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See Century Spinning Co. v. Ulhasnagar Municipal Council, AIR (1971
Precedent
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SC 1021 1970 Indlaw SC 341, Radhakrishna v. State of Bihar, AIR (1977
Precedent
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SC 1496 1977 Indlaw SC 282, Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., [1979] 2 SCC 409 1978 Indlaw SC 56, Union of India v. Godfrey Philips Indian Ltd., [1985] 4 SCC 369 1985 Indlaw SC 275 and Dr. Ashok Kumar Maheshwari v. State of U.P. & Another, (1998) 2 Supreme 100 1998 Indlaw SC 1376
Precedent
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In the backdrop, let us travel a little distance into the past to understand the evolution of the doctrine of "promissory estoppel
Precedent
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Dixon, J. an Australian Jurists, 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
Precedent
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Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine
Precedent
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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
Precedent
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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
Precedent
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The principle, set out above, was reiterated by Lord Denning in High Trees's case (supra
Precedent
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This principle has been evolved by equity to avoid injustice
Precedent
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It is nether in the realm of contract nor in the realm of estoppel
Precedent
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Its object is to interpose equity shorn of its form to mitigate the rigour of strict law, as noted in Anglo Afghan Aencies's case1967 Indlaw SC 411 (supra) and Sharma Transport Represented by D.P. Sharma v. Government of A.P. and Others, [2002] 2 SCC 188 2001 Indlaw SC 19917
Precedent
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No vested right as to tax holding is acquired by a person who is granted concession
Ratio of the decision
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If any concession has been given it can be withdrawn at any time and no time limit should be insisted upon before it was withdrawn
Ratio of the decision
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The rule of promissory estoppel can be invoked only if on the basis of representation made by the Government, the industry was established to avail benefit if of exemption
Ratio of the decision
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In Kasinka Trading and Anr
Precedent
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v. Union of India and Anr
Precedent
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1995] 1 SCC 274 1994 Indlaw SC 2183
Precedent
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it was held that the doctrine of promissory estoppel represents a principle evolved by equity to avoid injustice
Precedent
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A person may have a 'legitimate expectation' of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment
Ratio of the decision
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The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice
Ratio of the decision
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The doctrine of legitimate expectation has an important place in the developing law of judicial review
Ratio of the decision
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It is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review
Ratio of the decision
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It is generally agreed that 'legitimate expectation' gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right to a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken
Ratio of the decision
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The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such involved
Ratio of the decision
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The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise
Ratio of the decision
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In other words, where a person's legitimate expectation in not fulfilled by taking a particular decision then decision maker should justify the denial of such expectation by showing some overriding public interest
Ratio of the decision
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See Union of India and Others
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v. Hindustan Development Corporation and Others, AIR (1994
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SC 9981993 Indlaw SC 1085
Ratio of the decision
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While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily or by any ulterior criteria
Ratio of the decision
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The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet
Ratio of the decision
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The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heart beat of fair play
Ratio of the decision
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Actions are amenable, in the panorama of judicial review only to the extent that the State must act validity for discernible reasons, not whimsically for any ulterior purpose
Ratio of the decision
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The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined
Ratio of the decision
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A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case
Ratio of the decision
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A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does if really satisfy the test of reasonableness
Ratio of the decision
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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 small be labelled as arbitrary
Ratio of the decision
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Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary
Ratio of the decision
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This Court's observations in G. B. Mahajan v. Jalgaon Municipal Council, AIR (1991) SC 1153 1990 Indlaw SC 438 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
Ratio of the decision
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But there has to be a word of caution
Ratio of the decision
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Something overwhelming must appear before the Court will intervene
Ratio of the decision
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That is and ought to be a difficult onus for an applicant to discharge
Ratio of the decision
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The Courts are not very good at formulating or evaluating policy
Ratio of the decision
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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
Ratio of the decision
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On the contrary, curial views of policy have been subjected to stringent criticism
Ratio of the decision
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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
Ratio of the decision
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The reasonableness in administrative law must, therefore, distinguish between proper course and improper abuse of power
Ratio of the decision
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Nor is the test Court's own standard of reasonableness as it might conceive it in a given situation
Ratio of the decision
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The point to note is that the thing is not unreasonable in the legal sense merely because the Court thinks it to be unwise
Ratio of the decision
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In Hindustan Development Corporation's case1993 Indlaw SC 1085 (supra), 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
Ratio of the decision
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If it is a question of policy, even by ways of change of old policy, the Courts cannot intervene with the decision
Ratio of the decision
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In a given case whether there are such facts and circumstances giving rise to legitimate expectation, would primarily be a question of fact
Ratio of the decision
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As was observed in Punjab Communications Ltd. v. Union of India of Others, AIR (1999) SC 1801 1999 Indlaw SC 1548, the change in policy can defeat a substantive legitimate expectation if it can be justified on "Wednesbury reasonableness
Precedent
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The decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy
Precedent
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It is, therefore, clear that the choice of police is for the decision-maker and not the Court
Precedent
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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
Precedent
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A claim based on merely legitimate expectation without anything more cannot ipso facto give a right
Precedent
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Its uniqueness lies in the fact that it covers the entire span of time; present, past and future
Precedent
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How significant is the statement that today is tomorrows' yesterday
Precedent
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The present is as we experience it, the past is a present memory and future is a present expectation
Ratio of the decision
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For legal purposes, expectation is not same as anticipation
Ratio of the decision
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Legitimacy of an expectation can be inferred only if it is founded on the sanction of law
Ratio of the decision
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As observed in Attorney General for New South wale 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
Ratio of the decision
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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
Ratio of the decision
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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 of 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
Ratio of the decision
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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
Ratio of the decision
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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
Ratio of the decision
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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
Ratio of the decision
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As cautioned in Attorney General for New South wale's case the Courts should restrain themselves and respect such claims duly to the legal limitations
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It is a well meant caution
Ratio of the decision
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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
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The caution, particularly in the changing scenario becomes all the more important
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If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies
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As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed
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Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration
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A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly
Ratio of the decision
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In determining whether there is any unfairness involved the nature of the right alleged to have taken infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time enter into judicial verdict, the reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question
Ratio of the decision
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Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country
Ratio of the decision
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See Parbhani Transport Co-operative Society Ltd. v. Regional Transport Authority, Aurangabad and Others, AIR (1960
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SC 9011960 Indlaw SC 472; Shree Meenakshi Mills Ltd. v. Union of India, AIR (1974
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SC 3651973 Indlaw SC 291; Hari Chand Sarda v. Mizo District Council and Another, AIR (1967) SC 829 1966 Indlaw SC 125; Krishnan Kakkanth v. Government of Kerala and Others, AIR (1997
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SC 128 1996 Indlaw SC 1845 and Union of India and Another v. International Trading Co. and Another, [2003] 5 SCC 437 2003 Indlaw SC 472
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Article 166 of the Constitution deals with the conduct of Government business
Statute
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The said provision reads as follows: "166
Statute
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Conduct of business of the Government of a State,- (1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor
Statute
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2) 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 Governor
Statute
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The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocating 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
Statute
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Clause (1) requires that all executive action of the State Government shall have to be taken in the name of the Governor
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Further, is no particular formula of words required for compliance with Article 166(1
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What the Court has to see is whether the substance of its requirement has been complied with
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A Constitution Bench in R. Chitralekha Etc
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v. State of Mysore and Ors
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AIR (1964
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SC 1823 1964 Indlaw SC 103 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
Ratio of the decision
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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
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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
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Whether there is any Government order in terms of Article 166; has to be adjudicated from the factual background of each case
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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 and doctrine the 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
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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 for ever be present in the mind of the Court
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