l Appeal Nos
2130 and 2131 of 1969
Appeals by special leave from the judgment and order dated June 16 19 1969 of the Bombay High Court in Special Civil Application No 41 of 1969 and SCA No 1774 of 1969
C K Daphtary Suresh A Shroff P C Bhartari and O C Mathur for the appellants in both the appeals
H R Gokhale N H Gurshani and N N Keswani for res pondent No 1 in both the appeals
B D Sharma and section P Nayar for respondent No 2 in both the appeals
856 The Judgment of the Court was delivered by Civil Appeal No 2130 of 1967 Shah J
The High Court of Bombay dismissed in limine a petition filed by the Century Spinning Manufacturing Co Ltd hereinafter called the Company for the issue of a writ restraining the respondent Municipality from enforcing the provisions of the Maharashtra Municipalities Act 40 of 1965 relating to the levy assessment collection recovery of octroi and in particular section 105 and Ss 136 to 144 thereof and from enforcing the Maharashtra Municipalities Octroi Rules 1967 and from acting upon resolutions passed by the Municipal Council dated September 9 1968 and  September 13 1968 and from levying assessing collecting recovering or taking any other step under the Act rules or the resolu tions and for an order restraining the Municipality of Ulhasnagar from levying assessing collecting any octroi on the goods imported by the Company within the limits of the Municipal Council for a period of 7 years from the date of its first imposition
With special leave the Company has appealed against the order rejecting the petition
The Company was incorporated under the Indian Companies Act 1913
It set up its factory in 1956 within the limits of village Shahad Taluka Kalyan on a site purchased from the State of Bombay and within an area known as the Industrial Area 
No octroi duty was then payable in respect of goods imported by the Company into the Industrial Area for use in the manufacture of its products
On October 30 1959 the Government of Bombay issued a notification announcing its intention to constitute a Municipality for certain villages including the Industrial Area
The Company and other manufacturers who had set up their plants and factories objected to the proposed constitution of the Municipal Area
On September 20 1960 the State of Maharashtra successor to the State of Bombay published a notification constituting with effect from April 1 1960 the Municipality including the area in which the Industrial Area was included
Representations were then made by the Company and other manufacturers for excluding the Industrial Area from the Ulhasnagar Municipal District Area
On April 27 1962 the Government of Maharashtra the new State of Maharashtra having been constituted under the Bombay Reorganization Act 1960 proclaimed that the Industrial Area be excluded from the Municipal jurisdiction
The District Municipality then made a representation to the Government of Maharashtra that the proclamation dated April 27 1962 be withdrawn by the Government
The Municipality agreed to exempt the existing factories viz the Company and other manufacturers whose factories were then existing in the Industrial Area from payment of octroi for a period of seven years from the date of levy of octroi and for exempting new industrial units from payment of octroi for 8 5 7 a similar period from the date of establishment
The Government of Maharashtra acceded to the request of the Municipality to retain the Industrial Area within the local limits of the Municipality
On August 24 1963 the District Municipality passed a resolution to implement the agreement
It was resolved that the Municipality agrees to give a concession to the existing factories by exempting them from the payment of octroi for a period of 7 years from the date of levy of octroi tax and by exempting new factories from the payment of the octroi tax for a period of 7 years from the date of their establishment as recommended by the Government of Maharashtra
On October 31 1963 the Government of Maharashtra issued a notification withdrawing the proclamation dated April 27 1962 and the Industrial Area became part of the Ulhasnagar Municipal District
Relying upon the assurance and undertaking given by the Municipality the Company claims that it had expanded its activities and commenced manufacturing new products by setting up additional plant which it would not have done but for the concessions given assurances and representations made and agreement arrived at on May 21 1963
On September 10 1965 the Legislature of the State of Maha rashtra enacted the Maharashtra Municipalities Act which repealed the Bombay District Municipal Act 3 of 1901
the notification declaring the area of the former District Municipality of Ulhasnagar into the Ulhasnagar Municipality became effective as from June 15 1966
The Ulhasnagar Municipality took over as successor to the Ulhasnagar District Municipality the assets and the affairs of that body
On September 9 1968 the Ulhasnagar Municipality resolved to levy minimum rates of octroi duty as shown in columns 4 and 6 on all items shown in Sch 1 to the Rules and by resolution dated September 13 1968 the Municipality adopted with effect from January 1 1969 the rates for the imposition of octroi duty on the goods imported for use sale and consumption within the Municipal Council limits
At a special meeting held on December 24 1968 the Munici pal Council considered the letters written by the Government of Maharashtra dated November 22 1968 and December 10 1968 drawing the attention of the Municipality to the circumstances in which the Industrial Area was included and retained in the local limits of the Ulhasnagar District Municipality and continued to reman within the local limits of the Municipality and advised the Municipality to pass a resolution confirming such exemption and honour the commitments of its predecessor The Municipality ignored the advice and resolved that the Government of Maharashtra be informed that the Municipality would consider afresh on Sup
CINP70 10 858 merits any representation of a tax payer for exemption from payment of octroi and if any such representation was made by the factories situate in the Industrial Area the Council would consider the same and take such action as it would deem fit
Thereafter the Municipality sought to levy octroi duty and to recover from the Company octroi duty amounting to approximately Rs 15 lakhs per annum
The Company moved a petition before the High Court of Bombay under article 226 of the Constitution for the writs set out earlier seeking to restrain the Ulhasnagar Municipality from enforcing the octroi Rules
The High Court may in exercise of its discretion decline to exercise its extra ordinary jurisdiction under article 226 of the Constitution
But the discretion is judicial  if the petition makes a claim which is frivolous vexatious or prima facie unjust or may not appropriately be tried in a petition invoking extra ordinary jurisdiction the Court may decline to entertain the petition
But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful high handed arbitrary or unjust is entitled to a hearing of its petition on the merits
Apparently the petition filed by the Company did not raise any complicated questions of fact for determination and the claim could not be characterised as frivolous vexatious or unjust
The High Court has given no reasons for dismissing the petition in limine and on a consideration of the averments in the petition and the materials placed before the Court we are satisfied that the Company was entitled to have its grievance against the action of the Municipality which was prima facie unjust tried
The Company pleaded that the Ulhasnagar Municipality had entered into a solemn arrangement not to levy octroi duty for aperiod of seven years from the date of its imposition
The evidence relating to the undertaking was contained in public records
The Government of Maharashtra advised the Municipality that it was acting in violation of the terms of that undertaking
By its resolution the Municipality declined to abide by the undertaking of itspredecessor
There is undoubtedly a clear distinction between a representation of an existing fact and a representation that something will be done in future
The former may if it amounts to a representation as to some fact alleged at the time to be actually in existence raise an estoppel if another person alters his position relying upon that representation
A representation that something will be done in the future may result in a contract if another person to whom it is 859 addressed acts upon it
A representation that something will be done in future is not a representation that it is true when made
But between a representation of a fact which is untrue and a representation express or implied to do something in future there is no clear antithesis
A representation that sotmething will be done in future may involve an existing intention to act in future in the manner represented
If the representation is acted upon by another person it may unless the statute governing the person mak ing the representation provides otherwise result in an agreement enforceable at law if the statute requires that the agreement shall be in a certain form no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation
Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them relying on which other persons have altered their position to their prejudice
The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promise  when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity In Union of India  Ors
vs Mls
IndoAfghan Agencies Ltd1 this Court held that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice relying upon the representations as to its future conduct made by the Government
This Court held that the following observations made by Denning J in Robertson vs Minister of Pensions1 applied in India The Crown cannot escape by saying that estoppe ls do not bind the Crown for that doctrin e has long been explode d
Nor can the Crown escape by praying in aid the doctrin e of executi ve necessi ty that is the doctrin e that the Crown cannot bind itself so as to fetter its future executi ve action
 We are in this case not concerned to deal with the question whether Denning LJ was right in extending the rule to a different class of cases as in Falmouth Boat Construction Co Ltd vs Howell1 where he observed at p 542  Whenever Government officers in their dealings with a subject take on themselves to assume authority in a 1  2 3 8 6 0 matter with which the subject is concerned he is entitled to rely on their having the authority which they assume
He does not know and cannot be expected to mow the limits of their authority and he ought not to suffer if they exceed it
 It may be sufficient to observe that in appeal from that judgment Howell vs Falmouth Boat Construction do
Ltd Lord Simonds observed after referring to the observations of Denning LJ The illegality of an act is the same whether the action has been misled by an assumption of authority on the part of a government officer however high or low in the hierarchy  
The question is whether the character of an act done in force of a statutory prohibition is affected by the fact that it had been induced by a misleading assumption of authority
In my opinion the answer is clearly  No If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted
A public body is in our judgment not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice
Mr Gokhale appearing on behalf of the Municipality urged that the petition filed by the Company apparently raised questions of fact which in the view of the High Court could not appropriately be tried in the exercise of the extra ordinary jurisdiction under article 226
But the High Court has not said so and on a review of the averments made in the petition this argument cannot be sustained
Merely because a question of fact is raised the High Court will got be justified in requiring the party to seek relief by the somewhat lengthfiy dilatory and expensive process by a civil suit against a public body
The questions of fact raised by the petition in this case are elementary
The order passed by the High Court is set aside and the case is remanded to the High Court with a direction that it be readmitted to the file and be dealt with and disposed of according to law
The High Court will issue rule to the Municipality and the State and dispose of the petition
We recommend that the case may be taken up for early hearing
We had during the pendency of the appeal in this Court made an order restraining the levy of octroi duty
We extend the operation of the order for a fortnight from this date to enable the 861 Company to move the High Court for an appropriate interim order pending hearing and disposal of the writ petition
There will be no order as to costs in this Court
Costs in the High Court will be costs in the cause
Since we have granted special leave against the order dismissing the petition we do not deem it necessary to consider whether the order rejecting the application for certificate was erroneous
Civil Appeal No 2131 of 1969 is therefore dismissed


Summary:
The appellants companies set up their factories within an Industrial Area No octroi duty was payable in respect of goods imported by the appellants into the Industrial Area for use in the manufacture of its products
The State of Maharashtra constituted a Municipality for certain villages including the Industrial Area
On representations made by the appellants and other manufacturers the State proclaimed the exclusion of the Industrial Area from the Municipal Jurisdiction
The Municipality made representations to the State requesting that the proclamation be withdrawn agreeing to exempt the factories in the Industrial Area from payment of octroi for seven years from the date of the levy
The State acceeded to the request of the Municipality
The appellants claimed to expand their activities relying upon the Municipality s assurance and undertaking
The Maharashtra Municipalities Act was enacted and the respondent Municipality took over the administration of the former municipality as its successor
Thereafter the respondent Municipality sought to levy octroi duty on the appellant amounting to about Rs 15 lakhs per annum
The appellants filed a petition under article 226 of the Constitution to restrain the respondent Municipality from enforcing the levy of the Octroi
The High Court dismissed the petition in limine
In appeal by special leave HELD  The case must be remanded to the High Court for being readmitted to its file and dealt with and disposed of according to law
The High Court may in exercise of its discretion decline to exercise its extra ordinary jurisdiction under article 226 of the Constitution
But the discretion is judicial if the petitioner makes a claim which is frivolous vexatious or prima facie unjust or which may not appropriately be true in a petition invoking extraordinary jurisdiction the Court may decline to entertain the petition
But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful highhanded arbitrary or unjust is entitled to a hearing of its petition on the merits
Apparently the petition filed by the Company did not raise any complicated questions of fact for determination and the claim could not be characterised as frivolous vexatious or unjust
The High Court has given no reason for dismissing the petition in limine and on a consideration of the averments in the petition and the materials placed before the Court the appellants were entitled to have its grievance against the action of the Municipality which was prima facie unjust tried
Merely because a question of fact is raised the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy dilatory and expensive process by a civil suit against a public body
The questions of fact raised by the petition in this case are elementary
858 C F Public bodies are as much bound as private individuals to carry out representations or facts and promises made by them relying on which 855 other persons have altered their position to their prejudice
The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promises when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute and if the contract be not in that form the obligation may still be enforced against the body in appropriate cases in equity
859 D If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted
A public body is not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice
860 D There is undoubtedly a clear distinction between a representation of an existing fact and a representation that something will be done in future
The former may if it amounts to a representation as to some fact alleged at the time to be actually in existence raise an estoppel if another person alters his position relying upon that representation A representation that something will be done in future may result in a contract if another person to whom it is addressed acts upon it
A representation that something will be done in future is not a representation that it is true when made
But between a representation of a fact which is untrue and a representation express or implied to do something in future there is no clear anti thesis
A representation that something will be done in future may involve an existing intention to act in future in the manner represented
If the representation is acted upon by another person it may unless the statute governing the person making the representation provides otherwise result in an agreement enforceable at law if the statute requires that the agreement shall be in a certain form no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation
858 H 859 C Union of India  Ors
vs Ms Indo Afghan Agencies Ltd  Robertson vs Minister of Pensions  Falmouth Board Construction Co Ltd vs Howell  referred to