Estoppel

               Estoppel, a product of Equity Courts of England, has been statutorily encoded under Section 115 of Indian Evidence Act, 1872(hereinafter IEA). It springs out from famous latin maxim “allegans contraria non est audidendus” meaning (a person alleging contrary facts should not be heard). It is based upon the rational notion of admission and legitimate expectations first arising out in case of Pickard v. Sears (1). Object of estoppel is to prevent fraud and to secure justice between the parties by the promotion of honestly and good faith. Sir Edward Coke divided estoppel in three parts. 

    • Estoppel by Record such as the doctrine of Res Judicata as provided under Section 11 of Code of Civil Procedure,1908. 

    • Estoppel by Deed such as the doctrine of Feeding the Grant by Estoppel as provided under Section 43 of Transfer of Property Act, 1882. 

    • Estoppel by Pias or Conduct such as the doctrine of Estoppel as provided under Section 115, 117, etc of Indian Evidence Act, 1872. 

Estoppel by Conduct: 

               Simply Section 115, IEA provides that whenever a person by declaration, act or omission represents another to be something or believe in something, later neither he can be allowed to deny it nor his representative be allowed to deny it. 

Essentials: 

    i. Representation in the form of declaration or act or omission by one person to another.

    ii. Other person believed it and acts upon such belief thereby altering his position. 

    iii. The representation must be of existing facts. 

    iv. Such representation must have a proximate cause to lead other party to prejudice.

    v. The party claiming estoppel must show he was not aware of the real situation. 

       

             For a simple example to understand let's assume ‘A’ says to ‘B’ he wants to sell mobile for  ₨ 5000. This is a representation by declaration. ‘B’ on this begins to arrange money for Rs 5000 for mobile. This is changing/altering the legal position by ‘B’. Now if ‘A’ says I won't sell mobile. He can’t do so. He may be estopped by ‘B’ from denying the truth of selling.  

             One very important aspect of this doctrine is that it applies only upon a fact and not upon law. Equity cannot support the violation of any law. To understand this let's take an example. 

    • ‘A’ makes a contract with ‘B’. A agrees to file a particular suit anytime up to  6 years from the date of cause of action while The Limitation Act, 1963 only provides for 3 years limitation period for the same. ‘A’ files suit after 5 years. ‘B’ takes the plea that Limitation for the same has expired (even though he earlier agreed for 6 years duration). ‘A’ claims that ‘B’ is bound by estoppel. Here ‘A’ will fail because estoppel cannot defeat the statutory law i.e. The Limitation Act, 1963. 

Promissory Estoppel:

               The doctrine of promissory estoppel is an equitable doctrine. It is not expressly coded anywhere in India. Like all other equitable remedies, it is discretionary. Doctrine sometimes is called promissory estoppel, equitable estoppel, quasi estoppel, or new estoppel. Promissory estoppel is basically a hybrid doctrine which finds place neither in the contract nor in estoppel. It differs from estoppel in the manner that estoppel is always in regard to the existing fact while promissory estoppel is in regard of some future promise. It was first recognized by Lord Denning in Central London Properties Ltd. v. High Trees House Ltd.(2) Also known as High Trees case where your honor held “ A promise intended to be binding, intended to be acted upon, ad in fact acted upon is binding”. 

Essentials of Promissory Estoppel: 

    i. Representation or promise should be in regard to something to be done in the future. 

    ii. Representation or promise was intended to affect the legal relationship of parties. 

    iii. The other party altered his position believing such promise. 

               In India, there are two stages of application of this doctrine i.e. Pre Anglo-Afghan case and Post Anglo-Afghan case. Prior to this case, Doctrine was not applicable against the Government. In Union of India v. Anglo Afghan Agencies(3), Court held that doctrine was applicable against Government also. In this case, the Government announced certain concessions with regard to the import of certain raw material in order to encourage export of woolen garments to Afghanistan. Subsequently, only partial concession was given as against full concession as was so announced thus Supreme Court held that Government is estopped from going back from its promise. The doctrine of promissory estoppel is an exception to the doctrine of consideration in contract. Under it, though future promises are not supported by any consideration but if a promise is made in circumstances involving legal rights and obligations than the parties are enforced to do what they promised. In, M/S Motilal Padampat Sugar Mills v. State of Uttar Pradesh(4), it was reported in the newspaper that the State of Uttar Pradesh would grant 3-year sales tax exemption to new industrial units. Petitioner set up his vanaspati plant after reconfirming news with Chief Secretary of the state. Subsequently, the Government abrogated the policy. It was held that the Government is bound by the declaration. 

               Lastly, it has to be remembered that Estoppel is a rule of civil action only. No criminal liability can be brought by a party.  It is founded on sound principles of justice, equity and good conscience which are the essential pillars of any sustainable and mature justice delivery system. Once again the challenge before young judges in India which are working at ground level  (i.e. Civil Judges (J.D. & S.D. Cadre) is to ensure its actual implementation without fear and favor. Doctrine, if applied carefully and meticulously has the potential to serve society and promote the rule of law in true spirit. 

                                                             

Harihar Gupta

LL.M.

1.[1887] 6 Ad. & E. 469 

2.  [1947] KB 130 

3.  1968 AIR 718

4. 1979 AIR 621