of Arunachal Pradesh Vs. Nezone Law House, Assam  INSC 553 (1 April 2008)
Dr. ARIJIT PASAYAT & P.SATHASIVAM CIVIL APPEAL NO. 2092 OF 2002 Dr. ARIJIT PASAYAT, J.
1. Challenge in this appeal is to the order of a Division Bench of the
Guwahati High Court dismissing the writ appeal filed by the appellant.
2. The factual position is very interesting and needs to be noted in some
A Writ Petition was filed by the respondent claiming that the State
Government had promised to purchase 500 sets of 'North Eastern Region Local
Acts and Rules' from it. But contrary to its promise it had refused to place
any order. The prayer in the writ petition was for a direction to the present
appellant and its functionaries to maintain and keep the promise made by them
to the respondent in respect of printing and supply of 500 sets as noted above.
It was stated that the then Law Minister had assured the respondent through its
proprietor to purchase the books and had given green signal for publishing and
printing of the compilation of local laws at the relevant period and had
promised that if they publish those the government of Arunachal Pradesh will
purchase at least 500 sets of local Acts and Rules. It was submitted that in
view of the direction given by this Court in All India Judges' Association and
Ors. v. Union of India & Ors. [AIR 1992 SC 165] and in All India Judges'
Association and Ors. v. Union of India & Ors. [AIR 1993 SC 2493] such
promise was made. It according to the writ petitioner is a clear case where
principles of promissory estoppel and legitimate expectation applied. The stand
was resisted by the present appellant contending that there has been
manipulation of the notes. The alleged note does not indicate that there was
any promise or order for printing/publishing the book. It was merely a
departmental note sent to the Planning/Finance/Law Department from the Chief
Minister for examination. Further the Minister had specifically stated (in the
note) that 400 copies of one book containing all the North Eastern Regional
Local Acts and Rules of Rs.400/- each (total value of Rs.1,60,000/-) could be
purchased as the publisher on his own told that he has published such Acts and
Rules. This according to the present appellant established that the then Law Minister
had never ordered to undertake publication and supply thereafter of 500 sets of
such books. The mind of the then law Minister was clear as to the procedure to
be adopted. It was further pointed out that on the body of the respondent's
letter dated 27th April, 1997 the words/Figures '500 volumes' (in the third
line of the Minister's note) appears to be interpolated by the words '500 sets'
by obliterating the word 'volume' by using a white erasing ink and writing over
their 'sets' by hand. It was pointed out that the cost involvement would be
about a crore of rupees as the price of the books as claimed was nearly 40
lakhs and with escalation of price it was likely to reach Rupees one crore. It
was further submitted that the Writ Petition deserves to be dismissed. The High
Court observed that though there appear to be over writing, but the normal
practice is that books are purchased in sets and therefore, even if there was
any interpolation the same was intentionally done to correct the error. The
Writ Petition was, therefore, allowed purportedly holding that the principles
of promissory estoppel applied. As noted above, the writ appeal was filed by
the appellant which was dismissed by the impugned judgment.
3. Learned counsel for the appellant submitted that the learned Single Judge
and the Division Bench clearly overlooked the position in law that when a claim
is founded on disputed document, the writ petition is not to be entertained.
Additionally there was no question of any promissory estoppel involved. The
document relied upon by the respondent was a departmental note. The same need
approval of the various departments. The books were not useful for the judicial
officers and, therefore, there was no need for placing any order.
4. Though the respondent is represented in this appeal by a learned counsel,
none appeared when the matter was taken up.
5. As noted above the factual scenario is interesting. The document relied
upon by the respondent and the High Court refer to some oral expression of
desire by the then Law Minister. When the view of several departments were
involved the question of any oral view being expressed by a Minister is really
not relevant. Further the document relied upon was nothing but a departmental
note which itself clearly indicated that the view of various
departments/Ministries were to be taken and their concurrence was to be
obtained. Apart from that, undisputedly there was some factual dispute as to
whether the intended purchase was of volumes or sets. There is conceptual different
between the two. The books were not even printed at the relevant point of time.
The High Court has noticed only one volume had been printed. Further the need
for the purchase of the books for the judicial officers was to be assessed in
consultation with the High Court. The Law Minister could not have, without
taking the view of the High Court, placed orders. In any event the dispute as
to the volumes or the sets and the interpolation in the documents were of
considerable relevance. Unfortunately the High Court has lightly brushed aside
6. The doctrines of promissory estoppel and legitimate expectation were not
applicable to the facts of the case.
7. Estoppel is a rule of equity which has gained new dimensions in recent
years. A new class of estoppel has come to be recognized by the courts in this
country as well as in England. The doctrine of 'promissory estoppel' has
assumed importance in recent years though it was dimly noticed in some of the
earlier cases. The leading case on the subject is Central London Property Trust
Ltd. v. High Trees House Ltd.
(1947) 1 KB 130. The rule laid down in High Trees case (supra), again came
up for consideration before the King's Bench in Combe v. Bombe (1951) 2 KB 215.
Therein the court ruled that the principle stated in High Trees's case (supra),
is that, where one party has, by his words or conduct, made to the other a
promise or assurance which was intended to affect the legal relations between
them and to be acted on accordingly, then, once the other party has taken him
at his word and acted on it, the party who gave the promise or assurance cannot
afterwards be allowed to revert to the previous legal relationship as if no
such promise or assurance had been made by him, but he must accept their legal
relations subject to the qualification which he himself has so introduced, even
though it is not supported in point of law by any consideration, but only by
his word. But that principle does not create any cause of action, which did not
so that, where a promise is made which is not supported by any
consideration, the promise cannot bring an action on the basis of that promise.
The principle enunciated in the High Trees case (supra), was also recognized by
the House of Lords in Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric
Ltd (1955) 2 All ER 657. That principle was adopted by this Court in Union
of India v. Indo-Afghan Agencies Ltd. (AIR 1968 SC 718) and Turner Morrison and
Co. Ltd. v. Hungerford Investment Trust Ltd. (1972 (1) SCC 857). Doctrine of
"Promissory Estoppel" has been evolved by the courts, on the
principles of equity, to avoid injustice. "Promissory Estoppel"
is defined in Black's Law Dictionary as "an estoppel which arises when
there is a promise which promisor should reasonably expect to induce action or
forbearance of a definite and substantial character on the part of promisee,
and which does induce such action or forbearance, and such promise is binding
if injustice can be avoided only by enforcement of promise". So far as
this Court is concerned, it invoked the doctrine in Indo Afghan Agencies's case
(supra) in which it was, inter alia, laid down that even though the case would
not fall within the terms of Section 115 of the Indian Evidence Act, 1872 (in
short the 'Evidence Act') which enacts the rule of estoppel, it would still be
open to a party who had acted on a representation made by the Government to
claim that the Government should be bound to carry out the promise made by it
even though the promise was not recorded in the form of a formal contract as
required by Article 299 of the Constitution. (See Century Spinning Co. v.
Ulhasnagar Municipal Council (AIR 1971 SC 1021), Radhakrishna v. State of Bihar
(AIR 1977 SC 1496), Motilal Padampat Sugar Mills Co. Ltd v. State of U.P. (1979
(2) SCC 409), Union of India v.
Godfrey Philips India Ltd. (1985 (4) SCC 369), Dr. Ashok Kumar Maheshwari v.
State of U.P. & Another (1998 (2) Supreme 100).
8. In the backdrop, let us travel a little distance into the past to
understand the evolution of the doctrine of "promissory estoppel".
Dixon, J. an Australian Jurist, in Grundt v. Great Boulder Gold Mines
Prorietary Ltd. (1939) 59 CLR 641 (Aust) laid down as under: "It is often
said simply that the party asserting the estoppel must have been induced to act
to his detriment. Although substantially such a statement is correct and leads
to no misunderstanding, it does not bring out clearly the basal purpose of the
doctrine. That purpose is to avoid or prevent a detriment to the party asserting
the estoppel by compelling the opposite party to adhere to the assumption upon
which the former acted or abstained from acting. This means that the real
detriment or harm from which the law seeks to give protection is that which
would flow from the change of position if the assumptions were deserted that
led to it". The principle, set out above, was reiterated by Lord Denning
in High Trees's case (supra). This principle has been evolved by equity to
avoid injustice. It is neither in the realm of contract nor in the realm of
estoppel. Its object is to interpose equity shorn of its form to mitigate the
rigour of strict law, as noted in Anglo Afghan Agencies's case (supra) and
Sharma Transport Represented by D.P. Sharma v.
Government of A.P. and others (2002 (2) SCC 188).
9. Where a particular mode is prescribed for doing an act and there is no
impediment in adopting the procedure, the deviation to act in different manner
which does not disclose any discernible principle which is reasonable itself
shall be labelled as arbitrary. Every State action must be informed by reason
and it follows that an act uninformed by reason is per se arbitrary.
10. This Court's observations in G. B. Mahajan v. Jalgaon Municipal Council
(AIR 1991 SC 1153) are kept out of lush field of administrative policy except
where policy is inconsistent with the express or implied provision of a statute
which creates the power to which the policy relates or where a decision made in
purported exercise of power is such that a repository of the power acting
reasonably and in good faith could not have made it. But there has to be a word
Something overwhelming must appear before the Court will intervene. That is
and ought to be a difficult onus for an applicant to discharge. The Courts are
not very good at formulating or evaluating policy. Sometimes when the Courts
have intervened on policy grounds the Court's view of the range of policies
open under the statute or of what is unreasonable policy has not got public
acceptance. On the contrary, curial views of policy have been subjected to
11. As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6th
Edition) there is ample room within the legal boundaries for radical
differences of opinion in which neither side is unreasonable. The
reasonableness in administrative law must, therefore, distinguish between
proper course and improper abuse of power. Nor is the test Court's own standard
of reasonableness as it might conceive it in a given situation.
The point to note is that the thing is not unreasonable in the legal sense
merely because the Court thinks it to be unwise.
12. In Union of India and Ors. v. Hindustan Development Corporation and Ors.
(AIR 1994 SC 998), it was observed that decision taken by the authority must be
found to be arbitrary, unreasonable and not taken in public interest where the
doctrine of legitimate expectation can be applied. If it is a question of
policy, even by ways of change of old policy, the Courts cannot intervene with
the decision. In a given case whether there are such facts and circumstances
giving rise to legitimate expectation, would primarily be a question of fact.
13. As was observed in Punjab Communications Ltd. v.
Union of India and others (AIR 1999 SC 1801), the change in policy can
defeat a substantive legitimate expectation if it can be justified on
"Wednesbury reasonableness." The decision- maker has the choice in
the balancing of the pros and cons relevant to the change in policy. It is,
therefore, clear that the choice of policy is for the decision-maker and not
The legitimate substantive expectation merely permits the Court to find out
if the change of policy which is the cause for defeating the legitimate
expectation is irrational or perverse or one which no reasonable person could
have made. A claim based on merely legitimate expectation without anything more
cannot ipso facto give a right. Its uniqueness lies in the fact that it covers
the entire span of time; present, past and future.
How significant is the statement that today is tomorrows' yesterday. The
present is as we experience it, the past is a present memory and future is a
present expectation. For legal purposes, expectation is not same as
anticipation. Legitimacy of an expectation can be inferred only if it is
founded on the sanction of law.
14. As observed in Attorney General for New Southwale v.
Quinn (1990 (64) Australian LJR 327) to strike the exercise of
administrative power solely on the ground of avoiding the disappointment of the
legitimate expectations of an individual would be to set the Courts adrift on a
featureless sea of pragmatism. Moreover, the negotiation of a legitimate
expectation (falling short of a legal right) is too nebulous to form a basis
for invalidating the exercise of a power when its exercise otherwise accords
with law. If a denial of legitimate expectation in a given case amounts to
denial of right guaranteed or is arbitrary, discriminatory, unfair or biased,
gross abuse of power or violation of principles of natural justice, the same
can be questioned on the well known grounds attracting Article 14 but a claim
based on mere legitimate expectation without anything more cannot ipso facto
give a right to invoke these principles. It can be one of the grounds to
consider, but the Court must lift the veil and see whether the decision is
violative of these principles warranting interference. It depends very much on
the facts and the recognised general principles of administrative law
applicable to such facts and the concept of legitimate expectation which is the
latest recruit to a long list of concepts fashioned by the Courts for the
review of administrative action must be restricted to the general legal
limitations applicable and binding the manner of the future exercise of administrative
power in a particular case. It follows that the concept of legitimate
expectation is 'not the key which unlocks the treasure of natural justice and
it ought not to unlock the gates which shuts the Court out of review on the
merits,' particularly, when the elements of speculation and uncertainty are
inherent in that very concept. As cautioned in Attorney General for New
Southwale's case the Courts should restrain themselves and respect such claims
duly to the legal limitations. It is a well meant caution. Otherwise, a
resourceful litigant having vested interest in contract, licences, etc. can
successfully indulge in getting welfare activities mandated by directing
principles thwarted to further his own interest. The caution, particularly in the
changing scenario becomes all the more important.
15. If the State acts within the bounds of reasonableness, it would be
legitimate to take into consideration the national priorities and adopt trade
policies. As noted above, the ultimate test is whether on the touchstone of
reasonableness the policy decision comes out unscathed.
16. Article 166 of the Constitution deals with the conduct of Government
business. The said provision reads as follows:
"166. Conduct of business of the
Government of a State.
All executive action of the Government
of a State shall be expressed to be taken in the name of the Governor.
Orders and other instruments made and
executed in the name of the Governor shall be authenticated in such manner as
may be specified in rules to be made by the Governor, and the validity of an
order or instrument which is so authenticated shall not be called in question on
the ground that it is not an order or instrument made or executed by the
The Governor shall make rules for the
more convenient transaction of the business of the Government of the State, and
for the allocation among Ministers of the said business in so far as it is not
business with respect to which the Governor is by or under this Constitution
required to act in his discretion."
Clause (1) requires that all executive action of the State Government shall
have to be taken in the name of the Governor. Further there is no particular
formula of words required for compliance with Article 166(1). What the Court
has to see is whether the substance of its requirement has been complied with.
A Constitution Bench in R. Chitralekha etc. v. State of Mysore and Ors. (AIR
1964 1823) held that the provisions of the Article were only directory and not
mandatory in character and if they were not complied with it could still be
established as a question of fact that the impugned order was issued in fact by
the State Government or the Governor. Clause (1) does not prescribe how an
executive action of the Government is to be performed; it only prescribes the
mode under which such act is to be expressed. While clause (1) is in relation
to the mode of expression, clause (2) lays down the ways in which the order is
to be authenticated.
Whether there is any Government order in terms of Article 166; has to be
adjudicated from the factual background of each case.
17. In order to invoke the doctrine of promissory estoppel clear, sound and
positive foundation must be laid in the petition itself by the party invoking
the doctrine and bald expressions without any supporting material to the effect
that the doctrine is attracted because the party invoking the doctrine has
altered its position relying on the assurance of the Government would not be
sufficient to press into aid the doctrine. The Courts are bound to consider all
aspects including the results sought to be achieved and the public good at
large, because while considering the applicability of the doctrine, the Courts
have to do equity and the fundamental principles of equity must forever be
present in the mind of the Court.
18. As the factual scenario goes to show the principles of promissory
estoppel were clearly inapplicable to the facts of the case. Above being the
position, the appeal deserves to be allowed which we direct. Orders of learned
Single Judge and the Division Bench are set aside.
19. The appeal is allowed but without any order as to costs.
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