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Published : December 10, 2011 | Author : veervikrantsingh
Category : Civil Laws | Total Views : 4896 | Unrated

Veer Vikrant Singh Law Graduate'11 DOB:18/08/1988

It is a established principle in the Law of Contract that when a person, makes a promise, unless the promisee does, has done or promises to do something at the desire of promisor, the promise would be without consideration and the promise cannot be enforced in law. Now if, a charitable institution constructs a building on the promise of subscription by a person, but he does not honor his promise, then the institution will not be able to sue him successfully because the promise is not supported by consideration. The question arises whether the court could compel him to honor their representation and the answer to it emerged as that the court could do so on the basis of Doctrine of Estoppel. This doctrine has been expressed by the Bench of two judges of the Supreme Court of India as follows1

“Where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relation, a legal relationship to arise in the future to arise in future, knowing or intending that it would be acted upon by the other 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 lending on the party making it and party, the promise would be entitled to 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 whether there is any pre-existing relationship or not .

Estoppel thus, is a principle evolved by equity to avoid injustice where a promise is made by a person to whom it is made and in fact it is so acted and it is inequitable to allow the party making to go back upon it. Though the provision of estoppel is being expressly provided in the Indian Evidence Act under Section 115, but it is by no means confined to subjects which are to be dealt as evidence. It is being widely stated in the following, observation of Supreme Court2 :

We doubt whether the court while determining whether the conduct of a particular person amounts to an estoppels, could travel beyond the provision of S.115 of Evidence Act and rely upon what is called equitable estoppels.

The object behind estoppels is to prevent fraud and secure justice between the parties promotion of honesty and good faith .It is based on the maxim allegans contraria non est audiendus (a person alleging contradictory facts should not be heard) and is that taken to be true not as against a particular party and that only by reason of same act done, it is in truth a kind of argumentum and hominem. It depends on the existence of same duty. In order to succeed on a plea of estoppels it must be shown that there was neglect of some duty owing to the person led into a particular belief. It is however a rule of civil action, having no application to criminal proceedings. It is being guarded with strictness therefore the estoppel must be certain to every intent for no one shall be prevented from setting up truth unless it is plain in contradiction to former allegation. The Supreme Court has stated3 , the requirements in terms of larger number of points “To bring the case within the scope of Estoppel as defined in Section 115 of the Evidence act

1) A person is entitled to plead estoppels in his own individual character and not as representative.

2) There must be representation by person or his authorized agent to another in any form: a declaration, an act or omission

3) Representation must have been of existence of a fact and not promise.

4) Representations must have been made to be relied upon.

5) There must have been belief on the part of the other party in its truth.

6) There must have been an action on the faith of that declaration, act or faith.

7) The misrepresentation or conduct as business must have been the proximate cause of leading the other party to act to the prejudice.

8) The person claiming benefit of estoppels must show that he was not aware of true state of things

9) Only the person to whom representation was made could avail himself of it”

Am estoppels to have any judicial value must be clear and non-ambiguous, it must be free, voluntary and without any artifice 4. Estoppel refers to a belief in a fact and not in preposition of law. There is no estoppel of law. The court said 5“the souls of estoppel is equity, not facility of inequality of inequality nor is estoppel against statute permissible because public policy animating may then become the causality”. Similarly, it was held6 , that is not applicable to a decision on pure question of law such as question of court’s jurisdiction. The government is not exempted from the equity arising out of the acts done by the citizens due to their prejudice relying upon the representation as to future conditions made by government.

Public bodies are as much bound as private individual to carry out representation of facts and promises made by them relying on which other persons have altered their position to their prejudice7. Government agencies have to work within the framework of the legal system8

There can be no whimsical withdrawal from a declared program which has already guaranted action. The doctrine of estoppel is not based upon loss or determined or fraud but upon alteration of position in response to representation .The court9 said that “It would be upon to a party who has acted on a representation made by the government to claim that the government should be bound to carry out the promise made by it even though he promise was not recorded in the form of a formal contract.”

The extent of relief available against the government on the plea of promissory estoppel was summarized by the Patna High Court citing Kailashraj J said, “The scope of the plea of doctrine of promissory estoppel against government may be summarized as follows.

Ø The plea of promissory estoppel is not available against the exercise of the legislature of the state.

Ø It cannot be invoked for preventing the government from discharging its functions under the law.

Ø When an office of the government act outside the scope of his authority the plea of promissory estoppel is not available.

Ø When the officer act within the scope of his authority under a scheme and enters into an agreement and makes a representation and a person acting puts himself in a disadvantageous position, the court is entitled to require the officer to act according to the scheme.

Ø The officer would be bounded in terms of the agreement to the prejudice of the other party” 10.

Estoppel can thus be invoked to hold the Government bound to its promises and agreement whether they be of executive or administrative character. However estoppel cannot be stretched to the extent of exercising in legislative and sovereign power .The doctrine of estoppel has always been that it can be used as a defense and not as a cause of action. But now under the impact of its application and extension to promissory estoppel it is affording a cause of action also. Noting this development the high court of Delhi observed that11 “Modern doctrine of promissory estoppel is of comparatively recent origin in the field of public law .The provision regarding estoppel is of comparatively recent origin in the field of public law. The provisions regarding estoppel continued in section 115-117 are a mere shadow of what the modern principles of promissory estoppel have come to be. The present development in this area is that an independent action can now be founded on a promissory estoppel and it is no longer a principle available only as a shield .it can be used as a weapon of offence”
1. M.P.Sugar Mills Vs State of UP AIR 1979 SC 621
2. Maddnappa v Chandramma AIR1965 SC 1812
3 Chaganlal Keshavlal Mehta Vs Patel Narendra Das AIR 1982 SC 121
4. Mouy Vs National Bank of India (1900) 2 Bom LR 1041
5 CIT Vs B.N. Bhattacharya AIR 1979 SC 1725
6. Issabella Johnson Vs M.A.Sasa AIR 1991 SC 993
7. Century Spg & Mfg Co. Vs Ulhasnagar Municipality AIR 1971 SC 1021
8. AIR 1990 Bombay 776
9. Ashok Kumar Maheshwari Vs State of UP AIR 1998 SC 966
10 Sah Mahadeo Lal Vs State of Bihar AIR 1982 Pat 158
11 R.K.Kawatra Vs DSIDC AIR 1992 Del 28

Authors contact info - articles The  author can be reached at: veervikrant@legalserviceindia.com

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