IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION ORIGINAL SIDE BEFORE THE HON'BLE JUSTICE BISWANATH SOMADDER AND THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA A.P.O. NO. 3 OF 2017 With C.S. NO. 369 OF 2014 MERLIN PROJECTS LIMITED VERSUS PAWAN KUMAR AGARWAL With A.P.D. NO. 6 OF 2017 With C.S. NO. 369 OF 2014 MERLIN PROJECTS LIMITED VERSUS PAWAN KUMAR AGARWAL For the Appellant: Mr Abhrajit Mitra Sr. Adv., Mr. Aniruddha Roy, Adv., Ms. Shankersan Sarkar, Adv., For the Respondent: Mr. Utpal Bose, Sr. Adv., Mr. Pushan Kar, Adv., Mr. Aniruddha Sinha, Adv., Mr. Sagnik Mazumdar, Adv., Mr. Rishav Karnani, Adv. Heard on: 07.11.17, 11.01.18, 18.01.18, 25.01.18, 06.02.18, 08.02.18, 13.02.18, 15.02.18, 22.06.18, 29.06.18, 20.07.18, 03.08.18, 17.08.18, 24.08.18, 16.11.18, 30.11.18, 11.1.19, 01.02.19, 01.3.19, 29.03.19, 14.06.19, 21.6.19, 05.07.19, 19.07.19, 02.08.19, 16.8.19 and 30.08.19 Judgment on: 01.10.2019. BISWANATH SOMADDER, J. :- 1. The two appeals, being A.P.O. No. 3 of 2017 and A.P.D. No. 6 of 2017, arise out of a judgment and order passed by a learned Single Judge on July 20, 2016, wherein an application, being G.A. No. 3675 of 2016, to amend a plaint in a civil suit, being C.S. No. 369 of 2014, was rejected and an application,being G.A. No. 1118 of 2015, for the dismissal of the said suit, was upheld under Order VII, Rule 11 of the Code of Civil Procedure, 1908. 2. The facts of the case, for the purposes of deciding the two appeals, are as follows:- i. The appellant, i.e. Merlin Projects Limited (hereinafter "Merlin") entered into negotiations with the co-owners of a plot of land, under Municipal holding No. 86/90, B.L. Shah Road, P.S. Behala, Kolkata-700 053(hereinafter "the said premises"), for the purposes of developing/purchasing the said premises. ii. Pursuant to such negotiations, Merlin entered into a Memorandum of Understanding (hereinafter "M.O.U.") on August 24, 2002with Pawan Kumar Agarwal and Giniya Devi Agarwal, being the defendants in the suit C.S. No. 369 of 2014, who jointly had a 1/12thundivided share in the ownership of the said premises. In this M.O.U., the parties incorporated the broad terms of their arrangement for developing the said premises with the expectation of a development agreement later on. Merlin also transferred Rs.11,000/- to Pawan Kumar Agarwal and Giniya Devi Agarwal, under the said M.O.U., as an interest free security deposit. iii. The development agreement contemplated under the said M.O.U. with Pawan Kumar Agarwal and Giniya Devi Agarwal could not be executed, and Rs.11,000/- paid as a security deposit by Merlin was refunded to the latter by a payment instrument dated December 8, 2008, with the said M.O.U. being cancelled by an undated letter before the return of the security amount. However, Merlin claimed to have not encashed the said Rs.11,000/- and stated that it continued to have possession over the said premises. iv. According to Merlin, there were negotiations thereafter.Pawan Kumar and Giniya Devi agreed to not cancel the said M.O.U. whilst giving a go-by to the cancellation, inter alia, by not attempting to remove Merlin's men from the said premises. When Merlin allegedly found that Pawan Kumar and Giniya Devi along with the other co-owners of the said premises were trying to deal with the said premises or dispose of their interest in it - in alleged contradiction of their purportedly extended M.O.U. - it filed a suit on July 17, 2014, i.e. C.S. No. 369 of 2014, in this Court,wherein it was prayed for:- (a) A decree for specific performance against Pawan Kumar and Giniya Devi, jointly and severally, of the terms and acts agreed under the said M.O.U. of August 24, 2002. (b) Alternatively, a decree for declaration that the said M.O.U. of August 24, 2002 was valid and subsisting and a decree for specific performance thereof. (c) A decree for permanent injunction restraining Pawan Kumar and Giniya Devi, and their men, servants and agents from dealing with, disposing of, encumbering, alienating or creating any third party interest with regard to their shares. (d) Temporary injunction. (e) Receiver/Commissioner (f) Attachment/Attachment before judgment. (g) Costs (h) Such further or other relief or reliefs. v. The defendant no. 2 in the instituted suit, i.e. Pawan Kumar Agarwal filed an application on April 2, 2015, being G.A. No. 1118 of 2015, praying for the following reliefs:- (a) That the filed plaint be rejected and/or taken off the file and the suit being C.S. No. 369 of 2014 be dismissed. (b) In the alternative, the leave granted under clause 12 of the Letters Patent be revoked. (c) Stay of all further proceedings in the suit named during the pendency of the application. (d) Ad interim order in terms of prayers above. (e) Costs of and incidental to this application be borne by Merlin. (f) The passing of such other or further order or orders as the Hon'ble Court may deem fit and proper. This application was based, inter alia, on the grounds thatthe suit was barred by the laws of limitation: that the suit did not declare a right to sue or a cause of action; that the suit did not involve a concluded agreement that was capable of enforcement since the said M.O.U. had been terminated in December, 2008 with the security being repaid; that the defendant no. 1, i.e. Giniya Devi had passed away on December 21, 2013; and that the suit lay outside the Calcutta High Court's Ordinary Original Civil Jurisdiction. vi. In response to this application, Merlin filed an affidavit-in-opposition that was affirmed on November 19, 2015. In this affidavit, Merlin denied all allegations and contentions made by the defendant no. 2 in the application, being G.A. No. 1118 of 2015. The affidavit stated that the demise of the defendant no. 1, i.e. Giniya Devi Agarwal on December 21, 2013 was not brought to the knowledge of the plaintiff by the defendant no. 2, i.e. Pawan Kumar Agarwal. Merlin claimed that it had requested Pawan Kumar Agarwal for disclosure of the names of the heirs of Giniya Devi by its advocate's letter of August 24, 2015, to which it had received no reply. Merlin also claimed in the affidavit that upon further investigation, it had found the certified copy of an agreement dated June 5, 2014, between all the branches of the Agarwalla family, who owned the said premises, including the defendants in C.S. No. 369 of 2014, on one hand and one veteran developer, Jagdamba Commercial Pvt.Ltd.(in short "Jagdamba"), on the other hand. It was alleged that there were negotiations between the defendants and Jagdamba since September, 2009 with unregistered agreements therafter, while simultaneously Merlin had been represented with the willingness of proceeding with the said M.O.U. by the defendants and other owners of the said premises. Jagdamba - as alleged by Merlin - was thus supposed to be a necessary party to be added to the suit, having purportedly acted in collusion and conspiracy with all the members of the Agarwalla family despite being well aware of the plaintiff's agreements in respect of the said premises including the said M.O.U. vii. Apart from trying to make out a case for addition of Jagdamba as a party to the suit, Merlin sought for the other co-owners of the said property, i.e., other members of the Agarwalla family to be added as parties to the suit. Merlin also sought to bring some further facts to light by the aforesaid affidavit in order to prove the subsistence and continuance of the said M.O.U. It alleged the existence of a jural relationship by furnishing electronic mail excerpts between Merlin and the defendants' advocate, Mr. NirupamSaraogi, dated December 30, 2008 and January 2, 2009, which supposedly led to the finalisation of the development agreement evolving from clause 3 of the said M.O.U. that was approved by the senior-most member of the Agarwalla family (the owners of the said premises), one Narayan Agarwalla. It was also alleged that the conclusion of the development agreement was reflected in the payment of legal fees through cheques, being no. 582707 on December 30, 2008 and no. B37614 on May 20, 2008, that were made in favour of Mr. Saraogi, the advocate involved in the preparation of the purported development agreement. In addition Merlin claimed possession of portions of the premises, namely, godowns 1, 2 and 3. viii. In response to Merlin's affidavit, the defendant no. 2, i.e.,Pawan Kumar Agarwal, filed an affidavit-in-reply affirmed on December 15, 2015 in respect of the said application, being G.A. No. 1118 of 2015. This affidavit - apart from denying all contentions in the plaintiff's affidavit - stated that there had been gross suppression of material facts by the plaintiff, i.e. Merlin; the plaintiff was not in possession of the suit premises or any part thereof; the suit was also barred by section 34 of the Specific Relief Act, 1963, along with the laws of limitation; most pertinently, the plaintiff in relation to the suit property on or about November 10, 2009 had filed a suit for temporary injunction before the Court of the learned 5th Civil Judge (Junior Division) at Alipore, being Title Suit No. 3302 of 2009 (Merlin Projects Ltd. v. Sri Amar Chand Agarwal &Ors.), wherein Merlin had claimed their alleged right over the suit property by virtue of the said M.O.U.; from a meaningful reading of the pleadings of Title Suit No. 3302 of 2009 and C.S. No. 369 of 2014, it would transpire that both these case were more or less the same, thus being barred by section 10 of the Code of the Civil Procedure, 1908 as well as by Order VII, Rule 11 of the said Code. ix. The plaintiff, in the instituted suit C.S. No. 369 of 2014, i.e. Merlin filed an amendment application on November 19, 2015, being G.A. No. 3675 of 2015. This application, at the outset, sought for the addition of parties necessary for complete and effective adjudication of all disputes arising out of the said M.O.U. dated January 24, 2002due to the death of defendant no. 1 as on December 21, 2013 and the subsequent agreement between Jagdamba and the Agarwalla family dated June 5, 2014. The parties sought to be impleaded were as follows: Amar Chand Agarwal, Kailash Chand Agarwal, Om Prakash Agarwala, all sons of late Shrinarain Agarwal, Raj Kumar Agarwal, son of Novranglal Agarwal, Sitaram Agarwal, Ramavtar Agarwal, Kishan Lal Agarwal, Prahlad Agarwal, all sons of late Ganpat Lal Agarwal, Phool Devi Agarwal, Binod Kumar Agarwal, Pramod Kumar Agarwal, Ashok Kumar Agarwal, Sarita Parasrampuria, Sabita Agarwal and Jagdamba Commercial Pvt. Ltd. Secondly, the amendment application sought to reassert the claims of fact that the plaintiff had made in the affidavit-in-opposition affirmed on November 19, 2015 (see (vi) and (vii) above). In addition, the application asserted that the plaintiff sought for a perpetual injunction against the creation of third party interests for the protection of its possession of godowns no. 1, 2 and 3 in the said premises. Thereafter, by a supplementary affidavit affirmed on May 2, 2016,the plaintiff also sought to correct some grammatical and clerical errors in the proposed application for amendment of the original plaint. x. The defendant no. 2, i.e., Pawan Kumar Agarwal filed an affidavit-in- opposition affirmed on May 16, 2016 to the aforesaid application, being G.A. No. 3675 of 2015, denying the allegations levelled therein and stating, inter alia, that : (i) the application for amendment filed by the plaintiff could not stand for the purpose of recording the death of the very person against whom the suit had been filed and since the death was prior to the institution of the suit, the application should fail on that ground alone; (ii) the amendment sought would not only change the nature and character of the suit but would also introduce a complete new cause of action; (iii) the paragraphs sought to be incorporated in the suit by the amendment were beyond the scope of the said suit and cause of action purported therein; (iv) it was evident from a meaningful reading of the plaint that Jagdamba did not appear to be either a proper or necessary party, as any alleged agreement between Jagdamba and the co-owners of the suit property did not affect the issues of the present suit; (v) the inclusion of all other parties in view of the purported development agreement made pursuant to the said M.O.U. also had no ground, as there existed no executed development agreement but merely a draft unsigned agreement, and the presence of all Agarwallas was not necessary for adjudication of disputes arising out of the said M.O.U. dated August 24, 2002. xi. The learned Single Judge, after perusal of the facts and pleadings on record, delivered the impugned judgment on July 20, 2016. Relevant parts of the judgment are reproduced hereinbelow:- ".....The substance of the suit as originally filed was that the plaintiff had entered into a memorandum of understanding with the original defendants (the first of whom was dead before the suit was filed; but, thankfully, the second was the only heir of the deceased first defendant) in the year 2002 which contemplated that a development agreement would be entered into by the original defendants and the other co-owners of a Tollygunge property. The original defendants held 8.33% undivided share in the entire property. The memorandum of understanding, a copy whereof is incorporated as a part of the original plaint, envisaged a development agreement to be concluded within a year of the execution of such memorandum. The development agreement in respect of the entirety of the premises was never entered into or executed. Though the original defendants were not required to expressly terminate the memorandum of understanding of 2002 as it was only an understanding to enter into a development agreement, they effected a formal termination in December, 2008 by returning the token sum of Rs.11, 000/- which had been received from the plaintiff. The original plaint was founded on the plaintiff not encashing the instrument by which the sum of Rs. 11, 000/- was returned by the original defendants. It was sought to be asserted that since the original memorandum of understanding of 2002 still survived, the plaintiff was entitled to specific performance of the development agreement envisaged therein. In other words, an understanding to enter into a development agreement of 12 years prior to the institution of the suit was cited for bringing a suit to claim title to a valuable property. By the amendment which has been proposed, the plaintiff relies on a draft development agreement, which is unexecuted and unsigned, apparently prepared by a lawyer who may have been engaged by the plaintiff to take care of the partition in the Agarwala family." ".....It is also evident from the proposed amended plaint that all the co-owners of the land in question have entered into a development agreement with the proposed sixteenth defendant [i.e. Jagdamba Commercial Pvt. Ltd.] and such agreement has been registered." ".......The original defendants, or the surviving original defendant, has applied for rejection of the plaint. The rejection is on the ground that the claim is hopelessly barred by limitation, even if the proposed amendment is taken into account; and, there does not appear to be any cause of action for the suit being instituted or the same being continued with. The first defendant says that in view of Article 54 in the Schedule to the Limitation Act, 1963, this suit could not have been instituted against the original defendants in 2014 nor could it had been instituted against the proposed added defendants at the time that the amendment application was filed in 2015. The surviving original defendant has relied on the judgments of the Supreme Court reported at (1997) 2 SCC 611 and AIR 2011 SC 41. In either case, the Court recognised that the claim for specific performance was carried after the expiry of the period of limitation. Paragraph 13 of the plaint as it now stands claims that the memorandum to enter into a development agreement was entered into in August, 2002. The subsequent averments speak of the plaintiff paying the token amount of Rs.11,000/- to the original defendants and the plaintiff obtaining possession of the part of the premises in the possession of certain branches of the Agarwala family almost simultaneously. The impression given in the original plaint is that the plaintiff is in possession of the premises, though it is evident from the application to amend the plaint and the proposed amendments that the plaintiff is not in possession of the entirety of the premises but may only be in possession of a couple of godowns thereat. It is not even clear from the plaint or its proposed amended version as to what is the extent of the area covered by the suit property." ".....In addition, the last sentence of paragraph 21I of the proposed amended plaint has been placed with much vigour to assert that the cancellation of the agreement of 2002 had been given a go-by. It is also mentioned elsewhere in the plaint that the fact that the original or the proposed added defendants had given a go-by to the cancellation of the agreement in 2002 is evident from the fact that they had not attempted to dispossess the plaintiff from the couple of godowns at the property that the plaintiff claims to be in possession of. It is elementary that a suit for specific performance of a contract has to be filed within three years of the date fixed for the performance; or if no such date is fixed, within three years of the time when the plaintiff has notice that the performance is refused. As far as the original defendants are concerned, it is evident that the time fixed for the performance of whatever was required to be performed by the 6 August, 2002 agreement expired after a year of the execution of such agreement. In any event, such agreement was specifically terminated by what is described in the plaint to be an undated letter which was made over by the original defendants to the plaintiff along with an instrument for payment dated December 8, 2008 for the refund of the sum of Rs.11,000/-. There is no averment in the plaint of anything done by the original defendants thereafter for the plaintiff to obtain the benefit of any provision of the Act of 1963 for the clock of limitation to stop running and the cause of action qua the agreement of 2002 to be alive to be pursued at the time of the institution of the suit in 2014. Merely because the plaintiff did not encash the instrument for payment or the original defendants or any other took no step to evict the plaintiff from a part of the premises allegedly under the plaintiff's possession would be of no relevance in counting the period of limitation. By the proposed amendment, the plaintiff claims a veritable development agreement having been entered into between the plaintiff and original defendants and all the owners of the land in question. However, there was never any development agreement entered into between the plaintiff and the original defendants or between the plaintiff and the other owners. The unsigned and undated document of 2009 which is cited as the development agreement cannot be seen to be a concluded contract and, specific performance thereof would not be permissible nor would the plaintiff be entitled thereto." ".....If the proposed amendments to the plaint are taken into consideration and the proposed amended plaint is seen to be one filed on the date of the institution of the suit, even then the plaintiff would have no cause of action against the Agarwala defendants and, as a consequence, against the proposed sixteenth defendant. At the highest, the nebulous agreement between the plaintiff and the proposed added defendants was entered into in or about the year 2009. The suit was instituted in 2014 and even if the proposed amendment dates back to the date of the institution of the suit, the claim on such count would be barred by limitation. Since the suit as originally instituted was after the expiration of the period prescribed by the laws of limitation, it was incumbent on the plaintiff to plead the grounds upon which exemption from such law was claimed. Again, since the proposed amendment would, at the highest, date back to the date of institution of the suit, which date was after the expiration of the period prescribed by the laws of limitation in respect of the additional reliefs claimed, the plaintiff ought to have indicated the grounds to explain the delay or claim exemption in accordance with law therefor. The original plaint and the proposed amended plaint are singularly lacking in such aspect. Indeed, it has been submitted on behalf of the plaintiff that the proposed amendment seeks merely to amplify what is already stated in the original plaint; though it is evident from the proposed amended plaint that an altogether different claim is sought to be made by the proposed amendment." ".....If the plaintiff has no cause of action or no right to pursue the cause of action against the Agarwala defendants, the plaintiff has no right to chase the proposed sixteenth defendant, at least not in this Court or via the present suit. Since the suit fails primarily on the ground of limitation and the plaint disclosing no cause of action, the aspect of this suit being a suit for land has not been gone into; though plaintiff may have failed even on such count." "......The plaint relating to CS No. 369 of 2014 is dismissed on being ex-facie barred by limitation and not disclosing any cause of action. As a consequence, GA No. 1118 of 2015 succeeded and GA No. 3675 of 2015 failed." 3. Before us two questions of law arise:- i. Whether the learned Single Judge was right in applying the provisions contained under Order VII, Rule 11 of the Code and deciding that the limitation period had expired, without allowing the application for amendment of the plaint or making determination of facts in relation to the amended plaint? ii. Whether the learned Single Judge was right in admitting the application for rejection of the plaint and in deciding that no cause of action was disclosed by the plaintiff in the present case? 4. The submission advanced on behalf of the appellant-Merlin was very attractive, initially. Learned senior counsel had submitted that the learned Single Judge ought to have allowed the plaint to be amended and ought to have proceeded to decide the limitation question, only after making certain determination of facts; such as, whether the appellant had certain godowns in the said premises, as stated in the amended plaint and/or whether the purported development agreement existed. In this context, the learned senior counsel placed reliance on two decisions of the Hon'ble Supreme Court in C. Natarajan v. Ashim Bai & Anr., reported in A.I.R. 2008 S.C. 363, (paragraphs 10-13, 18) and Nandkishore Lalbhai Mehta v. New Era Fabrics Pvt. Ltd. reported in (2015) 9 S.C.C. 755, (paragraphs 8, 9, 35-37). 5. We notice that the Hon'ble Supreme Court at paragraph 10 of Natarajan (supra) had followed its earlier decision in Popat and Kotecha Property v. State Bank of India Staff Association, reported in (2005) 7 S.C.C. 510. Popat (supra), in turn, refers to and relies upon Sopan Sukhdeo Sable & Ors. v. Assistant Charity Commissioner & Ors., reported in (2004) 3 S.C.C. 137 which lays down the general principles for examining a plaint and its maintainability under provisions of Order VII Rule 11. These principles are reproduced hereinbelow: "12. The trial court must remember that if on a meaningful and not formal reading of the plaint it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise the power under Order 7 Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. If clever drafting has created the illusion of a cause of action, it has to be nipped in the bud at the first hearing by examining the party searchingly under Order 10 of the Code. (See T. Arivandandam v. T.V. Satyapal [(1977) 4 SCC 467] .) 13. It is trite law that not any particular plea has to be considered, and the whole plaint has to be read. As was observed by this Court in Roop Lal Sathi v. Nachhattar Singh Gill [(1982) 3 SCC 487] only a part of the plaint cannot be rejected and if no cause of action is disclosed, the plaint as a whole must be rejected. 14. In Raptakos Brett & Co. Ltd. v. Ganesh Property [(1998) 7 SCC 184] it was observed that the averments in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order 7 was applicable. 15. There cannot be any compartmentalisation, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction or words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair-splitting technicalities." 6. In relation to the question of limitation barring a suit under Order VII, Rule 11 of the C.P.C, 1908, the general principles of law laid down in Sopan (supra), were taken into consideration both in Popat (supra) and Natarajan (supra). In Natarajan, the cause of action arose in 1994, when there was alleged trespass to the plaintiff's property, while the suit therein was filed in 2001. The suit sought for the reliefs of declaration of plaintiff's title to the suit property and consequential injunction restraining the defendants from interfering with plaintiff's possession. In the alternative, recovery of vacant possession. The trial judge dismissed an application for rejecting the plaint on the ground of limitation, while the High Court reversed the trial court's ruling by stating that the three year limit had expired for the main relief sought for, i.e. declaration of title. The Supreme Court, while allowing the appeal observed as follows in paragraph 19: "We have noticed hereinbefore that the defendant, inter alia, on the plea of identification of the suit land vis-a-vis the deeds of sale, under which the plaintiff has claimed his title, claimed possession. The defendant did not accept that the plaintiff was in possession. An issue in this behalf is, therefore, required to be framed and the said question is, therefore, required to be gone into. Limitation would not commence unless there has been a clear and unequivocal threat to the right claimed by the plaintiff. In a situation of this nature, in our opinion, the application under Order VII Rule 11(d) was not maintainable. The contentions raised by the learned counsel for the respondent may have to be gone into at a proper stage. Lest it may prejudice the contention of one party or the other at the trial, we resist from making any observations at this stage." (e.a.) 7. The ratio of Natarajan (supra), which follows the general principles laid down in Sopan (supra) implies that the rejection of a plaint on the ground of limitation under the provisions of Order VII, Rule 11 may require a determination of fact requiring evidence to be adduced - only in certain cases - so as to allow the Court to determine when the limitation period begins. In the instant case, however, the original plaint never asserted the existence of the development agreement or the possession of certain godowns in the said premises. Rather, an entirely new case was sought to be made out in the amendment application. As such, the learned Single Judge was not required to conduct a fact finding exercise in order to decide on the question of limitation. 8. Going into such a fact-finding enquiry in order to arrive at such a conclusion would offend the very basic principles governing the scope of Order VII, Rule 11(a) of the Code of Civil Procedure, 1908. It would mean allowing the plaintiff to introduce a new case by way of an amendment to the plaint that would change the very cause of action of the suit from an alleged violation of an M.O.U. to an alleged violation of a purported development agreement made pursuant to that said M.O.U., as rightly held by the learned Single Judge. In other words, our present case is quite distinguishable from Natarajan (supra). That case dealt with a fact situation where the Court had to determine whether the plaintiff was actually in possession or not since the factum of such possession was being disputed by the defendant, as stated in paragraph 9 of Natarajan (supra). The situation here is completely different. Acceptance of the amended plaint and not rejecting the original plaint on the ground of limitation is to allow a suit to metamorphose into a new cause of action, which clearly circumvents the laws of limitation that bars the suit and requires rejection of the plaint. 9. So far as Nandkishore (supra) is concerned, the appellant therein had waived the stipulation/condition of obtaining the consent of the labour, but inspite of the efforts, the agreement never materialised. The question of the suit being barred by limitation never arose and therefore the applicability of Order VII, Rule 11(d) was not even an issue before the Court. 10. This brings us to the second issue. On facts we notice that the M.O.U. had been cancelled by the defendants. The cause for seeking an action, inter alia, for specific enforcement of the M.O.U., therefore, does not exist since the M.O.U itself does not exist and/or subsist. In a recent pronouncement of the law by the Hon'ble Supreme Court in Colonel Shrawan Kumar Jaipuriyar @ Sarwan Kumar Jaipuriyar v. Krishna Nandan Singh &Anr., on September 2, 2019, in Civil Appeal No. 6760 of 2019, it was held as follows in paragraph 10: "10. This Court in Church of Christ Charitable Trust and Educational Society Represented by its Chairman v. Ponniamman Educational Society Represented by its Chairman/Managing Trustee [reported at (2012) 8 SCC 706] has referred to the earlier judgment of this Court in A.B.C. Laminart Pvt. Ltd. and Another v. A.P. Agencies, Salem [reported at (1989) 2 SCC 163] to explain that the cause of action means every fact which, if traversed would be necessary for the plaintiff to prove in order to seek a decree and relief against the defendant. Cause of action requires infringement of the right or breach of an obligation and comprises of all material facts on which the right and claim for breach is founded, that is, some act done by the defendant to infringe and violate the right or breach an obligation. In T. Arivanandam v. T.V. Satypal and Another [reported at (1977) 4 S.C.C. 467] this Court has held that if the plaint is manifestly vexatious, meritless and groundless, in the sense that it does not disclose a clear right to sue, it would be right and proper to exercise power under Order VII Rule 11 of the Code of Civil Procedure, 1908 ('Code', for short). A mere contemplation or possibility that a right may be infringed without any legitimate basis for that right, would not be sufficient to hold that the plaint discloses a cause of action." 11. Following the ratio as discussed above, it can, therefore, be held that in the facts and circumstances of the instant case, the same is squarely applicable as the plaintiff has been unable to disclose a clear right to sue and a mere contemplation or possibility that a right may be infringed without any basis for that right - but solely depending upon the amendment application being allowed - would not be sufficient to hold that the plaint discloses a cause of action. Thus, the second issue is answered in the affirmative. 12. The learned Single Judge's decision, therefore, requires no interference and consequentially, both appeals are liable to be dismissed and stand accordingly dismissed. No order as to costs. Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the parties on a priority basis. (MOUSUMI BHATTACHARYA, J.) (BISWANATH SOMADDER, J.) Later After the judgment has been pronounced in Court, learned advocate representing the appellant prays for stay of operation of the judgment which is considered and refused. (MOUSUMI BHATTACHARYA, J.) (BISWANATH SOMADDER, J.)


PETITIONER: DELHI CLOTH & GENERAL MILLS LTD. Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT08/10/1987 BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) MUKHARJI, SABYASACHI (J) CITATION: 1987 AIR 2414 1988 SCR (1) 383 1988 SCC (1) 86 JT 1987 (4) 35 1987 SCALE (2)715 CITATOR INFO : R 1988 SC 354 (11) RF 1992 SC1075 (3) RF 1992 SC2169 (28) ACT: Refusal of permission by the Railway Board to charge concessional station to station freight rate for the carriage of Naptha for a fertilizer factory complaint under section 41(1)(a) and (b) of the Railways Act, 1980, against HEADNOTE: The appellant, a company, set up a fertilizer factory at Kota in Rajasthan. The factory manufactures urea for which the main raw material is Naptha, which has to be transported from the Koyali Refinery of the Indian oil Corporation. Before the actual setting up of the factory, the appellant requested the Railway Board by letter for a concessional frieght rate for the carriage of Naptha to the factory. The Railway Board by its letter EX 5 dated November 5, 1966, quoted station to station rate equal to 85-B (special) as against the rate equivalent to classification 62.5-B requested for by the appellant, and also stated that as the special rate was being quoted ahead of the actual setting up of the factory, the frieght rate would be reviewed when the traffic actually began to move. When the factory was almost ready for operation, the appellant again requested the Railway Board by letter for charging the rate under classification 62-5-B instead of 85- B (special) quoted by it. The Railway Board refused to oblige. The appellant wrote another letter to the Board, requesting it to permit charging the rate equivalent to 85-B (special) pending its final decision, as the movement of naptha was to commence from June/July, 1968. The Railway Board refused to grant that request also, saying that it could reconsider the question if on the basis of the facts and figures of the cost of production vis-a-vis the sale price of the fertilizers, it could be established that the production of the fertilisers at Kota was uneconomical unless freight concession on the movement of naptha was granted. The appellant filed a complaint under section 41(1)(a) and (b) of the Railways Act, 1890, before the Railway Rates Tribunal. The Tri- 384 bunal decided against the appellant. Aggrieved, the appellant appealed to this Court by special leave for relief against the order and judgment of the Tribunal. Dismissing the appeal, the Court ^ HELD: Three questions arise for consideration of the Court: (1) whether the Railway Board was bound to allow the concessional rate offered to the appellant, that is, 85-B (special) quoted in its letter Ex. C 5 dt. November 5, 1966, to the appellant, (2) whether the rate charged for the carriage of the naptha between the stations concerned was unreasonable, and (3) whether the Railways were showing undue preference or advantage in respect of other traffic in contravention of the provisions of section 28 of the Railways Act. [389E-F ] Dealing with the third question first, which relates to the contravention of section 28 of the Railways Act, the scope of the section was considered by this Court in Rajgarh Jute Mills Ltd v. Eastern Railway and another, [1959] SCR 236 at 241, and the Railway Rates Tribunal, considering the material on record in the light of the decision of the Court in case, held that there was no evidence produced by the appellant to justify any grievance under section 28. This conclusions is perfectly justified. [390E; 391C] The second question above-said relates to the rate charged by the Railway Administration being per se unreasonable. Even assuming, as argued by appellant's counsel, that the Railways are earning some surplus income, that by itself is no ground to hold that the frieght charged is per se unreasonable. In the case of commodities of national needs such as foodgrains, crude oil etc., it may be necessary for the Railways to charge below the operation cost, and to offset the loss, the Railways may charge higher freight for some other classified commodities. The cost of operation cannot by itself be the basis for judging the reasonableness of the rate charged. Counsel for the appellant also argued that crude oil and naptha were comparable commodities for the purpose of carriage but there was disparity in the rates charged in respect of the two, naptha being charged at a much higher rate. The Tribunal rejected the demand of the appellant for parity in frieghts, and the Court cannot interfere with the finding to the Tribunal in this appeal under Article 136 of the Constitution. On merits also, there is no justification to demand that neptha should take the same freight rate as that of the crude oil. [391D, F-H; 392B. D-E] 385 Lastly, the first question: It relates to the correctness of the view taken by the Tribunal on doctrine of promissory estoppel consequent upon the letter Ex. 5 of the Railway Board. The Tribunal rejected this claim of the appellant. Considering the conclusion of the Tribunal on this question, it appears the Tribunal has not correctly understood the doctrine of promissory estoppel: The party asserting the estoppel must have relied and acted upon the assurance given to him. It means the party has changed or altered the position by relying on the assurance or representation. The alteration of position by the party is the only indispensable requirement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. "A promise intended to be binding, intended to be acted upon, and in fact acted upon, is binding", said Lord Denning, sitting as a trial judge in Central London Properties Ltd v. High trees House Ltd., [1947] K.B. 130. If the promisee has acted upon the promise, the promisor is precluded from receding from his promise. The concept of detriment as it is understood now is whether it appears unjust, unreasonable or inequitable that the promisor should be allowed to resile from his assurance or representation, having regard to what the promisee has done or refrained from doing in reliance on the assurance or representation. It is, however quite fundamental that the doctrine of promissory estoppel cannot be used to compel the public bodies or The Government to carry out the representation or promise which is contrary to law or which is outside their authority or power. Secondly, the estoppel stems from equitable doctrine. it requires that he who seeks equity must do equity. The doctrine, therefore, cannot also be invoked if it is found to be inequitable or unjust in its enforcement. or the purpose of invoking the doctrine, it is not necessary for the appellant to show that the insurance contained in Ex. (I S was mainly responsible for the establishing of the factory at Kota. There may be several representation to one party from different authorities in regard to different matters. Or there may be several representations from the same party in regard to different matters; In the instant case, there was one representation by the Rajasthan government to supply power to the appellant's factory at concessional rate. There is another representation from the same government to exempt the appellant from payment of tax for a certain period. If those representations have been relied upon by the appellant, the Court would compel the authorities to adhere to their representations. What is required is the fact that the appellant was induced to act on the representations. The assurance given by the Railway Board in the letter Ex. S was not clear and unqualified. it was subject to review to be undertaken 386 when the appellant started moving the raw material. Accordingly, A appellant was put to notice that it has to approach the Railway administration again when it would review the whole matter. From the tenor of Ex. 5, the railways are entitled to say that they have reviewed the matter and found no justification for a concessional frieght rate for naptha; that does not amount to resiling from the earlier assurance. No question of estoppel arises in favour of the appellant in the case out of the representation made in Ex 5. The Court agreed with the conclusion of the Tribunal but not for all the reasons stated. Rajgarh Jute Mills Ltd v. Eastern Railway & Anr, [1959] SCR 234 at 241; Central London Properties Ltd v. High Trees House Ltd, [1947] KB 130; Central Newbury Car Auctions Ltd v. Unity Finance Ltd, [1956] 3 All ER 905 at 909; Article "Recent Development in the Doctrine of Consideration"-Modern Law Review, Vol. 15, P. 5, Grundt v. The Great Boulder Ptv Gold, Mines Ltd, [1938] 59 CLR 641; Mohlal Padampet Sugar Mills Co Ltd v. State of UP and ors, [1979] 2 SCR 641 at 695= [1979] 2 SCC 409; Union of India and ors v. Godfrey Philips Ltd, [1985] 4 SCC 369= [1985] Supp. 3 SCR 123 and Halsbury's Laws of England-4th Edn., Vol. 16, P. 1071, para 1595, referred to. JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 223 of 1974. From the Judgment and order dated 13.7.1973 of the Railways Rates Tribunal, Madras in Complaint No. 2 of 1969. K.K. Jain, Bishamber Lal, Pramod Dayal and A.D. Sanger for the Appellant. Bed Brat Barua, Ms. A. Subhashini,.C.V. Subba Rao, Mrs. S. Suri, P. Parmeswaran and Anil Katiyar for the Respondent. The Judgment of the Court was delivered by JAGANNATHA SHETTY, J. This appeal, with Special Leave, is against the order and judgment dated July 13, 1973, of the Railways Rates Tribunal Madras, in complaint filed by the appellant under Section 41(1) of the Indian Railways Act No. 9 of 1890. The background facts are these: The appellant is a Company. It has set up a fertilizer factory at Kota in Rajasthan. It is said to be an industrially backward area. The factory manufactures Urea for which the main raw material is Naptha. Naptha has to be transported from Koyali Refinery of Indian oil Corporation. The nearest railway station is Bajuva near Baroda. The nearest railway station serving Company's factory is Dadhevi in Rajasthan. The distance between Bajuva and Dadhevi is about 520 kms. For transportation, the Naptha has been classified by the Railway under Clause 110-B of the tariff. Before the actual setting up of the factory, the Company, by its letter dated September 5, 1966 requested the Railway Board for a concessional frieght rate for the carriage of Naptha. It requested the Railway Board for fixed Station to Station rate equivalent to classification 62.5-B. That would have meant reduction of about 43% in the normal tariff under clause 110-B. In that letter it was pointed out that if such concessional rate was not fixed, the Company would be put to disadvantageous position as against the other factories located at ports or near the refineries. The Railway Board by its letter Ex. C5 dated November 5, 1966 agreed to quote station to station rate equal to 85-B (Special). In the said letter it was also stated that as the special rate was being quoted ahead of the actual setting up of the factory the freight rate need to be reviewed when the traffic actually begins to move. When the factory was almost ready for operation the company wrote a letter dated June 5, 1967 requesting the Railway Board for charging the rate under classification 62.5-B instead of 85-B(Special). The Railway Board did not accede to the request. On May 31, 1968 the company wrote another letter informing the Railway Board that the movement of Naptha would commence from June/July 1968 and pending decision of the company's earlier request, the Railway Board may permit charging the rate equivalent to 85-B (Special) already offered in terms of the letter Ex. 5. The Railway Board refused to grant that request also. The Railway Board, however, informed the Company in the letter dated July 11, 1968 as follows: "However, if on the basis of facts and figures your cost of production (date to be furnished for at least one complete year) vis-a-vis the sale price of fertilizers, it can be established that production of fertilizers at Kota is uneconomical, until freight concession on the movement of Naptha from Bajuva/Trombay to Kota is granted, the Railway Board would be prepared to reconsider the question." on April 19, 1969, the company filed a complaint under Section 41(1)(a) and (b) of the Railways Act, 1890 before the Railway Rates Tribunal Madras. The principal contentions raised in the complaint are as follows: "(i) The Railway Board was estopped and/or precluded from going back on the assurance Of quoting station to station concessional rate 85-B when the company had in vested a large amount of capital in setting up the factory at a place away from the refinery or port (ii) The rate charges by the Railway for the carriage of Naptha between two stations-Bajuva and Dadhevi was unreasonable under Section 41(1)(b) of the Indian Railways Act, 1980, and (iii) The Railways were showing undue preference or advantage in respect of other traffic and contravening the provisions of Section 28 of the Indian Railway Act, 1890." With these and other contentions, the company requested the tribunal to declare the rate charged for the carriage of Naptha as unreasonable and to fix a reasonable rate for such carriage. The Railway Board in its reply maintained that while quoting the concessional rate equal to 85-B (Special) it was made clear to the company that the rate was subject to review when the traffic starts moving and that concessional rate was provisional in character. The company did not construct the factory relying solely on the concessional rate offered by the Railway Board. There was no scope for any such understanding since the Railway reserved its right to determine the correct rate when the traffic started moving. It was later found that the chemicals have been advisedly given low class rate with a view to encourage fertilizer industry and no further concession was necessary to the company. It was further stated that the question of any undue prejudice of undue favour to any party does not arise when charging the respective class rates for specified commodities. On these pleadings the Tribunal considered among others, the following issues: 1. Whether freight charges, now charged, for the carriage of a Company's traffic in Neptha from Bajuva to Dadhevi station are unreasonable under Section 41(1) of the Indian Railways Act, 1890? 2. Whether the Railways are contravening Section 28 of the Indian Railways Act in charging the respective class rates for commodities naptha, chemical manures, divisions A & B, Urea and Gypsum? 3. Whether the Railways are estopped by the doctrine of promissory estoppel in view of the assurance given in the letter Ex. C? The Tribunal determined all these questions against the company. It was held that there was no unreasonableness in the rate charged for the carriage of Naptha from Bajuva to Dadhevi. The Railways are not contravening Section 28 of the Railways Act. The rate charged has not caused any prejudice to the company. On the question of promissory estoppel, the Tribunal held that the assurance given by the Railway Board in the letter Ex. C5 was not mainly responsible for setting up of fertilizer factory at Kota. It was further held that even if Ex. CS was an assurance to the Company the withdrawal of that assurance has not adversely affected the interests of the company. Upon the submissions made by learned counsel on both sides, the following questions arise for our consideration: (1) Whether the Railway Board was bound to give the concessional rate offered to the company under Ex. C5 dated November 5, 1966? (2) Whether the rate charged for the carriage of Naptha between Bajuva and Dadhevi is unreasonable? (3) Whether the Railways are showing undue preference or advantage in respect of other traffic and contravening the provisions of Section 28 of the Railways Act? We may conveniently take up third question first for consideration. The relevant provisions of the Railways Act, 1890, which have a material bearing on the question are these: Section 41 provides for filing complaints against Railway Administration. The Section provides as follows, so far as it is material: 41(I) Any complaint that a railway administration (a) is contravening the provisions of Section 28 or (b) is charging for the carriage of any commodity between two stations a rate which is unreasonable, or (c) x x x x x may be made to the Tribunal and the Tribunal shall hear and decide any such complaint in accordance with the provisions of this chapter. Section 28 provides: "28. A Railway administration shall not make or give any undue or unreasonable preference or advantage to, or in favour of, any particular person or railway administration, or any particular description of traffic, in any respect what soever, or subject any particular person or railway administration or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. " The third question formulated by us relates, to the contravention of Section 28 of the Railways Act. The scope of this Section has been considered by this Court in Rajgarh Jute Mills Ltd v Eastern Railway and another, [ 1959] SCR 236 at 241. There it was observed that a party who complains against the railway administration that the provisions of Section 28 have been contravened must establish that there has been preference between himself and his goods on the one hand and his competitor and his goods on the other. Gajendragadkar, J. (as he then was) observed: "Section 28 is obviously based on the principle that the power derived from the monopoly of railway carriage must be used in a fair and just manner in respect of all persons and all descriptions of traffic passing over the railway area. In other words, equal charges should normally be levied against persons or goods of the same or similar kinds pas sing over the same or similar area of the railway lines and under the same or similar circumstances; but this rule does not mean that, if the railway administration charges un- equal rates in respect of the same or similar class of goods travelling over the same or similar areas, the inequality of rates necessarily attract the provisions of S. 28. All cases of unequal rates cannot necessarily be treated as cases of preference because the very concept of preference postulates competition between the person of traffic receiving preference and the person or traffic suffering prejudice in consequence. It is only as between competitors in the same trade that a complaint of preference can be made by one in reference to the other." In the light of these principles, the Tribunal considering the material on record held that there is no evidence produced by the Company to justify any grievance under Section 28. We see no reason to disagree with this conclusion. It is, in our opinion, perfectly justified. In fact Mr. K.K. Jain learned counsel for the appellant also did not seriously dispute the correctness of that finding recorded by the Tribunal. We may now turn to the second question.Mr. K.K. Jain urged that the rate charged by the Railway Administration is per se unreasonable. Here again the onus to prove the alleged unreasonableness of the freight rests on the company. It is for the company to establish that the rate charged by the Railway Administration for the carriage of Naptha is unreasonable. Of course, this onus could be discharged by relying upon the material produced by the Railways. Mr. Jain, therefore, relied upon a statement Ex. C46 in support of his case. Ex. C46 is a statement of surplus "working cost" in respect of carriage of Naptha from Bajuva to Dadhevi. It is, in our opinion, not necessary to analyse the statement. Even assuming that the railways are earning some surplus income after deducting the operation cost that by itself is no ground to hold that the freight charged is per se unreasonable. It must be born in mind that the railways are run as commercial undertaking and at the same time it being an instrumentality of the State, should serve the national interest as well. There is however, no obligation on the railways to pass on the extra amount realised by the carriage of goods to customers. Nor it is necessary to share the profit with the commuters. As Mr. Barua learned counsel for the Railways said that in the case of commodities of national needs such a foodgrains, crude oil etc., it may be necessary for the Railways to charge below the operation cost. To off set such a loss the Railways may charge higher freight for certain other classified commodities. Therefore, it seems to us, that the cost of operation cannot by itself be the basis for judging the reasonableness of the rate changed. It was next urged by Mr. K.K. Jain that the crude oil and Naptha are considered as comparable commodities for the purpose of carriage. The crude oil carries the rate equal to class 85-B(old), 85(new) while Naptha carries rate 110- B(old), 105-B(new). In terms of amounts it works out at Rs.59.45 for crude oil as against Rs.73.13 for Naptha. The counsel urged that there is no justification shown for this wide disparity in the first place. Secondly, the freight rate of crude oil was the rate offered to the company under Ex. CS and the denial of that rate without any good reason is arbitrary. This argument though attractive does not carry conviction if one analyses the evidence on record. Crude oil has been clubbed with Glycerine, fruit juices and syrups, fibres, flax etc. Naptha has been clubbed with Aviation Spirit, Petrol, Petroleum, Ether and solvent oil. From the evidence produced by the Railways Naptha has been classified as a dangerous commodity with the flash point below 24.4øC spontaneously. The crude oil has no such dangerous characteristics. It is also on record that Naptha requires special type of tank wagons and the Railways have to take special precautions for transportation. These and other relevant factors have been taken into account by the Tribunal for rejecting the demand of the company for parity in freights. This Court cannot, interfere with such a finding in this appeal under Article 136 of the Constitution. On the merits also, we see no justification to demand that Neptha should take the same freight rate as that of crude oil. We may now revert to the first question. It relates to the correctness of the view taken by the Tribunal on the doctrine of promissory estoppel resulting by the letter Ex. CS of the Railway Board. The Tribunal has rejected this claim of the company by summarising its conclusion in the following terms: "We must, therefore, hold that the assurance contained in . Ext. CS was not mainly responsible for the setting up of the Fertilizer Factory at Kota. 15.3. Even if it was held that Ex. CS was a definite encouragement to the complainant to set up the Kota factory, there is no evidence on record to show that the withdrawal of the concession by Ex. 12 has adversely affected the complainant. We will show in the (i succeeding paragraphs that the complainant has suffered no material injury by virtue of the withdrawal of the concessional rate and the charging of the normal rate. It is well settled that the principle of estoppel cannot be applied unless the person pleading estoppel can show that he has been prejudiced by the conduct of the party on whose assurance l l he has acted." Here the Railways Rates Tribunal apparently, appears to have gone off the track. The doctrine of promissory estoppel has not been correctly understood by the Tribunal. It is true, that is the formative period, it was generally said that the doctrine of promissory estoppel cannot be invoked by the promisee unless he has suffered 'detriment' or 'prejudice'. It was often said simply, that the party asserting the estoppel must have been induced to act to his detriment. But this has now been explained in so many decisions all over. All that is now required is that the party asserting the estoppel must have acted upon the assurance given to him. Must have relied upon the representation made to him. It means, the party has changed or altered the position by relying on the assurance or the representation. The,alteration of position by the party is the only indispensable requirement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. The Court, however, would compel the opposite party to adhere to the representation acted upon or abstained from acting. The entire doctrine proceeds on the promise that it is reliance based and nothing more. This principle would be clear if we study the cases in which the doctrine has been applied even since it was burst out into sudden blaze in 1946. Lord Denning in Central London Properties Ltd v High Trees House Ltd, 11947] K.B. 130 sitting as a trial judge, asserted: "A promise intended to be binding, intended to be acted upon, and in fact acted upon is binding ....... The history of the High Trees principle is too well known to bear repetition. It will be enough to make the following points. The promisor is bound because he led the promisee to commit himself to change the position. If the promisee has acted upon the promise, the promisor is. precluded from receding his promise. No further detriment to the promisee upon his temporal interests need be established. This position has been made clear by Lord Denning himself in his article "Recent Developments in the Doctrine of Consideration" Modern Law Review, Vol. 15 at p. 5. "A man should keep his word. All the more so when the promise 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" 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 the 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 to show that he acted to his detriment in reliance on the promise. It should be sufficient that he acted on it. The principle governing this branch of the subject cannot be better put then in the wolds of a great Australian jurist, DIXON, J. in Grundt v The Great Boulder Pty Gold Mines Ltd, [1938] 59 CLR 641. There he said: "It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or pre vent 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 give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice." This passage was referred to, with approval, by Lord Denning in Central Newbury Car Auction Ltd v Unity Finance Ltd, [1956] 3 All E.R. 905 at 909. The said passage has also been quoted, with approval, by Bhagwati, J. (as he then was) in Motilal Padampat Sugar Mills Co A Ltd v state of U.P. & Ors.,[ 1979]2 SCR 641 at p. 695= 1979(2)SCC 409. The learned Judge then said: "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 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. " The view taken in Motilal Padmapat Sugar Mills case (supra) has been reiterated in Union of India & Ors. v. Godfrey Philips India Ltd,, [ 1985 ] 4 SCC 369 = [ 1985 ] Supp 3 SCR 123 . The concept of detriment as we know understand is whether it appears unjust, unreasonable or inequitable that the promisor should be allowed to resile from his assurance or representation, having regard to what the promisee has done or refrained from doing in reliance on the assurance or representation. It is, however, quite fundamental that the doctrine of promissory estoppel, cannot be used to compel the public bodies or the Government to carry out the representation or promise which is contrary to law or which is outside their authority or power. Secondly, the estoppel stems from equitable doctrine. It, therefore, requires that he who seeks equity must do equity. The doctrine, therefore, cannot, also be invoked if it is found to be inequitable or unjust in its enforcement. We may also state that for the purpose of invoking the doctrine, it is not necessary for the company to show that the assurance contained in Ex.C5 was mainly responsible for establishing the factory at Kota. There may be several representations to one party from different authorities in regard to different matters. Or, there may be several representations from the same party in regard to different matters. As in the instant case, there was one representation by the Rajasthan Government to supply power to the company at concessional rate. There was another representation from the same Govern- ment to exempt the company from payment of tax for certain period. There may be other representations from the same or some other authorities. If those representations have been relied upon by the company, the Court would compel those parties to adhere to their respective representations. It is immaterial whether each of the representations was wholly responsible or partly responsible for locating the factory at Kota. It is sufficient if the company was induced to act on that representation. The last and final aspect of the matter to which attention should be drawn is that for the purpose of finding whether an estoppel arises in favour of the person acting on the representation, it is necessary to look into the whole of the representation made. It is also necessary to state that the representation must be clear and unambiguous and not tentative or uncertain. In this context we may usefully refer to the following passage from Halsbury's Laws of England, Halsbury's Laws of England 4th Edn. Vol. 16 p. 1071 para 1595. "1595. Representation must be unambiguous To found an estoppel a representation must be clear and unambiguous, not necessarily susceptible of only one interpretation, but such as will reasonably be understood by the person to whom it is made in the sense contended for, and for this purpose the whole of the representation must be looked at. This is merely an application of the old maxim applicable to all estoppels, that they "must be certain to every intent The question now is whether the assurance given by the Railway Board in the letter Ex.C5 was clear and unqualified. But unfortunately, it is not so. It was subject to review to be undertaken when the company starts moving the raw material. Ex. C5 reads:- New Delhi I, Dated S Nov., 1966 Dear Sir, Sub: Integrated Fertilizer-PVC project at Kota, Rajasthan Rail movement of Naptha. Ref: Your letter No. SFC/Gen-72 dated 5.9.1966 I am directed to state that the Railway Board agree to quote a special rate equal o class 85-B (Special) CC: K for transport of Naptha in train loads from Bombay or Koyali to Kota, for manufacture of fertilizers. The proposed special rate will apply at owner's risk. Since the special rate is being quoted ahead of the actual setting up of the factory the rate may need to be reviewed when the traffic actually begins to move. The Railway may accordingly be approached before the traffic actually starts moving. Yours faithfully, Sd/- R.L. Sharma for Secretary Railway Board" What does this letter mean? The first part of the letter offering the concessional rate equal to class 85-B (Special) has been completely watered down in the second part of the letter. It has been expressly stated that the rate may need be reviewed when the traffic actually begins to move. The company was put to notice that it has to again approach the Railway Administration. The Railway authorities now states that they have reviewed the whole matter and found no justification to offer a concessional freight rate for Naptha, since fertilizers are deliberately given a low classification in the tariff. From the tenor of Ex. S the Railways are entitled to state so, and it does not amount to resiling from the earlier assurance. No question of estoppel arises in favour of appellant out of the representation made in Ex. CS. We, therefore, agree with the conclusion of the Tribunal but not for all the reasons stated. In the result the appeal fails and is dismissed. In the circumstances. however, we make no order as to costs. S.L. Appeal dismissed.


IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side Present : Hon'ble Justice Amrita Sinha WP No. 22018 (W) of 2018 CAN 7460 of 2019 Md. Jahidul Islam & Ors. Vs. The State of West Bengal & Ors. With WP No. 22019 (W) of 2018 CAN 7461 of 2019 Sahar Ali Laskar Vs. The State of West Bengal & Ors. For the writ petitioners : Mr. Samim Ahammed, Adv. Mr. Arka Maiti, Adv. For the State : Mr. Santanu Mitra, Adv. Mr. Shamim Ul Bari, Adv. [in WP No. 22018 (W) of 2018] Mr. Tapan Mukherjee, Adv. Mr. Pritam Chowdhury, Adv. [in WP No. 22019 (W) of 2018] For the respondentnos. 3, 4 and 5 : Mr. P. S. Bhattacharyya, Adv. Mr. S. S. Koley, Adv. Mr. Arunava Maiti, Adv. For the AICTE : Mr. Sunil Singhania, Adv. Hearing concluded on : 20.01.2020 Judgment on : 13.05.2020 Amrita Sinha, J.: W.P No. 22019 (W) of 2018 The petitioner is an OBCA category candidate. He possesses the qualification of Bachelor in Technology (B.Tech) in Computer and Engineering from Aliah University. He obtained the aforesaid qualification in the year 2014 upon completion of a regular course of four years. He cleared the Graduate Aptitude Test in Engineering (GATE)2017 and obtained the score of 40.79. In response to an advertisement dated 25 th February, 2017 published by the West Bengal State Electricity Distribution Company Limited, hereinafter referred to as 'the Company', the petitioner participated in the recruitment process for being appointed in the post of Assistant Engineer (IT & C). He was issued admit card for participating in the recruitment process. He appeared for personal interview and according to him, he performed reasonably well. Sometime in June, 2018 the petitioner came to learn that successful candidates were being issued appointment letters by the Company. As the petitioner did not receive any communication from the Company he tried to collect information of the same. On enquiry the petitioner got to learn that his candidature was cancelled. In response to an application made under the Right to Information Act, 2005 the petitioner was informed that the appointment letter was not issued in his favour even though he obtained higher marks than the last empanelled candidate, allegedly because the B.Tech course pursued by him was not approved by the All India Council for Technical Education (AICTE). The petitioner was further informed that he received a total score of 52.12 and the score of the last empanelled candidate was 36.74. W.P No. 22018 (W) of 2018 The petitioners are OBCA category candidates. They obtained the B.Tech Degree in Electrical Engineering during the period 20132015 from the Aliah University after completion of a regular course of four years. In response to an advertisement published by the Company the petitioners applied for being appointed in the post of SubAssistant Engineer (Electrical). The petitioners participated in the written test and the computer proficiency test. As the petitioners were not called for the viva voce test the petitioners made enquiry wherefrom they learnt that their candidatures stood cancelled. On an application made under the Right to Information Act the petitioners were informed that their application could not be taken up for consideration as the B.Tech course completed by them was not approved by AICTE. The petitioners have filed the writ petition being aggrieved by the action of the Company in cancelling their candidature by not recognising the B.Tech degree obtained by them. The issue which falls for consideration in both the writ petitions is whether the Company was right in rejecting the candidature of the petitioners on the ground of nonapproval of their B.Tech course by AICTE. As the issue to be decided in both the writ petitions are identical, both the petitions were taken up for consideration analogously and are being disposed of by this common judgment. According to the petitioners their qualification of B.Tech has been obtained from the Aliah University which is established under the Aliah University Act, 2007. The said Act was passed by the West Bengal Legislative Assembly and according to Section 2(h) and Section 10(k) of the AICTE Act, 1987 the University is empowered to grant degrees on its own, without the approval of AICTE. The petitioners have relied upon the various provisions of the UGC Act, 1956, AICTE Notifications dated 27th January, 2005 and 29th January, 2014, the Aliah University Act, 2007 in support of their contention that the respondent authority erred in rejecting their candidature. The petitioners further submit that Aliah University is recommended by the University Grants Commission as a State University and accordingly the degree granted by Aliah University is valid and the Company ought to recognize the said degree for the purpose of considering their candidature for appointment. The petitioners have annexed documents to show that AICTE has approved the B.Tech course offered by Aliah University with effect from 2015 and accordingly the degree awarded by the said University in the year 2014 and prior thereto should be deemed and treated to be an approved degree by AICTE. The petitioners pray for a direction upon the Company to issue appointment letters in their favour as they obtained more or nearly same marks as that of the last empanelled candidates in the respective posts. The petitioners rely upon the judgment delivered by the Hon'ble Supreme Court in the matter of Bharathidasan University & Anr. -vs All India Council for Technical Education & Ors. reported in (2001) 8 SCC 676 paragraphs 8, 9, 10, 13 and 15 wherein the court took into consideration the definition of the expression "technical institution" under Section 2(h) of the AICTE Act which mentions that technical institution means an institution, not being a university which offers courses or programmes of technical education. It has been submitted that University has been kept out of the definition of technical institution. In the said judgment the court also took note of the fact that according to Section 2(i) of the AICTE Act "University" means a university defined under Clause (f) of Section 2 of the University Grants Commission Act, 1956 and also to be inclusive of an institution deemed to be a university under Section 3 of the said Act, the court was of the opinion that any regulation in exercise of powers under Section 23 of the Act, in so far as, it compels the universities to seek for and obtain prior approval and not to start any new department or course or programme in technical education (Regulation 4) and empower itself to withdraw the said approval, in a given case of contravention of the Regulations (Regulation 12), are strictly opposed and inconsistent with the provisions of Section 10(1)(k) of the Act and consequently void and unenforceable. The court held that the Regulation of AICTE could not have made, so as to bind universities/University Grants Commission in the matter of any necessity to seek prior approval to commence a new department or course and programme in technical education in any university or any of its departments and constituent institutions. The petitioners submit that in view of the law laid down by the Hon'ble Supreme Court, Aliah University was not required to seek any prior approval for granting the degree in technical education. The petitioners also rely upon the judgment delivered by a threejudge Bench of the Hon'ble Supreme Court in the matter of Dr. B. L. Asawa -vs State of Rajasthan & Ors. reported in (1982) 2 SCC 55 wherein the court held that a degree granted by a university duly established by statute in the country has ipso facto to be regarded, accepted and treated as valid throughout the country. In the absence of any express provision to the contrary, such a degree does not require to be specifically recognized by other universities in any State in India before it can be accepted as a valid qualification for the purpose of appointment to any post in such a State. The petitioners submit that the Company ought to have appointed the petitioners in the post in question by treating their degree to be a valid one, as the same was awarded by a State university duly recognised by the UGC, more so, because they obtained reasonably more marks than that of the last empanelled candidates. Per contra, the learned advocate appearing on behalf of the Company submits that in the advertisement published on 25 th February, 2017 there was a specific indication that for the post of Assistant Engineer (IT & C), the educational qualification required is B.E./ B.Tech/ B.Sc (Engg.) degree in Information Technology / Computer Science / Electronics / Electronics & Telecommunications / Electronics & Communication / M.Sc (Computer Science)/ MCA/ B.Sc. (Hons.) with B.Tech (three years' duration) in Computer Science and Engineering from any Institute approved by AICTE/IITs. The educational qualification for being appointed in the post of Sub Assistant Engineer (Electrical) is diploma in Electrical Engineering from any Institute/College duly recognised by any of the State Council of Technical Education (SCTE). It was specifically mentioned that the degree/diploma has to be approved by AICTE/ SCTE. The Company relies upon the communication made by the training and placement officer of the Aliah University specifically mentioning that the B.Tech courses offered by the Aliah University were not approved by AICTE during the academic years 2010 to 2015. It has been submitted that as the petitioners did not meet the requisite qualification, as prescribed in the advertisement, the employment was rightly not offered to them. It has further been contended that the petitioners never challenged the advertisement which required candidates to possess degrees/diplomas from any Institute approved by AICTE/SCTE. The petitioners being aware of the eligibility criteria participated in the recruitment process. As soon as it was revealed that the petitioners did not meet the requisite eligibility criteria as per the advertisement their candidature was cancelled. It has been urged that as the petitioners did not possess the requisite minimum essential qualification as prescribed in the advertisement, they do not have any right to be considered for appointment. Ld. Advocate for AICTE submits that the B. Tech course of the petitioners was not approved by ACITE. The respondents pray for dismissal of the writ petitions. I have heard the submissions made on behalf of all the parties. The minimum essential qualification prescribed for appointment in the post of Assistant Engineer (IT & C), as published in the advertisement, is set out herein below: "B.E./B.Tech/B.Sc.(Engg.) degree in Information Technology/Computer Science/Electronics/Electronics and Telecommunication/Electronic and Communication/M.Sc. (Computer Science)/MCA/B.Sc. (Hons.) with B.Tech (three years' duration) in Computer Science and Engineering from any Institute approved by AICTE/IITs." The minimum essential educational qualification for appointment in the post of SubAssistant Engineer (Electrical) is diploma in Electrical Engineering from Institute/College duly recognised by any of the State Council of Technical Education (SCTE). The general instructions attached to the advertisement clearly mentioned that the candidate must fulfil the essential qualification as per the advertisement published and it will be the candidates' prerogative to ensure that he fulfils the eligibility criteria before applying. The petitioners have annexed certificates issued by the Aliah University mentioning that they obtained the degree of Bachelor of Technology in Computer Science and Engineering/Electrical Engineering in the years 2013/ 2014/2015. The Company in their affidavit in opposition has annexed a letter dated 31 st August, 2017, allegedly issued by the Training and Placement Officer of Aliah University to the Additional General Manager (HR & A) recruitment and manpower planning cell of the Company, inter alia, mentioning that the B.Tech course offered by Aliah University in the stream of Computer Science and Engineering was not approved by AICTE during the academic years 20102014 and 20112015. It was further informed that all B.Tech courses of the University have been approved by AICTE in the academic years 20152016. AICTE has candidly accepted the fact that the degree awarded to the petitioners was not approved by them. The petitioners have not produced any document to show that the diploma/degree awarded by Aliah university was approved by either AICTE or SCTE. From the aforesaid it is crystal clear that, the degree/diploma awarded to the petitioners by the University was not approved by AICTE/SCTE in the year 2014 or prior thereto. The minimum essential qualification required for participating in the selection process was a degree/diploma approved by AICTE. Admittedly, the degree/ diploma awarded by the University in favour of the petitioners was not approved by either the Central or State Council of Technical Education. The learned advocate representing the petitioners strenuously submits that, as the B.Tech degree/ diploma was awarded by the University, the same is not required to be approved by AICTE/ SCTE. The petitioner has relied upon the provisions of the AICTE Act, 1987, the Aliah University Act, 2007, the UGC Act, 1956 and the various notifications issued by AICTE from time to time, in support of his contention that the degree obtained by the petitioners is not required to be approved by AICTE. It has been contended that it is the degree that matters and not the approval of AICTE. As long as the petitioners possesses the degree of B.Tech (Computer Science and Engineering)/(Electrical) from a university, recognised by UGC, the degree is not required to be separately approved by AICTE/ SCTE. Prior to going into further discussions, it is noted that, the petitioners have neither challenged the advertisement nor the educational criterion set out in the advertisement for appointment in the various posts. The petitioners were ineligible to participate in the selection process the day the advertisement was published, i.e from the very inception of the recruitment process, as they did not possess the minimum essential qualification as prescribed therein. They do not appear to be aggrieved by the act of the Company in prescribing the minimum requirement of the degree/ diploma to be approved by AICTE/ SCTE. It appears that, the petitioners were all along aware that their degree/diploma was not approved by AICTE/ SCTE, but even then, took the risk of applying in response to the said advertisement, presumably on the mistaken notion that the degree/ diploma does not require any approval from AICTE/ SCTE. Whether the degree/diploma awarded by Aliah university is at all required to be separately approved by a Council of Technical Education is a different issue altogether. According to the petitioners, the degree awarded by Aliah University is equivalent to the degree awarded by any other Institute approved by AICTE/IITs. The Aliah University in their communication to the Company specifically mentioned that all the B.Tech courses of the university have been approved in the academic year 20152016. The aforesaid statement made by the Training and Placement Officer of the University in the letter dated 31 st August, 2017 negates the contention of the petitioners, that there was no requirement for obtaining approval of AICTE in respect of the B.Tech courses conducted by the Aliah University. Had there been no requirement of approval, then the question of granting approval to the B.Tech courses awarded by the University, does not and could not arise at all. The categorical averment by the Aliah University, that the degree of the petitioners awarded by Aliah University was not approved, stands admitted. The Company fixed the minimum essential qualification for appointment being a degree/diploma from any Institute approved by AICTE/IITs/ SCTE. It is always the choice and prerogative of an employer to fix up the minimum essential educational qualification required for appointment. The same is usually fixed as per the requirement of the employer. Fixing up the selection mode, procedure, criteria for recruitment, is the sole domain of the employer and it has been consistently laid down that the courts should abstain from transgressing into the jurisdiction of the employer, unless of course, the same is patently illegal or arbitrary. In the opinion of the Court, the act of the Company in restricting appointment amongst candidates possessing degree/ diploma approved by AICTE/ SCTE, is neither illegal nor arbitrary. Since the eligibility criteria prescribed for appointment is not under challenge, accordingly, whether the degree awarded by Aliah University and the degree awarded by any other Institute approved by AICTE/IITs are equivalent to each other, is not an issue to be decided in the instant writ petition. It is also not required to be decided whether the University was required to get the courses approved by AICTE or whether the degree awarded by the University required a separate approval or not. The issue of equivalence of the degrees, one approved by AICTE and the other not, has not been addressed by the respondents at all. The issue of validity of the degree awarded by the Aliah University has also not been addressed by the respondents. The clear stand of the respondent is that, as the petitioners did not possess a degree/diploma approved by AICTE/ SCTE, accordingly, the application of the petitioners for being appointed in the post in question, has rightly been rejected by the Company. In view of the stand taken by the respondents, the ratio of the decisions relied upon by the petitioners, in my opinion, will not be applicable in the facts and circumstances of the instant case. The petitioners have brought to the notice of this court that the Company by an office order dated 23 rd October, 2019 has modified the existing Recruitment Policy 2010 with regard to the eligibility criteria and the layout of qualification. It mentions that candidates with B.E./B.Tech/B.Sc. (Engineering) degree in the respective branch of engineering from any university or deemed university duly recognized by UGC or institute approved by AICTE, IITs/NITs or any institute of eminence or national importance or concerned statutory council (wherever applicable) will be eligible to apply for recruitment for ClassI technical post. The office order is prospective in operation. As admittedly, the petitioners did not possess the requisite qualification, as per the advertisement, the action of the Company in not appointing the petitioners, even though they scored nearly similar or more marks than the last empanelled candidates, cannot be faulted. The employer Company always has the liberty to review and modify the eligibility criteria of the recruitment process as and when required, and it is not proper for the court to intrude into the domain of the employer. The employer is the best person/authority to know what is exactly required from his/its employee. A writ of Mandamus can be issued only in cases of proven breach of the fundamental or statutory right of a citizen. In the instant case, it does not appear that there has been any breach in either the fundamental or the statutory right of the petitioners. Accordingly, no direction can be issued upon the Company to treat the petitioners as eligible candidates for selection to the posts in question. Moreover, there may be candidates from various other universities possessing similar degree/diploma not approved by AICTE/ SCTE, who may have applied in response to the said advertisement, and may have met the same fate. Many may not have even applied, knowing fully well, that their degree was not approved by AICTE. The petitioners participated in the selection process without any murmur. Being unsuccessful, they cannot turn around and raise issue with the prescribed minimum essential qualification fixed by the employer. At the same time, they ought not to get any preferential treatment only because they have approached the court for relief. Since however it appears that the Company has modified its recruitment policy and have taken a decision that the candidates possessing B.Tech degree from any University, duly recognized by UGC will be eligible to apply, and as the University awarding degree to the petitioners was duly recognized by UGC it will be open for the Company to reconsider the case of the petitioners for appointment in the post in question within a period of eight weeks from the date of communication of a copy of this order. The reconsidered order of the Company will be communicated to the petitioners within a week thereafter. It is specifically made clear, that the order passed by the court shall neither be treated as a mandate upon the respondents to consider giving appointment to the petitioners, nor will it create any right in favour of the petitioners to be appointed in the posts in question. The Company shall have and exercise the discretion to appoint the best available candidate. W.P. Nos. 22018 (W) of 2018 and 22019 (W) of 2018 are disposed of. Urgent certified photocopy of this judgment, if applied for, be supplied to the parties or their advocates on record expeditiously, on compliance of usual legal formalities. (Amrita Sinha, J.)