THE NATIONAL LAW INSTITUTE UNIVERSITY BHOPAL

                                          
LAW OF CONTRACT-2 PROJECT

SECOND TRIMESTER

THE DOCTRINE OF PROMISSORY ESTOPPEL

SUBMITTED BY :                                                           SUBMITTED TO : 

Radha Charpota          Prof. Neha Sharma

2019 BALLB 30

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TABLE OF CONTENTS:

1. INTRODUCTION 5
2. PRINCIPLE OF ESTOPPEL 7
3. NATURE OF ESTOPPEL 10
4. TYPES OF ESTOPPEL 12
5. EVOLUTION OF DOCTRINE OF ESTOPPEL 15
6. EXCEPTIONS TO ESTOPPEL 18
7. CONCLUSION 20
8. BIBLIOGRAPHY 21

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INTRODUCTION:
Dealt from Section 115 to 117 of the Indian Evidence Act, 1872 Doctrine of Estoppel is that
provision which prohibits a person from giving false evidence by preventing them from making
contradicting statements in a Court of Law. The objective of this doctrine is to avert the
commission of fraud by one person against another person. This doctrine holds a person
accountable for false representations made by him, either through his words or through his
conduct. 

 Promissory estoppel is the idea that a promise can be enforced by the law if, after relying on that
promise, the promisee is injured or suffers a resulting loss. The idea of promissory estoppel is
that the promisor is barred from arguing that the underlying promise at the heart of the case
should not be legally upheld. While promissory estoppel is enforceable in all fifty states, the
requirements associated with the concept vary from state to state.

Meaning of Estoppel –

Section 115 of the Indian Evidence Act, 1872 incorporates the meaning of estoppel as when one
person either by his act or omission, or by declaration, has made another person believe
something to be true and persuaded that person to act upon it, then in no case can he or his
representative deny the truth of that thing later in the suit or in the proceedings. In simple words,
estoppel means one cannot contradict, deny or declare to be false the previous statement made by
him in the Court.

STATEMENT OF PROBLEM
The legal doctrine of promissory estoppel is applied in all American states and finds its roots in
equity.[1] In contract law, promissory estoppel is an exception to the requirement of
consideration for a contract to be enforceable. Even in the absence of bargained-for exchange, a
promise is enforceable if the following three elements are satisfied:
1)    The promisor should reasonably expect to induce action or forbearance from the
promisee;
2)    Such action or forbearance is in fact induced; and
3)    Injustice can be avoided only by enforcement of the promise.

OBJECTIVES OF STUDY:
Promissory estoppel was formally “ushered” onto the stage of American contract law in 1932
in the First Restatement of Contracts.[3] At the time, the development of such a legal principle

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was viewed as a major departure from classical contract law. Now, it is reserved for the limited
class of cases where it would be unconscionable or unfair to deny the promise upon which the
plaintiff has relied.

HYPOTHESIS:
when a person makes a promise, unless the promisee does, has done or promises to something ,
at the desire of the promisor, the promise would be without consideration and the promise cannot
be enforced in a court of law.

METHOD OF STUDY:
This project is largely based on doctrinal method of collection.

REVIEW OF LITERATURE:
The promissory estoppel doctrine is most commonly enforced in the field of contract law. This is
because the whole point of a contract is for parties to negotiate an agreement based on a promise.
Ordinarily, a contract is enforceable upon an agreement for an exchange of money, or a promise
to refrain from engaging in a particular activity. However, in order to be truly fair, a court may
enforce a promise even if no such exchange was made. All that must be proven is that a promise
was made, and that in relying on that promise, a party suffered a loss as a result.

The elements of promissory estoppel determine whether the remedies that are available to the
injured party are equitable, or fair. This means that the court has discretion in deciding how best
to make the situation right. The court will not always force the promisor to honor his promise.
The only time this is done is if that is the only way to ensure justice for the promisee. A party
looking to enforce promissory estoppel must be able to prove that it was unconscionable for the
promisor to go back on his promise. Unfairness is at the very core of the promissory estoppel
doctrine.

Courts look at all the circumstances to determine whether the promisor should have foreseen that
the promisee would rely on the promise. This may include looking at the communications
between the two parties to establish their states of mind. For example, if the promisee told the
promissor that he wanted to purchase a car but was $2,000 short of being able to make a down
payment, and the promissor then promised him $2,000, the promissor should reasonably expect
the promisee to make the down payment in reliance of the promise. 

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Second, a plaintiff will have to show that there was a direct cause-effect relationship between the
promisor’s promise and the promisee’s action

Courts interpret the term “injustice” to mean an unfair result. If an unfair result would otherwise
occur, a promise will be enforced by awarding damages to a harmed party. Damages, however,
are limited to reliance damages, which means the amount of harm suffered because of the
reliance on the promise.  While courts generally prefer to award expectation damages, which
means the full promised value of the agreement, these are not necessarily available in promissory
estoppel cases. The court will award only those damages necessary to avoid injustice.

PRINCIPLES OF ESTOPPEL:
Conditions for application of Doctrine of Estoppel

 The following conditions are to be satisfied in order to apply the doctrine of estoppel:
 The representation must be made by one person to another person.
 The representation made must be as to facts and not as to the law.
 The representation must be made as to an existing fact.
 The representation must be made in a manner which makes the other person believe that
it is true.
 The person to whom the representation is being made must act upon that belief.
 The person to whom the representation would be made should suffer a loss by such
representation. 

NATURE OF ESTOPPEL:
The legal principle of the doctrine of estoppel is viewed as a substantive rule of law, albeit,  it has
been described as a principle under the Indian Evidence Act, 1872. 

TYPES OF ESTOPPEL:
Estoppel by a matter of Record or Quasi-record

Alike res judicata once a court has given the judgement, the parties, their representatives, their
executors, etc. all are bound by that decision. This doctrine stops the parties to a case, from
raising another suit in the same matter or to dispute the facts of the case after the decision has
been made by the court. 

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Situations where estoppel by record or quasi record arises are as follows:

Where the dispute between the parties on the facts have been decided upon by the tribunal which
was entitled to take decision in the particular case, and when the same dispute arises again in the
matter subsequent to the first one, between the same parties;

Where the issue raised between the parties which has been resolved by the judiciary, incidently
comes again into question in the subsequent proceedings between the same party.

Where an issue raised on the facts, affecting the status of the person or thing, has been willing
determined in a manner that in the final decision it be included as a substantive part of the
judgment in rem of the tribunal that has been setup to decide the particular case. This should take
place when the same issue comes directly in question in subsequent civil proceedings between
any party whatever. 

Estoppel by Deed

It is the concept where two parties enter into an agreement by way of a deed as to certain facts.
This implies that neither he nor his representatives or any person claiming under him can deny
the facts mentioned and agreed in the deed. 

Estoppel by Pais or Estoppel by Conduct

The elucidated meaning of ‘Estoppel by Pias’ is ‘Estoppel in the Country’ or ‘Estoppel before
the public’. It has been discussed in Ss. 115 to 117. 

Estoppel by conduct means when a person through agreement, misrepresentation or negligence

makes the other person believe in certain things upon which the other person had taken some
action causing a change in their current situation, then the first person cannot deny the veracity
of the statements given by him in the latter stages. 

In the case of Sardar Chand Singh v. Commissioner; Burdwan Division, [1] Chang Singh, the
Managing Director of Messrs., was denied any revolver license as he was accused in a gruesome
murder case and other cases. When the District Magistrate issued an order that he could not hold
any revolver license on the grounds of public order and safety, Chand made no appeal. This
planted a reasonable belief that he has consented to it. Later on when makes an application to the
District Magistrate to reconsider his case, it was denied following the doctrine of ‘Estoppel by
Conduct’.

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Estoppel by election

Kantabai offers his maid Meena Malhotra her second-hand car. Meena out of generosity says
that she would not take it for free. Kantabai says to Meena that she has the freedom to take it as a
gift or to make a payment as per her willingness. Meena has the option to either take it as a gift
or claim a right over it by purchasing the car. Now, Meena makes the payment and takes the car
in her possession. After a year, Meena becomes bankrupt and asks Kantabai to return the money
which she had given to her as the payment for buying the car, as she now wants it as a gift. 

Equitable estoppel

When a person tries to take a legal action that would conflict with his previously given
statements, claims or acts, this legal principle would prohibit him from doing so. So, the plaintiff
would be stopped from bringing a suit against the defendant who acted pursuant to the
commands of the plaintiff. 

Estoppel by negligence

This principle allows one party to claim a right over the property of another party who might not
be having the possession of it. This reflects that the person being estopped owes a duty to the
other person whom he had led into wrong belief. 

In the case of Mercantile Bank of India v/s The Central Bank of India Limited [3] a firm of
merchants committed a series of fraud and until it came to the notice of the authorities, enjoyed
high repute in the state of Madras. This firm was known for groundnuts-merchant and exporters.
Both the plaintiff and defendant financed the consignments of ground-nuts purchased and each
received a ‘railway receipt’ in respect of their consignment. 

The merchants needed a loan so what they did was, at first pledged the railway receipt from the
Central Bank to obtain a loan and then again fraudulently pledged it to the Mercantile Bank also.
The plaintiff, the Central Bank had filed a suit for conversion of the goods against Mercantile
Bank. It was held that there was no negligence as Central Bank didn’t owe a duty to the
Mercantile Bank and so Central Bank was not estopped from having a prior title as ‘pledgees’.

Estoppel by Benami Transaction

Badrinath, the owner of land, decides to hand over the apparent ownership of his property to
Kaju Rastogi. Badrinath does so and acknowledges that Kaju has paid him the consideration for
the promise. Now, Kaju Rastogi sells this land to Tripti Sanoon, a film actress, in good faith and
for a good amount of money, as by gaining ownership over the property Kaju has also gained the
right of disposition over that property. Badrinath hates Tripti Sanoon and asserts his title over the

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property. But he would be estopped from doing so under the given legal principle. And this is
what benami transaction means.

Estoppel on a Point of law

The Doctrine of estoppel does not apply to statutes but only to the facts. Estoppel, if applied to
the law would go against public policy and general welfare of the society. The principle of
estoppel can never be invoked for the purpose of defeating the provisions of law. 

For example, if a minor, representing himself to be a major, enters into an agreement with Mr
Kanjilal for the sale of a plot of land, the agreement would be void. And nothing would stop the
minor from taking the defence that the agreement was void ab initio, as it was true that at the
time when he entered into the agreement he was a minor. 

In the case of Olga Tellis & Ors. v. Bombay Municipal Corporation & Ors.[6], pavement
dwellers who migrated to India, because of proximity to their place of work started living on the
pavements in Bombay. Bombay Municipal Corporation (BMC) initially allowed them to stay as
they constituted the major part of the population of Bombay.

Later on when the pavement dwellers were evacuated, Olga Tellis, a journalist raised questions
against this action. It was upheld that no estoppel can arise against the Constitution of India or
against the fundamental right, i.e. the right to life and livelihood in this case. 

Unambiguous laws cannot be dodged

In Sales Tax Officer v. Kanhaiya Lal [9] it was formulated that the doctrine of estoppel would
not arise in cases where the law clearly, without any ambiguity, states that the plaintiff should be
given relief. When any law is absolute and has no exception clauses, than anybody acting against
it would be acting beyond powers which would be void and the party getting affected by it can
file suit claiming estoppel against it. Whereas if any exemption clause exists in the law then
relaxation can be given based upon it. The party would not be said to be acting ultra vires and
estoppel can be claimed as mentioned in the judgement of Delhi university v. Ashok Kumar [10].

Proprietary Estoppel

We often see promises being made and later broken. While in some cases we can do nothing
about it, but in certain circumstances, particularly in matters related to land or property, there is a
possibility to bring a claim to enforce a broken promise. This is called proprietary estoppel.
In Thorner v. Major [13] it was laid down that in order to claim a right under proprietary
estoppel these things have to be proved:

That representation has been made.

That the party believed it to be true and acted upon it.

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That the party suffered a loss as a result of such representation.

In James v. James [14] Allen and Sandra had two daughters and one son. The son worked for the
major part of his life with his father eventually becoming a partner. When making the will, Allen
gave some land to one of his daughters which created a dispute in the family leading to the
dissolution of the partnership. Later Allen distributed his property amongst the three ladies of his
house, cutting down the name of his son. Son brought a case of proprietary estoppel against the
women and also challenged the validity of Allen’s will. It was held that nothing has been shown
or said with clarity that Aleen would transfer his entire will to him. 

Estoppel by Convention

In the case of the Republic of India v. India Steam Ship Company Limited,  [16] it was observed
that estoppel by convention arises when parties to a transaction assume the facts or the law. This
assumption might be made by both the parties or either of the parties. Under this principle,
parties to an agreement could not deny to the assumed facts, because if the party or parties are
allowed to go back on their assumptions, it would be unfair and lead to injustice. 

Estoppel by Acquiescence

When one party, through a legitimate notice, informs the other party about the facts of a claim,
and the other party fails to acknowledge it, that is, neither he/she challenges it nor does refute it
within a reasonable period of time. The other party now would be estopped from challenging it
or making any counterclaim in the future. The other party is said to have accepted the claim
though reluctantly, that is, he/she has acquiesced it.

Contractual Estoppel

Pappi Lahari from Bihar entered into a contract with Batman from Chennai whereby Pappi
would supply 100 bales of cotton to Batman in exchange of 25,000 rupees. While signing the
contract they agreed to the fact that in case of any dispute between them, the case would be filed
in the court of in Tamil Nadu. Once agreed the parties cannot, later on, assert to change the
jurisdiction in the particular case. They are bound by the principle of contractual estoppel. 

This principle would apply even when the original statement made by the parties is not true.

Conflict Estoppel

When one person through his speech or conduct makes the other person believe in a particular
thing and induces him to act upon it, he would be estopped from taking any conflicting or
contrary or erratic position, which could cause loss to the other party. 

For example, Sattu in an agreement with Kabir says that he would not roam with his girlfriend if
he offers him a ride on his bike every day until his birthday. Kabir follows his instructions. Sattu

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after few days says that the number of rides would be two per day and only then will he not
chase Kabir’s girlfriend. After 2 months he asks that the bike ride be replaced with a ride in his
car. Here Sattu cannot take conflicting positions. Once there has been an agreement to offer one
ride everyday on the bike, he cannot contradict that and make other demands, he would be
estopped from doing so.

Issue Estoppel

Father of Neena had given words to his friend that Neena would get married only to his son,
Thangabali when they become adults. When they grew up, Thangabali went for a court marriage
with Neena. Just before the signing of the documents, Neena ran with her lover Rahul.
Thangabali filed a case stating that Rahul has forcefully taken Neena with her and that there was
an agreement whereby they were supposed to get married to each other only. But Neena
confessed that her father and Thangabali were forcing this marriage on her and that she wanted
to marry her childhood friend Rahul. The court said that the agreement is void and the matter
was dismissed. 

After 5 years it was found that Rahul has filed a suit where he claims that Thangabali has been
following him and his wife everywhere taking the plea that it was because of his work. It was
found that Thangabali has been meeting Neena over a period of time. This case again raises the
issue of whether Neena was forced by Rahul or Thangabali for marriage. Here issue estoppel
would apply and re-litigation of the said issue would be not be allowed.

Collateral Estoppel

The doctrine of collateral estoppel safeguards a criminal from being prosecuted for the same
issue as raised in the earlier trial in more than one criminal trial. 

In the case of Ashe v. Swenson [19] six men who were playing poker when they were robbed by
three or four men. They stole one of the victim’s cars and ran away. Next morning 3 men were
found near the stolen car and Ashe was found at some distance. Ashe was put to trial and was
found not guilty due to lack of evidence. Weeks later he was called for trial in case of robbery
against the second victim. It was held that the second trial be dismissed as the prosecution of a
crime arising out of the same course of events is not permissible by the law.  

Judicial Estoppel

It prevents a party from making conflicting or contradicting statements as to what was previously
said in the court as this would adversely affect the court proceedings and also cause disrepute to
the court. It was held in First National Bank of Jacksboro v. Lasater [20], a bankrupt person by
not following the schedule and preventing from giving all the information of his property finally
lead the estate to shut down due to bankruptcy. After this, he started claiming a title over the
property on the ground that the trustee never took any action against it. It was held that the

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creditors were automatically entitled to the property and asserting title over the property in such
manner is not permissible. 

Legal Estoppel

It means that the assignor or the grantor, in the subject matter of assignment or grant, cannot in
the latter stage deny the validity of title. In Westinghouse Elec. & Mfg. Co. v. Formica Insulation
Co. [21] the court reached a conclusion that the legal principle of estoppel by deed should apply
to the patent right as well. Law clearly recognizes that assignor of the patent for novelty or utility
cannot say that a patent is void. 

He would be estopped by law from doing so. In such cases court is allowed to view the art or
work in order to understand what that thing was which was assigned and to decipher the primary
and secondary character of the assigned patent. This would also assist them in determining the
extent to which the doctrine of equivalents could be invoked against the one infringing it. It is
believed that the court would not make any assumptions other than that the invention presented a
sufficient degree of utility and novelty which would justify the issuing of the patent assignee. 

EVOLUTION OF DOCTRINE OF ESTOPPEL:

The study of the evolution of the doctrine of estoppel can be done by comparing its development
in English law and Indian law.

Development in English Law

The foundation for this doctrine was first laid down in English Law, in the case of Hughes v.
Metropolitan Railway Co. [22] In the particular case, Hughes leased his land to Metropolitan
Railway Company to carry out repair work. The defendants were required to complete it in 6
months time period, and if it failed the lease would stand forfeited. The parties to the agreement
negotiated another agreement by which the railway company was to purchase the freehold of the
land. 

Both the parties were under the delusion that transfer of property would take place and therefore
the defendants didn’t carry out the repair work. He believed that sooner he would be having the
freehold of the property and those repairs are of no use to him. But towards the end of the 6
months period, the negotiation dissolved and the plaintiff gave the notice to forfeit the lease. 

The court upheld that when negotiation was initiated there was an implied promise to forfeit the
lease with respect to the limited time period. The Railway company acted upon this promise
which proved out to be detrimental to them. The doctrine of estoppel was thus applied and the
railway company was given more time to complete the repair work. 

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Even after this case, the doctrine of estoppel had not gained much attention until Lord Denning
delivered his judgement in the case of Central London Property Trust Ltd. v. High Trees House
Ltd.  [23] The defendants, High Trees, rented his flat to the plaintiff in return for a certain amount
of money. Due to the outbreak of World War II this amount was reduced to half as his
occupancy rate was decreasing. When the war ended the defendant continued to pay half of the
amount of rent, claiming that the plaintiff had not mentioned any time period while entering into
the agreement. Plaintiffs sued the defendant for payment of the full amount of rent. 

Applying the principle of estoppel laid down in the case of Hughes v. Metropolitan Railway
Co. [24] the court said that it was implied that the reduced rate is limited to the time till the war
continues, and so the defendants are liable to pay the full rent. 

DEVELOPMENT IN ENGLISH LAW

The Doctrine of estoppel in general and promissory estoppel, in particular, was recognized in
India from the case of Sourujmull And Ors. v. The Ganges Manufacturing Co., where the
Calcutta High Court determined that this doctrine would also apply in other situations where a
person can be estopped from performing certain acts or depending completely upon particular
arguments or claim or contention. This implies, as laid down in the judgement, that the doctrine
of estoppel is not limited to the law of evidence. 

Estoppel Example

Real Estate 

A real estate contract is the one where purchase and sale, or exchange, or transfer of the real
estate, i.e. land, building, etc. takes place between the parties. The sale and purchase of the
land(s) are governed by the laws of the state to which the particular land belongs. The essential
elements required to bring such contract into force is similar to that required in contracts under
the Indian Contract Act, 1872. 

Estoppel in a real estate contract only means that the estoppel letter issued by the association or
its management company would be legally binding on the parties. Such letters would contain the
dues, and other assessments and fees that the closing owner would be responsible to pay and the
coming owner owes. 

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EXCEPTIONS TO ESTOPPEL:
Following are the exceptions to the doctrine of estoppel

This doctrine does not apply when both parties have the entire knowledge of the things in their
matter.

Estoppel cannot be applied against statutes and regulations. It should not come in conflict with
the statutes and regulations.

It would not apply to cases where one party has exceeded his power while acting or taking a
decision.

It cannot be applied against the sovereign acts or the government. 

DIFFERENCE BETWEEN ESTOPPEL AND PROMISORY ESTOPPEL:

The Doctrine of promissory estoppel binds a party by his promise made to the other party,
having faith in which the other party has taken an action. The party cannot make contracting or
conflicting statements later on, neither he can go back on his words. In Motilal Padampat Sugar
Mills v. State of Uttar Pradesh And Ors. [26] the state of Uttar Pradesh first promised to exempt
the new industrial units from paying sales tax for an initial period of 3 years. 

Based on this the plaintiff took a huge amount of loan to set up a new industrial unit. Later on the
government made a change in its promise and said that only partial concession would be allowed
to which the plaintiff agreed. But the government yet again changed the policy and this time said
that no concession would be given. 

The court said that the defendant made a representation to the plaintiff. Laying his trust in it,
plaintiff took a large sum of money as a loan. So, now the government would have to exempt the
plaintiff from paying taxes for an initial period of 3 years as per the principle of the doctrine of
promissory estoppel. 

NO ESTOPPEL AGAINST MINOR:

Section 3 of The Maturity Act’, 1875 defines a minor to be a person who is under the age of 18
years and Section 11 of the Indian Contract Act, 1872 says that parties entering into a contract
should be competent, i.e. should be a major, of sound mind and barred by no law to enter into a
contract. A contract with a minor is void ab initio which means void from the very beginning. 

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So when a minor misrepresenting himself to a major enters into a contract, then he cannot be
made liable for it, not even on the grounds of estoppel. The minor can always plead that at the
time of entering into the contract he was a minor. 

In the case of Ajudhia Prasad And Anr. v. Chandan Lal And Anr. [29] two minors fraudulently
entered into a mortgage deed by concealing the fact that they were minor as a guardian has been
appointed for them under the Wards Act. The court held that no estoppel would arise in this
case. 

ESTOPPEL CASES
There are three sections under the Indian Evidence Act, 1872 which talks about the situations
where the plea of estoppel can be taken and where it cannot be taken, and they are Section 115,
116 and 117.

Provisions

SECTION 115

It defines estoppel as a principle which prohibits a person from denying what was earlier said by
him in the Court. The court in Pickard v. Sears [30] said that estoppel is where:

One party by his words or actions makes a representation

The other party believing in his words acts on that

Or alters his position

then the party would not be allowed to deny the things he previously said.

In the third clause, the altering of the position should be such that going back would be unjust or
unfair in the eyes of law, as established in the case of Pratima Chowdhury v. Kalpana
Mukherjee. [31]

CASE LAWS
Estoppel when applied to Insurance Company

In Life Insurance Corporation v. O.P. Bhalla and Ors. [47], the assured failed to pay the second
installment and the policy lapsed. Later, the corporation accepted 3rd and 4th installment and
also the 2nd installment with an interest. This policy ultimately came to an end with the death of
the assured. The nominee of the assured claimed the insured amount from the corporation. It was

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found that before entering into a contract with the corporation, the assured had undergone an
operation about which he didn’t inform the insurer. The court said that the assured’s act of
keeping the information with him would not allow him to take the plea of estoppel. The defence
that disclosing it would not have made any difference if it was not accepted.

Estoppel when applied to Educational Institutions

In Sanatan Gauda v. Bharampur University [48], the student took admission in a law college

and successfully complete his two years. In his final year university objected from releasing his
result of the pre and intermediate examination on the ground that he is not eligible to do so. The
Student had submitted all the required documents at the time of admission and also has obtained
the card for writing his final examination. The court declared that the university would be
estopped from doing so, i.e. declaring the result of that student. 

In Kumar Nilofar Insaf (Dr.) v. State of Madhya Pradesh [49], while taking the admission in the
medical college, the college released a merit list for house-job. When the same merit list was
released for the admission in the M.D. course, the plaintiff filed a suit. The court estopped the
plaintiff since he had consented to the first merit list. 

Estoppel when applied to tenancy

In Dataram S. Victore v. Tukaram S. Victore [50], the tenants while filling the form for an
agreement clearly stated that he would be living along with his brother and his wife and it was
accepted. The court dismissed the order of eviction and estopped the landlord from terminating
the tenancy on the ground of lease. 

Estoppel when applied to employers  

In Shiv Kumar Tiwari deceased represented by L.R. v. Jagat Narain Rai and Ors. [51], the
plaintiff was a lecturer in college. He was appointed on a temporary basis and was given
approval on a yearly basis. After some years the college stopped giving approval to him and a
new lecturer who is the defendant in the case was appointed by the education department. 

The plaintiff filed a suit against the college. The civil court decided in favour of the plaintiff and
said that the plaintiff was a permanent lecturer. This decision was taken in the absence of the
education department and the defendant. Subsequent to this, the Deputy Director of that locality,
basing his decision on the judgement of the Civil court, declared that the plaintiff was the
permanent lecturer of the college. 

The plaintiff’s plea of estoppel was not considered acceptable as the Deputy Director was not a
party to the decision taken by the court and therefore he has no authority to make such decisions.
Further, the judgement given by the civil court could be challenged under the Specific Relief
Act. 

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In Anil Bajaj (Dr.) v. Post Graduate Institute of Medical Education and Research [52],  the
plaintiff was allowed to go abroad on the condition that within 2 years he will have to resume
office else his service would be terminated. He did not return within 2 years and as said he was
terminated from the job. The plaintiff cannot rely on the doctrine of estoppel as he was aware of
the consequences that would follow.

Estoppel when applied to employees 

In State of Maharashtra v. Anita [53], the court upheld that once the person has been appointed
as an employee under a contract and has accepted all its terms and conditions, he would be
estopped if in the later stage he challenges the term of the appointment. 

Estoppel when applied to the selection board

In Central Airman Selection Board v. Surendra Kumar Das [54] the apex court laid down that if
the person himself has made false representation and induced the authority to act upon it then he
could not challenge it on the grounds of promissory estoppel. The authority upon finding that it
has been misled can cancel the agreement. 

Estoppel when applied to Development Authority

In H.V. Nirmala v. Karnataka State Financial Corporation [55], an inquiry officer was

appointed with appellant’s consent. He participated in the inquiry proceeding and cross-
examined a number of witnesses and still found nothing in favour of the appellant. The appellant
could not question his appointment. 

Section 116

The section states that during the continuance of the tenancy, the tenant of the immovable
property or any person claiming through such tenancy can deny to the fact that at the beginning
of the tenancy it was the landlord who had the title over the immovable property. Further, the
Section also explains that a person who came upon an immovable property by the license cannot
deny the fact that the person from whom he got the license, that is, in whose possession the
immovable property, had the title at the time when he got his license. 

Tenant- landlord relationship

A relationship between a tenant and a landlord can be created either by written contract or verbal
contract. The beginning of the tenancy can be marked by the taking of possession of the land, or
by the payment of rent, or other circumstances. 

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If X leases his land to Y and Y takes the possession and starts paying the rent and later on X
sales the land to Z, then Y can make his payment to Z. Here, Y and Z have formed the tenant-
landlord relationship. 

Scope of section 116

It is concerned with those estoppels which occurs between:

Tenant and his landlord

Licensor and licensee

Title of the landlord cannot be denied 

Once a tenant enters into a relationship of landlord and tenant, receives the possession of the
property and finally enters into the premise, during the period of such possession may deny to
things or course of action by the landlord which is against to what was mentioned in the
agreement. A tenant in no case claim that the landlord has no title over the property.  

In Moti Lal v. Yar Md [56], the judge said that the tenant cannot say that the landlord has no
more interest in the property when the landlord filed a suit for default payment and ejectment. It
is only after leaving the possession can the holding of title by the landlord be questioned as
mentioned in Suraj Bali Ram v. Dhani Ram [57].

In Sri S.K. Sharma v. Mahesh Kumar Verma [58], where defendant upon attaining a higher post
was allotted a premise by the railway company. In the case, it was said that even when it was not
known whether the land belonged to the railway company or not, the officer will have to
evacuate the premises after retirement.

Can landlord plead estoppel

In the following situations, the landlord can plead estoppel:

When the tenancy itself stands disputed then the tenant can challenge the landlord’s title on the
property. The tenant would not be estopped from doing so.

In cases where the tenancy has been moved by fraud, coercion, misrepresentation or mistake.

If no such circumstances occur than the tenants would be restricted by the doctrine of estoppel.
However, the tenants are always at liberty to overturn the lease or change its status as a lessee. 

The Case is similar in the licensor- licensee relationship. 

In E. Parashuram v. V. Doraiswamy [59], the Bangalore Mahanagar Palike owned land which

was leased to Mr. Dhanpal for the period of next 10 years. It was found that Mr. Dhanpal had
decreed the land to Mr. Doraiswamy. A decree was passed in the name of Mr. Dhanpal whereby

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the vendors were directed to execute the reconveyance of deed in Dhanpal’s favour. Thereafter,
pursuant to the orders, all the documents were to be kept in Dhanpal’s possession. Sooner it was
found that the vendors were trying to claim ownership over the property. This was brought to the
notice of the assignee, Mr. Doraiswamy, who filed a suit of eviction in court.

In the second instance regarding the purchasing of land by Mr. Doraiswamy, it was found that at
the initial stage, the signature of Mr. Doraiswamy was also taken along with Mr. Dhanpal and
when this mistake was rectified by the corporation by deleting the signature of Mr. Doraiswamy,
he challenged it. 

The court in the first instance upheld that the landlord could not be denied the title to the land
even though certain disputes still remain unresolved with the corporation. In the second instance,
the court said that no jural relationship existed and thus exceptions under Section 116 of the
Indian Evidence Act cannot be pleaded. 

Estoppel applied when tenancy is in existence 

In Udai Pratap v. Krishna Pradhan [60], the continuance of tenancy was defined as a period

during which the tenant enjoys the possession of the property and is seeking benefits from it. 

The Tenant cannot deny the title to the landlord, neither at the beginning of the tenancy nor
during its continuance. The Tenant would be estopped from denying the title of the landlord only
when the tenancy is continuing. Once the tenancy ceases to exist, the tenant will have the right to
deny title to the landlord. 

For example, HUM is the tenant of land which belongs to TUM. As soon as HUM takes
possession of the property, the tenancy comes into existence and continues until it comes to an
end. During this TUM cannot be denied title to the property by HUM. But once the tenancy
lapses, HUM will have the right to question the interest of TUM in the property. 

Title at the beginning 

The tenant can not deny the title to the landlord at the beginning of the tenancy. However,
tenants can exercise certain powers like:

He would not be estopped from claiming that on the death of the landlord the property would be
transferred or the title would be delegated to the tenant and not to some third party. 

He can prove that till the day before signing the lease, the landlord had no title over it.

The tenant can prove that during the tenancy period the landlord lost his title over the property
either through his acts or because he was barred by the law. [61]

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Licensor- Licensee relationship

In  licensor- licensee relationship the same rule operates like that in the landlord-
tenant relationship. When a licensee obtains the possession through licence cannot deny the title
to the licensor unless the relationship ceases to exist. 

A allowed B to use the washroom in his backyard. B fraudulently made the duplicate keys of
those washrooms and refused to vacate. In court A cannot in his suit for ejectment say that B
holds no title over those washrooms as he was the one who gave him access to them.

Estoppel in mortgagor- mortgagee relationship

When upon the contract of mortgage, a property has been mortgaged by one person to another
and the person to whom it has been mortgaged, i.e. the mortgagee, has taken possession, then the
parties to the contract cannot deny the right of each other under the contract as proposed in Arjun
Singh v. Mahasaband [62].

In a situation where the mortgage is about the end and payment has to be made by the
mortgagee, in that period if the mortgagee claims that the mortgagor seems to have no interest in
the property, he would be estopped from doing so. The rule under mortgagor-mortgagee
relationship gives rise to the doctrine of estoppel only when the claims under the suit filed is
based on the contract of mortgage and in cases of repudiation of the mortgage. 

The section states that the acceptor of the bills of exchange cannot deny the person who is
supposed to draw the bills, from drawing it or endorsing it. Also no bailee or licensee can deny
the fact that at the time when the bailment and license began, the bailor and the licensor had the
authority to make bailment or to give license. 

The person accepting the bills of exchange can deny that the bills of exchange were really drawn
by the very person who showed to have drawn it. 

If the bailor mistakenly delivers the goods to some third party instead of the bailee, he can prove
that a third party has the right over the goods bailed against the bailor.

SCOPE:
This section demarcates that the person who accepts the bills of exchange although cannot deny
that the person drawing the bills has the authority to draw or to endorse it but can deny that the
bills were actually drawn by the person by whom it appeared to have been drawn. 

The bailee or the licensor cannot deny the fact that at the beginning of bailment or grant, the
bailor or the licensor had the authority to perform it. But a bailee can prove that the third party to
whom the goods were delivered instead of the bailor had the right against the bailee. 

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CONCLUSION:
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.

The Doctrine of estoppel is an important principle which protects people against fraud or
misrepresentation. There are several instances where an innocent person becomes a prey to false
representations made to them by some party. Sometimes the case may be such that the plaintiff
suffered huge losses. This doctrine avoids such situations and charges the person for his
wrongful conduct.

This legal principle gives an incentive to every one of those people who tries to make false
representations to other and induces them to act upon it by planting their faith in them, and incur
losses as a result of such false representations, by not performing such acts, else they would be
held liable.

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BIBLIOGRAPHY:

WEBSITES

 https://blog.ipleaders.in/doctrine-of-estoppel-in-the-indian-evidence-act/
 http://www.legalservicesindia.com/article/1135/The-Doctrine-of-Promissory-
Estoppel.html
 https://legaldictionary.net/promissory-estoppel/

BOOKS:
 Avtar Singh, Contract and Specific Relief Act, 10th ed., 2008, Eastern Book Company
 Guenter Treitel, The Law of Contract, 11th ed., 2003, Thomson Sweet and Maxwell
 H.K.Saharay, Dutt on Contract, 10th ed., Eastern Law House.
 J. Beatson, Anson’s Law of Contract, 28th ed., Oxford University Press.

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