In this blogpost, Anmol Deepak, Student, National University of Study and Research in Law, Ranchi writes about what is doctrine of estoppel, different kinds of estoppel and circumstances where the principle of estoppel is applicable.
According to the doctrine of estoppel there are certain facts which the parties are prohibited from proving, Estoppel is a principle of law by which a person is held bound by the representation made by him or arising out of his conduct. Estoppel has been dealt in sections 115 to 117 of the Indian evidence act.
What is doctrine of estoppel
When one person has, by his declaration or by his act, 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.
In a case, a judge, who has showed high age in his certificates right from the beginning of his career, sought to deny it by showing actual municipal birth records, so as to retire at a later age. Held that the judge is estopped. In another case, the wife was of Buddhist faith and the husband a Muslim. She sought a divorce under Buddhist law. Held that she was estopped from denying her earlier committal to Islamic law.
Doctrine of estoppel has gained a new dimension in recent years with the recognition of an equitable doctrine of promissory estoppel both by English and Indian courts. According to it, if a promise is made in the expectation that it should be acted upon in the future, and it was in fact acted upon, the party making the promise will not be allowed to back out of it. The development of such a principle was easy in Britain and USA, where estoppel is a rule of equity (common law), but in India, it is a rule of law, and terms of sec 115 must be strictly complied with.
Difference between promissory estoppel and estoppel
The concept of promissory estoppel differs from the concept of estoppel as continued in Section 115 in that representation in the latter is to an existing fact, while the former relates to a representation of future intention. But it has been accepted by the Supreme Court as “advancing the cause of justice. Though such promise (future) is not supported in point of law by any ‘consideration’( the basis of contract), but only by the party’s conduct; however, if promise is made in circumstances involving legal rights and obligations it is only proper that the parties should be enforced to do what they promised. In Cases, where the government is one of the parties, the court will balance the harm to the public interest by compelling the government to fulfil its promise and not to allow the government to back out of it to see government does not act arbitrarily.
The doctrine has been variously described as “equitable estoppel”, “quasi estoppel” and “new estoppel. The Doctrine is not really based on the principle of estoppel, but it is a doctrine evolved by equity in order to prevent injustice where a promise made by a person knowing that it would be acted on, it is inequitable to allow the party making the promise to go back upon it. The Doctrine of promissory estoppel need not, therefore, be confined to the limitations of estoppel in the strict sense of word.[1]
In that case, there was news in the papers that the State of U.P. would grant exemptions from sales tax for 3 years to new industrial units. The Petitioner wanted to set up a Vanaspati Plant. He applied to the director of industries and the chief secretary, and both confirmed the availability of the exemption. The petitioner contended that the government should be estopped from going back upon the declared exemption. The Supreme Court allowed the petition, holding that the government was bound by its declared intention. The court also held that detriment is not necessary to create an estoppel against the State. What is necessary is only that the promise should have altered his positions in reliance on the promise.
A mere promise to make a gift will not create an estoppel. It would require a clear and unequivocal promise to import the doctrine into a matter. A leading institution intimated the sanction of a loan with a remark that it did not constitute a commitment on the part of the institution. Held that there was no promise to found the doctrine of promissory estoppel. [2]
Thus, if a person gives rights under a statute, and he gives them up at one stage voluntarily and, later on, tries to enforce those rights, no estoppel can be invoked against him. For example, under the rent control act, the landlord can demand from his tenant only a fair/standard rent. If a tenant agreed to pay a high rent and thereafter files a petition for fixing the fair rent, he wouldn’t be estopped.
The Supreme Court has laid down that it is well settled that there cannot be any estoppel against the Government in the exercise of its sovereign, legislative and executive functions. Where a local development authority announced a housing scheme and accepted applications under it, subsequently finding that the scheme was in violation of the Master Plan cancelled it. It was held that to be free to do so without any shackles of promissory estoppel.[3]
The Doctrine of estoppel has been allowed to be invoked against a University. In Univ. of Madras v. Sundara Shetti (1965) MLJ 25, the university was estopped from claiming that a student had not actually passed, but that his mark sheet contained a mistake. The respondent was declared successful in SSLC exams, got certificates and admitted in college. While in the senior class, he received a notice that his name was not on the list of SSLC holders. Thus, his name was removed from the college rolls. It was held that it was a case of legal or equitable estoppel which satisfies him his right. Moreover, there was no mala fide on the part of the respondent. The fact of a miscalculation of marks was within the special knowledge of the university and was not known to any other person.
Conclusion
Extensively talking, estoppels work to set up a state of facts that assume an integral part in modifying what might be the legal rights of the parties, as the rights of the parties are judged by different set of facts and laws. The relevant estoppel might be used to set up a cause of action, give a defence to a cause of action or have some other unequivocal impact on evidence causing a claim to succeed or fail.
[1] M.P. Sugar Mills v. State of U.P. AIR 1979 SC 61
[2] Rabishankar v. Orissa state fin. Corpn. AIR1992Ori. 93
[3] Housing Board cooperative Society v. State AIR 1987 M.P.193
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