Estoppel

This article titled ‘Estoppel’ is written by Aritra Sarkaar and discusses the doctrine of estoppel.

I. Introduction

The doctrine of Estoppel is enshrined in Section 115 of the Indian Evidence Act. It prevents a person from denying the truth of something said by him, which made the other party believe that the same is true. In Hope Plantations Ltd. v. Taluk Land Board, Peermade and Another (1999) 5 SCC 590, the Supreme Court opined that the doctrine of estoppel is based on public policy.

II. Section 115

Section 115 gives us the meaning of estoppel it says that “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 illustration explains it very well it says that “A intentionally and falsely leads B to believe that certain land belongs to A, and thereby induces B to buy and pay for it. The land afterwards becomes the property of 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 of title.”

Sarat Chunder Dey v. Gopal Chunder Laha[1] it was said that estoppel is based on the principle that it would be most unjust and inequitable that if one person by a representation made and or conduct amounting to a representation should not repudiate or withdraw his statement to the injury of the other, person who acted on it.

The different types of estoppel are-

1. Estoppel by Record
2. Estoppel by Deed
3. Estoppel by Conduct
4. Estoppel by Admission

1. Estoppel by record

It arises when a judgement has been given by a competent court and due to that a person, who was a party or his representative to the case already decided is estopped to reopen the case. This principle is not used in India but we use the principle of Res judicata to get the same effect.[2] It should be noted that an appeal is considered to be the continuation of the same case and thus it will not come under the principle of res-judicata.

Relevant case law on this would be Govindiji Jevat and Co. v. Shree Saraswat Mills[3] basing on this principle it was said that a party accepting payment on an arbitrator’s award cannot afterwards challenge it. Similarly, in another case namely Amar Singh v. Prahlad[4] it was held that a party accepting payment even under protest amounts to accepting the order of the court as the correct order.

2. Estoppel by deed

When a person makes an engagement by a deed then he is not allowed to go back and say the opposite later. However, this rule is also not followed in India. In India, a deed is the only admission and under section 31 it is not conclusive proof therefore evidence can be given to show that the evidence can be wrongly given.[5]

In the case of Atmaram v. State[6], the petitioner claimed the possession of a land of a tribal acquired by virtue of a registered sale deed obtained by proper permission. The court held that the plea by the petitioner need to be considered before concluding that the possession was without lawful authority.

3. Estoppel by conduct

To raise an estoppel in pais it is required for a person to induce another person, by words or by conduct, to believe that a certain state of things exists and to cause that person to act on that belief in a way that he would not have done had he known that the facts are not true so that in a case between them the person making the representation is allowed to prove the true facts and tell the truth the other person will be prejudiced. In this case, the person making the representation will be estopped and he will not be allowed to go back and withdraw his words that he said earlier or his conduct and say that it was falsely made.[7]

In the case of Pranaya Ballari Mohanty v. Utkal University[8], it was said that a university can not withdraw its results and say it’s wrong after as long as 20 years. the candidate in question had acquired her PhD qualification and she was working as a lecturer. The university was held to have become bound by estoppel, wavier and acquaintance.

Equitable estoppel- According to V. P. Sarathi, this is a misnomer as estoppel was originally an equitable doctrine.[9]

In the case of Baidyanath Mahapatra v. State of Orissa[10], it was held that when the government made delay in communicating adverse remarks to the employee then the court prohibited the government to reject the representation of the employee as belated. The court said that the government was bound by equitable estoppel to consider the representation on merits.

Promissory estoppel- When one party by his conduct or words made to the other party a promise or assurance intending to affect the legal relations between them then once the other party has taken his word and acted on it then the one who gave the assurance is not allowed to take it back so as to return to the previous legal relation as f no such promise was made. The doctrine of promissory estoppel is premised on the conduct of one party to another so as to cause the other party to make changes as if the said representation will be acted upon. It provides for a cause of action it need not necessarily be a defence. This was said in the case of LML ltd. v. State of Uttar Pradesh.[11]

No promissory estoppel will arise when the representation or promise made by a government official or public authority is beyond its power or is prohibited by law. This was held in the case of Bajrang Industries v. General Manager D.I.C., Vizianagaram.[12]

Also, in the case of Jacob Philip v. Union of India[13], no promissory estoppel arose when the government cancel a cement permit on account of a change in policy.

4. Estoppel by admission

In case of admission, there is a statement and in case of estoppel also there can be a statement as shown by the word “declaration” in section 115 of the Indian Evidence Act, 1872. Mere admission will not become estoppel until the other party believes in it and act according to the belief. In the case of mere admission, evidence can be given to show that the admission is wrong but when it becomes estoppel then such evidence cannot be given to show that it is wrongly made.

III. Estoppel and fraud

In the case of fraud, there is deliberate misstatement or suppression. The effect of it is that an action for deceit lies against the person playing the fraud. There can be cases where a statement may be made honestly believing the truth but even in those cases if the other party believes in it and acts upon it then the person making the statement will be estopped from denying it’s truth.[14]

In the case of Krishi Utpadan Mandi Samiti v. Bipin Kumar[15], a party was precluded in leading evidence contrary to the terms of a written document. The court said that parties who undervalued their document for stamp duty cannot claim that their own document does not reflect the current market value.

IV. Estoppel and Res-Judicata

Though estoppel and res-judicata have similar effects they have two fundamental differences. Firstly, in the case of estoppel, it is the court that is estopped and in the case of res judicata, it is the court that loses its jurisdiction. Secondly, in case of estoppel the person who already made a representation is prevented from saying the opposite after the person to whom it was said has believed in it and act accordingly, whereas in case of res-judicata having obtained adjudication the same cannot be contested before the same court or another court.

V. Section 116

This section says that “No tenant of immovable property, or the person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property; and no person who came upon any immovable property by the licence of the person in possession thereof shall be permitted to deny that such person had a title to such possession at the time when such licence was given.”

This estoppel continues to operate as long as the tenancy continues unless the tenant surrenders the possession to the landlord. The estoppel ceases to operate only when the tenant openly restoring possession surrendering the property to the landlord. This was held in the case of T. Lakshmipathi v. P. Nithyananda Reddy.[16]

In the case of Lahu v. Kailash Matasaran Gupta[17], the tenant denied the ownership of the landlady but in a subsequent civil suit, the tenant affirms the ownership of the landlady. The court says that such approbation and reprobation was not permissible under section 116 of the evidence act and such mala fide denial of ownership will call for the application of section 116 of the evidence act. Section 111(g) Transfer of property has an independent operation it is not dependent on the operation of section 116.

VII. Section 117

This section says that

“No acceptor of a bill of exchange shall be permitted to deny that the drawer had authority to draw such bill or to endorse it; nor shall any bailee or licensee be permitted to deny that his bailor or licensor had, at the time when the bailment or licence commenced, authority to make such bailment or grant such licence.”

Under this section, the acceptor of a bill can not deny that the bill was drawn by a person who does not have the authority to draw it but under the explanation, it is acceptable for the person to contest that the bill really drawn by someone else other than the person who was supposed to have drawn the bill.

A bailee or a licensee can not deny that at the commencement of the bailment or license the bailor or the licensor have the authority to make the bailment or grant the license. But according to explanation 2 if the bailee delivers the goods to a third person then the bailee will have the right to prove that such person is having the right to such goods other than the bailor. In this section, the bailee and the license are placed in the same position as that of the tenant.[18]

Edited by- Akriti

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References

[1] (1892) 19 IA 203, 215, 216

[2]V. P. Sarathi p.247 ed.7

[3] AIR 1982 Bom 76

[4] AIR 1989 P&H 229

[5] V. P. Sarathi p.247 ed.7

[6] AIR 1995 MP 225

[7] Ratanlal & Dhirajlal p.617 ed.25

[8] AIR 2014 Ori 26

[9] V. P. Sarathi p. 261 ed.7

[10] AIR 1989 SC 2218

[11] (2008) 3 SCC 128

[12] AIR 1994 AP 10

[13] AIR 1985 Ker 255

[14] V. P. Sarathi p.254 ed.7

[15] (2004) 2 SCC 283

[16] (2003) 5 SCC 150

[17] AIR 2014 Bom 143

[18] Ratanlal and Dhirajlal p.675 ed.25

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