is fair and just or that it is not bound by considerations of “honesty and good faith”? Why should the Government not be held to a high “standard of rectangular rectitude while dealing with its citizens”? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations; but, let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Indo-Afghan Agencies case and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action.

It could be discerned that principle of promissory estoppel is applicable against the Government but in case there is a supervening public equity, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. However, the Court must satisfy itself that such a public interest exists. The law on this aspect has been emphatically laid down in the case of Motilal Padampat Sugar Mills Co. Ltd as under:

We must also refer to the decision of this Court in M. Ramanatha Pillai v. State of Kerala”. Because that was a decision strongly relied upon on behalf of the State for negativing the applicability of the doctrine of estoppel against the Government. This was a case where the appellant was appointed to a temporary post and on the post being abolished, the service of the appellant was terminated. The appellant challenged the validity of termination of service, inter alia on the ground that the Government was precluded from abolishing the post and terminating the service, on the principle of promissory estoppel. This ground based on the doctrine of promissory estoppel was negatived and it was pointed out by the Court that the appellant knew that the post was temporary, suggesting clearly that the appellant could not possibly be led into the belief that the post would not be abolished. If the post was temporary to the knowledge of the appellant, it is obvious that the appellant knew that the post would be liable to abolished at any time and if that be so, there could be no factual basis for invoking the doctrine of promissory estoppel for the purpose of precluding the Government from abolishing the post. This view taken by the Court was sufficient to dispose of the contention based on promissory estoppel and it was not necessary to say anything more about it, but the Court proceeded to cite a passage from American Jurisprudence, Vol. 28 (2 ed) at 783, Para.123 and observed that the High Court rightly held “that the courts exclude the operation of the doctrine of estoppel. When it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate”. It was this observation which was heavily relied upon on behalf of the State but well fail to see how it can assist the contention of the State. In the first place, this observation was clearly obiter, since as pointed out by us, there was on the facts of the present case no scope for the applicability of the doctrine of promissory estoppel. Secondly, this observation was based upon a quotation from the passage in Para.123 of page 783 of Volume 28 of American Jurisprudence (2 ed.), but unfortunately this quotation was incomplete and it overlooked perhaps inadvertently, the following two important sentence at the commencement of the paragraph which clearly show that even in the united States the doctrine of promissory estoppel is applied against the State “when justified by the facts” :

There is considerable dispute as to the application of estoppel with respect to the State. While it is said that equitable estoppel will be invoked against the State when justified by the facts, clearly the doctrine of estoppel should not lightly invoked against the State. (emphasis supplied)

Even the truncated passage quoted by the Court recognised in the last sentence that though, as a general rule, the doctrine of promissory estoppel would not be applied against the State in its governmental, public or sovereign capacity, the Court would unhesitatingly allow the doctrine to be invoked in cases where it is necessary in order “to prevent fraud to manifest injustice”. This passage leaves no doubt that the doctrine of promissory estoppel may be applied against the State even in its government, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. It is difficult to imagine that the Court citing this passage with approval could have possibly intended to lay down that in no case can the doctrine of promissory estoppel be invoked against the Government. Lastly, a proper reading of the observation of the Court clearly shows that what the Court intended to say was that where the Government owes a duty to the public to act differently, promissory estoppel cannot invoked to prevent the Government from doing so. This proposition is unexceptionable, because where the Government owes a duty to the public to act in a particular manner, and here obviously duty means a course of conduct enjoined by law, the doctrine of promissory estoppel cannot be invoked for preventing the Government from acting in discharge of its duty the law. The doctrine of promissory estoppel cannot be applied in teeth of an obligation or liability impose by law.

The Court further held:

“It is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such overriding public interest, it may still be competent to the Government to resile from the promise ‘on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position’ provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. (Vide Emmanuel Ayodeji Ajayi v. Briscoe, 1964 (3) All ER 556).”

Two propositions follow from the above analysis:

(1) The determination of applicability of promissory estoppel against public authority/Government hinges upon balance of equity or “public interest”.

(2) It is the Court which has to determine whether the Government should be held exempt from the liability of the “promise” or “representation”. “(See Shriji Sales Corporation v Union of India, 1997 (3) SCC 398)

The Supreme Court in further observed thus:

“……………..There can also be no promissory estoppel against the exercise of legislative power. The Legislature can never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. Vide State of Kerala v. Gwalior Rayon Silk Manufacturing Co. Ltd. (1973 (2) SCC 713,)

g. Discordance Between Motilal Padampat Sugar Mills Co. Ltd. (Authored by Bhagwati, J and M/s Jit Ram Shiv Kumar ( Authored by Kailasam, J) – Two Schools of Thought

In Another two judges bench in the case of M/s Jit Ram Shiv Kumar and Others v. State of Haryana and Others, AIR 1980 SC 1285:1981 (1) SCC 11, (Kailasam, J. and Fazal Ali, J.),  the municipal committee established a small mandi and decided that the purchasers of the plots for sale in the mandi would not be required to pay octroi duty on goods imported within the said mandi. Subsequently, the municipal committee started imposing octroi duty. Challenging the said act of the municipal committee, a writ petition was filed before the High Court. The High Court dismissed the said writ petition. The Supreme Court held that the doctrine of Promissory Estoppel cannot be applied. The Court held:

“The scope of the plea of doctrine of promissory estoppel against the Government may be summed up as follows:

(1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State.

(2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law.

(3) When the officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available. The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers.

(4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme and the agreement or representation. The officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position.

(5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interest of the State.”

In Jit Ram, Justice Kailasam vociferously found fault with some of the observations made in the case of ‘Motilal Padampat Sugar Mills’ and held that the observations made in ‘Motilal Padampat Sugar Mills’ were not in tune with the judgments of Constitution Benches in the cases M. Ramanatha Pillai and The Gwalior Rayon Silk Manufacturing (WVG). Co. Ltd. Etc; and the judgment of a four –  Judge Bench in the case of Ram Kumar and others.

The Court in Jit Ram observed:

With respect, we feel we are unable to agree with the interpretation put by Bhagwati, J. Bhagwati, J. states “the defence of executive necessity was thus clearly negatived by this Court and it was pointed out that it did not release the Government from its obligation to honour the promise made by it, if the citizen acting in reliance on the promise, had altered his position. The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be defeated by invoking the defence of executive necessity.” The same view has again been reiterated at page 682 where it is stated “the law may therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promise and in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Art.299 of the Constitution”. These observations would be right if they are read with the qualifications, laid down in the Indo-Afghan Agencies case (AIR 1968 SC 718) and other cases.

 The further observations of the learned Judge that : “Every one is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned, the former is equally bound as the latter”. Again “but if the Government makes such a promise and the promisee acts in reliance upon it and alters his position there is no reason why the Government should not be compelled to make good such promise like any other private individual do not appear to convey the true effect of the decision.” The decision of this Court in Century Spinning and Manufacturing Co. Ltd. v. The Ulhasnagar Municipal Council (AIR 1971 SC 1021) (supra) was understood by Justice Bhagwati as refusing to make a distinction between the private individual and public body so far as the doctrine of promissory estoppel is concerned. These observations would be correct only if they are read with the exceptions recognised by Justice Bhagwati himself elsewhere in his judgment along with other restrictions imposed by judgments of this Court.

It was further observed in Jit Ram:

We find ourselves unable to ignore the three decisions of this Court, two by Constitution Benches M. Ramanathan Pillai v. The State of Kerala (AIR 1973 SC 2641) (supra) and State of Kerala v. The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. (AIR 1973 SC 2734) (supra) and the third by a Bench of four Judges of this Court in Excise Commissioner, U. P., Allahabad v. Ram Kumar (AIR 1976 SC 2237) (supra) on the ground that the observations are in the nature of obiter dicta and that it cannot be insisted as intending to have laid down any proposition of law different from that enunciated in the Indo-Afghan Agencies case.

We find ourselves unable to share the view of the learned Judge that the Constitution Bench of this Court in Ramanathan Pillai’s case (AIR 1973 SC 2641) (supra) heavily relied upon the quotation from the American jurisprudence para 123 p. 873 of Vol. 28. Again we feel to remark that “unfortunately this quotation was incomplete and had overlooked perhaps inadvertently” is unjustified

 We feel we are in duty bound to express our reservations regarding the “activist” jurisprudence and the wide implications thereof which the learned Judge has propounded in his judgment.

…..The learned Judge has held that if the Government is to resist its liability it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempted from the liability and it would be for the Court to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the Government. This statement will have to be read with the exceptions stated by the learned Judge himself and those recognised by the decisions of this Court. In C. Sankaranarayana v. State of Kerala, 1971 (2) SCC 361 : AIR 1971 SC 1997, it was held that the power of the Government under Art.309 to make rules regulating the conditions of service of Government employees or of teachers of aided schools cannot in any way be affected by any agreement. Rule of estoppel against Government cannot be invoked in such cases.

…. In a fervent plea for the doctrine to speak in all its activist magnitude the learned Judge observes : “that is no reason why this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters and not allowed to operate in all the activist magnitude, so that it may fulfil the purpose for which it was conceived and born”. It is no doubt desirable that in a civilised society man’s word should be as good as his bond and his fellow men should be able to rely on his promise. It may be an improvement if a cause of action would be based on a mere promise without consideration. The law should as far as possible accord with the moral values of the society, and effort should be made to bring the law in conformity with the moral values. What are the moral values of the Society? This is a very complex question because the concept of moral values amongst different persons and classes of persons is not always the same. The concept of moral values is not static one. It differs from time to time and from society to society. It is hazardous for the Court to attempt to enforce what according to it is the moral value. As pointed out by Roscoo Pound : “It leads to an attempt to enforce overhigh ethical standards and to make legal duties out of moral duties which are not sufficiently tangible to be made effective by the machinery of the legal order. A more serious difficulty is that the attempt to identify law and morals gives too wide a scope to judicial discretion”. The question is how should it be brought about. The learned Judge says that it should be the constant endeavour of the Courts and the legislature to close the gap between the law and morality and bring about as near an approximation between the two as possible. Lord Denning might have exhorted the Judges not to be timorous souls but to be bold spirits, ready to allow a new cause of action if justice so requires. These are lofty ideals which one should steadfastly pursue. But before embarking on the mission, it is necessary for the Court to understand clearly its limitations. The powers of the Court to legislate is strictly limited. “Judges ought to remember that their office is jus dicero and not jus dare, to interpret law, and not to make law or give law”.

The judgment of Justice Kailasam in the case of ‘Jit Ram Shiv Kumar’ fell for consideration before a three – judge Bench of the Supreme Court in the case of Union of India and Others v. Godfrey Philips India Ltd. (1985 (4) SCC 369), which is again authored by Bhagwati, J. In the case of Godfrey Philips India Ltd., the Supreme Court held that what has been held by learned two judges in the case of Motilal Padampat Sugar Mills Co. Ltd. has been correctly held so and endorses the said judgment. The said judgment also criticizes the view taken in M/s Jit Ram Shiv Kumar and others of overturning a coequal bench decision.

In, Godfrey Philips India Ltd, The Central Board of Excise and Customs of the Central government granted exemptions of duty, which was later revoked. The Supreme Court held that the Board was bound by the doctrine of Promissory Estoppel.

h. Criticism of ‘Jit Ram’

Lectures on Administrative Law – C. K Takwani Second Edition at page No. 304, opined as under:

“It is submitted that apart from the fact that Jit Ram does not lay down correct law on the point, even according to the theory of precedent and judicial propriety also, the Court ought not to have taken a different view….. it ought to have referred the matter to the larger bench.

It is further submitted that even on merits also, Jut Ram had really put the clock back and was a step in the reverse direction. In England as well as in America, the traditional view has now been liberalised. So far as India is concerned, one cannot overlook and ignore the written Constitution, Fundamental Rights and the Rule of Law. In this view of the matter, if Motilal Sugar Mills was decided on the basis of justice, equity and morality, one cannot say that it was illegal or improper. Again, if the Government has been treated on par with private individuals so far as legal obligations are concerned, it is really a welcome approach and should be encouraged rather than discouraged or condemned.

It is, therefore, submitted that Jit Ram does not lay down correct law.”

The view of the illustrious Author and Judge  C.K Takwani appears to be correct.

i. Summing Up of The Guiding Principles of Promissory Estoppel

In, Monnet Ispat & Energy Ltd. v. Union of India, 2012 (11) SCC 1, the Supreme Court speaking through Justice R.M Lodha, summarised the guiding principles of promissory estoppel thus;

In my view, the following principles must guide a Court where an issue of applicability of promissory estoppel arises:

(i) Where one party has by his words or conduct made to the other clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is, in fact, so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre – existing relationship between the parties or not.

(ii) The doctrine of promissory estoppel may be applied against the Government where the interest of justice, morality and common fairness dictate such a course. The doctrine is applicable against the State even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. However, the Government or even a private party under the doctrine of promissory estoppel cannot be asked to do an act prohibited in law. The nature and function which the Government discharges is not very relevant. The Government is subject to the rule of promissory estoppel and if the essential ingredients of this doctrine are satisfied, the Government can be compelled to carry out the promise made by it.

(iii) The doctrine of promissory estoppel is not limited in its application only to defence but it can also furnish a cause of action. In other words, the doctrine of promissory estoppel can by itself be the basis of action.

(iv) For invocation of the doctrine of promissory estoppel, it is necessary for the promisee to show that by acting on promise made by the other party, he altered his position. The alteration of position by the promisee is a sine qua non for the applicability of the doctrine. However, it is not necessary for him to prove any damage, detriment or prejudice because of alteration of such promise.

(v) In no case, the doctrine of promissory estoppel can be pressed into aid to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. No promise can be enforced which is statutorily prohibited or is against public policy.

(vi) It is necessary for invocation of the doctrine of promissory estoppel that a clear, sound and positive foundation is laid in the petition. Bald assertions, averments or allegations without any supporting material are not sufficient to press into aid the doctrine of promissory estoppel.

(vii) The doctrine of promissory estoppel cannot be invoked in abstract. When it is sought to be invoked, the Court must consider all aspects including the result sought to be achieved and the public good at large. The fundamental principle of equity must forever be present to the mind of the court. Absence of it must not hold the Government or the public authority to its promise, assurance or representation.

j. Promissory Estoppel and Principles of legitimate expectation

In, the above referred, ‘Monnet Ispat & Energy Ltd. v. Union of India’ the Supreme Court referred to various precedents and observed:

As there are parallels between the doctrines of promissory estoppel and legitimate expectation because both these doctrines are founded on the concept of fairness and arise out of natural justice, it is appropriate that the principles of legitimate expectation are also noticed here only to appreciate the case of the appellants founded on the basis of doctrines of promissory estoppel and legitimate expectation.

  1. In Union of India and Others v. Hindustan Development Corporation and Others, 1993 (3) SCC 499, this Court had an occasion to consider nature, scope and applicability of the doctrine of legitimate expectation. The matter related to a government contract. This Court in paragraph 35 (Pgs. 548-549) observed as follows:

” Legitimate expectations may come in various forms and owe their existence to different kind of circumstances and it is not possible to give an exhaustive list in the context of vast and fast expansion of the governmental activities. They shift and change so fast that the start of our list would be obsolete before we reached the middle. By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. For instance, discretionary grant of licences, permits or the like, carry with it a reasonable expectation, though not a legal right to renewal or non – revocation, but to summarily disappoint that expectation may be seen as unfair without the expectant person being heard. But there again the court has to see whether it was done as a policy or in the public interest either by way of G.O., rule or by way of a legislation. If that be so, a decision denying a legitimate expectation based on such grounds does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power. Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power, the concept of legitimate expectation can have no role to play and the court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. For instance if an authority who has full discretion to grant a licence prefers an existing licence holder to a new applicant, the decision cannot be interfered with on the ground of legitimate expectation entertained by the new applicant applying the principles of natural justice. It can therefore be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited. It would thus appear that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected. In other words such a legal obligation exists whenever the case supporting the same in terms of legal principles of different sorts, is stronger than the case against it. As observed in Attorney General for New South Wales case: [(1990) 64 Aust LJR 327]: “To strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism. Moreover, the notion of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law.” If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well –  known grounds attracting Art.14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is “not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits”, particularly when the element of speculation and uncertainty is inherent in that very concept. As cautioned in Attorney General for New South Wales case the courts should restrain themselves and restrict such claims duly to the legal limitations. It is a well – meant caution. Otherwise a resourceful litigant having vested interests in contracts, licences etc. can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests. The caution, particularly in the changing scenario, becomes all the more important.”

While observing as above, the Court observed that legitimacy of an expectation could be inferred only if it was founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. Every such legitimate expectation does not by itself fructify into a right and, therefore, it does not amount to a right in the conventional sense.

  1. A three – Judge Bench of this Court in P.T.R. Exports (Madras) Pvt. Ltd. & Ors. v. Union of India & Ors., 1996 (5) SCC 268 while dealing with the doctrine of legitimate expectation in paras 3, 4 and 5 (Pages. 272-273) stated as follows :

“3………The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic policy, it is a settled law that the court gives a large leeway to the executive and the legislature. Granting licences for import or export is by executive or legislative policy. Government would take diverse factors for formulating the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger interest of the economy of the country. It is, therefore, by exercise of the power given to the executive or as the case may be, the legislature is at liberty to evolve such policies.

  1. An applicant has no vested right to have export or import licences in terms of the policies in force at the date of his making application. For obvious reasons, granting of licences depends upon the policy prevailing on the date of the grant of the licence or permit. The authority concerned may be in a better position to have the overall picture of diverse factors to grant permit or refuse to grant permission to import or export goods. The decision, therefore, would be taken from diverse economic perspectives which the executive is in a better informed position unless, as we have stated earlier, the refusal is mala fide or is an abuse of the power in which event it is for the applicant to plead and prove to the satisfaction of the court that the refusal was vitiated by the above factors.
  2. It would, therefore, be clear that grant of licence depends upon the policy prevailing as on the date of the grant of the licence. The court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. It would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject to their satisfying the conditions required in the scheme. The High Court, therefore, was right in its conclusion that the Government is not barred by the promises or legitimate expectations from evolving new policy in the impugned notification.”

Recently in K B Tea Product Pvt Ltd and another v. Commercial Tax Officer, Siliguri and others, Supreme Court bench comprising Justices M.R Shah and Krishna Murari delivered a split verdict on the issue of whether amendments to tax exemption statutes can be challenged based on the doctrine of legitimate Expectation. ( https://www.livelaw.in/supreme-court/supreme-court-split-verdict-legitimate-expectation-sales-tax-exemption-case-west-bengal-sales-tax-act-228636 )

With that we come to the close of this Module on the subject ‘Law of Evidence’. Hope you enjoyed and found it useful.

See you again in another module with another interesting topic on the ‘Law of Evidence’.

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Exercise Questions

  1. Explain ‘Estoppel’? Does estoppel apply to criminal trials?
  2. What is issue Estoppel?
  3. What, if any, are the difference between estoppel, acquiescence and waiver?
  4. Explain Promissory estoppel. Discuss case law relating to the application of Promissory Estoppel against the Government.