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Introduction
Estoppel hinges on the notion that it would be supremely unfair and unjust for an individual, through a representation or conduct tantamount to a representation, to induce another person to act in a manner they otherwise wouldn't have, only to later disavow or negate the consequences of their initial statement.
This would result in loss and harm to the individual who acted in reliance upon it.
Estoppel, as a principle rooted in equity, concerns itself primarily with the consequences of a contract rather than its origins.
The responsibility of demonstrating the elements outlined in this section rests upon the party asserting estoppel.
The representation forming the foundation of this principle must be explicit and unequivocal, rather than vague or uncertain, upon which the relying party is deemed to have acted in good faith and with belief.
Estoppel finds its foundation in the legal maxim "allegans contraria non est audiendus" (one alleging contradictory facts should not be heard).
It represents a form of presumption in law, where a fact presumed is deemed true not universally, but solely against a specific party, and only by virtue of some action taken.
In essence, it operates as a type of argument directed at an individual. It's important to note that "estoppel" shouldn't be conflated with "conclusive evidence" – the former entails legal conclusions drawn against parties based on specific facts, while the latter refers to evidence robust enough to sway a tribunal's conviction or is deemed conclusive by law.
Estoppel is a multifaceted legal concept, encompassing several key elements: a statement to be relied upon, reliance upon that statement, and resulting harm to the party relying on it.
While estoppel is often categorised as a rule of evidence, it is more accurately understood as a substantive legal principle. It differs from a contract in both its nature and consequences.
Additionally, for estoppel to apply, there must be a requisite relationship between the parties such that the assumed truth of the statement is integral to the formation of the cause of action.
However, the entirety of an estoppel claim collapses if the statement in question lacks sufficient clarity and definitiveness.
Section 115 of Indian Evidence Act
According to this section, if one individual intentionally leads another to believe something to be true through declaration, action, or omission, and the latter acts upon that belief, neither the former nor their representative can subsequently deny the truth of that assertion in any legal proceeding between them.
Suppose A knowingly and falsely convinces B that a certain piece of land belongs to A, prompting B to purchase and pay for it.
Later, the land indeed becomes A's property, and A endeavours to invalidate the sale, alleging lack of title at the time of purchase. A cannot be permitted to establish their deficiency of title in this scenario.
This provision finds its basis in the precedent set by the case of Pickard v Sears, elucidating that when one individual deliberately leads another to believe in a certain state of affairs and induces action based on that belief, they are precluded from asserting a contrary state of affairs existing concurrently.
Importantly, this principle is not an equitable rule but rather a rule of evidence established and enforced within legal courts.
Essentially, this provision bars an individual from disavowing the truth of a prior statement made by themselves, without generating a separate cause of action based solely on estoppel.
Essential Ingredients of Section 115 of Indian Evidence Act
Section 115 of the Indian Evidence Act outlines three essential elements:
Representation: This involves one person making a declaration, acting, or omitting to act in a manner that induces another person to believe in the existence of a certain fact. This representation can take various forms and must create a belief in the other person's mind about the represented fact.
Reliance and Detriment: The second condition necessitates that the individual relying on the representation alters their position based on it, and would suffer a loss if the representative is permitted to retract their statement.
Detriment is crucial for actionable promissory estoppel. However, in some cases, such as against the State, detriment may not be required.
For instance, in Secretary of State v Tatya Holkar, the government's conduct in acquiring land and paying compensation estopped them from later seeking to recover the amount paid upon discovering that the land actually belonged to them.
Similarly, the case of a judge seeking to deny his age after consistently presenting himself as older in official documents, or a wife seeking to change her religious affiliation after previously adhering to a different faith, exemplifies instances where estoppel was deemed applicable based on the reliance and detriment incurred by the affected parties.
Estoppel and Res Judicata
Estoppel and res judicata are different beasts, you see:
(1) Estoppel deals with what you can bring up in court based on fairness and changed circumstances; res judicata is more about closing the door on endless legal battles.
(2) Estoppel stops you from flip-flopping on what you've said or done before, to avoid unfairly harming someone who's acted in reliance on your words or actions; res judicata stops the court from rehashing stuff that's already been settled.
(3) Estoppel keeps a party from backtracking; res judicata tells the court to hands-off because it's already been dealt with.
To break it down real simple, res judicata means you can't keep repeating the same argument in different lawsuits, while estoppel means you can't say one thing now and the opposite later.
Estoppel and Waiver
Estoppel, while not constituting a cause of action in itself, can bolster a plaintiff's case by preventing a defendant from refuting a crucial fact necessary for the cause of action.
Essentially, it bars a defendant from asserting a fact that would undermine the plaintiff's claim. On the contrary, waiver operates within a contractual framework and can indeed form the basis of a cause of action. It involves an agreement to relinquish or refrain from asserting a particular right.
If an agent, authorised to make such agreements on behalf of their principal, consents to waive the principal's rights, the principal becomes bound by the agreement, albeit through contract, not estoppel. Estoppel by waiver does not exist.
Traditionally, waiver entails the deliberate surrender or abandonment of a known legal right, or conduct that implies such relinquishment.
Promissory Estoppel
The concept of promissory estoppel has introduced a fresh perspective to the doctrine of estoppel, embraced by both English and Indian courts in recent times.
Under this principle, if a promise is made with the expectation that it will be acted upon in the future, and indeed it is, the promisor cannot renege on the promise.
This evolution finds ease in jurisdictions like Britain and the USA, where estoppel is rooted in equity (common law). However, in India, where it's a rule of law, adherence to the terms of Section 115 is imperative.
Promissory estoppel diverges from the traditional estoppel outlined in Section 115, as it pertains to a promise regarding future intentions rather than an existing fact. Nonetheless, the Supreme Court acknowledges its role in furthering the cause of justice.
While such promises lack legal backing in terms of consideration (the foundation of a contract) and rely solely on the party's actions, if made in circumstances involving legal rights and obligations, it's deemed appropriate to enforce them.
In cases involving the government, the court must weigh the potential harm to public interest against that to citizens to ensure governmental actions aren't arbitrary.
Termed as "equitable estoppel," "quasi estoppel," or "new estoppel," this doctrine isn't strictly bound by estoppel's principles but rather evolved by equity to prevent injustice where a promise, made with the knowledge it would be relied upon, is breached.
The case of M.P. Sugar Mills v State of U.P. exemplifies this. Despite no detriment, the promisee's reliance on the promise is sufficient to invoke estoppel against the State.
Mere promises of gifts don't suffice to create estoppel; a clear and unequivocal promise is necessary.
In a notable case involving a loan sanction, where it was stated not to constitute a commitment, the absence of a clear promise precluded the application of promissory estoppel.
Similarly, amendments to commitments made by the State Government, such as imposing age requirements not present initially, are not permitted, as seen in R.K. Rama Rao v State of A.P.
However, the Supreme Court, in Madhuri Patel v Addl. Commissioner, Tribal Development, ruled against extending the benefit of promissory estoppel to a candidate who secured admission through false pretences, highlighting that fraudulent actions cannot be shielded by estoppel.
Types of Estoppel
Estoppel by Matter of Record
Arises from judgments of competent courts, forming part of court records.
Estoppel by Deed
Occurs when a party, through a formal deed, asserts certain facts and is precluded from denying them or allowing others to do so.
Estoppel in Pais by Conduct
Arises from agreements, acts, or conduct inducing reliance and resulting in a change of position.
Estoppel of Tenant and of Licensee
Section 116 deals with the principle of estoppel concerning tenants and licensees in possession of immovable property.
It asserts that if an individual enters an immovable property and assumes the role of a tenant under someone they acknowledge as the landlord, they are precluded, throughout the duration of the tenancy, from contesting the landlord's title to the property from the outset.
Likewise, if someone enters immovable property with the authorization of the current possessor, they are prohibited from later disavowing the possessor's right to the property.
In essence, tenants and licensees are barred from repudiating the title of their respective landlords or licensors.
For instance, if a landlord initiates legal action for eviction and rental arrears, a tenant placed in possession of the property by said landlord cannot claim that the landlord lacked interest in the property (see Moti Lal v Yar Md. AIR 1925 All. 275).
In the case of S.K. Sharma v Mahesh Kumar Verma AIR 2002 SC 3294, the respondent, a railway servant, was estopped from challenging the railway administration's title over the premises allocated to him as an official residence as long as he remained in possession, pursuant to Section 116 of the Evidence Act.
Similarly, in Lal v Raj Kumar Singh AIR 2002 SC 3341, the tenant's defence was not admitted since it solely rested on denying the landlord's title.
However, this estoppel is limited to the circumstances prevailing at the inception of the tenancy or licence. Subsequent developments, such as the loss of title by the landlord or licensor, can be freely discussed by the tenant or licensee.
Once the tenancy has concluded, the tenant may dispute the landlord's title without restraint. The estoppel between landlord and tenant terminates when the tenant openly surrenders possession (refer to T. Lakshmipathi v P. Nithyananda Reddy (2003) 5 SCC 150).
It should be noted that if the legitimacy of the tenancy itself is in question (e.g., due to fraud or coercion), tenants are not estopped from contesting the landlord's title.
Estoppel of Acceptor of Bill of Exchange, Bailee, etc
Section 117 of the Indian Evidence Act outlines the principle of estoppel concerning the acceptor of a bill of exchange, as well as bailees and licensees.
According to Section 117, an acceptor of a bill of exchange is barred from contesting that the drawer possessed the authority to draw or endorse the bill.
However, the acceptor reserves the right to dispute the authenticity of the bill's originator (for instance, by demonstrating that the drawer's signature was forged).
Similarly, bailees and licensees are prohibited from refuting that their bailor or licensor possessed the requisite authority to initiate the bailment or grant the license at the commencement of the arrangement.
Nonetheless, if a bailee holds goods bailed by someone other than the bailor, they are permitted to establish that the said person holds a rightful claim to the goods against the bailor.
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