1|Page PRINCIPLE OF ESTOPPEL

THE PRINCIPLE OF ESTOPPEL

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 is dealt with in
Sections 115 to 117 of the Indian Evidence Act. While section 115 contains the
general principals of estoppel by conduct, Section 116 and 117 are instances of
estoppel by contract. However there are other recognized instances of estoppel,
viz., The Indian Contract Act (Sec. 234), The Specific Relief Act, (Sec. 18), The
Transfer of Property Act (Section 41 and 43). Estoppels which are not proved by
the Evidence Act may be termed as ‘equitable estoppels’. Estoppel is a procedure
of proof. Sir Edward Coke had defined estoppel in these words: An estoppel exists
“where a man’s own act or acceptance stopped or closet up his mouth to allege or
plead the truth.” In simpler language, a person cannot be allowed to say one thing
at one time and the contrary at another: He cannot blow both hot and cold at the
same time.

Section 115 of evidence act reads:

“When one person has, by his (a) declaration, (b) act, or (c) omission,

Intentionally caused or permitted another person

(i) to believe a thing to be true, and

(ii) 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”.

To invoke the doctrine of estoppel three conditions must be satisfied;

 2|Page PRINCIPLE OF ESTOPPEL

(1) representation by a person to another,

(2) the other shall have acted upon such representation and
(3) such action shall have been detrimental to the interests of the person to whom
the representation has been made

REPRESENTATION:

Representation of the existing fact may arise in any way- a declaration, act or
omission. Anything done which has the effect of creating in the mind of the other a
belief as to the existence of the fact represented will do. A person who is making
representation may not have intention to deceive and may himself be acting under
mistake or apprehension. The estoppel will operate in this case also.1
Representation of mere an intention cannot amount to an estoppel. In order to find
an estoppel the representation relates to an existing fact. Representation must be
clear, definite and unambiguous.

Estoppel by conduct may be active or passive. Estoppel by silence or acquiescence

arises only when there is duty to speak or disclose. No cause of action arises from
estoppel itself.

To invoke the benefit of estoppel it has to be proved that the representation has
been acted upon. The representation must have been acting upon taking it to be
true by the party to whom it was made. Estoppel can arise only if a party to a
proceeding has altered his position on the faith of a representation or promise
made by another.

The burden of proving the ingredients of this section lies on the party claiming
estoppel. The representation which is the basis for the rule must be clear and
ambiguous and not indefinite, upon which the party relying on it is said to have, in
good faith and in belief of it, acted.

1
Sarat Chader Dey v. Gopal Chander Laha ILR 20 Cal 296(PC)
 3|Page PRINCIPLE OF ESTOPPEL

This section is founded upon the doctrine laid down in Pickard v. Sears2 namely,
that where a person “by his words or conduct, wilfully causes another to believe
the existence of a certain state of things, and induces him to act on that belief, so as
to alter his own previous position, the former is concluded from proving against
the latter, a different state of things as existing at the same time.” This doctrine
precludes a person from denying the truth of some statement previously made by
himself.
Facts of the case are as; the mortgagee of the machinery permitted it to remain in
the possession of the mortgagor, against whom a judgment was executed. The
machinery was seized in execution, but although the mortgagee spoke to the
judgment creditors attorney he foolishly made no reference to the fact that
machinery in which he had an interest had been seized to pay another man’s debt,
nor did he make any claim to the machinery for some time. When he eventually did
so, it was held that he might be estopped from denying that the machinery was the
debtor’s, as his conduct amounted to a wilful representation to that effect.

Estoppel is based on the maxim, allegans contraria non est audiendus means a
person alleging contradictory facts should not be heard.

Estoppel is based on the principle that it would be most inequitable and unjust
that if one person by a representation made, or by conduct amounting to a
representation, had induced another to act as he would not otherwise have done,
the person who made the representation should not be allowed to deny or
repudiate the effect of his former statement, to the loss and injury of the person
who acted on it.3

2
(1837 6A. & E. 475)
3
Supra note 1
 4|Page PRINCIPLE OF ESTOPPEL

The doctrine embodied under this section is not a rule of equity, but is a rule of
evidence formulated and applied in courts of law.

In Chhaganlal Mehta v. Haribhai Patel,4 the Supreme Court analysed the scope
of S. 115 of the Act, and laid down that the following eight conditions must be
satisfied to bring a case within the scope of estoppel, as defined in S. 115.

1. There must have been a representation by a person (or his authorised agent) to
another person. Such a representation may be in any form — a declaration or an
act or an omission.
2. Such representation must have been of the existence of a fact, and not of future
promises or intention.
3. The representation must have been meant to have been relied upon.
4. There must have been belief on the part of the other party in its truth. There must
have been some action on the faith of that declaration, act or omission. In other
words, such declaration, act or omission must have actually caused the other
person to act on the faith of it, and to alter his position to his prejudice or
detriment.
5. The misrepresentation or conduct or omission must have been the proximate
cause of leading the other party to act to his prejudice.
6. The person claiming the benefit of an estoppel must show that he was not aware of
the true state of things. There can be no estoppel if such a person was aware of the
true state of affairs or if he had means of such knowledge.
7. Only the person to whom the representation was made or for whom it was
designed (or his representative) can avail of the doctrine.

4
Chhaganlal Mehta v. Haribhai Patel, (1982) 1 S.C.C. 223.
 5|Page PRINCIPLE OF ESTOPPEL

Estoppel is often described as a rule of evidence, as indeed it may be so described.

But the whole concept is more correctly viewed as a substantive rule of law.
Estoppel is essentially a rule of civil action. It has limited application to criminal
proceedings.

KINDS OF ESTOPPEL

ESTOPPEL BY DEED

Where a party has entered into solemn engagement by deed as to certain facts,
neither he nor any claiming through or under him is permitted to deny such facts.
This rule is however subject to certain, qualifications:

i. It is applicable only between parties and privies and only in actions on the deed.
ii. No estoppel arises upon recitals or descriptions which are either immaterial or not
intended to bind.
iii. No estoppel arises where the deed is tainted by fraud or illegality.

ESTOPPEL IN PAIS (BY CONDUCT)

Estoppel in pais arises (1) from agreement or contract
(2) from act or conduct of misrepresentation which has induced a change of
position in accordance with the intention of the party against whom the estoppel is
alleged.
To raise an estoppel by conduct, a person must by word or conduct induce another
to believe that a certain state of things exists, and to cause that other to act on that
 6|Page PRINCIPLE OF ESTOPPEL

belief in a way he would not have done had he known the facts, so that, if in an
action between them the person making a representation were allowed to prove
the true facts—to tell the truth—to other person would be prejudiced.
The following are the recognised principles of an estoppel in pais:

(1) (a) if a man by his words or conduct wilfully endeavours to cause another to
believe in a certain state of things which the first knows to be false,

(b) if the second believe in such state of things

(c)acts upon such belief then

He who knowingly made the false statement is estopped from alleging that such
state of things did not exist in fact.

(2) (a) if a man makes a representation to another of the existence of a certain

state of facts

(b) which he intends to be acted upon in a certain way either in express terms or
the conduct, and

(c) it be acted upon in that way, to the damage of the person who believe in such
state of things, then

The first is estopped from denying the existence of such a state of things.

(3) (a) if a man whatever his real meaning may be conducts himself in such a way
that a reasonable man would take his conduct to mean a certain representation of
fact and that it was a true representation

(b)the second party believed and

(c)does same act in that way to his damage then the first is estopped from denying
that the facts were as represented.
 7|Page PRINCIPLE OF ESTOPPEL

(4) if in a transaction itself which is in despite one has led another into the belief
of a certain state of facts by conduct of culpable negligence calculated to have that
result and such culpable negligence has been the proximate cause of leading and
has led the other to act by mistake upon such belief to his prejudice,

The second afterwards cannot be heard as against the first to show the state of
facts referred to did not exist.5

ISSUE ESTOPPEL

It means issues which are already settled, parties are estopped from unsettle those
issues.

(1) the basic principle underlined the rule of issue estoppel is that the same issue
of fact and law must have been determined in the previous litigation.

(2) the doctrine of issue estoppel in criminal proceedings could come into play
only if the earlier and subsequent proceedings were criminal prosecutions.

(3) the court has inherent jurisdiction as a matter of discretion in the interest of
finality not to allow a particular issue which had already been litigated to be
reopened, nor a party to change his pleadings.

In a suit for partition, there were findings of court in earlier two suits that there
had been oral partition, the plaintiff, a minor at the time was represented through
guardian, there was no plea that the earlier proceedings were null and void, or that
the decrees passed in those suits should be set aside, no evidence to show that the
minor was adversely affected, rather he had the fruits of the decrees, not allowed
to sue.6

5
Dhirubhai D & Co. v. Nizam Sugar Factory Ltd. AIR 2010 NOC 660(AP)
6
Muthake v. Devanna , AIR 2002Ker 301.
 8|Page PRINCIPLE OF ESTOPPEL

PROMISSORY ESTOPPEL

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.

Promissory estoppel is a relatively new development. In order to trace the

evolution of the doctrine in England, we need to refer to some of the English
decisions. The early cases did not speak of this doctrine as estoppel. They spoke of
it as ‘raising equity’. Lord Cairns stated the doctrine in its earliest form in the
following words in Hughes v. Metropolitan Railway Company7:

“It is the first principle upon which all courts of equity proceed, that if parties who
have entered into definite and distinct terms involving certain legal results
afterwards by their own act or with their own consent enter upon a course of
negotiation which has the effect of leading one of the parties to suppose that the
strict rights arising under the contract will not be enforced, or will be kept in
suspense, or held in abeyance, the person who otherwise might have enforced those
rights will not be allowed to enforce them where it would be inequitable having
regard to the dealings which have thus taken place between the parties.”

7
[1877] 2 A.C. 439
 9|Page PRINCIPLE OF ESTOPPEL

This principle of equity made sporadic appearances but it was only in 1947 that it
was restated as a recognized doctrine by Lord Denning in Central London
Properties Ltd. v. High Trees House Ltd.8, who asserted:

“A promise intended to be binding, intended to be acted upon, and in fact acted upon
is binding.”

In the formative period the doctrine of promissory estoppel could not be invoked
by the promisee unless he had suffered ‘detriment’ or ‘prejudice’. All that is
required is that the party asserting the estoppel must have acted upon the
assurance given by him. The alteration of position by the party is the only
indispensable requirement of the doctrine.

In India, there are two stages in the evolution of the application of this doctrine;
pre-Indo-Afghan case and post-Indo- Afghan case. Prior to this case, the position
was that promissory estoppel did not apply against the Government. But the
position altered with this case. In Union of India v. Indo-Afghan Agencies9 , the
Government of India announced certain concessions with regard to the import of
certain raw materials in order to encourage export of woollen garments to
Afghanistan. Subsequently, only partial concessions and not full concessions were
extended as announced. The Supreme Court held that the Government was
estopped by its promise. Thereafter the courts have applied the doctrine of
promissory estoppel even against the Government.

The case of M. P. Sugar Mills v. State of U.P.10 is a trendsetter regarding the

application of the doctrine of promissory estoppel against the Government. In this
case the Chief Secretary of the Government gave a categorical assurance that total

8
[1947] K.B. 130
9
AIR1968 SC718.
10
AIR 1979 SC 621.
 10 | P a g e PRINCIPLE OF ESTOPPEL

exemption from sales tax would be given for three years to all new industrial units
in order them to establish themselves firmly. Acting on this assurance the
appellant sugar mills set up a hydrogenation plant by raising a huge loan.
Subsequently, the Government changed its policy and announced that sales tax
exemption will be given at varying rates over three years. The appellant contended
that they set up the plant and raised huge loans only due to the assurance given by
the Government. The Supreme Court held that the Government was bound by its
promise and was liable to exempt the appellants from sales tax for a period of
three years commencing from the date of production.

The doctrine of estoppel cannot be invoked for preventing the Government from
acting in discharge of its duties under the law. The doctrine of cannot be applied in
teeth of an obligation or liability imposed by the law. It cannot be used to compel
the Government or even a private party to do an act prohibited by law. There can
be no promissory estoppel against the exercise of legislative power. The
legislature can never be precluded from exercising its legislative functions by
resort to the doctrine of promissory estoppel.11

11
Housing Board Cooperative Society v. State AIR 1987 M.P. 193.
 11 | P a g e PRINCIPLE OF ESTOPPEL

SIGNIFICANCE OF THE DOCTRINE OF PROMISSORY ESTOPPEL IN

INDIA

Today we are living in a world where a promise of Government to any citizen or

non-citizen matters a lot especially if it is done in a contractual or business
transaction. When a person relies on the Government’s promise and invests hard
earned money and the Government afterwards does not abide by its promise then
it creates a position where the person’s investment is in danger and he becomes
helpless and paralyzed. The judiciary in India has played a very significant role in
making the State responsible and accountable and made it abide by its promise.

AGAINST UNIVERSITIES

The Doctrine of estoppel has been allowed to be invoked against a University.

In Univ. of Madras v. Sundara Shetti12, 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.

12
(1965) MLJ 25
 12 | P a g e PRINCIPLE OF ESTOPPEL

EXCEPTIONS TO THE DOCTRINE OF ESTOPPEL

There are various exceptions to the doctrine of estoppel:

(1) NO ESTOPPEL AGAINST A MINOR : when a minor represents fraudulently or

otherwise that he is of age and thereby induces another to enter into contract with
him, then in an action founded on contract, the infant is not estopped from setting
up infancy as a plea. However equity demands that he should not retain a benefit
which he had obtained by his fraudulent conduct.

(2) WHEN TRUE FACTS ARE KNOWN TO BOTH THE PARTIES: section 115 does
not apply to a case where the statement relied upon is made to a person who
knows the real facts and is not misled by the untrue statement.13

(3) FRAUD OR NEGLIGENCE ON THE PART OF OTHER PARTY: If the other party
does not believe the representation but act independently of such belief, or in
cases where the person to whom representations is made is under a duty to make
a further inquiry, the estoppel will not operate. Likewise, if there is a fraud on the
part of the other party, which could not be detected by promisor with ordinary
care, the estoppel will not operate.

(4) WHEN BOTH PARTIES PLEAD ESTOPPEL: If both parties establish a case for
application of estoppel, then it is as if the two estoppels cancel out and the court
will have to proceed as if there is no plea of estoppel on either side. Further, if both
sides had laboured under a mistake however bonafide or genuine, the plea of
estoppel will not operate.

(5) NO ESTOPPEL ON POINT OF LAW: Estoppel refers only to a belief in a fact. If a

person gives his opinion that law is such and such and another acts upon such
belief, then there can be no estoppel against the former subsequently asserting

13
Madanappa v. Chandramma AIR 1965 SC 1812.
 13 | P a g e PRINCIPLE OF ESTOPPEL

that law is different. Representation under section 115 should be of facts, not of
law or opinion.14

(6) NO ESTOPPEL AGAINST STATUTE OR SOVEREIGN ACTS : A rule of law

cannot be nullified by resorting to the doctrine of estoppel. A person who makes a
statement as to the existence of the provisions of a statute is not estopped,
subsequently, from contending that the statutory provision is different from what
he has previously stated. For example, where a minor has contracted by
misrepresenting his age, he still can afterwards disclose his real age. It is rule of
law of contract that a minor not permitted to disclose his real age. Hence there can
be no estoppel against the provisions of a statute.

SECTION 116 - ESTOPPEL OF TENANT; AND OF LICENSEE OF PERSON IN

POSSESSION:

No tenant of immovable property or person claiming through such tenant, shall,

during the continuance of the tenancy, be permitted to deny that the landlord of
such tenant had, at the beginning of the tenancy, a title to such immovable
property; and no person who came upon any immovable property by the license of
the person in possession thereof, shall be permitted to deny that such person had a
title to such possession at the time when such license was given.

It provides that a person who comes into an immovable property taking

possession from a person, who he accepts as the landlord, is not permitted during
the continuance of tenancy to say as against his landlord that he had no title to the
property at the commencement of the tenancy. Similarly, a person who comes
upon any immovable property with the licence of the person in possession is not
14
Union of India v. K.S. Subramaniam AIR 1989 SC 662.
 14 | P a g e PRINCIPLE OF ESTOPPEL

permitted to say afterwards that his licensor had no right to the possession of the
property.

In short, a tenant/ licensee is not permitted to deny the title of his

landlord/licensor. Where a landlord files a suit for ejectment and for arrears of
rent the tenant who has been put into possession of the property in a suit by the
landlord cannot be allowed to say that the landlord had no interest in the property
of suit.15

The doctrine is generally recognized that a tenant is estopped, while the tenancy
continues, to deny the title of his landlord.

SECTION 117 - ESTOPPEL OF ACCEPTOR OF BILL OF EXCHANGE, BAILEE OR

LICENSEE:

No acceptor of a bill of exchange shall be permitted to deny that the drawer had
authority to draw such bill or to endorse it; nor shall any Bailee or licensee be
permitted to deny that his bailor or licensor had, at the time with the bailment or
licence commenced, authority to make such bailment or grant such licence.

Explanation 1.-The acceptor of a bill of exchange may deny that the bill was really
drawn by the person by whom it purports to have been drawn.

Explanation 2.-If a Bailee delivers the goods bailed to a person other than the
bailor, the may prove that such person had a right to them as against the bailor.

Section 117 provides that no acceptor of a bill of exchange can deny that the
drawer had authority to draw such bill or to endorse it ; but he may deny that the

15
Moti Lal v. Yar Md. AIR 1925 All. 275.
 15 | P a g e PRINCIPLE OF ESTOPPEL

bill was really drawn by the person by whom it purports to have been drawn (it
can always be shown that the drawer’s signature was forged).

Likewise no bailee/licensee can deny that his bailor/ licensor had, at the time
when the bailment/licence commenced, authority to make such bailment or grant
such licence. But if a bailee of the goods bailed to a person other than the bailor, he
may prove that such person has right to them as against the bailor.

ESTOPPEL BY ATTESTATION- AN attester ordinarily knows nothing of the

contents of document, and so he is not estopped from denying the truth in
document. But if knows about the contents, then estoppel operates.

COMAPRISON OF ESTOPPEL WITH OTHER CONCEPTS

ESTOPPEL AND PRESUMPTION—

An estoppel is a personal disqualification laid upon a person peculiarly
circumstanced from proving particular facts, whereas a presumption is a rule that
a particular inference is to be drawn from particular fact, whoever proves them. In
presumption, evidence to rebut it can be given, while in estoppel, the party
estopped from denying the truth.

ESTOPPEL AND WAIVER—

Waiver is abandonment of right which normally everybody is at liberty to waive. A
waiver requires a positive relinquishment of something which one had before, but
estoppel does not require any such thing as that; and a party waiving his right may
in circumstances reinforce them, while in estoppel it cannot be so. In waiver, there
is full knowledge of facts, while in estoppel, even mistake or omission has no effect.
 16 | P a g e PRINCIPLE OF ESTOPPEL

ESTOPPEL AND RES JUDICATA--

Res Judicata precludes a man averring the same thing twice over in successive
litigation, while estoppel prevents him saying one thing at one time and opposite
at another. Thus res judicata prohibits a court from inquiring into a matter already
adjudicated, while estoppel prohibits a party. Further res judicata is not a rule of
evidence but rule of procedure.

LAW COMMISSION OF INDIA 185TH REPORT16

March 2003

The Report has elaborately analysed Section 115 which deals with a very
important principle of law called ‘Promissory estoppel’. This section briefly
enumerates that whenever any person has by his act, declaration etc. has
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.

The Report has then referred to U.K laws for describing several types of estoppels
namely-estoppel by deed, estoppel by record or judgment, estoppel by conduct.
But in our system it is only of one kind, estoppel by conduct. The report further
refers to various case laws to explain this doctrine. The principle was first laid
down in the High Trees case viz. Central London Property Trust Ltd. vs. High
Trees House Ltd17. Indian Cases which have widely covered this principle are

16
http://lawcommissionofindia.nic.in/reports/185threport-parti.pdf accessed on 11/08/2016 12:23 A.M
17
1947 (1) KB 130
 17 | P a g e PRINCIPLE OF ESTOPPEL

State of HP vs. Ganesh Wood Products18, State of Rajasthan vs. Mahaveer Oil
Industries19 .

With regard to application of this Sec to ‘minors’ 69th report has made an
observation that the word also means and includes minor within its ambit. In
England this Sec has wide application as the word person also means and includes
a married woman under coverture or a trustee in bankruptcy or to a Corporation
in regard to acts which are ultra-virus.

CHANGES RECOMMENDED: Sec. 115 so in order to clear the position regarding

minors a proposal was made for adding an Explanation to include “minor or other
persons under disability”.

Comments and Suggestions on the 185th Law Commission of India Report – Indian
Evidence Act 1872 The Explanation so proposed to be added read as follows:
“Explanation: This section applies to a minor or other person under disability; but
nothing in this section shall affect any provision of law whereby the minor or other
person under disability becomes incompetent to incur a particular liability.” But
the Current Report has not considered it correct to introduce such explanation
where its first part which says that this section applies to a minor or other person
under disability is not necessary. It has even considered that it gives a wrong
notion about the proposed Explanation. Therefore the 185th Report has also
recommended that the second part also requires some re-drafting. They have thus
recommended that instead of an Explanation, a proviso be added below sec. 115 as
follows: “Provided that nothing contained in this section shall apply to minors or
other persons under disability for the purpose of enforcing any liability arising out
of a representation made by such persons, where a contract entered into by such
persons incurring a like liability would have been null and void.”

18
AIR 1996 SC 149
19
AIR 1999 SC 2302
 18 | P a g e PRINCIPLE OF ESTOPPEL

The report has done a brilliant job in critically analysing such Explanation and
thereafter proposing a Proviso instead of an Explanation which now correctly
explains and justifies the position of minors with regard to application of principle
of promissory estoppels.

Section 116 &117

An important point of law that was considered by this Report was the question of
limiting the estoppel ‘during the continuance of the tenancy; does this mean that
once a notice of termination is given under sec. 106 of the Transfer of Property Act,
the tenant is free to dispute the landlord’s title? This was answered by referring to
an old case of Bilas vs. Desraj20 and 69th Report which suggested the position
that even after the words ‘during the continuance of the tenancy’, the words ‘or at
any time after termination of the tenancy’ must be added.21 But one more point
that was considered was that if a tenant has a case that the lease was vitiated by
undue influence, fraud or coercion or mistake, the ban under this section, does not
apply. Estoppel should still apply to a person already in possession. This was
explained with the help of an illustration which is as follows:

If a person becomes a tenant of A first and later enters into a tenancy agreement
with B, even so, the estoppel applies against both A and B, whether A or B was the
owner or even if A or B were not the real owners. Having obtained possession
from A under the first lease, he cannot be allowed to get out of the estoppel by
executing a tenancy agreement with B. If A files a suit, the tenant is estopped from
disputing A’s title and cannot say that it was B who put him later in possession.

20
AIR 1915 PC 96
21
http://lawcommissionofindia.nic.in/51-100/Report69.pdf acessed on 11/08/2016 at 12:57 A.M.
 19 | P a g e PRINCIPLE OF ESTOPPEL

Changes recommended: This report has agreed with the recommendation of

69th report with slight modification that the words “or the person claiming
through such tenant” should also be added after the proposed words “if the
tenant”. The 69th report recommended insertion of new sub-section (2) for
dealing with the issue of attornment. But this report did not deal with cases arising
under Rent Acts where the tenant in possession becomes a statutory tenant and is
permitted a denial of title provided it is bona fide. So the following recommended
and altered Sec 116 as proposed by this report is as follows:

Comments and Suggestions on the 185th Law Commission of India Report

Estoppel of tenant and of licensee of person in possession

116 (1). No tenant of immoveable property, or person claiming through such

tenant, shall, during the continuance of the tenancy or any time thereafter, if the
tenant or the person claiming through such tenant, continuous in possession after
termination of the tenancy, be permitted to deny that the landlord of such tenant
had, at the beginning of the tenancy, a title to such property; and no person who
came upon any immoveable property by the licence of the person in possession
thereof shall be permitted to deny that such person had a title to such possession
at the time when such licence was given.

(3) Where a tenant in possession of immoveable property is attorned to another,

the tenant or any person claiming through him shall not, during the continuance of
the tenancy, or at any time thereafter if the tenant or the person claiming through
him continues in possession after termination of the tenancy, be permitted to deny
that the person to whom the tenant was attorned had, on the date of the
attornment, title to such immoveable property; but nothing in this sub-section
shall preclude the tenant or the person claiming through him from producing
evidence to the effect that the attornment was made under mistake or was
procured by fraud.”
 20 | P a g e PRINCIPLE OF ESTOPPEL

SECTION 117

Changes recommended: The 69th Report, (in para 59.5) after referring to 11th
Report of the Commission recommended that the portion of section 117 which
relates to the acceptor of a bill of exchange, be transferred to the Negotiable
Instruments Act as sec. 104. But, in the 69th Report no positive recommendation
for such transfer was made. Therefore in the present Report it is not considered
necessary to shift the first part of sec. 117 to the Negotiable Instruments Act. For
that matter, there are presumptions relating to landlord and tenant and other
relationships of bailees, etc. contained in the Evidence Act and if there is no need
to transfer them to the Transfer of Property Act or the Contract Act, there is
equally no need to transfer the first part of sec. 117 to the Negotiable Instrument
Act
 21 | P a g e PRINCIPLE OF ESTOPPEL

RECENT CASES

S. V. A. Steel Rollings Mill Ltd.

v.

State of Kerala22

FACTS: -

The appellants are businessmen having their manufacturing units in the State of
Kerala and they are manufacturing different articles with the help of electricity,
which is generated/supplied by the Kerala State Electricity Board .100%
Uninterrupted supply promised by state of Kerala. Policy to give 100%
uninterrupted power supply at same tariff for 5 year period for new
manufacturing units set up in the State. Despite State assurances, power cuts
adversely affected new units.

HELD:

Before laying down any policy which would give benefits to its subjects, the State
must think about pros and cons of the policy and its capacity to give the benefits.
Without proper appreciation of all the relevant factors, the State should not give
any assurance, not only because that would be in violation of the principles of
promissory estoppel but it would be unfair and immoral on the part of the State
not to act as per its promise. Framing policies and their implementation are
administrative functions of the State and normally courts would not like to
interfere with its policies - But in present case, where an assurance had been given

22
2014(4) SCC 186
 22 | P a g e PRINCIPLE OF ESTOPPEL

for uninterrupted supply of electricity, respondent State was bound to give the
benefits which had been assured to appellants.23

UNION OF INDIA & ANR.

V.

SHREE HANUMAN INDUSTRIES24

FACTS OF THE CASE

In the year 1997, a policy decision was taken by the Planning and Development
Department, Government of India for promotion of industries in the North East
Region, during the period of 9th Plan by providing inter alia a package of
incentives to create an entrepreneurial environment. With this objective, a scheme
nomenclature SPINE, as above, was launched by the Ministry of Development of
North Eastern Region, North Eastern Council, Shilong (DONER).

In terms of the scheme, The North Eastern Council (NEC) was to provide to the
newly set up industries to the extent of 25 per cent of the project cost or Rs. 50
lacs, whichever was less as deemed proper by the recommending authority on the
fulfilment of the conditions stipulated therein. The Union of India, represented by
the Ministry of DONER and the NEC were entrusted with the role of implementing
the scheme.

23
http://www.airwebworld.com/content/freetextsearch/judgmentsearchresult.php ACCESED ON 11/08/2016
AT 7:53 P.M.
24
(2015) 6 SCC 600.
 23 | P a g e PRINCIPLE OF ESTOPPEL

In response to this scheme, which was apparently akin to a State policy, the
respondents on various dates submitted their applications accompanied by
necessary documents for setting up their industries as mentioned therein inter alia
disclosing the investments made even by obtaining financial accommodation from
banking institutions and otherwise. According to the respondents though their
applications remained pending and they were made to understand that the same
were being processed as per the norms applicable, it was noticeable, that the
implementing authorities were adopting pick and choose methods in the matter of
disbursement of the financial assistance to a selected few by overlooking their
worthy claims.25

HELD:

Supreme Court observed that relief of promissory estoppel can be deny in

following cases:-

(1) if deliberate delay or other factors make such relief in equitable.

(2) if such relief is against public interest.

(3) if court has given a reasonable notice, which need not be formal one affecting
promise a reasonable opportunity of resuming his position.26

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25
http://www.lawweb.in/2015/09/when-doctrine-of-promissory-estoppel-is.html ACCESSED ON 8:03 P.M.
11/08/2016.
26
https://www.indianbarassociation.org/wp-content/uploads/2015/07/Supreme-Court-Judgment-Union-of-
India-Ors.-vs-Shri-Hanuman-Industries-Anr. Accessed on 11/08/2016 at 8:08 P.M.