Estoppel

(Section 115 – 117)

I. Principle

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. The foundation of the doctrine of estoppel
is that no person can approbate and reprobate at the same time. The doctrine is
incorporated in S. 115 and it is not a rule of equity but a rule of evidence applied in
courts of law.

II. Evolution of Doctrine of Promissory Estoppel

This doctrine found its roots as an exception to the doctrine of consideration in the
law of contract. It became a recognized doctrine in the glorious case of Central
London Property Trust Ltd. v. High Trees House Ltd. wherein Lord Dening
asserted that" A promise intended to be binding, intended to be acted upon, and in
fact acted upon is binding". Thereafter, it has been applied by Indian courts as well
even against the govt.

III. Scope & Essentials u/s 115

The section provides that when one person has by his (a) declaration, (b) act, or (c)
omission intentionally caused or permitted a person :

1. to believe a thing to be true, and

2. to act upon such belief, then neither he nor his representative can be allowed to
deny the truth of that thing in any suit or proceeding between himself and such
person or his representative.

Therefore, to hold a person bound by estoppel the following requirements must be

met:

1. Firstly, there should be a representation that a certain state of thing is true,

and
2. Secondly, the person to whom such representation has been made should have
acted on the belief of it and altered his position by so acting and the alteration
is such that it will unjust to require him to revert back to his original position.

A. REPRESENTATION

Anything done which has the effect of creating in the mind of the other, a belief as to
the existence of the fact will amount to representation. It may in the form of
declaration, act or omission. Also statements whether written or oral, conduct active
or passive, may amount to representation, may amount to representation in the
particular circumstances of the case. The representation should be of facts and not of
law.

Selection through examination - In University of Cochin v. N.S.Kunjoojaama, the

Supreme Court held that a person who participates in a selection process will be
estopped from challenging the validity of the process unless he makes a protest
immediately after discovering the alleged error in process.

Estoppel against educational institutions - In Basanta Kumar Mohanty v. Utkal

University, wrong mark-sheet was supplied to a candidate and the student had no
other means of knowing the truth, therefore, the university was estopped when it tried
to question the marks-sheet after a gap of 5 years.

An estoppel can arise from a waiver, but not from an expression of opinion or from
invitation of tenders.

Invitation from tenders - In C. Jayasree v. Commissioner, a promise by municipal

corporation that the property would be given to the tendorer who will pay the whole of
bid money within two months was held to be not capable of binding the corporation by
invoking the doctrine of estoppel.

B. RELIANCE AND ALTERATION OF POSITION

The second condition necessary to create an estoppel is that the plaintiff has altered
his position on the basis of the representation and he would suffer a loss if the person
who made the representation is allowed to resile from his statement.

Case Law : Joyjit Das v. State of Assam

Facts : Govt. license was granted to a person to establish a saw mill and subsequently
the person spent huge amounts of money. Afterwards, the govt. changed its policy and
refused to grant further licenses to that person.

Held : The Court held the govt to be bound to grant the license not being granted and
said that the change or revision in policy can be done for future.

IV. Applicability & Extent of relief against State

The doctrine of promissory estoppel necessitates striking a balance between individual

rights and larger public interest. In this regard the doctrine of legitimate expectation
can also be invoked along with doctrine of promissory estoppel. The state is bound by
this doctrine had been held in the following case :

Case Law : MPS Mills v. State of U.P.

Facts : State of UP published a news that it would grant sales tax exemption for three
years to new industrial units. The petitioner was granted exemption and proceeded
with plans. State govt. abrogated the policy of exemption. Petitioner filed application

Held : The SC held that the govt. will be bound by its policy of exemption.

The scope of plea of promissory estoppel against the govt. is as follows :

1. It is not available against legislative functions of the state.

2. It cannot be invoked for preventing the govt. from discharging its function
under the law or act contrary to the law.
3. If the officer of the govt. acts outside the scope of his authority, the plea is not
available.
4. The officer will be justified in changing the terms of the agreement to the
prejudice of the other party on special circumstances, such as difficult foreign
exchange position.

V. No estoppel against law or statute

A rule of law cannot be nullified by resorting to the doctrine of estoppel.

Case Law: Basanti Das v. Kamala Nayak,

Facts : Panchayat election resulted in draw and candidates mutually decided to decide
the winner by lot.

Held : There was no estoppel against the candidate challenging the validity of the
result as voters' will has to be ascertained according to the statutory provisions and
not according to parties agreement.

VI. Applications of estoppel: Kinds of estoppel

This doctrine is applicable in almost all legal branches. Some of such application are
as follows :
 1. Estoppel by record : The Doctrine of res judicata is an example of estoppel by
record. This kind of estoppel is dealt with u/s 10 & 11 of CPC, 1908 & S. 40-44
of IEA, 1872. But it is the final decision that has the effect of estoppel.
2. Estoppel by deed : If a person makes a deed, then he and his privies cannot
deny the factual basis on which the deed was entered into. If a lessee makes a
sub-lease , then the latter will be bound by the period of original lease, though
not mentioned in sub-lease.
3. Estoppel in pais : Estoppel by conduct arises when a person takes a particular
position by his conduct. An insurance claimant who neither produces original
policy nor objects to the copy filed by the insurer, cannot be permitted
afterwards to challenge the genuineness of the policy produced by the insurer.
4. Estoppel by pleading : If no specific plea is taken in a writ petition, the same
cannot be raised at the time of hearing.

VII. Estoppel & Waiver

Waiver is an abandonment of right which everybody is at liberty to waive. In order to

attract the principle of waiver, the following two essential elements should be satisfied:

1. The waiver should be voluntary and intentional and

2. There should be two parties, one waiving and the other getting the benefit from
such waiver.

The essence of waiver is an estoppel and where there is no estoppel, there is no waiver.
Estoppel and waiver are questions of conduct which are to be determined by the facts
of each case . However, waiver of advantages conferred by law is not permissible. It is
against public policy. Doctrine of waiver also does not apply to the question of
jurisdiction.