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Article by ArvindThapliyal and KunalKumar1
Estoppel Principle
"Estoppel may be defined as disability whereby a partyis precluded from alleging or proving in legal proceedings, that afact is otherwise than it has been made to appear by the mattergiving rise to that disability." HALSBURY (4th Ed, Vol.16, para 1501, page1008).
The term "Estoppel," comes from an old-French word-"Estoupail" (or variation), which means "stopperplug", referring to placing a brake on the imbalance of thesituation. The rationale behind estoppel is to prevent injusticeowing to fraud or inconsistency.
In its simplest sense, doctrine of Estoppels, precludes a personfrom denying or to negate anything to the contrary of that whichhas been constituted as truth, either by his own actions, by hisdeeds or by his representations or by the acts of judicial orlegislative officers. Estoppel is often described as a rule ofevidence as indeed it may be so described. But the whole concept ismore carefully viewed as a rule of substantive law.
To invoke the doctrine of estoppels, there are three conditionswhich must be satisfied;
- Representation by a person to another
- The other should have acted upon the said representationand
- Such action should have been detrimental to the interests ofthe person to whom the representation has been made.
However in the case, "Gyarsi Bai vs. DhansukhLal,2" it was observed by the Hon'bleApex Court that even if the first two conditions are fulfilled, butthe third is not, then there is no scope to invoke the doctrine ofestoppel.
Types of Estoppel
- Estoppel by Silence or Acquiescence
- Employment Estoppel
- Reliance-based estoppels:
- Promissory estoppel, without any enforceable contract a promisehas been made by one party to another.
- Proprietary estoppel, where the parties are litigating thetitle to land.
- Estoppel by deed
- Estoppel by record
- Estoppel Against Minor
- Estoppel by deed
International Prospective
The Development of Estoppel – U. K. InEnglish law, a promise which has been made without consideration isgenerally not enforceable. It is known as a bare promise. Thedoctrine of promissory estoppel was first developed inHughes v. Metropolitan Railway Co.3
Thomas Hughes was the owner of the property which was leased tothe Railway Company. Under the lease agreement, Hughes was entitledto compel the tenant to repair the building within six months ofnotice. The Notice was served to leasee on 22 October 1874, fromwhich the tenants had until 22 April to make those repairs. On 28November, the tenant had sent an offer letter to owner forpurchasing the same property. Negotiations began and continueduntil 30 December, but there was no settlement. The time of 6months had elapsed; the owner sued the tenants for the breach ofcontract and also tried to evict the tenant.
The House of Lords ruled that with the initiation of thenegotiations there was an implied promise by the landlord not toenforce their strict legal rights with respect to the time limit onthe repairs and the tenant acted on this promise to theirdetriment, thus allowing the tenants more time to repair. Hence,the owner is estopped from claiming to the contrary.
However, the doctrine of estoppel had lost its value for sometime after this case and it was resurrected by Lord Denning in thecase "Central London Property Trust Ltd v High TreesHouse Ltd"4
In 1937, High Trees House Ltd leased a block of flats inClapham, London, for a rate £2500/year from Central LondonProperty Trust Ltd. Due to the prevailing conditions during thebeginning of the World War II occupancy rates were drasticallylower than normal. In January 1940, to ameliorate the situation theparties made an agreement in writing to reduce rent by half.However, neither party stipulated the period for which this reducedrental was to apply. Over the next five years, High Trees paid thereduced rate while the flats began to fill, and by 1945, the flatswere back at full occupancy. Central London sued for payment of thefull rental costs from June 1945 onwards.5
Based on previous judgments as Hughes v MetropolitanRailway Co, Denning J held that the full rent was payablefrom the time that the flats became fully occupied in mid-1945.However, he continued in an obiter statement that if Central Londonhad tried to claim for the full rent from 1940 onwards, they wouldnot have been able to. This was reasoned on the basis that if aparty leads another party to believe that he will not enforce hisstrict legal rights, then the Courts will prevent him from doing soat a later stage. This obiter remark was not actually a bindingprecedent, yet it essentially created the doctrine of promissoryestoppel.
The Indian Development of Estoppel
Estoppel has been defined under Section 115 in "The IndianEvidence Act, 1872."
"When one person has, by his declaration, act oromission, intentionally caused or permitted another person tobelieve a thing to be true and to act upon such belief, neither henor his representative shall be allowed, in any suit or proceedingbetween himself and such person or his representative, to deny thetruth of that thing".
The History of doctrine of promissory estoppel in India can betraced to the case of Ganges Mfg Co. v.Sourajmul6whereby the Calcutta High Court hadheld that the doctrine of estoppel was not only limited to the lawof evidence, but that a person may be estopped from doing acts orrelying on particular arguments or contentions.
Estoppel against Government
In Motilal Padampat Sugar Mills vs. State ofU.P.,7it was held that the government was boundby its promise & was liable to exempt the appellant from salestax for a period of three years commencing from the date ofproduction.
Estoppel against the private parties
Taking note of section 115 of the Indian Evidence Act, whichwould be the governing law for deciding on the disputes between theparties, it can be held that promissory estoppel also applies incases of dispute between private parties. It was held in the case,"Century Spinning and Mfg Co. Ltd. v. UlhasnagarMunicipal Council"8 by Supreme Court, theconcept of promissory estoppel also applies to private individuals/entities.
No Estoppel can be made against Statutes
In Jatindra Prasad Das Vs. State of Orissa &others,9 Orissa High Court, held that:
"There can be no estoppel against statutes and theStatutory Provisions and therefore, the said statutory provisionscannot be ignored on the grounds of an earlier administrativedecision or precedent."
State of Bihar and others v. Project Uchcha Vidya,Sikshak Sangh and others,10 in which it waslaid that "We do not find any merit in the contention raisedby the learned counsel appearing on behalf of the respondents thatthe principle of equitable estoppel would apply against the Stateof Bihar. It is now well known, the rule of estoppels has noapplication where contention as regards a constitutional provisionor a statute is raised."
Olga Tellis v. Bombay Municipal Corporation (1985.07.10)(Right to Life and Livelihood for Homeless),11that there can be no estoppels against the constitution of India oragainst the fundamental rights.
Some Case-laws related to Estoppel
i. International Amusem*nt Ltd. v Entertainment TaxOfficer & Ors12. It was held that"Benefits of exemption which is available to Assessee shallnot be denied by Authority, unless it is justified bylaw."
ii. O.P. Sharma & Ors. Vs .Union of India &Ors.,13, once the voluntary retirement is takenby the petitioners and they have taken it without reserving anyright as claimed in the writ petition, the petitioners also wouldbe estopped in claiming any reliefs in the writ petition.
Footnotes
1 Intern
2 AIR 1965 SC 1055 3 (1876-77) LR 2 App Cas439
4 [1947] KB 130
5 http://en.wikipedia.org/wiki/Central_London_Property_Trust_Ltd_v_High_Trees_House_Ltd
6 (1880) ILR 5 Cal 669
7 1979 AIR 621, 1979 SCR (2) 641
8 [1970] 3SCR 854
9 MANU/OR/0225/2011
10 MANU/SC/0054/2006 : (2006) 2 SCC545
11 1986 AIR 180, 1985 SCR Supl. (2)51
12 MANU/DE/0360/2013
13 MANU/DE/0524/2013
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