Principle of Estoppel under Evidence Act

• The first one is not dealt with in the Evidence Act and has been dealt with in S. 11 of CPC. It belongs to the province of pure procedure and is not a rule of evidence. Res-judicata is an estoppel by judgment.
• An estoppel by deed precludes the parties and their privies to a deed to deny its force and effect by oral evidence. It rests upon contract. The second one is not recognized in India and its application is covered under the subject of admission.
• The third one i.e. estoppel by representation or by matter in pais is recognized in S. 115 of Evidence Act. The Act apart from dealing with estoppel by representation notices certain cases of estoppel by agreement or contract which are only species of the estoppel stipulated in S. 115 of the Act. These specific instances have been stated in Ss. 116 and 117 of the Act.
• Apart from that there is equitable doctrine of promissory estoppel.

Sec. 115. Estoppel

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.

Illustration:

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.

Rule of estoppel is based on Rule of equity and provide that when a person has made false representation and upon such representation other person has acted to his disadvantage then law prohibits the former to turn back and say that representation was false.

The Ingredients of Rule of Estoppel as Defined Under Section 115:

• There must be some representation made by a person to another
• The Representation must be made with the intention to be acted upon and thereby altering his position
• Then suit between the parties, the person who represented shall not be allowed to deny the truth of his representation

1. Representation:
   First requirement of Rule of Estoppel is that there must be representation either by words or by conduct to another. This representation may be untrue or false or of some existing fact, made to person who is not aware the truth of that fact. Where the party effected by the representation had come to know before acted upon it, that the representation was false he cannot avail the Rule of Estoppel.
   Case Laws:
   In Mohri Bibi v. Dharam Das Ghosh : A minor entered into contract of Mortgage Later when Minor claimed that he being minor at the time of contract, so contract is void. Fact that Mortgage was minor was in the knowledge of Mortgage Court held that Rule of Estoppel is not applicable as Mortgage was aware about his minority.
   Estoppel by conduct may be active or passive. Estoppel by silence or acquiescence arises only when there is a duty to speak or disclose.
   In Secy. of State v Tatya Holkar: The government acquired land of the respondent and paid compensation thereof. Later on, government discovered that the land actually belonged to it. The government sought to recover the amount paid. It was held that government is estopped by its conduct.
   In a case, a judge, who had showed high age in his certificates right from the beginning of his career, sought to deny it by showing actual municipal birth-records, so as to retire at a later age. Held that the judge is estopped. In another case, the wife was of Buddhist faith and the husband a Muslim. She sought a divorce under Buddhist law. Held that she was estopped from denying her earlier committal to Islamic law.
2. The Representation must be made with the intention to be acted upon and thereby altering his position:
   The second condition necessary to create an estoppel is that the plaintiff altered his position on the basis of the representation and he would suffer a loss if the representer is allowed to resile from his statement. Detriment is a prerequisite of actionable promissory estoppel. Thus, a mere statement of a person that he would not assert his rights does not create an estoppel unless it is intended to be acted upon and is in fact acted upon (Sida Nitinkumar v Gujarat University AIR 1991 Guj. 43).
   Joyjit Das v State of Assam AIR 1990 Gau. 24):
   However, detriment is not necessary to create an estoppel against the State.
   Where a government licence was granted to a person to establish saw mill and he spent huge sums of money acting on the grant and the Government subsequently changed policy refusing to grant any further licences, the Government was held bound to grant that particular licence, though the policy may be revised for the future.
   Certain candidates were admitted to recognised course in Physical Education for the purpose of appointment as physical training instructors in Government schools. The Government was not permitted to derecognize the course in reference to such candidates but had a right to do for the future (Suresh Pal v State of Haryana AIR 1987 SC 2027).
3. Then suit between the parties, the person who represented shall not be allowed to deny the truth of his representation:
   This is close to the principle of promissory estoppel. Promissory estoppel is similar to one by representation but requires additional requirements to be met. It can be described as preventing a party from acting in a particular manner having previously promised not to. It is more accurate to describe the estoppel of suspending rather than extinguishing contractual rights.
   To establish promissory estoppel, there must be an established legal relationship as well as a clear and unambiguous promise that for all intents and purposes was expected to be fulfilled whether it is express or implied. The party must then change their position on that promise (i.e. go back on their promise) and if that promise were to have reneged on an injustice would occur. There is also no need for the defendant to provide consideration for the promise.

Exceptions to the Doctrine of Estoppel:

There are various exceptions to the doctrine of estoppel: –

1. No estoppel against a minor – Where a minor represents fraudulently or otherwise that he is of age and thereby induces another to enter into a contract with him, then in an action founded on contract, the infant is not estopped from setting up infancy as a plea. However, equity demands that he should not retain a benefit which he had obtained by his fraudulent conduct.
2. When true facts are known to both the parties – Sec. 115 does not apply to a case where the statement relied upon is made to a person who knows the real facts and is not misled by the untrue statement (Madnappa v Chandramma AIR 1965 SC 1812).
3. Fraud or negligence on the part of other party – If the other party does not believe the representation but acts independently of such belief, or in cases where the person to whom representation is made is under a duty to make a further inquiry, the estoppel will not operate. Likewise, if there is a fraud on the part of the other party, which could not be detected by promisor with ordinary care, the estoppel will not operate.
4. When both the parties plead estoppel – If both the parties establish a case for application of estoppel, then it is as if the two estoppels cancel out and the court will have to proceed as if there is no plea of estoppel on either side. Further, if both sides had laboured under a mistake however bona fide or genuine, the plea of estoppel may not be available.
5. No estoppel on a point of law – Estoppel refers only to a belief in a fact. If a person gives his opinion that law is such and such and other acts upon such belief, then there can be no estoppel against the former subsequently asserting that law is different. One cannot be estopped from challenging the effectiveness of something (e.g. partition deed) for want of law (e.g. registration). Representations under Sec. 115 should be of facts, not of law or opinion (Union of India v K.S. Subramaniam AIR 1989 SC 662).
6. No estoppel against statute a / sovereign acts – A rule of law cannot be nullified by resorting to the doctrine of estoppel. A person who makes a statement as to the existence of the provisions of a statute is not estopped, subsequently, from contending that the statutory provision is different from what he has previously stated. For example, where a minor has contracted by misrepresenting his age, he still can afterwards disclose his real age. It is a rule of law of contract that a minor is not competent to contract and that rule would be defeated if a minor not permitted to disclose his real age. Hence there can be no estoppel against the provisions of a statute.
   Thus, if a person is given rights under a statute, and he gives them up at one stage voluntarily and later on tries to enforce those rights, no estoppel can be invoked against him. For example, under the Rent Control Act, the landlord can demand from his tenant only a fair/standard rent.
   If a tenant agreed to pay a high rent and thereafter files a petition for fixing the fair rent, he won’t be estopped.
   Thus, if a person is given rights under a statute, and he gives them up at one stage voluntarily and later on tries to enforce those rights, no estoppel can be invoked against him. For example, under the Rent Control Act, the landlord can demand from his tenant only a fair/standard rent. If a tenant agreed to pay a high rent and thereafter files a petition for fixing the fair rent, he won’t be estopped.
   In Bal Krishan v Rewa University (AIR 1978 M.P.86), it was pointed out if a candidate has appeared at an examination by misrepresenting facts (viz., a non-graduate appearing at law examination), the university will not be estopped from cancelling the examination if his candidature is against a rule of law.
   In State of Rajasthan v Mahavir Oil Mills (AIR 1999 SC 2302), when new industry was set up on basis of Incentive Scheme from Government and by relying on promise of benefits held out by it, the Supreme Court held that the State Government was bound by the promise held out by it in such situation. But this does not preclude the State Government from withdrawing the benefit prospectively even during the period of Scheme, if the public interest, so requires. Even in case the party had acted on promise, if there is any supervening public interest which requires that the benefit be withdrawn or the same be modified, that supervening public interest would prevail over promissory estoppel.
   Case Laws :
   R.S. MADNAPPA V CHANDRAMMA (AIR 1965 SC 1812):
   In this case, in a suit for possession of plaintiff’s half share of certain properties, a decree was passed in favour of the defendant No. 1 (brother of plaintiff) with respect to the other half share.
   In appeal by the other defendants, it was contended that defendant No. 1 was estopped from claiming half share (decreed), because he did not reply to a notice by the plaintiff asking him to join her in filing the suit,

1. He wrote a letter to his step mother disclaiming interest in suit property, and,
2. He attested a will executed by his father disposing of suit properties.

The Supreme Court held that:

1. The conduct in not replying to notice does not mean there was implied admission (or acquiescence) that he had no interest in properties, justifying an inference of estoppel,
2. When the father (defendant No. 2) knew about true legal position that he was not the owner of properties and his possession was on behalf of plaintiff and defendant No.1, the defendant No. 1’s letter to stepmother could not have created an erroneous or mistaken belief in father’s mind about his title to the suit properties,
3. Similarly, the reason of conduct of defendant No. 1 in attesting his father’s will could not justify an inference of estoppel.

Thus, in this case, as the facts are known to both the parties, the doctrine of estoppel cannot be invoked. Sec. 115 does not apply to a case where the statement relied upon is made to a person who knows the real facts and is not misled by the untrue statement. Also, in the present case, there is no detriment to the other party by the actions of defendant.

Sections 116-117

Sections 116 and 117 are illustrative of the principle of estoppel laid down in Sec. 115. These two sections deal with estoppels in specific cases.

Sec. 116. Estoppel of Tenant and of Licensee of Person in Possession

Sec. 116 provides that a person who comes into an immovable property taking possession from a person who he accepts as the landlord, is not permitted during the continuance of tenancy to say as against his landlord that he had no title to the property at the commencement of the tenancy.

Similarly, a person who comes upon any immovable property with the Licence of the person in possession is not permitted to say afterwards that his licensor had no right to the possession of the property.

In short, a tenant/ licensee is not permitted to deny the title of his landlord/ licensor. Where a landlord files a suit for ejectment and for arrears of rent the tenant who has been put into possession of the property in suit by the landlord cannot be allowed to say that the landlord had no interest in the property of suit.

In S.K. Sharma v Mahesh Kumar Verma AIR 2002 SC 3294: The respondent was a railway servant. He was allotted premises in question as official residence. The respondent was estopped from alleging title of railway administration over premises in question till he was in possession in view of Sec. 116 of the Evidence Act.

In Rita Lal v Raj Kumar Singh AIR 2002 SC 3341: The tenant was not allowed to defend because his only defence would have been to deny the title of the landlord.

The estoppel is confined to the state of things at the commencement

Section 117. Estoppel of Acceptor of Bill of Exchange, Bailee/ Licensee

Sec. 117 provides that no acceptor of a bill of exchange can deny that the drawer had authority to draw such bill or to endorse it; but he may deny that the bill was really drawn by the person by whom it purports to have been drawn (it can always be shown that the drawer’s signature was forged).

Likewise, no bailee/licencee can deny that his bailor/licensor had, at the time when the bailment/licence commenced, authority to make such bailment or grant such licence. But, if a bailee of the goods bailed to a person other than the bailor, he may prove that such person has a right to them as against the bailor.

[Note: Estoppel by attestation – An attestor ordinarily knows nothing of the contents of document, and so he is not estopped from denying the truth in document. But, if he knows about contents, then estoppel operates.]

Comparison of Estoppel with Other Concepts:

• Estoppel and Presumption – An estoppel is a personal disqualification laid upon a person peculiarly circumstanced from proving particular facts, whereas a presumption is a rule that a particular inference is to be drawn from particular facts, whoever proyes them. In presumption, evidence to rebut it can be given, while in estoppel, the party is estopped from denying the truth.
• Estoppel and Conclusive Proof – When a fact is conclusively proved, it is so against all the world. Estoppel operates only as a personal disability. In both, however, the very same fact cannot be denied (irrebuttable).
• Estoppel and Admission – Admissions being declarations against an interest are good evidence but they are not conclusive and a party is always at liberty to withdraw admissions by proving that they are either mistaken or untrue. But an estoppel creates an absolute bar. Further, estoppel being a rule of evidence, an action cannot be founded on it, whereas an action may be founded on an admission. It may be noted that admissions, if they have been acted upon by a third person, and if substantive rights have been created, operate as estoppel.
• Estoppel and Waiver – Waiver is the abandonment of a right which normally everybody is at liberty to waive. A waiver requires a positive relinquishment of something which one had before, but estoppel does not require any such thing as that; and a party waiving his rights may in circumstances reinforce them, while in estoppel it cannot be so. In waiver, there is full knowledge of facts, while in estoppel, even a mistake or omission has no effect.
• Estoppel and Res Judicata – Res judicata precludes a man averring the same thing twice over in successive litigation, while estoppel prevents him saying one thing at one time and the opposite at another. Thus, res judicata prohibits a court from inquiring into a matter already adjudicated, while estoppel prohibits a party. Further, res judicata is not a rule of evidence, but a rule of procedure.
• Estoppel and Fraud – An action cannot be founded on estoppel, while a fraud gives rise to a cause of action. Similar is the case of estoppel and breach of contract.