Case: Shyam Telelink Ltd Vs. Union Of India

Rs.7.3 crores was paid by the appellant in the beginning without any objection followed by a payment of Rs.70 lakhs made on 29th May, 2001. Although the appellant had sought waiver of the liquidated damages yet upon rejection of that request it had made the payment of the amount demanded which signified a clear acceptance on its part of the obligation to pay. If the appellant proposed to continue with its challenge to demand, nothing prevented it from taking recourse to appropriate proceedings and taking the adjudication process to its logical conclusion before exercising its option. Far from doing so, the appellant gave up the plea of waiver and deposited the amount which clearly indicates acceptance on its part of its liability to pay especially when it was only upon such payment that it could be permitted to avail of the Migration Package. Allowing the appellant at this stage to question the demand raised under the Migration Package would amount to permitting the appellant to accept what was favourable to it and reject what was not. The appellant cannot approbate and reprobate. The maxim qui approbat non reprobat (one who approbates cannot reprobate) is firmly embodied in English Common Law and often applied by Courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument. In Ambu Nair v. Kelu Nair AIR 1933 PC 167 the doctrine was explained thus: "Having thus, almost in terms, offered to be redeemed under the usufructuary mortgage in order to get payment of the other mortgage debt, the appellant, Their Lordships think, cannot now turn round and say that redemption under the usufructuary mortgage had been barred nearly seventeen years before he so obtained payment. It is a well- accepted principle that a party cannot both approbate and reprobate. He cannot, to use the words of Honyman, J. in Smith v. Baker (1878) LR 8 CP 350 at p. 357 `at the same time blow hot and cold. He cannot say at one time that the transaction is valid and thereby obtain some advantage to which he could only be entitled on the footing that it is valid, and at another time say it is void for the purpose of securing some further advantage." 14. View taken in the above decision has been reiterated by this Court in City Montessori School v. State of Uttar Pradesh and Ors. (2009) 14 SCC 253. To the same effect is the decision of this Court in New Bihar Biri Leaves Co. v. State of Bihar 1981 (1) SCC 537 where this Court said : "It is a fundamental principle of general application that if a person of his own accord, accepts a contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide by some of the terms of the contract which proved advantageous to him and repudiate the other terms of the same contract which might be disadvantageous to him. The maxim is qui approbat non reprobat (one who approbates cannot reprobate). This principle, though originally borrowed from Scots Law, is now firmly embodied in English Common Law. According to it, a party to an instrument or transaction cannot take advantage of one part of a document or transaction and reject the rest. That is to say, no party can accept and reject the same instrument or transaction (Per Scrutton, L.J., Verschures Creameries Ltd. v. Hull & Netherlands Steamship Co.)" 15. The decision of this Court in R.N. Goswain v. Yashpal Dhir AIR 1993 SC 352 , brings in the doctrine of election in support of the very same conclusion in the following words : "10. Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that "a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage". [See: Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. Ltd. (1921) 2 KB 608, at p.612, Scrutton, L.J.] According to Halsburys Laws of England, 4th Edn., Vol. 16, "after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside". (para 1508)" 16. In America Estoppel by acceptance of benefits is one of the recognized situations that would prevent a party from taking up inconsistent positions qua a contract or transaction under which it has benefited.17. American Jurisprudence, 2nd Edition, Volume 28, pages 677-680 discusses `Estoppel by acceptance of benefits in the following passage: "Estoppel by the acceptance of benefits: Estoppel is frequently based upon the acceptance and retention, by one having knowledge or notice of the facts, of benefits from a transaction, contract, instrument, regulation which he might have rejected or contested. This doctrine is obviously a branch of the rule against assuming inconsistent positions. As a general principle, one who knowingly accepts the benefits of a contract or conveyance is estopped to deny the validity or binding effect on him of such contract or conveyance. This rule has to be applied to do equity and must not be applied in such a manner as to violate the principles of right and good conscience." 18. For the reasons set out by us hereinabove, we have no hesitation in holding that the appellant was not entitled to question the terms of the Migration Package after unconditionally accepting and acting upon the same.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]9. In the light of the above admission which is the best evidence against the appellant, it is not open to the appellant to argue that it was ready to start commercial operations in February 1999. The Tribunal was, therefore, perfectly justified in holding that the commercial operations were started only on 5th June, 2000 and that for the intervening period such operations could not be commenced on account of deficiencies that were attributed entirely to the defects in the system which the appellant had installed. The Tribunal was also justified in our opinion in holding that the denial of permission to the appellant was neither arbitrary nor mala fide especially when the conditions in the licence agreement requiring the appellant to arrange and install suitable equipment to meet the prevailing technical specifications by Telecommunication Engineering Centre were not complied with nor were all performance tests required for successful commissioning of the services carried out by the Licensor before the services are commissioned for public use.10. The argument that the respondent has acted arbitrarily and in a discriminatory manner by overlooking similar deficiencies in the case of other service providers has also been correctly repelled by the Tribunal on the ground that the nature of the deficiencies found in the case of the appellant have not been found similar to those found in other cases where permission was granted. As a matter of fact, the appellant was given an opportunity to implead the other service providers so that the allegation could be examined in detail but the appellant failed to do so nor was any material placed on record to show that any discriminatory treatment was meted out to it. At any rate so long as the conditions of the agreement entitled the respondents to decline permission to commence commercial operations on account of failure on the part of the appellant to comply with the conditions stipulated in the said agreement, which condition included aefficient system, the fact that some other service providers were given permission in the peculiar facts of their cases and deficiencies allegedly noticed in their system could not make out a case for the appellant to question the demand raised on the basis of a package which the appellant had accepted unconditionally and pursuant to which acceptance a substantial part of the liquidated damages amounting to Rs.7.3 crores had been deposited by it without any demur.11. The Tribunal has also held and in our view correctly so that the computation of the liquidated damages forof the services as well as limiting the same to a total amount of Rs.8 crores was in conformity with the licence conditions executed between the parties. There is nothing before us to suggest that any error has crept in the computation of liquidated damages nor was any such error pointed out before the Tribunal. As a matter of fact, according to the respondents the amount of damages works out to Rs.29.86 crores was limited to Rs.8 crores in explicit terms of the limitation laid down in the licence agreement.12. The factual aspects apart we need to remember that the payment of liquidated damages was an essential condition of the Migration Package which was offered to the service providers. Unconditional acceptance of the package including the payment of outstanding licence fee with interest due thereon and liquidated damages was a specific requirement of the Migration Package which was unequivocally accepted by the appellant in terms of the declaration made in the followingWith reference to the letter No.842(Vol.V) (Pt.) dated 22nd July, 1999 on the subject noted above, I hereby covey unconditional acceptance on behalf of the Licensee with regard to the package proposed for migration of the existing licenses to NTP 1999 Regime on the terms and conditions in the letter under reference....The unconditional acceptance of the terms of the package and the benefit which the appellant derived under the same will estop the appellant from challenging the recovery of the dues under the package or the process of its determination. No dispute has been raised by the appellant and rightly so in regard to the payment of outstanding licence fee or the interest due thereon. The controversy is limited to the computation of liquidated damages of Rs.8 crores out of which Rs.7.3 crores was paid by the appellant in the beginning without any objection followed by a payment of Rs.70 lakhs made on 29th May, 2001. Although the appellant had sought waiver of the liquidated damages yet upon rejection of that request it had made the payment of the amount demanded which signified a clear acceptance on its part of the obligation to pay. If the appellant proposed to continue with its challenge to demand, nothing prevented it from taking recourse to appropriate proceedings and taking the adjudication process to its logical conclusion before exercising its option. Far from doing so, the appellant gave up the plea of waiver and deposited the amount which clearly indicates acceptance on its part of its liability to pay especially when it was only upon such payment that it could be permitted to avail of the Migration Package. Allowing the appellant at this stage to question the demand raised under the Migration Package would amount to permitting the appellant to accept what was favourable to it and reject what was not. The appellant cannot approbate and reprobate. The maxim qui approbat non reprobat (one who approbates cannot reprobate) is firmly embodied in English Common Law and often applied by Courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument.In America Estoppel by acceptance of benefits is one of the recognized situations that would prevent a party from taking up inconsistent positions qua a contract or transaction under which it has benefited.17. American Jurisprudence, 2nd Edition, Volume 28, pagesdiscusses `Estoppel by acceptance of benefits in the following passage:"Estoppel by the acceptance of benefits: Estoppel is frequently based upon the acceptance and retention, by one having knowledge or notice of the facts, of benefits from a transaction, contract, instrument, regulation which he might have rejected or contested. This doctrine is obviously a branch of the rule against assuming inconsistenta general principle, one who knowingly accepts the benefits of a contract or conveyance is estopped to deny the validity or binding effect on him of such contract or conveyance. This rule has to be applied to do equity and must not be applied in such a manner as to violate the principles of right and good conscience."18. For the reasons set out by us hereinabove, we have no hesitation in holding that the appellant was not entitled to question the terms of the Migration Package after unconditionally accepting and acting upon the same.