Doctrine of Estoppel

Doctrine Of Estoppel: Overview
Estoppel Principle
"Estoppel may be defined as disability whereby a party is precluded from alleging or proving
in legal proceedings, that a fact is otherwise than it has been made to appear by the matter
giving 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 "stopper plug", referring to placing a brake on the imbalance of the situation. The
rationale behind estoppel is to prevent injustice owing to fraud or inconsistency.
In its simplest sense, doctrine of Estoppels, precludes a person from denying or to negate
anything to the contrary of that which has been constituted as truth, either by his own actions,
by his deeds or by his representations or by the acts of judicial or legislative officers.
Estoppel is often described as a rule of evidence as indeed it may be so described. But the
whole concept is more carefully viewed as a rule of substantive law.
To invoke the doctrine of estoppels, there are three conditions which must be satisfied;
1. Representation by a person to another
2. The other should have acted upon the said representation and
3. Such action should have been detrimental to the interests of the person to whom the
representation has been made.
However in the case, "Gyarsi Bai vs. Dhansukh Lal,2" it was observed by the Hon'ble Apex
Court that even if the first two conditions are fulfilled, but the third is not, then there is no
scope to invoke the doctrine of estoppel.
Types of Estoppel
1. Estoppel by Silence or Acquiescence
2. Employment Estoppel
3. Reliance-based estoppels:
a. Promissory estoppel, without any enforceable contract a promise has been
made by one party to another.
b. Proprietary estoppel, where the parties are litigating the title to land.
4. Estoppel by deed
5. Estoppel by record
6. Estoppel Against Minor
7. Estoppel by deed
International Prospective
The Development of Estoppel U. K. In English law, a promise which has been made
without consideration is generally not enforceable. It is known as a bare promise. The
doctrine of promissory estoppel was first developed in Hughes v. Metropolitan Railway
Co.3
Thomas Hughes was the owner of the property which was leased to the Railway Company.
Under the lease agreement, Hughes was entitled to compel the tenant to repair the building
within six months of notice. The Notice was served to leasee on 22 October 1874, from
which the tenants had until 22 April to make those repairs. On 28 November, the tenant had
sent an offer letter to owner for purchasing the same property. Negotiations began and
continued until 30 December, but there was no settlement. The time of 6 months had elapsed;
the owner sued the tenants for the breach of contract and also tried to evict the tenant.
The House of Lords ruled that with the initiation of the negotiations there was an implied
promise by the landlord not to enforce their strict legal rights with respect to the time limit on
the repairs and the tenant acted on this promise to their detriment, 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 some time after this case and it was
resurrected by Lord Denning in the case "Central London Property Trust Ltd v High
Trees House Ltd"4
In 1937, High Trees House Ltd leased a block of flats in Clapham, London, for a rate
2500/year from Central London Property Trust Ltd. Due to the prevailing conditions during
the beginning of the World War II occupancy rates were drastically lower than normal. In
January 1940, to ameliorate the situation the parties made an agreement in writing to reduce
rent by half. However, neither party stipulated the period for which this reduced rental was to
apply. Over the next five years, High Trees paid the reduced rate while the flats began to fill,
and by 1945, the flats were back at full occupancy. Central London sued for payment of the
full rental costs from June 1945 onwards.5
Based on previous judgments as Hughes v Metropolitan Railway Co, Denning J held that
the full rent was payable from the time that the flats became fully occupied in mid-1945.
However, he continued in an obiter statement that if Central London had tried to claim for the
full rent from 1940 onwards, they would not have been able to. This was reasoned on the
basis that if a party leads another party to believe that he will not enforce his strict legal
rights, then the Courts will prevent him from doing so at a later stage. This obiter remark was
not actually a binding precedent, yet it essentially created the doctrine of promissory
estoppel.
The Indian Development of Estoppel

Estoppel has been defined under Section 115 in "The Indian Evidence Act, 1872."
"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 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 History of doctrine of promissory estoppel in India can be traced to the case of Ganges
Mfg Co. v. Sourajmul6whereby the Calcutta High Court had held that the doctrine of
estoppel was not only limited to the law of evidence, but that a person may be estopped from
doing acts or relying on particular arguments or contentions.
Estoppel against Government

In Motilal Padampat Sugar Mills vs. State of U.P.,7it was held that the government was
bound by its promise & was liable to exempt the appellant from sales tax for a period of three
years commencing from the date of production.
Estoppel against the private parties

Taking note of section 115 of the Indian Evidence Act, which would be the governing law for
deciding on the disputes between the parties, it can be held that promissory estoppel also
applies in cases of dispute between private parties. It was held in the case, "Century
Spinning and Mfg Co. Ltd. v. Ulhasnagar Municipal Council"8 by Supreme Court, the
concept 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 the Statutory Provisions and therefore, the said
statutory provisions cannot be ignored on the grounds of an earlier administrative decision or
precedent."
State of Bihar and others v. Project Uchcha Vidya, Sikshak Sangh and others,10 in which
it was laid that "We do not find any merit in the contention raised by the learned counsel
appearing on behalf of the respondents that the principle of equitable estoppel would apply
against the State of Bihar. It is now well known, the rule of estoppels has no application
where contention as regards a constitutional provision or a statute is raised."
Olga Tellis v. Bombay Municipal Corporation (1985.07.10) (Right to Life and
Livelihood for Homeless),11 that there can be no estoppels against the constitution of India or
against the fundamental rights.
Some Case-laws related to Estoppel

i. International Amusement Ltd. v Entertainment Tax Officer & Ors12. It was held that
"Benefits of exemption which is available to Assessee shall not be denied by Authority,
unless it is justified by law."
ii. O.P. Sharma & Ors. Vs .Union of India & Ors.,13, once the voluntary retirement is taken
by the petitioners and they have taken it without reserving any right as claimed in the writ
petition, the petitioners also would be estopped in claiming any reliefs in the writ petition.

Doctrine of Estoppel

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Doctrine of Estoppel

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Doctrine Of Estoppel: Overview

The Indian Development of Estoppel

Estoppel against Government

Estoppel against the private parties

No Estoppel can be made against Statutes

Some Case-laws related to Estoppel

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