DR. ASHOK KUMAR MAHESHWARI A

STATE OF U.P. AND ANR.

JANUARY 14, 1998

[S. SAGHJR AHMAD AND D.P. WADHWA, JJ.] B

Administrative Law :

Promissory Estoppel-Rule-Invoking of-Held: It has to be shown that there was a declaration or promise made which induced the party to C whom the promise was made to alter its position to its disadvantage.

Promissory Estoppel-Doctrine-Bar against invoking of-The prescribed mode of recruitment to the post of Lecturer in the Pharmacy Department of Government Medical College was by direct recruitment only D and not by promotion-Promise allegedly made to Demonstrators by State Government or Director, Medical Education & Training to promote them to posts of lecturers-Validity of -Held: Rule of Promissory Estoppel cannot be invoked to enforce a promise made contrary to law-Hence, the said

''promise" not enforceable against the State or the Director-In the facts and circumstances of the case, no case made out for invoking the said doctrine. E

Doctrines:

Doctrine of Promissory Estoppel-Essence of-Stated-Case law reviewed.

Evidence Act, I973: Section JJ5

Estoppel and Promissory Estoppel-Rule-Invoking of-Held: Even though a case does not fall under S. 115 the rule can be invoked.

Words and phrases:

"Promissory Estoppel"-Meaning of

The appellant was a Demonstrator in the Pharmacy Department of the

. Government Medical College. The appellant and five of his other colleagues

filed a writ petition in the High Court for a direction to , the respondent to H

A fill up at least fifty per cent of the posts of Lecturers in Pharmacy by promotion of Demonstrators. It was claimed that the respondents, namely, the State Government and the Director, Medical Education and Training, assured the appellant and his colleagues that they would be promoted to the posts of Lecturer.

B The High Court dismissed the petition on the ground that neither there were any statutory rules nor were there any executive instructions issued by the Government that fifty per cent posts of Lecturers in the Pharmacy Department would be filled up by promotion of Demonstrators. The High Court further held that none of the respondents had promised that the C appellant or any of his colleagues would be promoted as Lecturers. Hence this appeal.

On behalf of the appellant it was contended that the Government having itself assured the appellant and his other colleagues that they would be promoted as Lecturers, the Government was bound by its promise and,

--'--

D therefore, ought to have issued a notification that the posts of Lecturers ~

would be filled up by promotion; and that the Doctrine of Promissory Estoppel was applicable to this case.

Dismissing the appeal, this Court

HELD: 1.1. The Doctrine of"Promissory Estoppef' has been evolved by the courts, on the principles of equity to avoid injustice. 1153-B]

1.2. The definition of "Estopel" and Promissory Estoppel in Black's Law Dictionary which are based on decided cases, indicate that before the p rule of "promissory Estoppel" can be invoked, it has to be shown that there was a declaration or promise made which induced the party to whom the

J.... •

promise was made to alter its position to its position to its disadvantage.

(153 8-E]

Black's Law Dictionary, referred to.

2. Even though the case would not fall within the terms of Section 115 of the Evidence Act, 1872 which enacts the Rule of Estoppel, it would still

be open to a party who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made H by it even though the promise was not recorded in the form of a formal

DR. A.K. MAHESHWARI v. STATE 149

contract as required by Article 299 of the Constitution.1154-F-G]

Union of India v. Inda-Afghan Agencies, AIR (1968) SC 718, Century Spinning Co. v. Ulhasnagar Municipal Council. AIR (1971) SC 1021 and Radhakrishna v. State of Bihar, AIR (1977) SC 1496, relied.on.

3. In order .to invoke the doctrine of promissory estoppel it is not B ----;... necessary for the promisee to show that he suffered detriment as a result

... _,.,;

of acting in reliance on the promise. The detriment in uch a case is not some prejudice suffered by the promisee by acting on the promise, but t!Je prejudice, which would be caused to the.promisee, if the promisor were allowed to go b!lck on the promise. 1155-B-CI

Motilal Padampat Sugar Mills Co. ltd. v. State of UP., I 1979] 2 SCR 641, relied on. c

Union of India v. Godfrey Philips India Ltd., 11985] 4 SCC 369; Delhi Cloth & General Mills Ltd. v. Union of India, AIR (1987) SC 2414; Kasinka Trading v. Union of India, [1995] l SCC 274; Darshan Oil (P) Ltd. v. Union D of India, [1995] 1 SCC 345; Shabi Construction Co. v. City & Industrial Development Corporation, [ 1995] 4 SCC 301; Shrijee Sales Corporation v.

Union of India, [1997] 3 SCC 398; Pawan Alloys & Castings (P) Ltd. v. UP.

State Electricity Board, [1997] 7 SCC 251; referred to Grundt v. The Great Boulder Pty. Gold Mines Ltd. v. High Trees House ltd., (1947) KB 130 and E Central Newbury Car Auctions Ltd. v. Unity Finance ltd., (1956) 3 All ER 905, referred to.

4. Even if it is accepted that the State Government or the Director, Medical Education & Training, assured the appellant or any of his colleagues that they would be promoted to the posts of Lecturer, such a 'promise' cannot F be enforced against the respondents as the avenue of promotion for Demonstrators to the post of Lecturers was not provided either under the Statute or any executive instruction. Moreover, if the post of Lecturer were filled up by promotion of Demonstrator, it would defeat the existing mode of recruitment, namely, that it can be filled up by direct recruitment only and not by promotion . It may also be stated that the appellant did not make any G clear, sound and positive averment as to which offi..:er of the Government, when and in what manner gave the assurance to the appellant or any of his colleagues that they would be promoted as Lecturers. It was also not stated tha't the appellant had, at any time, acting upon the promise, altered his position, in any manner, especially to his detriment. Bald pleaings cannot H

A be made the foundation for invoking the Doctrine of Promissory Estopel. The basic principle is that the plea of estoppel cannot be raised to defeat the provisions of Statute. The rule of "Promissory Estoppel" cannot be invoked to enforce a "Promise" made contrary to law .

• G.H.C. Ariff v. Jadunath Majumdar Bahadur, AIR (1931) PC 78; Mis.

B Mathra Parshad & Sons v. State of Punjab, AIR (1962) SC 745; Bishabh

Kumar v. State of UP., AIR (1987) SC 1576, R.C.D' Souza, AIR (1987) SC ""·-

1172; Kasinka Trading & Anr. v. Union of India, 119951 1 SCC 274 and Shabi Construction Co. Ltd. v. City & Industrial Development Corporation & Anr., 119951 SCC 301, relied on. 1156 B-E; 155 E-FJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 25of1991.

From the Judgment and Order dated 1.1.90 of the Allahabad High Court inC.M.W.P.No.17049of1987.

Ms. Sandhya Goswami and P.K. Chakraborty for the Appellant.

The Judgment of the Court was delivered by

S. SAGHIR AHMAD, J. "Magnificent promises are always to be suspected" is an adage which was forgotten by the appellant and his colleagues who not only belie•ed such a promise but approached the Court E for its enforcement in writ proceedings which have since reached this Court

requiring us to decide whether the doctrine of "Promissory Estoppel" can be invoked for the enforcement of a "promise" made contrary to law.

The appellant is a Demonstrator in the Pharmacy Department of S.N.

Medical College, Agra where he was appointed on 11.01.73 and his services on that post were regularised on 28.6.76.

The appellant and five of his other colleagues, working as Demonstrators in various Government Medical Colleges in U.P., filed a Writ Petition in the Allahabad High Court that the State Government as also the Director, Medical G Education and Training, may be directed not to fill the posts of Lecturers in Pharmacy by direct recruitment and the same may be filled up, at least to the extent of fifty per cent, by promotion of Demonstrators working in the Department as is done in other Departments where posts of Readers are filled up, to the extent of fifty per cent by promoting the Lecturers, while the posts of Professors are filled up, to that extent, by promoting the Readers. It was H pleaded before the High Court that the Government, by its Order dated 31. J. 77

and 23.12.77, had provided, in respect of all posts of Readers and Professors A

.--<.. in the Government Medical Colleges, that they shall be filled up by direct recruitment to the extent of fifty per cent, and remaining fifty per cent would be filled up by promotion from amongst persons working as Lecturers in the Department provided they are qualified for the post. It was contended that the Government has not made bay provision for filling up the posts of B Lecturers in the Department of Pharmacy by promotion from amongst the '?'-- Demonstrators and that the Government had not passed any specific_ order to that effect although such an order should have been passed particularly in view of the fact that in all other Government services, avenue of promotion has been provided for. It was also claimed that the Government, by its Order dated 24.6.86 had made provision for time-bound promotions of the teachers c of Government Medical Colleges as it was provided that a Lecturer, on completing a particular period of service, would become entitled to the scale of pay admissible for Readers and Readers would become entitled to be paid salary in the pay scale applicable to Professors. It was claimed that these benefits should also be made applicable to the persons working as D Demonstrators in the Various Government Medical Colleges and they should also be provided an avenue of promotion by providing, as is done in the other Departments, that the post of Lecturer in the Department of Pharmacy would be filled up, to the extent of fifty per cent, by promotion from amongst the Demonstrators.

It was also claimed that in 1980 \vhen 4 posts of Lecturers were filled E

up by the respondents, namely the State Government and the Director, Medical Education and Training, by direct recruitment, the appellant and his Other colleagues made representations to the Director, and it was on this representation that the respondents assured them that the remaining posts

F ...

would be filled up by promotion. It was for this reason that a seniority list F . of Demonstrators, working in the Phamiacy Department of various Government Medical Colleges, was drawn up. Since th~ State Government did not, thereafter, ::l issue any instruction or order for pronwtion of Demonstrators to the posts of Lecturers in the Pharmacy Department, the petitioner filed the Writ petition in the High Court which, by the impugned judgment dated January I, 1990 G was dismissed with the findings that there were neither any statutory rules

nor were any executive instructions ever issued by the Government that fifty per cent posts of Lecturers in the Pharmacy Department in various Government Medical Colleges would be filled up by promotion of Demonstrators, working therein, and that the case that any of the respondent had promised that petitioner or any of his colleague would be promoted as Lecturer was not H

A made out.

Learned counsel for the appellant has raised, as was done in the High Court, the plea of Promissory Estoppel before us and has contended that the Government having itself assured the appellant and his other colleagues that they would be promoted as Lecturers and having itself taken steps to prepare B the seniority list of Demonstrators, working in various Government Medical

Colleges, was bound by its promise and, therefore, ought to have issued the necessary notification that the posts of Lecturers in the Department of Pharmacy would be filled up by promotion of Demonstrators. Since this was not done the High Court should itself have commanded the Government to issue such C a notification so that the promise, which was made to the appellant, was fulfilled. It is contended that the Government had already issued such Notification in respect of the posts of Professors and Readers by providing that they would be filled up, to the extent of fifty per cent, by promotion of Readers and Lecturers and, therefore, in respect of the Department of Pharmacy; the same policy should have been adopted.

D It is not disputed that the posts of Lecturers in the Department of Pharmacy as also in other Departments of the Medical Colleges are filed up by direct recruitment. It is also not disputed that so far as Demonstrators are concerned, there are no rules, statutory or otherwise, which provide that they E would be promoted to the posts of Lecturers. The High Court has also considered this aspect of the matter and has recorded a finding that medical education in Government Medical Colleges is a three-tier system consisting of the posts of Professors, Readers and Lecturers. While these posts were, earlier, filled up by direct recruitment by the two Government Notifications, issued in 1977, it was provided that the posts of Professors and Readers F would be filled up, to the extent of fifty per cent, by promotion of Readers .... ,. and Lecturers and the remaining fifty per cent would be filled up by direct recruitment. The scheme of personal promotion was also introduced under which a Lecturer or Reader w.ho had put in service for a specified period, was to be automatically promoted to the next higher grade available to the Readers or Professors, as the case may be. No such provision was made for the G promotion of Demonstrators not was the scheme of personal promotion made applicable to them. The High Co(fff has also found it as a fact that the respondents, or any of them, had not given any assurance to the appellant or other Demonstrators that they would be promoted to the posts of Lecturers.

In view of these findings, which are findings, of fact, we need not enter into H the factual dispute once again.

• -+

--..,:

Assuming, however, that any such assurance was given to the appellant A either by the State Government or by the Director that the appellant or any of this colleague who had joined him in filing the Writ Petition, would be promoted as Lecturers, let us examine whether the Rule of Promissory Estoppel could be invoked in the particular circumstances of the case.

Doctrine of "Promissory Estoppel" has been evolved by the courts, on B the principles of equity, to avoid injustice.

"Estoppel" in Black's Law Dictionary, is indicated to mean that a party is prevented by his own acts from claiming a right to the detriment of other party who was entitled to rely on such conduct and has acted accordingly.

Section 115 of!he Indian Evidence Act is also, more or less, couched in a C language which conveys the same expression.

"Promissory Estoppel" is defined as in Black's Law Dictionary as "an estoppel which arises when there is a promise which promisor should reasonably expect to induce action or forbearance of a definite and substantial D character on the part of promisee, and which does induce such action or forbearance, and such promise is binding if injustice can be avoide<!._ only by enforcement of promise."

These definitions in Black's Law Dictionary which are based on decided cases, indicate th.e before the Rule of "Promissory Estoppel" can be invoked, E it has to be shown that there was a declaration or promise made which induced the party to whom the promise was made to alter its position to its disadvantage.

In this backdrop, let us travel a little distance into the past to understand the evolution of the Doctrine of "Promissory Estoppel." F

Dixon, J., an Australian jurist, in Grundt v. The Great Boulder Pty. Gold Mines Ltd., (1938) 59 CLR 641, laid down as under:-

"It is often said simply that he party asserting the estoppel must have been induced to act to his detriment. Although substantially such a G statement is correct and leads to misunderstanding, it does not bring out Clearly the basal purpose of the doctrine, 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. This means that the real detriment or harm from which the law seeks to given protection H

A is that which would flow from the change of position if the assumption were deserted that led to it."

The principle, set out above, was reiterated by Lord Denning in Central London Properties Ltd. v. High Trees House Ltd. 1947 KB 130, when he stated as under :-

"A promise intended to be binding, intended to be acted upon, and in fact acted upon is binding .... "

Lord Denning approved the decision of Dixon, J. (supra) in Central Newbury Car Auctions Ltd. v. Unity Finance Ltd., (1956) 3 ALL ER 905. Apart C from propounding the above principle 0n judicial side, Lord Denning wrote out an article, a classic in legal literature, on "Recent Developments in the Doctrine of Consideration", Modem Law Review, Vol. 15, in which he expressed as under :-

"A man should keep his word. All the more so when the promises is not a bare promise but is made with the intention that the other party should act upon it. Just a contract is different from tort and from estoppel, so also in the sphere now under discussion promises may give rise to a different equity from other conduct.

The difference may lie in the necessity of showing "detriment".

E .

Where one party deliberately promises to waive, modify or discharge his strict legal rights, intending the other party to act on the faith of promise, and te other party actually does act on it, then it is contrary, not only to equity but also to good faith, to allow the promisor to go back on his promise. It should not be necessary for the other party

F to show that he acted to his detriment in reliance on the promise. It should be sufficient that he acted on it."

So far as this Court is concerned, it invoked the doctrine in Union of India v. Inda-Afghan Agencies & Ors., AIR (1968) SC 718 =, [ 1968] 2 SCR 366, in which it was, inter alia, laid down that even though the case would not fall G within the terms of Section 115 of the Evidence Act which enacts the Rule of Estoppel, it would still be open to a party who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made by it even though the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution.

To the same effect are the decisions in Century Spinning Co. v. Ulhasnagar H Municipal Council, AIR (1971) SC 1021 and Radhakrishna v. State o/Bihar,

./

. ·:{

AIR (1977) SC 1496.

In Moti/al Padampat Sugar Mills Co. Ltd. v. State of U.P, [1979] 2 SCR 641 = [1979] 2 SCC 409 =AIR (1979) SC 621, while reiterating the above principles and quoting with approval the passage of Dixon, J., extracted above, it was observed as under :- B "We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promisee to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which could result if the promisor were to recede from his promise then detriment would certainly come in as a necessary ingredient, The C detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise."

Thereafter, in successive cases, as for example, Union of India v. Godfrey Philips India Ltd., [1985] 4 SCC 369 = [1985] Supp. 3 SCR 123 =AIR (1986)

SC 806; Delhi Cloth & General Mills Ltd. v. Union of India, AIR (1987) SC 2414; Kasinka Trading & Anr. v. Union of India & Ors., [1995] I SCC 274; Darshan Oil (P) Ltd. v. Union of India & Ors., [1995] 1 SCC 345; Shabi Construction Co. Ltd. v. City & Industrial Development Corporation & Anr., E [1995] 4 sec 301; Shrijee Sales Corporation V. U.0.1. [1997] 3 sec 398; Pawan Al/ovs & Castings (P) Ltd. v. UP. State Electricity Board, [1997] 7 SCC 251, the Rule of "Promissory Estoppel" was discussed, explained and elaborated.

There are many aspects of "Promissory Estoppel", but in the instant F case we are concerned only with one aspect which is to the effect that if any "promise" has been made contrary to law, can it still be enforced by invoking this rule.

The basic principle is that the plea of estoppel cannot be raised to G defeat the provisions of a Statute. (See: G.H.C. Ariffv. Jadunath Majumdar Bahadur, AIR ( 1931) PC 79; Mf.s Mathra Parshad & Sons v. State of Punjab & Ors., AIR (1962) SC 745; Rishabh Kumar v. State ofU.P., AIR (1987) SC

1576 = [1987] (Supp.) sec 306.

This principle was reiterated in Union of India v. R.C. D'Souza, AIR H

A ( 1987) SC 1172 = [ 1987] 2 SCC 211, where a retired anny officer was recruited as Assistant Commandant on temporary basis and was called upon to exercise (< his option for regularisation contrary to the statutory rules. It was held that . it would not amount to estoppel against the Department.

Whether a Promissory Estoppel, which is based on a 'promise' contrary B to law can be invoked has already been considered by this Court in Kasinka Trading & Anr. v. Union of India & Ors., (1995] l SCC 274, as also in Shabi Construction Co. Ltd v.

City & Industrial Development Corporation & Anr., [ 1995] 4 SCC 30 l wherein it is laid down that.the Rule of "Promissory Estoppel" cannot Le invoked for the enforcement of a 'promise' or a C 'declaration' which is contrary to law or outside the authority or power of the Government or the person making that promise.

Applying the above principles to the instant case, even if it is accepted that the State Government or the Director, Medical Education & Training, assured the appellant or any of his colleagues that they would be promoted _ D to the posts of Lecturer, such a ' promise' cannot be enforced against the respondents as the avenue of promotion for Demonstrators to the post of Lecturers was not provided either under the Statute or any executive instruction. Moreover, if the post of Lecturer was filled up by promotion of I Demonstrator, it would defeat the existing mode of recruitment, namely, that it can be filled up by direct recruitment only and not by promotion. It may 1 E aho be stated that the appellant did not make any clear, sound and positive averment as to which officer of the Government, when and in what manner gave the assurance to the appellant or any of his colleague that they would be promoted as Lecturers. It was also not stated that the appellant had, at any time, acting upon the promise, altered his position, in any manner, specially F to his detriment. Bald Pleadings cannot be made the foundation for invoking the Doctrine of Promissory Estoppel.

The appeal being without merits has to be dismissed reminding the appellant that a mind, conscious of integrity, scorns to say more than it means to perform and the Government and Director were not of that material. No costs.

v.s.s.

Appeal dismissed.