“LAW RELATED TO ESTOPPEL- A STUDY”

SCHOOL OF LAW

MANIPAL UNIVERSITY JAIPUR

IN PARTIAL FULFILLMENT OF THE REQUIREMENT PRESCRIBED

FOR BA. LL.B (HONS.) 6th SEMESTER

UNDER SUPERVISION OF- SUBMITTED BY-

Dr. Vijaylaxmi Sharma Sourav Kumar (VI Semester)

Associate Professor Reg No- 151301082
B.A. LL.B (Hons)
 CERTIFICATE

This is to certify that Mr. Sourav Kumar student of B.A. LL.B (Hons.) sixth semester, School of
Law Manipal University Jaipur has completed the project work entitled “Law related to
estoppel” under my supervision and guidance.
It is further certifying that the candidate has made sincere efforts for the completion of the
project work.

Supervisor Name
Dr. Vijaylaxmi Sharma
Assistant Professor
 ACKNOWLEDGEMENT

This is not just a customary acknowledgement of help that I received but a sincere expression of
gratitude to all those who have helped me complete this project and made it seem apparently
more readable than otherwise it would have been.

I am in debt to my faculty advisor Dr. Vijaylaxmi Sharma for giving such an interesting
and amazing topic ‘Law related to estoppel - A study’ and making it seem easy by lucidly
explaining its various aspects. I would like to thank him for guiding me in doing all sorts of
researches, suggestions and having discussions regarding my project topic by devoting his
precious time.
I thank department for providing Library, Computer and Internet facilities. And lastly I
thank my friends and all those persons who have given valuable suggestions pertaining to the
topic and have been a constant source of help and support.

Thanking everyone,

SOURAV KUMAR
 TABLE OF CONTENTS

INTRODUCTION ........................................................................................................................................ 5
MEANING OF ESTOPPEL ......................................................................................................................... 5
ESTOPPEL – AS A RULE OF EVIDENCE ................................................................................................ 6
EVOLUTION OF DOCTRINE OF PROMISSORY ESTOPPEL ............................................................... 8
PROMISSORY ESTOPPEL: AN OUTLINE............................................................................................... 9
NATURE OF PROMISSORY ESTOPPEL ............................................................................................... 10
KINDS OF ESTOPPELS ............................................................................................................................ 13
ESTOPPEL BY MATTER OF RECORD .................................................................................................. 13
ESTOPPEL UNDER EVIDENCE ACT 1872............................................................................................ 14
CONCLUSION ........................................................................................................................................... 18
WEBLIOGRPAHY..................................................................................................................................... 19
BIBLIOGRAPHY ....................................................................................................................................... 19
 INTRODUCTION

In law, estoppel is a set of doctrines in which a court prevents a litigant from taking an action the
litigant normally would have the right to take, in order to prevent an inequitable result. Estoppel
occurs when a party "reasonably relies on the promise of another party, and because of the
reliance is injured or damaged". For example, estoppel precludes "a person from denying, or
asserting anything to the contrary of, that which has, in contemplation of law, been established as
the truth, either by the acts of judicial or legislative officers, or by his own deed, acts, or
representations, either express or implied

MEANING OF ESTOPPEL

Estoppel in simple words is a bar which prevents a party from asserting a fact or putting up claim
inconsistent with the position he previously took. It is said to be a rule which preludes a person
from saying one thing at one time and another thing, totally in consistent with the earlier one, at
another stage1.

In Black’s New Dictionary, “estoppel” is indicated to mean “that a party is prevented by his own
acts from claiming a right to the detriment of other party who was entitled to rely on such
conduct and has acted accordingly.”

According to Oxford Dictionary of Law estoppel is “a rule of evidence or a rule of law that
prevents a person from denying the truth of a statement he has made or from denying facts that
he has alleged to exist, The denial must have been acted upon (probably to his disadvantage) by
the person who wishes to take advantage of the estoppel or his position must have been altered as
a result2. When a person has, by his declaration, act or omission, intentionally caused or
permitted another person to believe a thing to be true, and to act upon such belief, neither he nor

1
Kumar, Narender; Nature and Concepts of Administrative Law, 1st Ed., Allahabad Law Agency, Faridabad,2011,
p. 366

2
Quoted inSharma Transport v. Government of Andhra Pradesh, AIR 2002 SC 322.
his representative shall be allowed in any suit or proceeding between himself and such person or
his representative, to deny the truth of the thing. The former person is thus stopped from denying
the truth of his previous statement. He, thus, cannot both approbate and reprobate, because of
invocation of rule of estoppel against him.

In other words, estoppel is a rule, whereby a party is precluded from or to say estopped from
denying the existence of some state of facts which he had previously asserted and on which the
other party has relied or is entitled to rely upon. According to Wade and Forsyth the basic
principle of estoppel is that a person who by some statement or representation or representation
of face causes the other to act to his determent in reliance on the truth of it is not allowed to deny
it later, even though it is wrong. Estoppel, thus, gives way to justice to prevail over the truth3.

In Indira Bai v. Nand Kishore ,Sahai, J., stated “Estoppel is a rule of equity flowing out of
fairness striking on behavior deficient in good faith. It operates as a check on spurious
conducting by preventing the inducer from taking advantage and assailing forfeiture already
accomplished. It is invoked and applied to aid the law in administration of justice. But for it great
many injustices may have been perpetrated.”

ESTOPPEL – AS A RULE OF EVIDENCE

Estoppel, as a rule of evidence, may be read in distinction to equitable principle of promissory

estoppel. While the former is more correctly described as “a principle of law”, the latter is known
as a rule of equity. As a principle of law estoppel applies only to representations about past or
present facts4. The basic premise of estoppel is that a person, who by some statement or
representation of facts causes another act in reliance on the truth of it, is not allowed to deny it
later, even though it is wrong.

3
Wade, H.W.R. & Forsyth, C.F.; Administrative Law, 9th Ed., Oxford University Press, New Delhi, 2006, p.237

4
Wade, H.W.R. & Forsyth, C.F.; Administrative Law, 9th Ed., Oxford University Press, New Delhi, 2006,
p.236
The principle of estoppel embodies in Section 115 of the Indian Evidence Act, 1872 is
commonly known as a rule of evidence. The Section reads as under: When one person has by his
declaration, act or omission, intentionally caused or permitted another person to believe a thing
to be true and to act on such belief, neither he nor his representatives 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 principle of estoppel enshrined in the Section, the following three conditions
are necessarily be satisfied:
(I).there must be a declaration, act or omission on the part of a person;
(ii).by the said declaration, etc., that person must have intentionally caused or permitted another
person to believe a thing to be true; and
(iii).he must have intentionally caused or permitted the said another person, to act upon such
belief.

Section 115 explains that a party is precluded from denying the existence of some state of facts
which he had previously asserted and on which the other party has relied or is entitled to rely on.
That is, a man should keep his words, all the more so when the promise is made with the
intention that the other party should act upon it.

As a rule of evidence, embodied in Section 115, estoppel may lie against the Government on a
representation or statement of facts, if the statement does not operate against the statute.

In Delhi University v. Ashok Kumar5, the respondent, a student after passing the Secondary
School Certificate Examination of the Gujarat Board was admitted provisionally in the B.A. I
year course in the Delhi University. After over a year, the University informed him that he was
ineligible to join the course because the Gujarat Board Examination had been recognized by the
appellate University as equivalent to Matric Examination while the qualification to join B.A. I
year Course was passing the Higher Secondary Examination. However, the Statute had
authorized the Academic Council of the University to grant exemption from the admission
requirements. The High Court of accepted the plea of the estoppel raised by the student

5
AIR 1968 Del. 131
against the University. The Court stated that estoppel was within the meaning of Section 115 of
the Evidence Act, 1872, might arise from the silence as well as words, the Court held “inaction
of the University for over a year amounted to a representation by it that it had approved his
admission” and. therefore the University would now be estopped from doing that

In Shri Krishna v. Kurukshetra University6, the Apex Court had ruled that the University could
not cancel the candidature of the appellant-student for the not complying with the attendance
requirement, as the respondents failed to tale the adequate care to scrutinize his examination
from at the relevant time to ascertain whether the candidate fulfilled the necessary conditions.

EVOLUTION OF DOCTRINE OF PROMISSORY ESTOPPEL

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

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 Trust Ltd. v. High Trees
House Ltd7, 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-Anglo Afghan case and post - Anglo 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.

6
AIR 1976 SC 376
7
1947) KB 130
In Union of India v. Indo Anglo Afghan Agencies Ltd.8, 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

PROMISSORY ESTOPPEL: AN OUTLINE

Lord Denning in Central London Property Trust Ltd. v. High Trees House Ltd9., expressing the
doctrine stated: “Once a promise has been made by a person knowing that it would be acted upon
by the person to whom it is made and in face it is no acted upon, then it is inequitable to allow
the party making the promise to go back upon it.”

In this case, during the Second World War, people left London owing to bombardment and as a
result, a number of flats remained unoccupied. A had left out his flat to B for 99 years at the rate
of £2500 a year. He, however, due to war conditions, agreed to reduce the rent by fifty per cent.
After the war was over, the tenants returned. A demanded full amount of rent to which B
objected relying on A’s assurance. The Court applied the doctrine of estoppel and granted relief
to B. The doctrine of Promissory Estoppel is premised to be conduct of a party making a
representation to the other so as to enable him to arrange its affairs in such a manner as if the said
representation is acted upon.

In Sharma Transport v. Government of Andhra Pradesh10, Promissory Estoppel was defined as:
An estoppel which arises when there is a promise which promisor should reasonably except to
induce action or forbearance of a definite and substantial character on the part of the promise and

8
AIR 1968 SC 718
9
(1947) 1 KB 130
10
AIR 2002 SC 322
which does induce be avoided only by enforcement of promise. The principle of promissory
estoppel is that where one party has by his words or conduct made to the other a clear and
unequivocal promise or representation which is intended to create legal relations or affect a legal
relationship to arise in the future, knowing or intending that it would be acted upon by the other
party, the promise or representation would be binding on the party making it and he would not be
entitled to go back upon it, if it would be inequitable to allow him to do so, having regard to the
dealings which have taken place between the parties.

NATURE OF PROMISSORY ESTOPPEL

It has been said that the rule of promissory estoppel cannot itself be the basis of an action. It
cannot be a cause of action; it can only be a shield and not a sword. Since the doctrine has been
usually invoked by way of defense, it has come to be identified as a measure of defense. But, in the
present day judicial tendency appears to be that estoppel can be used as a sword also11.

Stating that “there are estoppels and estoppels” Lord Denning held that “some do give rise to
cause of action, some do not.” In the species of estoppel called “proprietary estoppel”, says the
learned Lord “it does give rise to cause of action”. Estoppel is often described as a rule of
evidence, but the whole concept is more correctly viewed as a substantive rule of law. It is
necessary to make it clear that the doctrine of promissory estoppel or equitable estoppel is not
based on the principle of estoppel but it is a doctrine evolved by equity in order to prevent
injustice. Estoppel by conduct proceeds on the rule of substantive law and equity where a
promise made by a person knowing that it would be acted on by the person to whom it is made
and in fact it is so acted and it is inequitable to allow the party making the promise to go back
upon it.
It being an equitable principle evolved for doing justice, “there is no reason,” said Bhagwati, J.,
“why it should be given only limited application by way of defense. It can be the basis of cause
of action. “Though commonly named as “promissory estoppel”, it is neither in the realm of

11
Moorgate Mercantile Co. v. Twichings, (1975) 3 All ER 314
Contract nor in the realm of estoppel. The basis of the doctrine is the interposition of equity
which has always, true to its form, stepped in to mitigate the rigor of strict law12.

APPLICATION OF DOCTRINE OF PROMISSORY ESTOPPEL TO GOVERNMENT

Since the doctrine of promissory estoppel is an equitable doctrine it must yield when the equity
so requires. If it can be shown by the Government that having regard to the facts as they have
subsequently transpired, it would be inequitable to the Government to abide by the promise made
by it, the court would not raise equity in favor of the promise and enforce it against the
Government. When the Government is able to show that due to the facts which have transpired
subsequent to the promise being made, public interest would be prejudiced if the Government
were required to carry out the promise made, the court would have to balance the public interest
in the Government carrying out the promise made to a citizen which has induced the citizen to
alter his position to his prejudice and the public interest likely to suffer if the Government were
to carry out the promise, and determine which way the equity lies. The case of Motilal Padampat
Sugar Mills v. State of Uttar Pradesh13, 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 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. In
Century Spinning and Manufacturing Co. v. Ulhasnagar Municipality14, the municipality
agreed to exempt certain existent industrial concerns in the area from octroi duty for a period of
seven years. However, later on it sought to impose duty. This was challenged and the Supreme
12
Wade, H.W.R. & Forsyth, C.F.; Administrative Law, 9 th Ed., Oxford University Press, New Delhi, 2006, p.236

13
AIR 1979 SC 621
14
AIR 1971 SC 1021 : 1970 SCR (2) 854
Court, while remanding the case to the High Court, held that where the private party had acted
upon the representation of a public authority, it could be enforced against the authority on the
grounds of equity in appropriate cases even though the representation did not result in a contract
owing to the lack of proper form. However, the case of Jit Ram Shiv Kumar v. State of Haryana15,
cast a shadow on the Motilal case where it was held that the doctrine of promissory estoppel is not
available against the exercise of executive functions of the State. The Supreme Court in Union of
India v. Godfrey Phillips India Ltd.16, soon removed this doubt. The Court held that the law laid
down in Motilal case represents the correct law on promissory estoppel.

In State of Punjab v. Nestle India Ltd.17, the Apex Court said: “promissory estoppel long
recognized as a legitimate defense in equity was held to find cause of action against the
Government, even when, and this needs to be emphasized, the representation sought to be
enforced was legally invalid in the sense that it was made in a manner which was not in
conformity with the procedure prescribed by the statute. “It has also been made clear that the
Government could not, on some undefined and undisclosed ground of necessity or expediency
fail to carry out the promise solemnly made by it. Nor, the Government could claim to be the
Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in
which the obligation had arisen.
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 estoppels 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.

15
AIR 1980 SC 1285 : 1980 SCR (3) 689 : (1981) SCC (1) 11
16
1996 (85) ELT 242 Bom
17
AIR 2004 SC 4559
 KINDS OF ESTOPPELS

There are different kinds of estoppels:

1) Estoppels by matter of record;
2) Estoppels by deed; and
3) Estoppels in pais.

ESTOPPEL BY MATTER OF RECORD

A matter of record is something part of the records of a Court. It is at once the narrative and the
proof of its proceedings. Estoppel by records results from the judgment of a competent Court.
The law allows a party sample opportunity, by way of appeal and otherwise, of upsetting a
wrong decision. And if he takes the opportunity and fails, or does not choose to avail himself of
it, he cannot subsequently re-open or dispute that decision. And not only the parties themselves,
but also the heir, executor, administrator and assign of each of them are bound by the decision,
for they are privy to the estoppel. Estoppel by matter of record is chiefly concerned with the
effect of judgments and their admissibility in evidence, and this kind of estoppel is dealt with
Sections 11 to 14, Civil Procedure Code and Sections 40 to 44 of the Evidence Act. It is the final
decision and not any and every expression of opinion in a judgment which gives rise to an
estoppel by record, and the actual decision cannot be carried further than the circumstances
warrant. The general principle which runs through the doctrine of estoppel by record is that a
decree is an order of the Court and the judgment-debtor must, when it has once been completed,
obey it unless and until he can get it set aside in proceedings duly constituted for the purpose.
 ESTOPPEL UNDER EVIDENCE ACT 1872

When a person has, by his

(I) Declaration

(ii) Act, or

(iii) Omission

Intentionally caused or permitted or another person

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

(ii) To act upon such belief

Neither (I) he, nor (ii) his representative can be allowed to deny the truth of that thing in a suit or
proceeding between himself and such person or his representative.

Illustration:

A intentionally and falsely leads В to believe that certain land belongs to A, and A seeks to set
aside the sale on the ground that at the time of the sale, he had no title. He must not be allowed to
prove his want to title.

Principle of Section 115:

Estoppel is based on the principle that it would be most inequitable and unjust that if one person,
by a representation, or by conduct amounting to a representation, has induced another to act as he
would not otherwise have done, the person who made the representation should be allowed to
deny or repudiate the effect of his former statement, to the loss and injury of the person who
acted on it.
Sir Edward Coke had defined estoppel in these words: An estoppel exists “where a man’s own
act or acceptance stoppeth or closeth 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.

This section is founded upon the doctrine laid down in Pickard v. Sears (1837 6A. & E. 475),
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 averring 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. No cause of action arises upon estoppel itself.

Scope of Section 115:

In order to hold that a case comes within the scope of this section, a Court must find:

1. That A believed a thing to be true.

2. That in consequence of that belief, he acted in a particular manner.

3. That that belief, and A’s so acting were brought about by some representation by S, either by a
declaration, act, or omission, which representation was made intentionally to produce that result.

If the above three points are established, В is prohibited by law from denying the truth of his
representation in a proceeding by or against A or A’s representative.

It may be noted that it is not necessary to prove any fraudulent intention on B‘s part. He will be
nonetheless estopped if he himself was acting under a mistake or misapprehension.

The section does not apply where the statement relied upon is made to a person who knows the
true facts and is not misled by the untrue statement. There can be no estoppel if true facts are
known to both the parties. Therefore, if A knew the true facts, no estoppel arises.

In Chhaganlal Mehta v. Haribhai Patel, [(1982) 1 S.C.C. 223 ], the Supreme Court analyzed 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.
(I) there must have been a representation by a person (or his authorized agent) to another person.
Such a representation may be in any form — a declaration or an act or an omission.

(ii) Such representation must have been of the existence of a fact, and not of future promises or
intention.

(iii) The representation must have been meant to have been relied upon.

(iv) There must have been belief on the part of the other party in its truth.

(v) 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.

(vi) The misrepresentation or conduct or omission must have been the proximate cause of
leading the other party to act to his prejudice.

(vii) 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.

(viii) Only the person to whom the representation was made or for whom it was designed (or his
representative) can avail of the doctrine.

There are four classes of estoppel to be found in section 116 and 117 of the Act, viz., and
estoppel of

1. Tenant (Section 116)

No tenant of immovable property (or person claiming through such tenant) can, during the
continuance of the tenancy, be permitted to deny that the land-lord of such tenant had, at the
beginning of the tenancy, a title to such immovable property.

2. Licensee of a person in possession (Section 116)

No person who came upon immovable property by the license of the person in possession thereof
can deny that such person had a title to such possession at the time when such license was given.
3. Acceptor of a bill of exchange (Section 117)

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 bill was really drawn by the person by whom it purports to
have been drawn.

4. Bailee or licensee (Section 117):

No Bailee or licensee can deny that his bailor or licensor had, at the time when the bailment or
license commenced, authority to make such bailment or grant such license. But, if a Bailee
delivers the goods bailed to a person other than the bailor, he may prove that such person had a
right to them as against the bailor.
 CONCLUSION

A bar which precludes someone from denying the truth of a fact which has been determined in
an official proceeding or by an authoritative body. An estoppel arises when someone has done
some act which the policy of the law will not permit her to deny.

In certain situations, the law refuses to allow a person to deny facts when another person has
relied on and acted in accordance with the facts on the basis of the first person's behavior.

There are two kinds of estoppel.

Collateral estoppel prevents a party to a lawsuit from raising a fact or issue which was already
decided against him in another lawsuit. For example, if Donna obtained a paternity judgment
against Leroy and then sued him for child support, Leroy would be collaterally estopped from
claiming he isn't the father.

Equitable estoppel prevents one party from taking a different position at trial than she did at an
earlier time if the other party would be harmed by the change. For example, if after obtaining the
paternity judgment, Leroy sues Donna for custody, Donna is now equitably estopped from
claiming in the custody suit that Leroy is not the father.

An example of the slowly disappearing tendency of the legal profession to speak in secret code.
All it means is 'stopped,' 'blocked' or 'not allowed.' Not only is it bizarre but the term does not
appear to originate in any known language. Our research indicates it started either as a legal
fraternity's drunken prank or was the result of an unknown Judge's severe speech impediment.
 WEBLIOGRPAHY

 http://hanumant.com/index.php/articles/general-articles/41-promissory-estoppel-
application-to-the-govt-by-divya-bhargava.html
 http://www.indiankanoon.org/
 http://www.manupatra.com
 https://www.westlaw.com

BIBLIOGRAPHY

 Chief Justice M.Monir, Introduction To Evidence Law, 5th Edition, Universal Law
Publications
 Dr. Rakesh Kumar Singh, Textbook on the Evidence Law, 7th Edition, Universal Law
Publication