Doctrine of Estoppel Against the Government

Table of Contents

Introduction :

The doctrine of promissory estoppel can be regarded as an instrument in the hands of the courts to control administrative arbitrariness. The equitable doctrine of promissory estoppel has emerged in India in recent years, it has been evolved by the courts on the principles of equity to avoid injustice.

The principle of promissory estoppel is that where one party has by his words or conduct made to the other a clear and unequivocal promise or representation which is intended to create legal solutions.

Meaning :

Estoppel in the Black’s law dictionary is indicated to mean that a party is prevented by his acts from claiming a right to the detriment of the other party, who was entitled to rely on such conduct and has acted accordingly.

In other words, estoppel is a rule whereby a party is precluded from denying the existence of some state of facts which he had previously asserted and on which the other party has relied or is entitled to rely.

Essential elements:

The following conditions must be fulfilled; to claim the benefit of the doctrine of estoppel.

A representation or conduct of representation must have been made.
The other party to whom the representation was made have acted upon such representation
He must have acted to his detriment or suffered as a result of such representation.

Development of the doctrine:

The development of the doctrine can be studied in three distinct phases:

The position before Anglo-Afgan
Anglo-Afgan and after
Motilal Padampat and after.

Phase I: The position before anglo-afghan :

Earlier, judicial behavior indicated that in India, estoppel would not be available against the government in violation of the statute. In Amar Singh v. State of Rajasthan, the supreme court has refused to apply estoppel against the government where the collector has given assurance that the jagir of the petitioner would not be acquired during his lifetime under the Rajasthan land reforms Act,1952 because the assurance was in clear violation of the provisions of the statute. Similarly in Mathra prasad and sons v. State of Punjab, the court held that the estoppel is not available against the government if the representation violates the tax law.

In the Municipal corporation of the city of Bombay v. Secretary of the state, Bombay high court held that even in the absence of a formal contract as required by the statute the government could be bound by the representation made by it.

Phase II. Anglo-Afgan and after:

The most significant decisions in which the rule of the non-availability of estoppel against the government was relaxed in Union of India v. Anglo-Afgan agencies, the supreme court applied the promissory estoppel against the government on equitable grounds. For sometimes after the anglo-afghan, the judicial behavior in applying the doctrine of promissory estoppel against the administrative authorities remained equivocal and ambivalent.

The doctrine was further applied in the case of Central spinning and manufacturing company v. Ulhasnagar municipality, where the court observed that if the private party has acted upon the representation of public authority, it could be enforced against the authority on the ground of equity in appropriate cases, even though the representation did not result in a contract owing to the lack of proper form.

And the Gujarat High Court in Amrat Lal v. State , ruled that while administrative directions were ordinarily non-enforceable, these could be enforced based on estoppel.

**Phase III.The resurrection of Promissory Estoppel: Motilal Padampat and after:**

By the end of 1978, the position was that the doctrine of estoppel against an administrative authority was a matter of exception rather than a rule.

The decision of the court in Motilal Padampat sugar mills marks the significant development in law relating to the doctrine of promissory estoppel. In this case, the government of Uttar Pradesh gave an assurance through a statement published in the newspaper and individually to the petitioner that new industrial units in the state would be exempted from sales tax for 3 years. So acting on this assurance petitioner established a mill, later on, the government retracted its assurance and sought to impose a sales tax. The apex court, in this case, held that the government was bound by the promise on the ground of equity.

After this case there arose some confusion when it was held that the doctrine of estoppel is not available against the exercise of the executive function of the state and the state cannot be prevented from exercising its functions under the law in the case of Jit Ram Shivkumar v. State of Haryana

However, this confusion was removed by the supreme court in Union of India v. Godfrey Phillips, when it held that the law laid down in the Motilal case represents the correct law on promissory estoppel. Since this case, the doctrine of promissory estoppel has been applied by the courts in several cases.

The supreme court in Monnet Ispat and Energy Ltd. v. Union of India identified some of the principles which must guide the courts regarding the applicability of the doctrine of promissory estoppel against the government. They are as follows:

There must be clear words or conduct which make an unequivocal promise which is intended to create legal relations or affect the legal relationship to arise in the future, knowing that it will be acted upon by the other party.
The doctrine can be used as a sword or as a shield.
The doctrine cannot be invoked in the abstract, there must be strong supporting material to act upon.
It is an equity doctrine and must be used with wisdom and responsibility where reasonableness, fairness, and justice demand it.

Exceptions to the rule :

The Court would not also enforce the promise if public interest suffers in fulfilling the promise made by the government.
Merely a claim of change of policy would not be sufficient to exonerate the government from the liability. The government has to show what precisely is the changed policy and also its reason and justification for the change so that the court can judge for itself which way the public interest lies and what the equity of the case demands.

Conclusion :

The Indian judiciary has played a vital role in applying the doctrine of promissory estoppel against the government on the ground of equity and has made the state responsible for the promise made and has further made the state abide by the promise made so.

REFERENCES :

BOOKS:

C.K.Takwani, ‘lectures on administrative law’( eastern book company, Lucknow .,6th ed.,2018)
MP Jain and SN Jain, ‘Principles of administrative law’(Lexis Nexis, Haryana.,7th ed.,2011).
IP Massey, ‘Administrative law’ (Lexis Nexis, Haryana,9th ed.,2020)

Author: Naveen Talawar,
student in KSLU's law school