DOCTRINE OF PROMISSORY ESTOPPEL

This article is written by Ratnika Pathak of 3rd semester of Atal Bihari Vajpayee School of Legal Studies, CSJM, Kanpur, an intern under Legal Vidhiya

ABSTRACT

The doctrine of promissory Estoppel mentions in section 115 of the evidence act, 1872 and section 90 of the Indian contract act, 1872 which states that promissory Estoppel is a legal doctrine that may apply in contract law, it arises when a party makes a clear and definition promise intending the other party to rely on it, and the other party does rely on the promise to their detriment. in such cases, the courts may enforce the promise, even if there is not a formal contract.

In evidence law, promissory Estoppel may be relevant in establishing of an enforceable promise. The party seeking to rely on promissory Estoppel would need to demonstrate that the elements of the doctrine and this event could be presented in support their claim. The promissory Estoppel refers to the person may become bound by a promise not on the basis of contract entered into by him with the other party but on the basis of law of estoppel. this doctrine seeks to protect the right of promise or aggrieved party. This article also highlights the application against the government. the doctrine of promissory Estoppel means when there is no Estoppel then there is no promise to the contract. This doctrine also shows the exceptions which is against the public interest, legislative functions, representation against the law and so on. The doctrine of promissory Estoppel contains the essentials where it illustrates the conditions which is used in the contract when the promises are not fulfil by the promisee.

The promissory of Estoppel is another form of consideration because in this doctrine essential element required that is the something is return must be there .it is like an ordinary contract and has a pre contractual stage of the contract.

KEYWORDS

Promissory Estoppel, promise, contract, aggrieved party, doctrine, detriment, contractual obligations, a legal document, parties, contract, evidence act, agreement.[1]

INTRODUCTION

The term doctrine refers to any legal document made between the parties to a contract. The promissory Estoppel under the contract law referred as such doctrine where the party recover the promise made by the other party when the promise is reasonable then the party is reliance on it.  Promissory Estoppel is a legal doctrine that prevents a party from going back on a promise, even if the promise was not supported by consideration. in essence, if someone makes a clear and definite promise, and another party relies on that promise to their detriment, the promisor may be Estoppel from breaking the promise . this doctrine aims to prevent injustice when one party relies on the promise of another.

For example, if someone promises to give you job and you resign from your current position in reliance on that promise, the doctrine of promissory Estoppel might prevent the employer from reneging on their promise. The doctrine of promissory Estoppel is a legal principle that prevents a person from going back on a promise, especially if the other party has relied on that promise to their detriment. essentially, if someone makes a clear and definite promise, and another person relies on that promise and suffers a loss, as a result the person who made the promise may be prevented from breaking it by a court. this doctrine is often invoked in contract law to uphold the principle of fairness and prevent unjust enrichment.

In India, the doctrine of promissory of Estoppel is recognised under contract law. section 115 of the Indian evidence acts ,1872and section 90 of the Indian contract act ,1872 are relevant to understand promissory Estoppel.

Section 90 of the Indian contract act deals with the doctrine of promissory Estoppel and states that when a person makes a promise to another person, and that other person acts upon it, the promisor must fulfil the promise if injustice can only be avoided by enforcing it.The essential element for the application of promissory Estoppel in India include a clear and unequivocal promise, and detriment caused by the promisee due to the reliance. Indian court have applied and developed this

Cohen V. Cowels

The recognition is of promissory Estoppel is given in the case of cohen v. cowels media company. the law of Estoppel is an important part of the Indian evidence act, 1872 which is mentions under chapter 8 of the act. The rule of Estoppel is a Latin word in English is refered as stop. This rule is derived from 1837in the case of picard v. shiaer came through Latin phase that is allegans contraria non est audiendus it means who do contrary talks there is no hearing of it. In civil cases it is important, essential, applicable. the rule of Estoppel to maintain the public order and there are various types of Estoppel and it is not mention in law of evidence. When we go through the section 116,117,118 then it defined the kinds of Estoppel are in the following:

•  Estoppel by matters of records
•  Estoppel by deeds
• Estoppel by conduct also known as equitable conduct.
• Promissory Estoppel
• Estoppel by admission

EVOLUTION OF PROMISSORY ESTOPPEL

The promissory Estoppel means if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights either not be enforced or will be kept in suspense for some particular time, those persons will not be an allowed by a court of enquiry to enforce the rights until such time has elapsed.

The principle of promissory Estoppel has been first applied in England in case

Thomas Hughes V. Metropolitan Railway Company 

The facts of the case are given below;

A landlord had given notice to his tenant to repair the promises within six months, failing which the lease was to be for surrender. a month after this the landlord entered into negotiations for the sale of the land to the tenant and, consequently, during the period covered by negotiations, the tenant carried out no repairs. the negotiations failed to materalise and shortly afterwards the period of six months expired and the landlord claimed the lease to have been surrender.

But it was held that six months would run from the failure of the negotiations. the conduct of entering into negotiations was an implied promise the part of the landlord to suspend the notice and the tenant had acted on it by not carrying out the repairs.[2]

Central London Property Trust Limited V. High Trees House Limited.

Another landmark judgement in the development of this principle is the debated case of central London property trust limited v. high trees house limited where the judgement stated that a promise intended to be binding intended to be acted on and in fact acted on, is binding so far as it terms property apply

The facts where the plaintiffs gave the defendants tenancy of a block of flats at a ground rent of $2500 a year for a period of 10 years. As a result of the 2^nd world war, the flats could nit be fully let and, therefore, the plaintiffs agreed to reduce the rent by half the amount. in 1945, war conditions ceased to exist, and the flats became fully occupied, but the defendants continued to pay only the reduced rents. the plaintiff’s actions to recover the full rent as reserved in the original lease from the middle of 1945 was successful, but not for the arrears.

Through the opinion of denning j there was no necessity of finding consideration in a case like this where the promise is not set up as cause 0f action, but only as a defence. The plaintiff’s having deliberately agreed to forego the rent and the defendant’s having, acted on that here was no consideration for the promise.

Combe V. Combe

Referring to the above judgement in combe v. combe stated that principle does nit create new cause of action where none existed before. It only prevents a party from insisting upon his strict legal rights, when it would be unjust to allow him to enforce them, having regard to the dealings which have taken take place between the parties.

In this case a wife obtained a decree nisi against her husband for divorce. She received a latter from the husband in confirmation of her own, as exchanged through solicitors, that he would make her $100 allowance a year. the husband did not make the payments and ultimately the wife brought an action to enforce the promise.

The court of appeal held that neither there was any consideration for promise nor was there any promissory Estoppel against the husband. the husband never made a request that she should not enforce her normal right to maintenance, nor was there any undertaking on her part not to do so. Her abstinence was not the result of any promise of the husband.

The elements typically required for promissory Estoppel in England include a clear and unequivocal promise, reliance by the promisee, and a change in position or detriment suffered by the promise as a result of that reliance. The doctrine is seen as a means of preventing injustice in contractual relations when strict application of the contract terms would lead to unfair outcomes.

APPLICATION OF DOCTRINE AGAINST GOVERNMENT

Doctrine of executive necessity it means that government back their step may be for the future plans and we should not bound this doctrine and the court said that in the case of union of India v. Anglo afgton agency bind the government through the doctrine of promissory Estoppel and also liable on the act which is promise by the government in the contractual rights.

On the other hand, in the case of pouonami oil mills v. state of Kerala

State said invited small industries to helped in the industrialisation and also for the development of the industry and government said that after the development the state will not charge the tax. as a result, court stated that no right of the government to back out from their promise.

FUNDAMENTAL COMPONENTS OF PROMISSORY ESTOPPEL

Promissory Estoppel is a legal doctrine that may apply when one party relies on another party’s promise, and suffers a detriment as a result. the fundamental components include:

Clear promise:

There must be a clear and definite promise, made by one party to another. this can be an explicit statement assurance or commitment.

Reasonable reliance:

The promise must reasonably rely on the promise. the reliance should be justifiable, and the promisee should have acted in a way that demonstrates their reliance on the promise.

Detrimental action:

The promise must have taken some action or refrained from taking action based on the promise. this action results in a detriment to the promise, such as a financial loss or a change in position.

Unjust enrichment or injustice:

Enforcing the promise is necessary to prevent injustice or the unjust enrichment of the party who made the promise. the court will consider whether it would be unfair not to enforce the promise.

Foreseeability:

The promisor should have reasonably foreseen that the promise would rely on the promise, and such reliance would lead to a detriment.

Equitable considerations:

Promissory Estoppel is an equitable doctrine, and its application is based on fairness. courts consider whether it would be equitable to enforce the promise in the given circumstances.

In essence, promissory Estoppel acts aa a substitute for a formal contract when one party relies on a promise to their detriment and enforcing the promise becomes a preventing injustice.

PROMISSORY ESTOPPEL IN INDIA

Promissory Estoppel in India is a legal principle derived from common law, but it has ben recognised and applied by Indian courts. it essentially prevents a party from going back on a promise , even if the promise is not supported by consideration.

In india, the doctrine of promissory Estoppel is primarily based on section 115 of the Indian evidence act, 1872. the section states that when one person has made a promise to another person, and the latter has acted upon it, the former cannot deny the existence of the promise.

Key elements of promissory Estoppel in india include:

1. Clear promise: there must be a clear and unambiguous promise made by one party to another.
2. Reliance: the promise must have reasonably relied on the promise, altering their position or conduct based on the expectation that the promisor will fulfil the promise.
3. Detrimental change of position: the promise must have suffered some form of detriment or change in position as a result of relying on the promise.
4. Injustice if denied: it must be unjust or inequitable for the promise to go back on their promise.

Indian courts have recognised and applied promissory Estoppel in various cases, emphasizing the importance of fairness and equity in contractual relations. it acts as an exception of the general rule that consideration is necessary for a valid contract.

APPLICABILITY OF DOCTRINE OF PROMISSORY ESTOPPEL IN PUBLIC AND PRIVATE ENTITIES.

PRIVATE ENTITIES:

Contractual relationships:

• Formation of contract: in private transactions, promissory Estoppel is often applied in the context of contract law . if a party A make a clear promise to party B relies on that promise to their detriment , the courts may prevent party A from reneging on the promise .
• No need of consideration : unlike traditional contract law , promissory Estoppel allows enforcement of promises without the need for consideration , making it particularly relevant in situations where formal contracts are not involved .

Business and commercial dealings :

• Business assurances : in commercial settings , assurances or commitments made during negotiations can be binding if the other party relies on them and suffers a detriment as a result.
• Estoppel in equity : private entities can seek remedies in equity , and courts may apply the doctrine to prevent unconscionable contract.

PUBLIC ENTITIES

Government contract and dealings ;

• Promises by government agencies : promissory Estoppel can be invoked against the government entities if a clear promise is made and party relies on it to their detriment . however, enforcing promises against the government can be more complex due to sovereign immunity issues.

Administrative law:

• Government representation : if a public official makes a representation or promise , and an individual relies  on it , promissory Estoppel ma be invoked in administrative law to ensure fairness and prevent abuse of power .

• Public policy consideration: court may balance the principle of promissory Estoppel with broader public policy concerns when dealing with government entities.

Land use Planning:

Zoning and development: public entities involved in zoning and the land use planning may be subject to promissory Estoppel if a landowner relies on representations made by the government regarding permissible land use.

EXCEPTIONS

1. Public interest
2. Legislative functions
3. Ultra virus promises
4. Representation against law
5. Fraud on constitution
6. Equity

The essentials of the doctrine of promissory Estoppel which are in the following:

• Based on equity to avoid injustice
• A person makes promise to other
• The other person act on such promise
• While acting on such promise, changing his position to his detriment.

AGNIPATH SCHEME

It talks about the recruitment of the armed forces where there are controversy and the cases filed against the scheme and related to this scheme supreme court done a ruling and mention doctrine of promissory Estoppel.

The supreme court on Monday i.e., April 10 dismissed petitions challenging the Delhi high court judgement which upheld the agnipath scheme for recruitment to the armed forces.

Some of the petitions included candidates who were shortlisted in the earlier recruitment process to army and air force.

Advocate Prasant Bhushan who appeared for some candidates said that their apex court that their names appeared in a provisional list for recruitment to armed forces but for recruitment process was cancelled when agnipath scheme was notified.

He argued that the government must be directed to complete the old process citing the doctrine of promissory Estoppel

Now we understand the doctrine of promissory Estoppel through the apex court judgement.

WHAT IS THE DOCTRINE OF PROMISSORY ESTOPPEL

• Contractual laws are developed in promissory Estoppel .
• There must be a sufficient consideration on an agreement under contract law.
• A claim of doctrine of promissory Estoppel essentially prevents “promisor’’ from backing out of an agreement on the grounds that there is no “consideration’’.
• The doctrine is invoked in court by a plaintiff against the defendant to ensure execution of a contract or seek compensation for failure to perform the contract.
• In a 1981 decision in chhaganlal Keshava Lal Mehta v. Patel narandas haribhai, the supreme court lists out a checklist for when the doctrine can be applied.

First, there must be an unambiguous promise.

Second, the plaintiff acted on the relying on that promise.

Third, the plaintiff must have suffered a loss.[3]

HOW DOES IT RELATE TO THE AGNIPATH CASE?

• Bhushan’s arguments invoking the doctrine essentially means that the governments actions of putting up a shortlist etc would be a “promise’’ made by it.
• The other party here – the candidates acted based on the promise – they refused others jobs in CRPF, BSF etc and now must be compensated for their loss.
• The judges quickly refused these arguments.
• CJI DY Chandrachud pointed out that “promissory Estoppel is always subject to throughout public interest’’.
• Justice PS Narasimha added that “this is not a contract law where it is applied in public matters  and that the “the question applying  in this case and the principle will not arise.

CONCLUSION

This article represents the circumstances of the agnipath scheme through which we learn a lot about the promissory Estoppel and how the doctrine of promissory Estoppel is applied on the scheme of agnipath. It tends to be said that the state government or the government of India who makes promise to individual to fulfil the promise or any contractual obligations and then the entity backs out without committing the obligations.  In conclusion, the doctrine of promissory Estoppel is a vital legal principle that prevents a party from going back on their promise when the other party has relied on that promise to their detriment. this doctrine serves to uphold fairness and justice in contractual relationships by enforcing promises made, it acts as a shield for those who reasonably rely on assurances, fostering a sense of trust and accountability in legal transactions.

REFERENCES

• http://www.law.cornell.edu
• http://www.investopedia.com
• http://blog.ipleaders.in
• http://cleartax.in
• http://maupatra.com
• http://www.legalservicesindia.com
• http://www.lawctopus.com

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[1] http://www.investopedia.com

 

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