Holding

The State Government’s power to direct the municipality to levy octroi under s.62‑A and s.70(2)(c) of the Punjab Municipal Act is valid, the municipality’s exemption was ultra vires, and promissory estoppel is not available against the State in the exercise of its legislative or statutory functions.

Summary

The Municipal Committee of Bahadurgarh had repeatedly promised that the Fateh Mandi would be exempt from octroi duty, a promise later withdrawn by the State of Haryana under its statutory powers. The petitioners, who bought plots in the market relying on the exemption, challenged the State's order imposing octroi, arguing that the municipality was estopped from revoking the promise and that the State's direction was ultra vires. The Supreme Court examined the Punjab Municipal Act, finding that the State Government is expressly empowered under s.62‑A and s.70(2)(c) to direct a municipality to levy octroi and to confirm or withdraw any exemption. It held that the municipality had no authority to grant a permanent exemption and that the doctrine of promissory estoppel cannot be invoked against the State in the exercise of its legislative or statutory functions. Consequently, the State's order imposing octroi was upheld and the petitioners were left without enforceable rights. The Court dismissed both appeals with costs.

Issues considered

The municipal committee's authority to grant a permanent exemption from octroi duty.
Whether the State Government's direction to impose octroi under s.62‑A of the Punjab Municipal Act is valid.
The applicability of the doctrine of promissory estoppel against the State and the municipality.
Whether the resolutions and orders of the municipality were ultra vires.
The existence of any enforceable contractual right for the petitioners under the Municipal Act and Article 299.

Legislation cited

Constitution of Indias. Article 299(1)
Indian Contract Act, 1872s. 10, s. 25, s. 65, s. 70
Punjab Act 43 of 1958
Punjab Act 48 of 1953
Punjab Municipal Act, 1911 (as amended)s. 47, s. 60(A)(3), s. 61, s. 62, s. 62-A, s. 70(2)(c)
Punjab Reorganisation Act, 1966

Subjects

octroi dutymunicipal authoritystate government powerpromissory estoppelultra viresArticle 299public lawcontract lawlegislative discretiontaxation

Judgment

689

JIT RAM SHIV KUMAR AND ORS. ETC. A
v.
STA~ OF HARYANA AND ANR. ETC.

April 16, 1980
[S. MURTAZA FAZAL ALI AND P. S. KAILASAM, JJ.J B

P1'11}11b M1111icipal Act, 1911 as amended by Punjab Act 48 of 1951, Section
62.A-Power of State Government to di'rect the ,\lunicipality to impose any tax
ulllkr ~ction 61-Exemption from payment of octroi duty not within the com·
pelence of the Municipality and ultra vires of its powers-.Whet/1er any suc/1
lllCI whidi is void ab initio, enforceable-Principle of Promissory Estoppel, ingrt•
dienll of-Applicability to the instant case. C

The Municipal Committee of Bahadurgarh, respondent No. 2 established
Maadi Fateh in Bahadurgarh Town with a view to improve trade in the area.
The Municipal Committ<e decided that the purchasers of the plots for sale in
the Mandi would not be required to pay octroi duty 01> goods imported within
the said Mandi. A resolution (No. 8) dated 2().12-1916 was passed by the
Mllllicipality to this effect. Hand bills wore issued for tho sale of the plots on D
the basis of tpe resolution and it was proclaimed that Fateh. Mandi would
remain exempt from payment of octroi. Subsequently by resolution No. 4
dated 20-5-1917, the Municipal Committee decided that the term No. 14 to the
conditions of sale, namely, that tho purchasers of plots would not be required to
pay octroi, be amended to the effect that the Mandi shall remain intmuno from
payment of octroi duty for ever. When the resolution was received by the
Commissioner of Ambala, in paragraph 3 of his letter datod 26-6·1917, he E
minuted that the undertaking by the Municipal Commissioner never to in1pose
octroi duty in the Mandi was ultra vires and therefore the purchasers of the
p)Qla should be informed so that they may withdraw from the purchases. on
receipt of this letter the President of the Municipal Committee made represen-
tations that if octroi duty was to be levied, tha-e would be no purchasers for the
plota end the entire scheme would fall tllrough. On this, the Commissioner
reviled his earlier view and withdrew his objection by further observing tha~ "as F
l!OOn es the market is established it will be necessary to consider what form of
taxation is best to cover the market share of municipal expelnses". The Muni·
cipal COmmittee on I().3-1919 imposed house-tax of Rs. 3·14·6 per cent per
alinum on the shopkeepers to cover the ell<penditure of tho market.

' This state of affairs continued till 4-9-1953 when the MunicipaJ Committee
by nolification No. 9697-C.53163830 dated 4·9-1953 included Fateh Mand~ G
Bahadurgarh, within the Cktroi limits. The Examiner of Local Funds pointed
out that the h.funicipal Committee- is under obligation to charge octroi on goods
imported into Fateh Ma'1di. The President of the Municipal Committee made
a repr0oentation to the Deputy Comm:ssioner on 24-2-1954. The Municipal
Committee again passed another resolution No. I dated 2-3·1954 that the Fateh
Mandi will remain free from octroi duty according to the terms of the procla-
mation of the sale relating to the sale of plots. The matter was referred to Jl
Punjab State which after thoroughly examining the whole matter, confirmed
Resolution No. I passed by the Municipal Committee on 2·3-1954. Subs'e-
690 SUPREME COURT REPORTS [1980] 3 S.C.R,

A quently, the Municipal Committee changed its mind and by its resolution dated
S-5-1954, resolved .that octroi duty should also be levied on the goods imported
into Fateh Mandi. But this resolution was annulled by the Punjab Government
under s. 236 of the Punjab Municipal Act. The Examiner of Local Funds
Accounts in the meantime insisted on the levy of octroi duty on the goods
imr-orted into Fateh Mondi and the Punjab Govermnent after discussing the
issue on 9-4-19 56 informed the President of the Municipal Committee that the
Government's action in confirming ·me resolution No. 1 of 2-3-1954 of the
Municipal Committee, Bahadurgarh exempting goods imported into Fateh Mandi
from levy of ocroi duty under s. 70(2)(c) of the Municipal Act, 1911, is lluite
in order ood that no ·separate notification to this effect was necessary under -the
rules. Again on 21-7-1965, the Municipal Committee Bahadurgarh resolved that
the Govemment be requested to cancel Resolution No. 1 dated 2-3-1954. The
State of Haryanai Respondent No. 1 which came into existence on 1-11-64,wtaer
'C the Punjab Reorganisation Act, by its memo dated 13-10-1967 approv.4 tile
resolution No. 6 dated 21-7-65 of the Municipa~ Committee and cancelled the
Municipal Resolution No. 1 of 2-3-1964. As a result of the deci9ioo <It the
Government, the Municipal Committee startetl charging octroi duty on ·.-the
goods imported into the Mandi. On these facts, the petitioner• subml!Ml that
the resolution No. 6 of the Municipal Committee dated 21-7-1965 (~ 6)
and approval granted by the Haryana State as per its order dated 30-19'1%7
D (Ann. H) were illegal and ultra vires and without jurisdiction.

A Full Bench of the High Court rejei:ted the petition mainly Oil three
grounds. Firstly, it found that the State Government is entitled under S. 112-A
of Punjab Act, 48/1953 to direct the Municipal Committee to impose oettt>i 1duty
and as such even if the municipality is found to have erred in impOBing lfle
Octroi Duty, the legislative powers of the State cannot be questioned. Seconilly,
E it found, that it was not within the competeru:e of the Municipality to grant
any exemption from payment of octroi duty and this act '"as ultra vfrts t1t·its
power< and cannot be enforced. Thirdly, it found that the Court canndt gn
into the question as to whether the petitioners' plea based on equity fhat the
Municipality is bound, cannot be gorre into far waint of adequate faclB. · 'i'lle
High Court however granted certificates to the appellants.
F Dismissing the appeal,. the Court

HELD : l. Under section 62-A of the Punjab Municipal Act, 1911 as
amended by Punjab Act 43/1958 'the State G1>vemmen! is empowered to Im~
octroi duty and under sub clause (b) if the committee fails to canY cat ·the
order of the Government, the State Government 1may impose Octroi Duty.
Under S. 70{2) (c), :l Municipal Comn1ittee by a resolution pa£sed at a special
G meeting and confirmed by the State Government may exempt in whole or in· part
from payment of any such tax any person or class of persons or any property
or description of property, Jn exercise of those powers, the State Government
had by its order dated 4-5-1954 confirmed resolution No. I passed by the Muni-
cipal Committee in its specia1 meeting held on 2-3-1954 regarding the eittrip-
tion of goods imported into Fateh Mandi from levy of Octroi Duty. So"-'e-
quently, in reply to the objection raised 'by the Examiner of Local Funds, the
H Government pointed out by its letter dated 9-4-1956 (Ann. F) that the Govern-
ment's action confirming the resolution No. I dated 2-3-1954 of the Municipal
Comn1ittee exempting Goods imported into Fateh Mandi, under s. 70(2)(c) of
JIT RAM V. HARYANA 691
the Punjab. :rviunii:ipJl Act, 1911, was quite in order. By the impugned order
A
dated 20-10-1967 the Government approved the resolution No. 6 of- the Muni-
cipal Co1nmittte dated 21-7-1965 and permitted the Municipality to levy the
Octroi Duty. Therefore, the action taken by the State Government is strictly
in conformity with the powers conferred on it under s. '70(2) (c) of the Act. lt
exempted the petitioners from payment of Octroi Duty for· a partic~ar period
and ultimately withdrew the exemption. The action of th~ Government cannot
be q;1estione<l as it is in exercise of its statutory functions. The plea of estoppel B
is not:· available against the State in the exercise of its legislative or statutory
functions. The Governn1ent have powers to direct the Municipality to collecl
the Octroi Tax if the Municipality fails to take action by itself under s. 60(A)-
(3). Further, even on facts, this plea is' not available as against the Government
as it is .not the case of the petitioners that they acted on the representation of the
Government. [698 E-H, 699 A-CJ
2. The Municipality is not estopped from levying or recommending the levy c
of the tax to the Government even though in the proclan1ation of sale it was
notified that no octroi duty would be. levied and it was only in pursuance cf such
rep~sentation. the appt.Jlants purchased the property because the Municipal
Committee had uo authority to exempt the Fateh Market from the levy ot ·
Octroi .Duty. If the l\funicipa·I Committee had passed a reSolution or issued a
notification that no Octroi duty will ber levied, it will be ultra vires of the powers
of the Municipal Committee. When a public authority acts beyond the scope
of its authority the plea of estoppel is not available. to prevent the authority
from acting according to law. It is in public interes,t that no such plea should
be allowed. Further, in the instant case, the appellants are not entitled to any
enforceable legal right under the terms of the tvlunicipal Act, since non produc-
tion of any sale deed executed by the Municipal Connnittee in fa,•our of the
purchasers raises the only presumption that the; contract between the parties have
not been proved to have been reduced in writing and exocuted in the manner E
prescribed under section 47 of the Municipality Act, 1911 (Act 3 of 1911).
[699 C-E, 700 B-D]
3. Article 299(1) of the Constitution of India corresponding to Section
17.5(~) of t-he Government of India Act, 1935 provides that all contracts made
in the exercise of the executive powers of the Union or of a State shall be
exp~etl to he made by the President or by the Governor of the State, as the F
case may be, and all such contracts and all assurances of property made in the
exe~ of that power shall be executed on behalf of the President or the
GOYemor by such persons and in such manner as, he 'may direct or authorise.
The provisions of this Article is mandatory and not directory, is enacted as a.
matter .of public policy that the State should not be saddled with liability for
unauthorised contracts wid is enacted in the public interest. The· provisions
are e.Qlbodied on the ground of public1 policy-on the ground of protection of G
general public. [700 F-H, 701 A-BJ

Seth Bhikraj Jaipu1~i'a v. Union of India, [1962] 2 SCR 880; ¥ulam Chand
v. State of M.P., [1968] 2 SCR 214, Karan1shi Jethabfial Sa1nrayya v. Stat~ of
Bombay. r19641 6 SCR 984; referred to.

4. The scope of the plea of doctrine of pron1issory estoppel against the
Government is as follows :
H
(a). Th~ plea o.f promissory estoppel is not available against thei exeifcise of
the legislative or executive functions of the State. There could not be est?ppel .
692 SUPREME COURT REPORTS [1980] 3 S.C.R.

A against express provisiom of the Jaw nor could the State by its action waiive its
rights to exerc:se powers entrusted to it for the public good. [721 F]

Antonio Buttigieg v. Captain Stepheti H. Cross and Ors. AIR 1907 PC;
Adants v. London Improved Motor Coach Builders, [1821) 1 K.B. 495, York
Corporation v. Henry Lcethani ant! Sons Ltd., [1924] 1 Ch. 551; 1¥illiatn Cory
and Sons Ltd. v. London Corporation, [1951] 2 K.B. 476; Howell v. Faln1outh
B Boat Consttuctiou Co. Ltd., [19511 A.C. 837; Comrnissioner of Crown liznds v.
Page, [1960] 2 K.B. 274; South-e11d-01t-Sea Corporation v. H0<lgson (Wickford)
Ltd., [1962] 1 Q.B. 416; Federal rnsurance Corpn. v. Morril, 382 U.S. 380;
quoted with approval. ·
Robt?rtson v. Minister of Pensions, [1949] 1 K.B., 227 dissented from.

c Assistant Custodian of E.P. and Ors;,,_ v. Brij Kishore Agarwala, (1975] 2
SCR 359; Bihar Eastern Gangetic Fi.tltermen Cooperative Society v. Sipuhl Sing1i
& Ors. AIR 1977 SC 2149; applied.

Union of India v. lndo Afghan Agencies, [1968] 2 SCR 366; Ce111ury Spin-
ning cl Manufacturing Co. Ltd. and Anr. v. Ulhas Nagar Municipa~ Council and
Anr., [1970] 3 SCR 854; Turner Morrison Co. Ltd. v. Hungerford Investment
'
Trust Ltd., [1972] 3 SCR 711; explained and distinguished.
D
Collector of Bombay v. Municipal Corporation of tire City of Bombay and
Ors., [1952] SCR p. 43; E.xcise Commr. U.P., Allahabad v. Ram Ku111111', (1976]
Supp. SCR 532; M. Ramanatlra Pillai v. State of Kera/a, [1974] 1 SOR 515;
StQte of Kerala and Anr. v. Tire Gwalior Manufacturing (Wvg.) Co. Ltd.,
[1974] 1 SCR 671; followed.
E (b) The doctrine cannot be invoked for preventing the Government from
discharging its functions under .the law. (721 G]
(c) When an officer of the Government acts outside the scope of bis au1ho-
rity, the plea of promissory estoppel is not available. The doctrine of ultra
vires will come into operation and the Government cannot be held bound bt' the
unauthorised acts of its officers. [721 G-HJ
F (d) When the officer acts within the scope of his authority under a scheme
and enters into an agreement and makes a representation and a person aCtigg
on that representation puts himself in a disadvantageous position, the Court is
entitled to require the officer to act according to the scheme artd the agreement
or representation. The officer cannot arbitrarily act on his mere whim: and
ignore his promise on some undefined and undisclosed grounds of necessity or
change the conditions to the prejudice of the person who had acted upon auch
G representation and put himself in a disadvantageous position. [721 G-H, 122
A·B]

· Union of .fndia v. lndo Afghan Agrncies Ltd., [1968] 2 SCR 366; diScussed "!"'
and followed.
(e) The officer would be justified in changing'the tertns of the agreement to
the prejudice of the other party on special considerations such as difficult! foreign
H exchange position or other rnattdrS \Vhich have a bearing on general interest of
the State. [722 B-Cl
Union of Indio v. ·Mis lndo Afgl1an Agencies Ltd., [1968] 2 SCR 366 applied.
,JIT RAM V. HARYANA 693

5. It is only in public interest that it is recognised that an authority acting A
on behalf of the Government or by virtue of statutory pow'ers cannot exceed
his ~uthority. Rule of ultra vires "Will become applicable when he. exceeds his
authority an<l the Government would not 'be bound by such action. Any per-
son who enters into an arrangement \Vith the Government has to aticertain and
satisfy himself that the authority who purports to :ict for the Government, acts
within the scope of h'.s authority and cannot urge that thp Government iS in the
posiiion of any other litigant liable to be charged with liability. [705 G-H, B
706 A]
6. The doctrine of estoppel which burst out into sudden blaze in 1946 and
ever since continuing to smoulder due to the consistent maintenance of the ori-
ginal author's interest in its further development, now in this direction and nov;
in that; though interesting is not relevant in administering: Indian Law. Section
63 of the Contract Act which provides that when a creditor accepts a lesser
sum'.-in -satisfaction of the· whole debt, the whole1 debt becomes discharged is <11 c
wide departure from the E.nglish law as laid down in Jordan v. Mor1e:i. The
doctrine of estoppel referred to in lligh Trees case is tO' some extent taken care
of by section 65 and 70 of the Indian Contract. Section 65 provic:)es that when
a contract bec~mes void, any person who has. received ainy advantage undc~ such
ngreen~ent or contract is bound to restore it or to _make compensation for it, to
the person from whom he received it. Under section iO of the Contract Act. an
I)
ob!igation is cast' on the person enjoyi!ng benefit of a non~gmtutious act to com·
pe!l!iafe the person Who lawfully performed the Act. [707 A, 708 B, D-F]
Fqake.s v. Beer, [1884] 9 A.C. 605; Jordan v. Money, [18541 5 H.L. Cas
IRS; Fenner v. Blake, [1900] 1 Q.B. 426; Woodhouse Ltd. v. Nigerian Produce
Ltd., [1932] A.C. 431, IN Re. Wick/lam Will/am Porter and Co. Ltd., [1937) 2
All E.R. 361; Central London Property Trust Ltd. v. High Trees House Ltd.,
fl9S6l I All. E.R. 256; referred to. E
7. 1"he provisions of-Section 70 of the Indian Contrac~ Act are applicable to
contract '"'hich is not according to Section 175 of the Goverrunent of Iildia Act,
and Article 299 of the Constitution of India. [708 G-H]

State of West Bengal v. B. K. Monda/ and Ors., [1962] Supp. SCR p. 876;
New Marine Coal Co. Ltd. v. Union of illdia, [1964] 2 SCR 859; referred to.
F
8._ All that the lndo-Afghan Agencies case laid down was that a public
authority acting on behalf of the Government cannot on its own whim and in an
arbitrary manner seek to a1ter the conditions accepted by him to the prejudice of
the other side. The decision in temlS. accepts that after taking into considera..
tion the exigencies and change of circumstances the authority can modify the
conditions in exercise of his powers as a public: policy. Apart from not notic..
ing Howell's Case, the Court in lndo Afghan's case did not say that the 1aw as G
extracted from the judizrnent in Robertson's case by Denning J. was applica.ble
T to India. [719 D-E, 721 Al

9. The Judgment in Mis Moti/al Padampat Sugar Mills Co. (P) Ltd. y,
Star,,· of TJt(ar Pradesh, [1979] 2 SCR p. 641 is not in accordance with the view
consistantly taken by the Supreme Court in following respects : [722 F]
H
. n: The decision in the case-of Union of ln~ia v. Mis lndo Afvlian APP'1·
ciea Ltd., (1968] 2 SCR 366 cannot be constructed in the manner in which it was
694 SUPREME COURT REPORTS [1980) 3 S.C.R.

A done. All that the Inda Afghan case, purports to lay down is that the Court
can enforce an obligation 1ncurred by an authority on which another has acted
upon and put himself in ai disadvantageous position. when the authority re6iles
arbitrarily or on mer'e whim or on some undefined and undisclosed grounds
of necessity. [722 F-G]

(ii) 'fhe decision of this Court in Century Spinning and 1lfa1111fac:uring Co.
s: Ltd and Anr. v. The Ulhasnagar Municipal Council and Anr., [1970] 3 SCR
854 was understood as refusing to make a distinction bet\Veen t·he private· lli.di-
viduaJ and public body so far as the doctrine of promissory estoppel is con-
cerned. !723 F]
'
(iii) The three decisions of this Court, two by c·onstitution Benches M. J
Ranianatha Pillai v. State of Kerala, State of Kera/ti v. The Gwalior Ril,yi;n -jl
C Silk Mfg. (Wvg.) Co. Ltd. and th~ third by a Bench of four judges in Eici5''
Conzmissioner, [T.P. Allahabad v. Ram Kumar cannot be ignored on the ground
that the observations are in the nature of obiter dicta and that it cainnot be
insisted as intending to have la-id down any proposition of law different from
that enunciated in the lndo Afghan Agencies case. It was not necessary for
this Court in the three cases to refer to Union of India & others v. Inda-Afghan
Agencies. If properly understood it only held that the authority cannct go back
D on the agreement arbitrarily or on its own whim. [723 H, 724 A·B]

(iv) The. case of the House of Lords in Howell v. Faflnouth Boat Construc-
tion Co. Ltd. canont be read as not having overruled the view of Denning J.
and as not having expressed its disapproval of the doctrine of promissory<
estoppel against the crown in Robertson v. Minister of Pensions. [724 B.C]

E '. (v) Tue Indian Constitution as a matter of high policy in public interest
has enacted Article 299 so as to save the Government from liability arising
out of unauthorised acts of its officers and contracts not duly executed. Sec-
tions 65 and 70 of the Indian Contract Act provide for certain reliefs in void
contracts and in unenforceable contracts where a person relying on a represen-
tation has acted upon it and put himself in a disadvantageous position. The
activist jurisprudence and the wide implications thereof, propounded in the
F· Motilal Padampat, Sugar case doubted. [724 E, F, G]

(vii) Tue Indian Contract Act regulates the right of parties and expressly ---,
ins'ists on the necessity for lawful consideration which cannot be diSpe:naed
with by invoking some new equitable doctrine. Under Section 10 of the
Contract Act, for a contract to be valid, it should be for a lawful COD!lid'eration
and Section 25 of the Contract Act provides that an agreement made withont
G consideration is, void unless it satisfies one of the conditions mentioned in fhat
section. [725 B-C, DJ

(viii) Sankaranarayan v. State of Kerala, [1971] 2 S.C.C. 361; Narendra
chand I/em Ram and Ors. v. Lt. Governor Administration, Union Te"itory of
Himac/wl Pradesh, [1972] 1 SCR 940; State of Tamil Nadu and Ors. etc. v.
S. K. Kr;,;hnamurthi etc., [1972] 3 SCR 104; and M /s Andhra Industri•i
H Works v. Chief Controller of Imports and Ors., [1975] 1 SCR 327 indicate
that the Rule of estoppel against Government cannot be invoked against the
Government. [725 Fl
.JlT RAM v. HARYANA (Kai/asam, !.) 695

10. What are the moral values of the society is a c.omplex question becauae A
the cencept of moral values amongst different persons and classes of persons
is not always the same. Being not a static one, it differs from time to time
and from society to society. It is hazardous for a Court to attempt to enforce
what" according to it is the moral value. Before embarking on the mission of
11
closing the gap between the law and morality and bring about as near an
.approximation between the two as possible", it is necessary for the Court to
understand clearly its limitations. The powers of the Court to legislate is
• strictly limited. "Judges ought to remember that their office is jus dicere and
not ju.r 4are to interpret fhc law, and not to make l~w ori give law". [727 F, G,
728 A-CJ
The courts by its very nature are most ill suited to undertake the task of
legislating. There is no machinery for the Court to ascertain the conditions
of the people and their requirements and to make Jaws that would be mo~t
apprQPriate. Further two judges may think that a particular law would be c
deSirable to meet the requirements whereas another two judges may most pro-
foundly differ from the conclusions arrived at by two judges. 1728 G-H, 729 A]
Shri Gurbaksh Singh Sibbia etc. v. State of U.P., [1908) 3 SCR p. 383
followed.
CML APPELLATE JURISDICTION: Civil Appeal Nos. 1237-1238/1970. D
From the Judgment and Order dated 15-12-1969 of the Punjab
and Haryana High Court in Civil Writ Appeal Nos. 444/68 and 2975/
67.
Hardayal Hardy, Mahinder Narain and Rameshwar Nath for the
Appellants in both the Appeals.
E
S. M. Ashri and M. N. Shroff for the Respondents in both the
Appeals.
The Judgment of the Court was delivered by
KAILASAM, J. These two appeals are by certificate granted by the
Pu,njab and Haryana High Court at Chandigarh in C. W. No.444/1968 F
and C. W. No. 2975 of 1967 respectively. The petitions were disposed
of by a full Bench of the High Court on 15-12-1969.

The appellants who were the petitioners before the High Court
prayed for a writ of certiorari or mandamus or any other appropriate
writ for quashing the resolution No. 6 dated 21st July, 1965 of the G
Municipality and letter of the Government of Haryana to the President
of the Municipal Committee Bahadurgarh dated 30-10-1967. The
facts of the case briefly are as follows :-

The Municipal Committee of Bahadurgarh, Respondent No. 2,
established Mandi Fateh in Bahadurgarh Town, with a view to H
improve trade in the area. The Municipal Committee decided that the
purchasers of the plots for sale in the Mandi would not be required
696 SUPREME COURT· REPORTS [1980] 3 9.C.R.

A to pay octroi duty on goods imported within the said Mandi. In pur-.
suance of this decision, resolution No. 8 dated 20-12-1916 was passed
by the Municipality. Handbills were issued for the sale of the plots on
the basis of the resolution and it was proclaimed that Fateh Mandi
would remain exempt from payment of octroi. Subsequently by re-
solution No. 4 dated 20-5-1917, the Municipal Committee decided
B that the term No. 14 to the conditions of sale, namely, that the plots
would not be required to pay octroi, be amended to the effect that the
Mandi shall remain immune from payment of Octroi Duty for ever.
When the resolution was received by the Commissioner of Ambala,
in paragraph 3 of his letter dated 26-6-1917 marked as Annexure A
in the writ petition, he noted :-
c
"I note that by its resolution No. 4 of 20-5-1917, the Municipal
Committee has undertaken that Octroi shall never be imposed
in the Mandi. This is ultra vires, the Municipal Committee cannot
make such an undertaking and this should be explained to the
purchasers of sites before they begin building so that if they wish
D they may withdraw from the purchase".
Of course, it is unlikely that Octroi will be imposed."

On receipt of this letter, the Presid~nt of the Municipal Committee
made representations that if octroi duty was to be levied, there will be
no purchasers for the plots and the entire scheme will fall through.
E On receipt of this representation on 20-9-1917 (Annexure B), the
Commissioner revised his view and stated that he was cancelling para
3 of his letter dated 26-6-1917, that is to say, "that in deference to the
strong views of the Municipal Committee and to your own opini0n
that the market will collapse if I insist upon it, I withdraw my objec-
F tion to the undertaking made by the Municipal Committee that Octroi
will not be imposed on the market. As soon as the market is establish-
ed it will be necessary to conside1 what form of taxation is best to cover
the market share of Municipal expenses". The Municipal Committee
·--..'
on 10-3-1919 imposed house-tax of Rs. 3-14-6 per cent per annum
on the shopkeepers to cover the expenditure of the market.
G
This state of affairs continued till 4-9-1953 when the Municipal
Committee by notification No. 9697-C-53/63830 dated 4-9-1953 in-
cluded Fateh Mandi, Bahadurgarh, within the Octroi limits. The
Examiner of Local Funds pointed out that the Municipal Committee
is under obligation to charge octroi on goods imported into Fateh
H Mandi. The President of the Municipal Committee made a representa-
tion to the Dep11ty Commissioner on 24-2-1954. The Municipal Com-
mittee again passed another resolution No. I dated 2-3-1954 that the
r
~.
le

JIT RAM v. HARYANA (Kailasam, !.) 697

Fateh Mandi will remain free from octroi duty according to the terms A
of the proclamation of the sale relating to the sale of plots. The matter.
,. i was referred to the Punjab State which after thoroughly examining the
whole matter, confirmed Resolution No. I passed by the Municipal
Committee on 2-3-1954. Subsequently, the Municipal Committee
changed its mind and by its resolution dated 8-5-1954, resolved that
octroi duty should also be levied on the goods imported into Fateh B
Mandi. But this resolution was annulled by the Punjab Government
under S. 236 of the Punjab Municipal Act. The Examiner of Local
Funds Accounts in the meantime insisted on the levy of octroi duty
on the goods imported into Fateh Mandi and the Punjab Government
after discussing the issue on 94-1956 informed the President of the
Municipal Committee that the Government's action in confirming
c
the resolution No. I of 2-3-1954 of the Municipal Committee, Baha·
durgarh exempting goods imported into Fateh Mandi from levy of
octroi duty under S. 70(2) (c) of the Municipal Act, 1911, is quite in
order and that no separate notification to this effect was necessary under
the rules. Again on 21-7-1965, the Municipal Committee Bahadurgarh
D
resolved that the Government be requested to cancel Resolution No.
I dated 2-3-1954. The State of Haryana Respondent No. I which came
into exi•tence on 1-11-1964 under the Punjab Reorganisation Act,
by its memo dated 13-10-1967 approved the resolution No. 6 dated
21-7-1965 of Municipal Committee and cancelled the Municipal Re-
solution No. I of 2-3-1954. As a result of the decision of the Govern- E
ment, tbe Municipal Committee started charging octroi duty on the
goods imported into the Mandi. On these facts, the petitioners sub·
milted that the resolution No. 6 of the Municipal Committee dated
21-7-1965 (Annexure G) and the approval granted by the Haryana
State as per its order dated 30-10-1967 (Ann. H) are illegal and ultra

r vires and without jurisdiction.

A Fu!l Bench of the High Court rejected the petition mainly on
three grounds, Firstly, it found that the State Government is entitled
F

under S. 62-A of Punjab Act, 48/1953 to direct the Municipal Com-
mittee to impose octroi duty and as such even if the municipality is
G
found to have erred in imposing the Octroi Duty, the legislative powers
. ,,.,. of the State cannot be questioned. Secondly, it found, that it was not
within the competence of the Municipality to grant any exemption
from payment of octroi duty and this act is ultra vires of its powers
and cannot be enforced. Thirdly, it found that the Court cannot go
into the question as to whether the petitioners' plea based on equity JI
that the Municipality is bound, cannot be gone into for want of ade·
quate facts.
6-463SCI/80
698 SUPREME COURT REPORTS [1980] 3 s.c.R.

A Dealing with the first contention, relating to the legislative powers
of the State, it will be seen that Punjab Act 48/1953, introduced
s.62A which runs as follows
"62-A.
(l) The State Government may, by special or general order
B notified in the official Gazette, require a Committee to impose any
tax mentioned in S.61, not already imposed at such rate and with-
in such period as may be specified in the notification and the Com-
mittee shall thereupon act accordingly.

c
(2) The State Government may require a Committee to modify
the rate of any tax already imposed and thereon the committee
·y- '

shall modify the tax as required within such period as the State
Government may direct.

(3) If the Committee fails to carry out any order passed under
Sub-section (1) or (2) the State Government, may by a suitable
order notified in the official gazette, impose or modify the tax.
D
The order so passed shall operate as if it were a resolution duly
passed by the Committee and as if the proposal was sanctioned
in accordance with the procedure contained in S.62."

It is admitted that the State Government is empowered under
S. 62A to require the ,Municipal Committee to impose Octroi Duty
E
and under sub-s. (3) if the Committee fails to carry out the order of
the Government, the State Government may impose Octroi Duty.
Under S. 70(2) (c), a Municipal Committee by a resolution passed
at a special meeting and confirmed by the State Government may
exempt in whole or in part from the payment of any such tax any per-
F son or class of persons or any property or description of property. In
exercise of these powers, the State Government had by its order dated
4-5-1954 confirmed resolution No. 1 passed by the ,Municipal Com-
mittee in its special meeting held on 2-3-1954 regarding the exemp-
tion of goods imported into Fateh ;Mandi from levy of Octroi Duty.
Subsequently, in reply to the objection raised by the Examiner of
G Local Funds, the Government pointed out by it' letter dated 9-4-1956
(Ann. F) that the Government's action confirming the resolution No.
I dated 2-3-1954 of the Municipal Committee exempting Goods im-
ported into Patch Mandi, under S. 70(2) (c) of the Punjab ,Municipal
Act, 1911, is quite in order. By the impugned order dated 20-10-1967
the Government approved the re.solution No. 6 of the Municipal
ll Committee dated 21-7-1965 and permitted the Municipality to levy
the Octroi Duty. The action taken by the State Government is strictly
in conformity with the powers conferred on it under S. 70(2) (c) of the
.'
JIT RAM v. HARYANA (Kailasam, !. ) 699

Act. It exempted the petitioners from payment of Octroi Duty for a
particular period and ultimatelyjwithdrew the exemption. The action
of the Goverment cannot be questioned as it is in exercise of its sta-
tutory functions. The plea of estoppel is not available against the
State in the exercise of its legislative or statutory functions. The Govern-
ment have powers to direct the Municipality to,· collect the Octroi Tax
if the Municipality fails to take action by itself under S. 60(A) (3). II
Further, even on facts, this plea is not available as against the Govern-
ment as it is not the case of the petitioners tha*hey acted on the re-
presentation of the Government. We, 'therefore, agree with the view
of the Full Bench that the plea of estoppel is not available against
the Government for questioning the validity of the impugned
Government order. c
The second contention is that the Municipality is estopped from
levying or recommending the levy of the tax to the Government as
in the proclamation of sale it was notified that no Octroi Duty will be
levied and it was [only in pursuance of such representation, the
petitioners purchased the property. We feel this plea should also fail . o
because the Municipal Committee had no authority to exempt the
Fateh Market from the levy of Octroi Duty. If the Municipal Com-
mittee had passed a resolution or issued a notification that no Octroi
Duty will be levied, it will be ultra vires of the powers of the Muni-
cipal Committee. When a public authority acts beyond the scope of
its authority the plea of estoppel is not available to prevent the E
authority from acting according to law. It is in public interest that
no such plea should be allowed.
The third contention that was raised by the learned counsel for
the appellants before the High Court and reiterated before us, is that
the Municipality and its successors are bound by the doctrine of pro- F
missory estoppel and as such are estopped from levying the Octroi
Duty. The High Court rejected the plea on the following grounds :-
1. The Petitioners are not the original purchasers of the plots in
Fateh Mandi. They are either descendants of or transferees
from the original purchasers of the plots.
2. No sale-deed was executed by the Municipal Committee in G
favour of the original purchasers undertaking that no octroi
duty will be levied.
3. No allegation has been made that the original purchasers would
not have purchased the plots, if condition no. 14 about im-
munity from payment of Octroi had not been there.
H
The learned counsel by reference to the names of the list of the
purchasers was able to satisfy us that some of the appellants are the
700 SUPREME COURT REPORTS [1980) 3 S.C.R.

original purchasers and as such the first objection raised before the
•High Court is not sustainable. Again, regarding the third objection,
that there is no allegation that the original purchasers would not have:
purchased the plots if condition 14 about immunity from payment of
Octroi had not been there, it was .submitted as erroneous as in the
affidavit filed in support of the writ petition, the petitioners had pleaded
B in paragraph 2 that on the faith of the representation, the petitioners
purchased the plots and constructed establishments. The learned coun-
sel is, therefore, right in his submission that the third objection raised
before the High Court is without substance. But the High Court was
right in pointing out that none of the sale deeds executed by the Muni-
cipal Committee in favour of the purchasers was produced before
the Court. These circumstances would show that the contract between
the parties have not been proved to have been reduced in writing and
executed in the manner prescribed under S. 47 of the Act. Strictly,
therefore, under the terms of the Municipal Act, the appellants are
not entitled to any enforceable legal right. But it was submitted that
even though the contract had not been executed in due form, the ap-
pellants would be entitled to relief under, the doctrine of promissory
estoppel.
The question that arises for consideration'.in these cases is whether
the proclamation of sale which notified that there would be''no octroi
levy in the market relying on which statement the petitioners bid at the
E
auction, would estop the Municipality by operation of the doctrine
of promiss9ry estoppel from recommending to the Government and
the Government levying octroi duty under S. 61 of the Punjab Muni-
cipal Act. To answer this question it is necessary to examine at some
length the rights and liabilities of the State upder a contract entered
F into by it with third parties and in transactions carried on by it in
exercise of its executive and statutory, functions.
Art. 299 (1) of the Constitution of India provides that all contracts
made in the exercise of the executive power of the Union or
of a State shall be expressed · to be made by the President, or
by the Governor of the State, as the case may be, and all such
contracts and all assurances of property made in the exercise
of that power shall be executed on behalf of the President tor
the Governor by such persons and in such manner as he may
direct or authorise. This Article in the Constitution corresponds
to S. 175(3) of the Government of India Act, 1935. In cases, that
H arose out of S. 175(3) of the Government of India Act, 1935, this
Court starting from Seth Bikhraj Jaipuria v. Union of India,(I) has
(!) [1962] 2 S.C.R. 880.
JIT RAM v. HARYANA (Kailasam, J.) 701

repeatedly held that the provision is mandatory and not directory, that A
the provision is enacted as a matter of public policy, that the State
should not be saddled with liability for unauthorised contracts and
that the provision is enacted in the public interest. In Mulamchand v.
State of M. P.,(1) the earlier decisions of this;court were relied on and
it was held that the reasons for enacting the provision is not for the
sake of some form but for safeguarding the Government against un- B
authorised contracts. The provisions are embodied on the ground of
public policy-on the ground of protection \)f general public-and
these formalities cannot be waived or dispensed with. The Court clear-
ly observed that if the plea of the respondent regarding estoppel or
ratification is admitted that would mean, in effect, the repeal of an
important constitutional provision intended for the protection of the
c
general public. That is why the plea of estoppel or ratification cannot
be permitted in such a case." (emphasis Ours)

It was contended before this Court in Karamshi Jethabhai Somayya
v. State of Bombay,(2) that in an agreement entered into:under the Act
by statutory authority in pursuance of a statutory power, that conse- D
quences provided under the statute would follow and would uot fall
within the ambit of S. 175(3) of the Government of India Act. ),This
Court after examining the terms of the contract found that it did not
fall within the provisions of the Act and, found it unnecessary to
deal with the contention.
E
The scope of the doctrine of equitable estoppel arose for consi-
deration before this Court in Collector of Bombay v. Municipal Cor-
poration of the City of Bombay and Ors.(l) In 1865, the Government
of Bombay called upon the predecessor in title of the Corporation
of Bombay to remove some markets from a certain'.site andlvacate it, F'
and on the application of the then Municipal Commissioner the Go-
vernment passed a resolution approving and authorising the grant of
another site to the Municipality. The resolution rtated further that
"the Government do not consider that any rent should be charged to
the Municipality as the markets will be, like other public buildings,
for the benefit of the whole community". The Corporation gave up G
the sites on which the old markets were situated and speut a sum of
over 17 lacs. in erecting and maintaining markets on the new site. In
1940, the Collector of Bombay, overruling the objection of the Cor-
poration, assessed the new site under S.8 of the Bombay City Land
Revenue Act to land revenue rising from Rs. 7,500/- to Rs. 30,000/-
(1) [1968] 3 S.C.R. 214. II
(2) [1964] 6 S.C.R. 984.
(3) [1952] S.C.R. 43.
702 SUPREME COURT REPORTS [1980] 3 S.C.R.

A in 50 years. The Corporation sued for a declaration that the order of
assessment was ultra vires and that it was entitled to hold the land for
ever without payment of assessment. The Supreme Court held by a
majority of four Judges to one that the Government was not entitled
to assess land revenue for the land in question. Three of the Judges
who were parties to the majority judgment found that the Corporation
B had taken possession of the land in terms of the Government resolu-
tion and continued in such possession openly, uninterruptedly and
as of right for over 70 years and acquired limited title it had been pre-
scribing for during the period, that is to say, the right to hold the land
in perpetuity free of rent, but only for the purpose of a market and '
for no other purposes. The right acquired included as part of it an
c immunity from payment of rent which constituted a right in limitation
of the Government's right to assess in excess of the specific limit es-
tablished and preserved by the Government Resolution within the
meaning of S.8 of the Bombay City Land Revenue Act. Before the
Court there was considerable discussion as to the scope and
effect of the principle of equity enunciated in Ramsden v.
D Dyson,(l)f as· to whether such principle should be extended to the
facts of the case and as to whet)l.er the facts of the case attract
the application of the equity established in Ramsden v. Dyson or
attract the equity established in Maddison v. Alderson,(2) and
Walsh v. Lonsdale, (l) and finally as to whether the decision of the
Privy Council in Arif} v. Jadunath(4) the equity in Ramsden v.
E
Dyson can prevail against t)le requirement of formalities laid down
in the Victorian Statute referred to above any more than the equity
in Maddison v. Alderson can do against the requirements of the Trans-
fer of Property Act. The majority of the judges did not express any
opinion on this question but decided the appeal on a narrower and
F shorter ground stated above. One of the judges, Chandrasekhara
Aiyar, J. constituting the majority expressed his view thus :-
"Whether it is the equity recognised in Ramsden's case, or it is
some other form of equity, is not of much importance. Courts
must do justice by the promotion of honesty and good faith so
G far as it lies in their power. As pointed out by Jenkins C. J. in
Dadoba Janardhan's case a different conclusion would be opposed
to what is reasonable, to what is probable and what is fair.''
The other judges of the Court who spoke for the Court refrained
from going into this question. The view of Chandrasekhara Aiyer, J.
(I) [1866] L. R. I. H. L. 129.
'H (2) [1883] L. R. 8 App, Cas. 417.
(3) [1882[ L. R. 21 Ch. D. 9.
(4) [1931] L. R. 58 I. A. 91.
JIT RAM v. HARYANA (Kailasam, J.) 703

being the view of one of the judges of the majority, cannot be taken A
as the view of the Court. Patanjali Sastri, J. as he then was, dissented
with the majority and stated :-
"The principle of Ramsden v. Dyson cannot prevail against
statutory requirements regarding disposition of property or mak-
ing of contract by Government * • *The right to levy land revenue
B
is no part of the Government's right to property but a prerogative
of the Crown and adverse possession of the land could not destroy

,..
the Crown's prerogative to impose assessment on the land."

... • A Bench of four judges of this Court in a decision Excise Com-
missioner. U. P. Allahabadv. Rarn)Kumar(!), after examining the case
law on the subject observed that "it is now well-settled by a catena c
of decisions that there can be no question of estoppel against the Go-
vernment in exercise of its legislative, sovereign or executive powers."
The earlier decisions of this Court in M. Ramanathan Pillai v. State
of Kera/a('), and State of Kera/a and Anr. v. The Gwalior Rayon Silk
Manufacturing (Wvg.) Co. Ltd.(3) were followed. It may, thci'efore,
D
be stated that the view of this Court has been that the principle
of estoppel is not available against the Government in exercise of
legislative, sovereign or executive power.
On behalf of the petitioners, it was submitted that a liberal view
was taken by this Court in the decision Union of India v. M/s. lndo-
Afghan Agencies Ltd.(4)which recognised the principle of promissory E
estoppel and held that whether the agreement is executive or adminis-
trative in character, the courts have power in appropriate cases to
compel performance of the obligations imposed by the schemes upon
the departmental authorities. At this decision is relied on as the
sheet anchor of the doctrine of promissory estoppel, the facts of the
case and the decision rendered therein, have to be examined carefully. F
Mfs. lndo-Afghan Agencies Ltd., the respondents before this Court
exported woollen goods to Afghanistan and were issued an Import
Entitlement Certificate by the Textile Commissions not for the full
F. 0. B. value of the goods exported, but for a reduced amount. By
' virtue of the powers conferred under S.3 of the Imports and Exports
G
(Control) Act, 1947, the Central Government issued the Imports
(Control) Order, 1955 setting out the policy governing the grant of
import and export licence. During the relevant period, it provided
for the grant to an exporter, certificates to import raw materials of a
(I) [1976] Suppl. S.C.R. .532.
(2) !1974] 1 S.C.R. 515. B
(3) [1974] 1 S.C.R. 671.
(4) [1968] 2 S.C.R. 366.
704 SUPRl!ME COURT REPORTS [1980] 3 S.C.R.

A total amount equal to 100 % of the F. 0. B. value of his exports. Cl.
10 of the Scheme provided that the Textile Commissioner could grant
an import certificate for a lesser amount if he is satisfied after holding
an enquiry that the declared value of the goods is higher than the real
value of the goods. It was contended, amongst other grounds, that the
Government on grounds of executive necessity was the sole judge of
B the validity of its action in matters relating to import and export policy,
because the policy depended upon the economic climate and other
•
related matters and had to be in its very nature flexible with power in
the Government to modify or adjust it as the altered circumstances
necessitate. It was pleaded that if the Government was held bound
by every representation made by it regarding its intentions, it would
c amount to holding the Government as being bound by contractual
obligations even though no formal contract iu the manner required
by Art. 299 of the Constitution was executed. Regarding the objection
on the ground of rontravention of Art. 299 of the Constitution, the
Court held that the respondents were not seeking to enforce any con-
tractual right but were seeking to enforce compliance of the obligation
D
which is laid 11pon the Textile Commissioner by the terms of the Scheme
and the claim of the respondents was founded upon the equity which
arose in their favour as a result of the repesentation made on behalf
of the Government in the Export Promotion Scheme. (emphasis sup-
plied). It may be noted that no finding was recorded by the Textile
E Commissioner, that there was any infringement which entitled him to
reduce the quota under Cl. 10 of the scheme.

The facts of the case disclose that the defence of the executive
necessity was not relied upon in the affidavit filed on hehalf of the
Union of India. It was also not pleaded that the representation in the
F Scheme was subject to an implied term that the Union of India will
not be bound to grant the import certificate for the full value of the
goods if they deem it inexpedient to grant the certificate. The Court
after referring to earlier decisions of this Court accepted the view
expressed in those decisions that reduction in the amount of import
certificate may be justified on the ground of misconduct of the expor-
G ters in relation to goods exported or on such considerations as the diffi-
cult foreign exchange position or other matters which have a bearing
on the general interest of the State (emphasis supplied). Summing up
the law laid down by the earlier cases, the Court found that in each of
the three cases this Court held that it was competent to grant reli9f
in appropriate cases, if, contrary to the Scheme, the authority declined
H to grant a licence or import certificate or the authority acted arbitrarily
and that the Union Bf India and its Officers are not entitled at their
mere whim to ignore the promises made by the Government (emphasis
JIT RAM v. HARYANA (Kai/asam, J.) 705

supplied). It rejected the plea on behalf of the Government that the A
Textile Commissioner is the sole judge of the quantum of the import
licence to be granted to an exporter and that the Courts were power-
less to grant relief if the promised import licence is not given to an
exporter who has acted in his prejudice relying upon therepresenta-
tion. The decision is, therefore, an authority for the.proposition that
in the absence of a plea of executive necessity, the Court in appropriate
cases is entitled to compel performance of the obligations~imposed
•
by the Scheme on the departmental authority. The right of the Govern-
ment on relevant considerations such as difficult foreign exchange
' position or other matters which have a bearing on the general interest
·.~ of the State, to reduce the amount of import certificate was recognised.
But the authorities have to act according to the terms of the scheme
c
and not arbitrarily or at their mere whim to ignore the promises made
by the Government (emphasis supplied). On the facts of the case, the
Court gave relief as the authorities declined to act according to the
terms of the Scheme and acted arbitrarily and at their mere whim
ignoring the promises made by the Government. The question as to D
the applicability of the 1doctrine of promissory estoppel against the
legislative or executive acts of the Government did not strictly arise
in the case. The decision was thus generally understood as stated above
is seen from the view expressed by Mr. H.M. Seervai on Constitution
.of India, 2nd Edn. Vol. I, paragraph 11 at para 146-B, p. 433 :
E
"The authorities considered by the Supreme Court, and~the
conclusions drawn from them, by Shah, J. in the present case,
merely affirm the proposition that the Government could not go
back upon promises made in the exercise of discretionary power
as embodied in a scheme,'merely on·a whim (emphasis by Mr. Seer-
vai) F
x x x x x x
• A promissory estoppel cannot stand on a higher footing than a
contract entered into between a citizen or subject and a public
authority and it is settled by numerous decisions that no public
authority entrusted with discretionary power to be exercised for G
the public can bind itself by a contract not to exercise that dis-
cretion when the public good demands its exercise".

It is only in public interest that it is recognised that an authority
acting on behalf of the Government or by virtue of statutory powers
cannot exceed his authority. Rule of ultra vires will become applicable II
wihen he exceeds his authority and the Government would uot be
bound by such action. Any person who enters into a" arrangement
706 SUPREME COURT REPORTS [1980] 3 s.c.R.

A with the Government has to ascertain and satisfy himself that the
authority who purports to act for the Government, acts within the
scope of his authority and cannot urge that the Government is in the
position of any other litigant liable to be charged with liability.

In refuting the contention that the contract is nnenforceable on
B the· ground that there had been no strict compliance of the require-
ment of Art. 299 of the Constitution, the Court observed that the
respondents were not seeking to enforce any contractual rights but
were seeking to enforce compliance with the obligation which was
laid upon the Textile Commissioner by the terms of the Scheme. Thus,
the relief that was granted by the Court was by enforcing the comp-
c liance of the obligation which was laid npon the Textile Commissioner
by the terms of the Scheme. The Court proceeded to state that the
claim of the respondents is appropriately founded upon the equity (em·
phasis ours) which arises in their favour as a result of the representation
made on behalf of the Union oflndia in the Export Promotion Scheme,
and the action taken by the respondents acting upon that representa-
tion under the belief that the Government would carry out the re-
presentation made by it. Thus the equity which the Court was enforc-
ing was to direct compliance of the obligation which is laid upon the
Textile Commissioner by the terms of the scheme. The equitylcannot
be understood as barring tbe authority from modifying the scheme
E on special considerations such as difficult foreign exchange position
or other matters which have a bearing on the general interest of the
State (vide p. 380). The purport of the judgment is made clear by its
own observation:-
"Under our jurisprudence the Government is not exempt
from liability to carry out the representation made by it as to
F its future conduct and it cannot be .some undefined and un-
disclosed ground of necessity or expediency fail to carry out
the promise solemnly made by it, nor claim to be the judge of
its own obligation to the citizen on an ex: parte appraisement
of the circumstances in which the obligation has arisen."
G The observations of the Court that the claim of the respondents
is properly founded on the equity should be understood on the facts
and findings of the Court in the case. The Court relying on the ob-
servations of Chief Justice Jenkins, observed that even though the case
does not fall within the terms of S.115 of the Evidence Act, it is still
open to a party who has acted on a representation made by the Govern-
H ment to claim that the Government shall be bound to carry out the
promise made by it, even though the promise is not recorded iil'~he
form of a formal contract as required by the Constitution. The Ctiilrt
JIT RAM 1. llARYANA (Kailasam, !.) 707

would be bound when the officer made the promise within the scope
of his authority and failed to act upon it at his mere whim and acted
arbitrarily on some undefined and undisclosed grounds of necessity.

Before proceeding further with the case, we will refer briefly to
the purport of the doctrine of promissory estoppel. The doctrine of
i B
promissory estoppel burst into sudden blaze in 1946 when Denning.
J. sitting in the Court of Kings Bench delivered the judgment in Central
London Property Trust Ltd. v. High Trees House Ltd.( I) which has now
become famous as the High Trees Case. The facts of the case are:
During the war many people left London owing to bombing. Flats were
empty. In one block, where the flats were let on 99 years leases at
£ 2,500/- a year, the landlord agreed to reduce it by half and to accept
c
£ 1,250/- a year. When the bombing was over, and the tenants came
back, the landlord sought to recover the full rent at £ 2,500/- a year.
Denning, J. held that the landlord could not recover the full amount
for the time when the flats were empty. The lease was a !_ease under
seal which according to English Common Law, could not be varied D
by an agreement by parol, but only by deed. The learned judge invoked
equity to his aid and said that if there has been a variation of a deed
by simple contract the courts may give effect to it. The counsel for the
lessee pleaded that the lessor had agreed though without considera-
tion to accept the rent at a reduced rate, and set up a plea of estoppel
by way of defence io the claim for arrears of rental calculated at the E
full rate. Faced with Foakes v. Beer,(2) if the defence was raised as a
matter of contract and Jorden v. Money,(3) if it was raised as estoppel,
Denning. J. held that the estoppel sustained although based on an
assurance as to the future, because the prornisor intended to be legally
bound and intended his promise to be acted upon, with the result that
it was so acted upon. In Jordan v. Money (supra), the House of Lords F
held that a promise to pay a smalicr sum of money in discharge of
• larger amount which was due, was void since such a promise was with-
out consideration. Denning, J. relying on Fenner v. Blake, (4)Re:
Wickhem William Porter & Co. Ltd. (')and Buttery v. Pickard(6) observ-
ed that they were cases of estoppel in the strict sense. Theyiare really
promises-promises intended to;be binding-intended to· be acted upon, G
aad_in fact acted on and in the circumstances the plaintiff company will
be bound by the arrangement in its letter. Though the observations of
(I) [1956] l All. E. R. 256.
(2) [1884] 9 A. C. 605.
(3) [1854] 5 H. L. Cas. 185.
(4) [1900] 1 Q. B. 426. II
(5) [1937] 2 All. E. R. 361.
(6) 11946] W. N. 25.
708 SUPREME COURT REPORTS [1980] 3 S.C.ll.

A Denning, J. in High Trees case were in the nature of obiter dicta, the
decision became the starting point of the several shades of opinion
regarding the scope of promissory estoppel. It is unnecessary for our
purpose to go into the development of law of promissory estoppel
starting from High Trees case. It is sufficient to state that since the
High Trees decision was rendered, many elaborations and glosses
B have appeared in the reports. Turner in his book Estoppel by Re·
presentation, has a separate chapter dealing with promissory estoppel.
The doctrine, as observed by the author at the conclusion of the chap-
ter, "burst out into sudden blaze in 1946 has ever since continued to
smoulder, and that its original author has constantly maintained his
interest in its further development, now in this direction, now in that''.
c But there has been high places counselling conservatism *** Lord
Hailsham of St. Marylebone, has expressed his views in Woodhouse
Ltd. v. Nigerian Produce Ltd.(I) as follows :-

"I desire to add that the time may soon come when the whole
sequence of cases basec\ on promissory estoppel since the
D war*** systematically explored",
'
This subject though interesting may uot be relevant in administer·
ing Indian Law. S. 63 of the Contract Act provides that wheu a creditor
accepts a lesser sum in satisfaction of the whole debt, the whole debt
become discharged. This provision is a wide departure from the English
Law and the discussion about Jordan v. Money wherein it was held
that a promise to accept a smaller sum is devoid of consideration,
becomes pointless. So also the doctrine of estoppel referred to in the
High Trees case is, to some extent taken care of by Ss. 65 and 70 of
the Indian contract Act. S.65 provides that when a contract becomes
F void, any person who bas received any advantage under such agree·
ment or contract is bound to restore it or to make compensation for
it, to the person from whom be received it. Under S. 70 oftbe Contract
Act, an obligation is cast on the person enjoying benefit of a non-
gratuitous act to compensate the person who lawfully performed the
act. As to whether the provisions of S. 65 and 70 of the Indian Con-
G tract Act, are applicable to contract which is not according to S. 175 of
the Government of India Act and Art. 299 of the Constitution of
India, there is a difference of opinion. Sir Maurice Gwyer expressed
his view that when a contract is void, recourse to S.70 cannot be had.
Later, the Supreme Court held in State of West Bengal v. B. K. Monda!
& Sons,(2) that S.70 was applicable to;such a case. This decision was
H
(I) [1932] A C. 431.
(2) [1962] Suppl I S.C.R. 876.
JIT RAM v. HARYASA (Kailasam, J.) 709

followed in New Marine Coal Co. Ltd. v. Union(I), and in later cases A
by the Supreme Court.
I In discussing the scope of the doctrine of promissory estoppel,
and its applicability against the Government and Government Officers
in their dealings with the subject, Lord Denning J. in Robertson v.
Minister of Pensions(2) observed :- B
"The Crown cannot escape by saying that estoppels do not
bind the Crown for that doctrine has long been exploded. Nor
can the Crown escape by praying in aid the doctrine of exe-
• cutive necessity, that is, the doctrine that the Crown cannot
bind itself so as to fetter its future executive action. That doctrine
was propounded by Rowlett J., in Redariaktiebolaget Amphtrite
c
v. The King but it was uunecessary for the decision because
the statement there was not a promise which was intended to be
binding but only an expression of intention. Rowlett, J., seems
c have been influenced by the cases on the right of the Crown
c dismiss its servants at pleasure, but those cases must uow all D
be read in the light of the judgment of Lord Atkin in Reilly v.
The King-(1954) A. C. 176, 179) ••• In my opinion the de-
fence of executive necessity is of limited scope. It only avails
the Crown where there is an implied term to that effect or that
is the true meaning of the contract."
E
Lord Denning was dealing with a case of a serving army officer
who wrote to the War Office regarding a disability and received a
reply that his disability had been accepted as attributable to "military
service". Relying on that assurance, he forebore to obtain an indepen-
dent medical opinion. The Minister of Pensions took the view that
appellant's disability could not be attributed to war services. Lord F
Denning held that between the subjects such an assurance would be
enforceable because it was intended to be binding, intended to be
acted upon, and it was in fact acted upon; and the assurance was also
binding on the Crown because no term could be implied that the Crown
was at liberty to revoke it.
G
The decision in Robertson's case is quoted with approval in the
Jndo-Afghan case but before we revert to the lndo-Afghan case, we will
follow the course which Robertson's case took. The correctness of the
case came up for consideration before the House of Lords in Howell v.
Falmouth Boat Constructi01i Co. Ltd.(l) The appeal_was'.preferred)o the
(1) [1964] 2 S.C.R. 859. B
(2) [194911 K. B. 227.
(3) [1951] A. C. 837.
710 SUPREME COURT REPORTS [1980] 3 s.c.R.

A House of Lords from the Court of Appeal against the judgment of
Bucknil, Singhleton and Denning, L.JJ. In his judgment in the Court
of Appeal, Denning L. JJ. pressed the principle in the following terms:-

"Whenever Government Officers, in their dealings with a sub·
ject, take c n themselves to assume authority in a matter with
which he is concerned, the subject is entitled to rely on their hav-
ing the authority which they assume. He does not know and
cannot be expected to know the limits of their authority, and
he ought not to suffer if they exceed it. That was the principle
;
which I applied to Robertson v. Minister of' Pensions, and it is
applicable in this case also."
c
Commenting on the view taken by Denning, L. J. Lord Simonds
observed :-
"My Lords, I know of no such principle in our law nor was
any authority for it cited. The illegality of act is the same whether
D or not the actor has been misled by an assumption of authority
on the part of a government officer however high or low in the
hierarchy.*** The question is whether the character of an
act done in face of statutory prohibition is affected by the fact
that it has been induced by a misleading assumption of authority.
In my opinion.the answer is clearly "no". Such an answer may
E make more difficult the task of the citizen who is anxious to
walk in the narrow way, but that does not justify a different ans-
wer being given."

Lord Normand referred to the principle laid down by Denning
L. J. and observed :-
F
"As J understand this statement, the respondents were in the
opinion of the learned Lord Justice, entitled to say that the Crown
was barred by representations made by Mr. Thompson and
acted on by them from alleging against them a breach of the
s'.atutory order, and further that the respondents were equally
G entitled to say in a question with the appellant that there had
been no breach. But it is certain that neither a Minister nor
any subordinate officer of the Crown cm by any conduct or re-
presentation bar the crown enforcing a statutory prohibition
or entitle the subject to maintain that there has been no breach
of the contract."
H
The view expressed by the House of Lords and the Privy Counoil
has been followed in English cases. ·
JIT RAM v. HARYANA (Kai/asam, !.) 711

The Privy Council in Antonio Buttigieg v. Captain Stephen H. Cross A
• .11nd Ors,(1) has ruled that it is not competent for the Government to
fetter its future executive action, which must necessarily be determined
b)i tl:e needs of the community when the quesrion arises, that it can-
n-0t by contract hamper its freedom of action in matters which concern
the welfare of the State. The ccrnretent Military Authority approach-
ed the appellant for opening a club for officers serving in his Majesty's B
forces. The <JHelknt stated his willingness to take on lease certain
premises and asked tt.e Military authcrities to procure him a licence
• to continue the club after the termination of the war. The military
authorities failed to obtain a licence and the appellant was informed
of their inability to obtain the licence '-nd an officer on behalf of the
military authorities stated that the appellant should have a guarantee c
seeing that the war was not likely to come to an end quickly and that
the club would be kept open throughout the war. The rules for the con-
duct of the club were drawn up and were approved by the Military
Authorities. Rule 18 provided that the club should endure during the
time when the said hostilities existed. The club was placed out of bounds
D
fox service members by order of the Military Authorities because the
club was being mismanaged by the sale of liquor long after permitted
h-Onrs. As the club was a purely Service Club, it" was subsequently
wound up. The appellant complained of the loss to which he had been
put by placing the club out of bounds and sought to hold the Military
Authorities responsible for such loss" The Court of Appeal while E
giving judgment in favou,r of the Military Authorities observed :-

"It is a 'ettled principle and it has been constantly held by
this Court and in local case-law, that those two functions of
the civil or the military Government are totally distinct. The
Military Authorities could not have renounced those rights, F
inasmuch as it would have been immoral and against every
• fundamental principle of Constitutional Law if the Authorities,
in order to open a club, which is "a purely administrative act-
were to sacrifice interests whicl~are far more important and
therefore of a much higher order, whether political, moral or
affecting public order. Consequently when, within the adminis- G
trative sphere, the Government enters into a contract with a
private individual, the Government is bound to respect that
contract, but it does not thereby deprive itself of its political
power to issue orders that may become necessary by reason of
public order, jure imperii-even though, in consequence of such
orders, the contract itself becomes impossible of fulftlment." H

(1) .\LR. 1947 P. C. 29.
712 SUPREME COURT REPORTS (1980] 3 S.C.R.
.
A During the arguments before the Privy Council, it was conceded
on behalf of the appellant taking into consideration the decision iii
Adams v.'London'.Jmproved~Motor,Coach.Builders(lXand Redariaktiebo-
laget Amphtrite v.. The King, (2) that it was not open to the Crown
to bind itself not to close the club if that course became necessary in
the public interest and the order placing the club out of bounds was
justified in the circumstances which existed. Havini thus observ~d
B
the Privy Council quoted the following passage from the Judgment .
of Rowlatt, J. in Rederiaktiebolaget Amphtrite case that "it is not '
competent for the Government to fetter its future executive action,
which must necessarily be determined by the needs of the community
when the question arises. It cannot by contract hamper the freedoin
of action in matters which concern the welfare of the State" and stated
that these words appear to their Lordships to cover that aspect of the

D
present case. While House of Lords in Howell's case disagreed with
the observations of Lord Denning J. in Robertson's case, the Privy
Council approved the law laid down by Rowlatt, J. in Rederiaktie-
bo/aget 'Amphtrite case which was dissented to by Denning, J. in
Roberston's case. It may be noted that in Indo-Afghan case, the Court
•
quoted the passage from.Denning's judgment which did not approve
the view of Rowlatt, J. The Privy Council approved the view taken
by Rowlatt, J. in Rederiaktiabolaget Amphtrita case.

In W11/iam Cory & Son"Ltd. v. London Corporation,(3) London Cor-
poration acting as sanitary authority under the Public Health (Lon-
don) Act, 1936 made a contract with the claimants, barge and lighter
owners, for the removal of refuse from a wharf in:the City of Horn-
church, Essex, where it was to be dumped. In April, 1948, the Cor-
poration acting as port health authority for the Port of London, sealed
•
F by-laws concerning the disposal of refuse in the area of the port one of
which relating to co-amings and coverings~of barges, was far more
onerous on the claimants than the requirements in the contract of
1936. It was'.provided that this by-law was not to come into effect until
November I, 1950. It was contended by the'claimants that by the pro-
visions of the contract of 1936, there was an implied or an express f •
G term that the corporation should not impose more onerous burden
on the claimants as to the coamings and coverings of their barges than
those contained in the contract of 1936. The plea of the claimants was
rejected and the Court held relying on a,decision'.in York' Corporation
v. Henry Leethem & Sons Ltd.(4) that the Corporation peingundera
(I) [1921] 1 K. B. 495.
H (2) (1921] 3 K. B. 500.
(3) [1951] 2 K. B. 476.
(4) [19241 1 Ch. 557.
JIT RAM v. HARYANA (Kailasam, !.) 713

dtt;' under the Act of 1936, expressed in imperative language, to make A
by-laws for the disposal of refuse within the area of the port, the term
for which the claimants contended, whether express or implied was
ultra vit'es the corporation.
In York Corporationv. Henry Leetham & Sons (supra), the Cor-
poration made two contracts with the defendants to which they agreed
B
to accept, in consideration of the right to navigate the Oues, a regular
annual payment of£ 600/- per annum, in place of the authorised tolls.
It was held that the contracts were ultra vires and void because under
.•
them the corporation had disabled itself whatever emergency might
• arise, from exercising its statutory powers to increase tolls as from time
to time might be necessary. The decision was based on the incapacity c
of a body charged with statutory powers for public purpose to divest
itself of such powers or to fetter itself in the use of such powers.
In Commissioner of Crown Lands v. Page,(!) in 1945, the Minister
of'Works, acting on behalf of the Crown and in exercise of powers
conferred by the Defence (General) Regulations, 1939 requisitioned
D
premises which had been demised in 1937 by the Commissioners of
Crown Lands for a term ofl25 years. The premises were derequisitioned
on September 5, 1945 until July 5, 1955 and the landlord brought
proceedings claiming arrears of rent. The lessee alleged that she had
been evicted by the requisitioning and that, accordingly, payment
of rent has been suspended. It was conceded that the:Crown was orie
"and indivisible as lessor and requisitioning authority. I(was held that
since the entry was by the Crown in the proper exercise of its executive
a11thority, it did not amount to an eviction and rent, accordingly,
continued to be payable. ~The view expressed by Lord Denning, J.
in Robertson v. Minister of Pensions (supra) that in the present day
age no distinction should be drawn as to the legal effect of its or their F
actions between the Crown and the ordinary subjects, so that the effect
ofa representation made by the Crown could no longer be qualified so
a11 to be subject to the future exercise by the Crown of its Executive
authorily, was relied on. Lord Evershet M. R. while observing that
the facts of the case were different held that the general proposition
laid down by Denning L. J. was not accepted by the House of Lords G
in [{owe// v. Falmouth Boat Construction Co. Ltd. (supra). Devlin, J.
stakd the principle in the following terms :-
"When the Crown, or any other person, is entrusted, whether
. by virtue of the prerogative or by statute, with discretionary
powers to be exercised for the public good, it does not when
; making a private contract in general terms, undertake (and
(I) [1960]2 KB. 274.
t-463 SC!/80
714 SUPREME COURT REPORTS [1989] 3 s.c.Jt.
IL
A it may be that it could not even with the use of specific language
validly undertake) to fetter itself in the use of those powers, and ,
in the exercise of the discretion."
I
Referring to the view of Denning, L. J. in Robertson v. Minister
of Pension (supra), the learned Judge observed :-
B "The observations of Denning, L. J. in Robertson v. MinisJer
ofPensions on the doctrine of 'executive necessity', were I think,
directed to a case of that sort. Here we are dealing with an act
done for a general executive purpose, and not done for the pur-
pose of achieving a partkular result under the contract in ques-
tion."
c
In Southend-on-Sea Corporation v. Hodgson (Wickford) Ltd.(I) a
company wished to establish a builder's yard and found suitable
premises. They wrote to the borough engineer, a Chief Official emplo-
,yed by the· local planning authority asking for a lease of the premises
!'for 20 years for the purpose of establishing a builders yard. The en-
,gineer replied that the premises had an existing user right as a builders'
. yard and that no planning permission was, therefore, necessary. Re-
lying on the borough engineer's letter, the company bought the pre- I
mises and started to use them as builder's yard. They would not have
·.done so if, as a consequence of the letter, they had not thought that
no further planning permission was required. Later, the local planning
authority notified the company that a considerable amount of evi-
dence had been presented to them showing that the premises had not
been used as a builder's yard and had no existing user as such; that
. they had decided that the premises could not be used without planning
, permission, The Court on the above facts held that assuming that the
F statement that the premises had an existing user right as a builder's
yard was a pure representation of fact, estoppel could not operate to
'hinder or prevent the exercise by the local planning authority of their
statutory discretion under S. 23 of the Act in deciding whether to
serve an enforcement notice, since this discretion was intended to be •
G
'exercised for the benefit of the public or section thereof.
'The decisions of the English Courts referred to above clearly indi-
f
•
cate that the English Courts did not accept the view of Denning, J. in
Robertson v. Minister ofPensions (supra). The house of Lords in Howe//
v. Falmouth Boat Construction Co. Ltd. disagreed with the view of
~ . •
I"
Lord Denning, J holding that there could not be an estoppel against
express provisions of the law nor could the State by its action waive
H
its rights to exerise powers entrusted to it for the public good. The ~
I
(2) [1962] 1 Q. B. 416.

•
I

I;'µ
J!T RAM v. HARYANA (Kailasam, J.) 715

Privy Council in Antonio Buttigieg's case approved the view of
Rowlatt. J. in Raderiaktiabo/aget Amphtrits's case with which
f Denning, J. did not agree.
We may noV( revert back to Indo-Afghan Agencies case. The Court
after quoting a passage from Rowlatt, J. in Rederiakiabo/aget
Amphtrite v. The King (supra) agreed that the view expressed by An-
• son's English Law of Contract 22nd Ed. p. 174 that the observation is
clearly very wide and it is difficult to determine its proper scope. The
Court quotec,1 the ,passage of Denning, J. at p. 231 wherein the learned
Judge expressed the disagreement with the view of Rowlatt, J :-
"The Crown cannot escape by saying tjiat estoppel do not
bind the Crown for that doctrine has long been exploded. Nor
can the Crown escape by praying in aid the doctrine of executive
necessity, that is, the doctine that the Crown cannot bind itself
so as to fetter its future executive action. The doctrine was pro-
pounded by Rowlatt, J. in ~ederiaktiebolaget Amphitrite v. The
King but it was unnecessary for the decision because the state-
D
ment there was not a promise which was intended to be binding
but only an expression of intention. Rowlatt, J., seems to have
been influenced by the cases on the right of the Crown to dis-
miss its servants at pleasure, but those cases must now all be
read in the light of the judgment of Lord Atkin in Reilly v. The
King- (1954) A. C. 176, 179). .
. . In my opinion the defence of executive necessity is oflimi-
ted scope. It only avails the Crown where there is an implied term
to that effect or that is the true meaning of the contract."
After quoting the above passage, the Court summarised the facts
and decision render.ed by Denning, J. The decision of the House
of Lords in Howell's case or that of the Privy Council was not brought
to the notice of the Court .
•
The law laid down by the House of Lords in Howell's case has
been accepted as correct by this Court in recent decision of this Court
by a Bench of four Judges in Excise Commissioner, U. P. Allahabad
v. Ram Kumar.( 1) The respondents before this Court were the highest G
?idders in an auction for exclusive manufacture and selling of liquor
m the State of U. P. Before boding the auction, the rates of excise
duty and prices of different varieties of country liquor and also the
eonditions of licence were announced. No announcement was made
~s to whether the exemption from sales tax in respect of sale of country
liquor granted by the notification dated 6-4-1959 was or was not likely H
(I) .[1976] Suppl. S.C. R. 532.
716 SUPREME COURT REPORTS [1980) 3 S.C.lt.

to be withdrawn. On the day following the day when the licences were
granted, the Government of U. P. issued a notification under S. 3A
and 4 of U. P. Sales Tax Act, 1948 superceding the earlier notification
exempting the payment of sales tax and imposing sales tax on the
turnover in respect of country liquor at the rate of 10 paise per rupee.
The respondents challenged the validity of the notification issued
B under the Sales Tax Act on the ground that the State Government
did not announce at the time of the earlier auction that the earlier
notification was likely to be withdrawn. This Court on a consideration
of the question whether the State Government is estopped from levying
the Sales Tax, after referring to the earlier decisions of this Court held.
that the State Government is not estopped or precluded from subject-
e· ing the sales of liquor to tax if it felt impelled to do so in the interest
of revenue of the State. The Court followed two earlier decisions of
this Court viz. M. Ramanathan Pillai v. State of Kera/a (supra) and
State of Kera/a v. The Gwalior Rayon Silk Manufacturing (Wvg.) Co.
Ltd. (supra). In Ramanathan Pillai's case, Ray, Chief Justice while
dealing with the question whether the Government has a right to abo-
D lish a post in the service, observed tha(the power to create or abolish
a post is not related to the doctrine of pleasure. It is a matter of govern-
mental policy. Every sovereign Government has this power in the
interest and necessity or internal adminiStration. The creation or abo-
lition of a post is dictated by policy decision, exigencies of circum·
E stances and administrative necessity. The creation, the continuance
and the abolition of post are all decided by the Government in the
interest of administration and general public. The learned Chief Justice
after quoting a passage in American Jurisprudence 2d. at p. 783, para-
graph 123, observed that the estoppel alleged by the appellant Rama-
nathan Pillai was on the ground that he entered into an agreement.
and thereby changed his position to his detriment. The High Court
rightly held that the Courts exclude the operation of the doctrine of.
e&toppel, when it is found that the authority against whom estoppel
is pleaded has owed a duty to the public against whom the estoppel
cannot fairly operate.
In State of Kera/a v. Gwalior Rayon Silk Manufacturing (Wvg.)
G
Co. Ltd. (supra), Palekar, J. who delivered the opinion with which
Krishna Iyer, J. and Bhagwati, J. agreed, rejected the contention that.
an agreement entered into by the Government with the parties, exclud- ·
ed the leg_islation on the subject .. The plea of equitable estoppel was.
put forward on the ground that the company established itself in Kerala
B for the production of rayon cloth pulp on an understanding that the
Government would bind itself to supply the raw material. Later Go-
vernment was unable to supply the raw material and by · an
JIT RAM v. HARYANA (Kailasam, !.) 717

agreement undertook not to legislate for the acquisition of private A
forests for a period of 60 years if the company purchased forest lands
j- for the purpose of its supply of raw-materials. Accordingly, the com-
pany purchased 30,000/- acres of private forests from the Nilabhuri
Kovila Kanna Estate for Rs. 75 lacs and, therefore, it was argued
that the agreement would operate as equitable estoppel against the
State. This Court agreed with the High Court that the surrender by B
•
the Government of its legislative powers to be used for public good
cannot avail the company or operate against the Government as
equitable estoppel.
•
~ In Assistant Custodian of E. P. and Ors. v. Brjj Kishore Agarwala, (1)
it was pleaded that the first respondent made an enquiry from the c
Assistant Custodian whether the property was evacuee property and
was told that it was not. As the first respondent acted on this represen-
tation, it was pleaded that the Assistant Custodian was estopped from
contending that the property was evacuee property. Thus, dismissing
this plea, the Court observed : D
,d
•
"We do not consider that the fact that the !st respondent
had. made an enquiry from the Assistant Custodian whether
the property in question was an evacuee property and was told
that it would not make any difference to the question."

")I- Reliance was placed on the observations of Denning L. J. in Robert- I:
son v. Minister of Pensions (supra), holding that the letter by the war
office which assured that the appellant's disability had been accepted
as attributable to the military service, was binding on the Crown and
through the Crown the Minister of Pensions. The Court pointed out
that the decision in Robertson v. Minister of Pensions had been dis-

,-
"'
approved by the House of Lords in Howell's case. After referring to
the passage from the judgment of Lord Denning, Lord Simonds and
Lord Normand which have been extracted earlier, this Court expressed
II'

its opinion that the view taken by the House of Lords it correct and
not that is taken by Lord Denning.

In Excise Commissioner U. P., Allahabad v. Ram Kumar (supra), G
the Court after consideration of the case law on the subject, held that
"f it was settled by a catena of cases that there could be no question
·Of estoppel against the legislative and sovereign functions.
A passage in American Jurisprudence 2d. at page 783 paragraph
123 was extracted by Ray C. J, in Ramanathan Pil/ai's case and Jaswant R
'
(I) [1975] 2 S.C.R. 359.
718 SUPREME COURT REPORTS [1980] 3 S.C.lt. I

A Siagh J. in:Excise Commissioner's c~;: The passage at p. 123 is as
follows :-
"Generally, a State is not subject to an estoppel to the same
extent as an individual or a private corporation. Otherwise, it
might be rendered helpless to assert its powers in Government.

• Therefore, as a general rule the doctrine of estoppel will not be
applied against the State in its Governmental, Public or sovereign
capacity. An exception however arises in the application of
estoppel to the State where it is necessary to prevent fraud or
manifest injustice." •
c But the learned Judges did not include the last sentence :
"An exception however arises in the application of estoppel
to the State where it is necessary to prevent fraud or manifest
injustice."
In Bihar Eastern Gangetic Fisherman Co-operative Society Ltd.,
v. Sipahi Singh & Ors.(l)Jthis'.Courtlheldfthalfthe respondent could not
invoke the doctrine of promissory estoppel because he was unable to
show that relying on the representation of the Government, he ha<l
altered his position to his prejudice. The· Court accepted the view of
this Court expressed in Ram Kumar's case and held that there cannot
be any estoppel against the Government in the exercise of its sovereiga,
E legislative or executive functions.

The leading case of the Supreme Court of the United States citeci
and relied upon in Ram Kumar's case (supra), is Federal Crop Insurance
Corporation v. Marril,(~ in which the United States Supreme Court
observed as follows :-
"It is too late in the day to urge that the Government is just
another private litigant, for the purposes of charging it with lia-
bility, whenever it takes over a business theretofore conducted
by private enterprises or engages in competition with private
ventures • * • Whatever the form in which the Government fun-
ctions, anyone entering into an arrangement with the Govern- ;
c ment takes the risk of having accurately ascertained that he who
purports to act for the Government stays within the bounds of
his authority;• • *And this is so even though, as here, the agent
himself may have been unaware of the limitations upon his ,
authority** • 'Men must turn square corners when they deal with
the Government' does not reflect a callous outlook. It merely
B
(I) A. I. R. 1977 S.C. 2149.
(2) 332 u. s. 380.
JIT RAM v. HARYANA (Kailasam, !.) 719

expresses the duty of all courts to:observe the conditions defined A
by congress for charging the public treasury".

The Court also relied on the views of the te~t book writer Melville
M. Bigelow and concluded that the plea of estoppel does not operate
against therGovemment or its assignees.
B
•
The extract from the American Jurisprudence which summarises
the American Law, and[the decision in Federal Crop Insurance Cor-
-poration case, make it clear that the plea of estoppel is not available
againsf theGovernment and its legislative or executive functions
except for preventing fraud or manifest injustice.
c
It was submitted that the cases cited above cannot be relied on as
an authority for the proposition tthat the do_ctrine of promissory
estoppel is not applicable agains(the Government in the"exercise of its
legislative and statutory functions as they were in the nature of obiter
dicta and that on the facts the present case could be distinguished.
The Inda-Afghan Agencies, Century Spinning and Manufacturing Co. D
and Turner Morisson Co.'Ltd. v. Hungerford Investment/Trust Ltd.(1),
were strongly relied on. We have pointed out that all that the Indo-
Afghan Agencies case laid down was, that a public authority acting
an behalf of the Gove=ent cannot on its own whim and in an arbi-
trary manner seek to alter the conditions accepted by him to the
prejudice of the other side. : The decision in terms accepts the view E
expressed in earlier cases that after taking into consideration the
exigencies and change of circumstances, the authority can modify
t.Jte conditions in exercise of his powers as a public ~ "thority.

Jn Century Spinning and Manufacturing Co. Ltd. und Anr. v. The
Ulhasnagar Municipal Council and Anr.(2), the facts of the case is set out F
in the head note and may be briefly stated. The State of Maharashtra
on the representation made by certain manufacturers proclaimed th~
exclusion of the Industrial Area from the Municipal Jurisdiction. The
Municipality made representations to the State requesting that the
proclamation be withdrawn, agreeing to exempt the factories in the
industrial area from payment of octroi from the date of levy. The State G
. acceded to the request of the' Municipality. The appellants expanded
their activities relying on the Municipality's assurance. The Maha-
rashtra Municipalities Act was enacted and the municipality took
over the administration. Thereafter, the Municipality sought to
levy octroi duty on the appellant amounting to about Rs. 15 lacs per·
I f'
(11 [1972] 3 S.C.R. 711.
(2) [1970] 3 S.CR. 854.
720 SUPREME COURT REPORTS (1980] 3 s.e.It.

A annum. The High Court dismissed the petition in limini filed by the
Industrialists against the levy of octroi. In an appeal to this Cotirt it
was held that the High Court had not given any reason for dismissing
the petition in limini and that on a consideration of the averments
in the petition and the materials placed before the High Court,. the
appellants were entitled to have its grievance heard against the action
B of the Municipality which was prima facie unjust. In remanding the
matter to the High Court, this Court observed :-

"A representation that something will be done in future may
involve an existing intention to act in future in the manner re-
presented. If the representation is acted upon by another per<nn
c it may, unless the statute governing the person making the re-
presentation provides otherwise, result in an agreement enforce-
able at law; if the statute requires that the agreement shall be in
a certain form, no contract may result from the representation
and acting thereupon but the law is not powerless to rnise in
appropriate cases an enquiry against him to compel performance
.o of the obligation arising out of his representation".

In dealing with the question as to how far the public bodies are
bOilnd by representation made by them on which other persons have
altered their position to their prejudice, the Court held that the obliga-
E tion arising against an individual out of his representation amounting
to a promise may be enforced ex contractu by a person 'who acts
upon the promise; when the law requires that a contract enforceable
at law against a public body shall be in certain form or be executed
in the manner prescribed by statute, the obligation may be if the con-
tract be not in that form be enforced against it in appropriate case in

('
F equity. The Court read the decision in Union of India and Ors. v. Indo-
Afghan Agencies (supra) as holding that the Government is not exempt
from the equity arising out of the acts done by citizens to their pre-
judices, relying upon the representations as to its future co~duct made '-
by the Government. This observation will have to be read alongwith - '
.., the conditions that were laid down in the Jndo-Afghan case and cannot
• be read as holding that the rule of estoppel will be applicable against
the Government in the exercise of its legislative and statutory powers.
The Court quoted the following passage from Denning J. :-
"Crown cannot escape by saying that estoppel do not bind the
Crown for that doctrine has long been exploded. Nor can the
H ' Crown escape by praying in aid the doctrine of executive neces-
sity, that is, the doctrine that the Crown cannot bind itself so
as to fetter its future executive action".
JIT RAM v. HARYANA (Kai/asam, J.) 721

an.d observed that the Court in Indo-Afghan case held that it was
applicable to India. It may be noted that apart from not noticing
Howell's case, the Court in Indo-Afghan case did not say that the law
as extracted from Denning J's. judgment was applicable to llndia.
Tlle Court after considering the Indo-Afghan case and Howell's case,
·expressed thus :-
"If our nascent democracy is to thrive diff~rent standards of
conduct for the people and the public bodies cannot ordinarily
.. be permitted. A public body is, in our judgment, not exempt
from liability to carry out its obligation arising 04t of represen-
tation made by it relying upon which a citizen has altered his
position to his prejudice". c
The third decision on which reliance was placed, for the proposi-
ti.in that doctrine of promissory estoppel is applicable against the
State acting in exercise of its legislative or executive function is Turner
Morrison and Co. Ltd. v. Hungerford Investment Trust Ltd. t(supra).
The case related to the payment of tax due from Hungerford by Turner
Morrison. The Court observed that if for any reason Turner Morrison
had not undertaken any responsibility to discharge the liability of
Hungerford, the latter could have taken recourse to voluntary liquida-
tion. Hence there could be no doubt that acting on the basis of the
representation made by Turner Morrison, Hungerford placed itself
jn a disadvantageous position. Hungerford raised the plea that the E
resolution was of the company, afforded a good basis for raising a
plea of promissory estoppel. This plea was accepted by the Court
relying on the observations of Denning J. in High Trees case (supra) .
.·The later decision of the House of Lords in Howell's case which dis-
approved Lord Denning's judgment was not brought to its notice.
F
Y The scope of the plea of doctrine of promissory estoppel against
• the Government may be summed up as follows :-
(1) The plea of promissory estoppel is not available against the
exercise of the legislative functions of the State .
• (2) The doctrine cannot be invoked for preventing the Government G
from discharging its functions under the law.
(3) When the officer of the Government acts outside the scope
of his authority, the plea of promissory estoppel is not available. The
<tloctrine of ultra vires will come into operation and the Government
<:annot be held bound by the unauthorised acts of its officers.
H
(4) When the officer acts within the scope of his authority under
~ scheme and enters into an agreement and makes a representation

-- ;;r'
722 SUPREME COURT REPORTS [1980] 3 S.C.R.
A and a person acting on that representation puts himself in a disadvan-
tageous position, the Court is entitled to require the officer to act
according _to the scheme and the agreement or representation. The
· Officer cannot arbitrarily act on his mere whim and ignore his promise
on some undefined and undisclosed grounds of necessity or change the

• conditions to the prejudice of the person who had acted upon such
representation and put himself in a disadvantageous position.
(5) The officer would be justified in changing the terms of the agree·
I
ment to the prejudice of the other party on special considerations.
such as difficult foreign exchange position or other matters which
have a bearing on general interest of the State.
c
Before we conclude, we would r~fer to a recent decision of this
Court in M/s. Moti Lal Padampat Sugar Mills Co. (P.) Ltd. v. State of
Uttar Pradesh and Ors.(1). It has beenlheld that there can be no promiss-
ory estoppel against the exercise of legislative power and the legislature
cannot be precluded from exercising its legislative functions by resort
to the doctrine of promissory estoppel. It has also held that when the
Government owes a duty to the public to act differently, promissory
estoppel could not be invoked to prevent the Government from d<Jing
so. The doctrine cannot be invoked for preventing the Government
from acting in discharge of its duty under the law. The Government
would not be bound by the acts of its officers and agents, who act
E beyond the scope of their aµthority. A person dealing with an agent
of the Government must be held to have noticed all the limitations.
of his authority.
With respect, we are in complete agreement with the law as stated
above but we find the judgment is not in accordance with the view
F consistently taken by this Court in some respects. We have read the
Judgment of Bhagwati, J. with considerable care and attention which
jt deserves. Firstly, . with great respect we are unable to construe
'the decision in Union of India & Ors, v. Mfs. Indo·Afghan Agew:ies
Ltd. case in the manner. in which it has been done. As pointed out by
us, all that the case purports to Jay down is that the court can enforce·
G an obligation incurred by an authority on which another has acted
npon and put himself in a disadvantageous position, when the autho-
rity resiles arbitrarily or on mere whim or on some un-defined and
un-disclosed grounds of necessity.
With respect, we feel we are unable to agre<withthe~nterpretation.
B put by Bhagwati, J. Bhagwati, J. states "The defence of executive
necessity was thus clearly negatived by this Court and it was pointed
(I) 11979] 2 S.C.R. 641.
J1T RAM v. HARYANA (Kailasam, J.) 723

out that it did;not release the Government from its obligation tojhonour
the promise made by it, ifthe citizen acting in reliance on the promise,
had altered his position. The doctrine of promissory estoppel was
in 1uch a case applicable agaimt the Government and it could not be
defeated by invoking the defence of executive necessity." The same
view has again been reiterated at page 682 where it is stated" The law
• may, therefore, now be taken to be settled as a result of this decision
B
tb.at where the Government makes a promise knowing or intending
that it would be acted on by the promises and in fact, the promisee,
acting in reliance on it, alters his position, the Goverrurent would be
held bound by the promise and the promise would be enforceable
against the Government at the instance of the promisee, notwithstand- c
ing that there is no consideration for the promise and the premise is
not recorded in the form of a formal contract as required by Article
299 of the Constitution." These observations would be right if they
are read with the qualifications, laid down in the Indo Afghan-Agencies
case and other cases.
D
The further observations of the learned Judge that: "Every one
is subject to the law as fully and completely as any other and the Go-
vernment is no exception. It is indeed the pride'.of constitutional demo-
cracy and rule of law that the Government stands on the same footing
as a private individual so far as the obligation of the law is concerned,
the former is equally bound as the latter." Again "but if the Govern· E
ment makes such a promise and the promises acts in relience upon it
and alters his position, there is no reason why the 'Government should
not be compelled to make good such promise like any other private
individual do not appear to convey the true effect of the decision."
The decision of this Court in Century Spinning and Manufacturing
Ce. Ltd. and Anr. v. The Ulhashagar Municipal Council and Anr. (supra) F
was understood by Justice Bhagwati as refusing to make a distinction
between the private individual and public body so far as the doctrine
• of promissory estoppel is concerned. These observations would be
correct only if they are read with the exceptions recognised by Justice
Bbagwati himself elsewhere in his judgment along with other restric-
• tions imposed by Judgments of this Court.

We find ourselves unable to ignore the three decisions of this Court,
two by Constitution· Benches M. Ramanatha Pillai v. The State of
Kera/a and Anr. (supra) and State of Kera/a and Anr. v. The Gwafior
Rayon Silk Manufacturing (Wvg.) Co. Ltd. etc. (supra) and the third
by a Bench of four Judges of this Court in Excise Commissioner, U. P. H.
Allahabad v. Ram Kumar (Supra) on the ground that the observations
are in the nature of obiter dicta and that it cannot be insisted as intend-
724 SUPREME COURT REPORTS [1980] 3 S.C.R.

A ng, to have laid down any proposition of law different from that en-
unciated in the lndo Afghan Agencies case. It was not necessary for
this Court in the cases referred to above to refer to Union of India and
Ors. v. M/s. lndo Afghan Agencies Ltd., or if properly ;understood
it only held that the authority cannot go back on the agreement arbi-
trarily or on its mere whim. We feel we are bound to follow the deci-
B sions of the three Benches of this Court which in our respectful opinion
have correctly stated the law. We are also unable to read the case of
the House of Lords in Howell v. Falmouth Boat Construction Co. Ltd.
(supra) as not having overruled the view of Denning, J and as not
having expressed its disapproval of the doctrine of promissory estoppel
against the Crown nor overruled the view taken by Denning, J in
c Robertson v. Minister of Pensions that "the Crown cannot escape the
obligation under the doctrine of promissory estoppel."
We find ourselves unable to share the view of the learned Judge
that the Constitution Bench of this Court in Ramanathan Pil/ai's case
(supra) heavily relied upon the quotation from the American juris-
D prudence para 123 p. 873 of Vol. 28. Again we feel to remark that
"unfortunately this quotation was incomplete and had overlooked
perhaps inadvertantly" is unjustified (emphasis supplied).
We feel we are in duty bound to express our reservations regarding
the "activist" jurisprudence and the wide implications thereof which
E the learned Judge has propounded in his judgment. The first part of
the judgment relates to the development of law relating to promissory
estoppel in England following the High Trees case. As pointed out by
us earlier tbe doftrine of promissory estoppel is not very helpful as
we are governed by the various provisions of the Indian Contract Act
Sections 65 and 70 provide for certain reliefs in void contracts and in
F . unenforceable contracts where a person relying on a representation
has acted upon it and put himself in a disadvantageous position .
. Apart from the case in Robertson v. Minister of Pensions, the House
of Lords in Howell's case and the Privy Council in Antonio Buttigieg's
case and the other English Authorities do not agree with the view that
.the plea of promissory estoppel is available against the Government.
G Further we have to bear in mind that the Indian Constitution as a
matter of high policy in public interest, has enacted Article 299 so as to
save the Government liability arising out of unathorised acts of its
officers and contracts not duly executed.
The learned Judge has considered at some length the doctrine of
H consideration and how it has thwarted the full development of the new
equitable principle of promissory estoppel. After discussing the Ameri-
can Law on the subject, he has observed that the leading text book
JIT RAM v. HARYANA (Kailasam, J.) 725

writers view with disfavour the importance giveu to "consideration". A
The leamed Judge proceeds to observe that : "having regard to the
general opprobrium to which the doctrine of consideration has been
subjected to by eminent jurists, we need not he unduly anxious to pro-
ject this doctrine against assault of erosion nor allow it to dwarf or
stultify the full development of the equity of promissory estoppel or
• illhibit or curtail its operational efficacy as a justice device for pre- B
venting injustice." Here again we have to bear in mind that the Indian
Contract Act regulates the right of parties, an.d expressly insists on the
necessity for lawful consideration which cannot be dispensed
with by invoking some equitable doctrine. Section 10 of the Contract
Act provides :-
c
"All agreements are contracts if they are made by the free
consent of parties competent to contract, for a lawful con-
sideration and with a lawful object, and are not hereby expressly
declared to be void."

It will be seen that for a contract to be valid, it should be for a D
lawful consideration. Section 25 of the Contract Act provides that an
agreement made without consideration is void unless it satisfies one
of the conditions mentioned in this section.

The learned Judge has held that if the Government is to resist its
liability it will have to disclose to the Court what are the facts and E
circumstances on account of which the Government claims to be exemp.
ted from the liability and it would be for the Court to decide whether
these facts and circumstances are such as to render it inequitable to
enforce the liability against the Government. This statement will have
to be read with the exceptions stated by the Learned Judge himself
and those recognised by the:decisions of this Court. In C. Sankaranara- F
yanan;v. State of Kera/a(') it was held that the-power of the Government
under Article 309 to make rules regulating the conditions of service
of Government employees or of teachers of aided schools cannot in
any way be effected by any agreement. Rule of estoppel against Govern-
ment cannot be iIJ,VOked in such cases. In Narendra Chand Hem Ram
and Ors. v. Lt. Governor Administrator Union Territory, Himachal G
Pradesh and Ors.,(2) this Court has laid down that the power to impose
tax is undoubtedly a legislative power and that no Court can issue
mandate to a legislature to enact a particular law and similarly no
Court can direct a subordinate:legislative;body to enact or not to enact
a law which it may be competent to enact. Again in State of Tamil
II
(I) [1971] 2 s.c.c. 361.
(2) [1972] I S.C.R. 940.
726. SUPREME COURT REPORTS [1980] 3 5.6.R..

A Nadu and Ors. etc. v. S. K. Krishnamurthi etc. etc.(lfthis Court held tllat
the policy of State to nationalise text books cannot be challenged bY
the publishers on the ground that the rules were in derogation of their
rights. It was held that the rules were in the nature of Departmental
\ instructions and do not confer any right on the publishers nor are they
designed to safeguard the interest of publishers and that the poliey
B of nationalisation was conceived in public interest and as the Govern-
ment is at liberty to change the text books and delete from and add
to the list of approved text books and the publishers can have no grie-
vance. In M/s. Andhra Industrial Works v. Chief Control/er of Imports
and Ors.,(2) alfourtiudges Bench of this Court)held that an applicant for
a permit under Import Trade Policy has no absolute right to the grant
c of import licence and that the applicant cannot complain that the
existing instructions or orders made in pursuance of the Import and
Export Control Act place "unreasonable restrictions" on the peti-
tioners' right to carry on trade or business. These restrictions obviously
have been imposed in. the interests of the general public and national
D economy and with the development of imports, regulating foreign
exchange have necessarily to be appropriately controlled and:regulated.

Professor S. A. De Smith in his Judicial Review on Administrative
Action, 3rd Edn. p. 279 sums up the position thus: "Contracts and
Covenants entered into by the Crown are not to be construed as being
E subject to implied terms that would exclude the exercise of general
discretionary powers for the public good: On the contrary they are to
be construed as incorporating an implied term that such powers re-
main exercisable. This is broadly true of other public authorities also.
But the status and functions of the Crown in this regard are of a higher
order. The Crown cannot be allowed to tie its hands completely by
F prior undertakings is as clear as the proposition that the Courts cannot
allow the Crown to evade compliance with ostensibly binding
obligations whenever it thinks fit: If a public authority lawfully re-
pudiates or departs from the terms of a binding contract in order to
· exercise its overriding discretionary powers, or if it is held never to
have been bound in law by an ostensibly binding contract because the
G undertakings would improperly fetter its general discretionary powers,
the other party to the agreement has no right whatsoever to damages
or compensation under the general law, no matter how serious the
damages that party may have suffered." Professor H. W. R. Wade in
Administrative Law Fourth Edn. pp. 329-330 has pointed out that the
doctrine of estoppel cannot be allowed to impede the proper exercise
H
(I) [1972] 3 S.C.R. 104.
(2) [1975] I S.C.R. 327.
JIT RAM v. HARYANA (Kailasam, J.) 727

eJ public and statutory functions by the State and public authorities. A
In Public Law the most obvious limitation on the doctrine of estoppel
is that it cannot be invoked so as to give an authority powers which
it does not in law possess. In other words, no estoppel can legitimate
action which is ultra vires. As has been amply illustrated the Court
is normally extremely careful to prevent any legal doctrine from im-
peding the exercise of statutory discretion in the public interest. B
•
On a consideration of the decisions of this Court it is clear that
there can be no promissory estoppel against the exercise of legislative
power of the State. So also the doctrine cannot be invoked for preven-
ting the Government from acting in discharge of its duty under the
law. The Government would not be bound by the act of its officers c
and agents who act beyond the scope of their authority and a person
dealing with the agent of the Government must be held to have notice
()f the limitations of his authority. The Court can enforce compliance
.by a public authorityoftheobligationlaid on him if he arbitrarily or
()D his mere whim ignores the promises made by him on behalf of the
D
6overnment. It would be open to the authority to plead and prove
that there were special considerations which necessitated his not being
able to comply with his obligations in public interest.

In a fervent plea for the doctrine to speak in all its activ isl magni-
tude the learned Judge observes "that is no reason why this new princi-
ple, which is a child of equity brought into the world with a view E
to promoting honesty and good faith and bringing law closer to jus-
tice should be held in fetters and not allowed to operate in all the
activist magnitude, so. that it may fulfil the purpose for which it was
conceived and born". It is no doubt desirable that in a civilised society
man's word should be as good as his bond and his fellow men should
F
be able to rely on his promise. It may be an improvement if a cause of
action would be based on a mere promise without consideration.
Jhe law should as far as possible accord with the moral values of the
society, and efforts should be made to bring the law in conformity with
the moral values. What are the moral values of the Society?
This is a very complex question because the concept of moral values G
.amongst different persons and classes of persons is not always the same.
The concept of moral values is not static one. It differs from time to
.time and from society to society. It is hazardous for a Court to attem-
pt to,enforce what according to it is the moral value. As pointed out
by Roscoe Pound ; "It leads to an attempt to enforce overhigh ethi-
.cal standards and to make legal duties out of moral duties which are H
not sufficiently, tangible to be made effective by the. machinery of
the legal order. A more serious.difficulty is that the attempt to identify
I,,,,
728 SUPREME COURT REPORTS [1980] 3 s.c.R.

A law and morals gives too wide a scope to judicial discretion". Thr
question is how should it be brought about. The learned Judge says ,
that it should be the constant endeavour of the Courts and the
~~ '
legislature to close the gap between the law and morality and bnng
about as near an approximation between the two as possible. LOrd
Denning might have exhorted the Judges not to be timorous sours but •
B to be bold spirits, ready to. allow a new cause of action if justice so
requires. These are lofty ideals which one should steadfastly pursue.
• -.
But before embarking on this mission, it is necessary for the Court t!)
understand clearly its limitations. The powers of the Court to legislate
is strictly limited. "Judges ought to remember that their office is jus
dicere and not jus dare to interpret law, and not to make law or give
c law." Chandrachud, C. J. Speaking for a Constitution Bench. in
Shri Gurbaksh Singh Sibbia etc. v. State of Punjab,(1) has clearly
pointed out the limited powers of the Courts to make laws in
· construingthe provisions of the statutes. The Learned Chief Justicj!
has observed :- '
D "The true question is whether by a process'.of constructiom,
the amplitude of judicial discretion which is given'to the High
Court and the Court of Session, to impose such'.conditions as

E
they may think fit while granting anticipatory bail, should be
cnt down by reading into the statute coilditiotls which ate not
to be found therein ***Our answer, clearly and emphatically ·
is in the negative."
'
Again the Learned Chief Justice warned "Judges'.have to decide
cases as they come before them, mindful:of the need to keep passions
and prejudices out of their decisions. AndJi(will be strange if, by en,i-
ployiug judicial artifices and techniques, we cut down the'.discretion.
F so wisely conferred upon the Courts, by devising a formula which will
confine the power to grant anticipatory bail within a strait-jacket.'.'-
"Therefore, even if we were to frame a 'code fof,thegrant'.of anticipl!7
tory bail', which really is the business of the:legislature, it can at best
furnish broad guide-lines and cannot compel blind adherence".
The Courts by its very nature are most ill-snited to undertake the
G task of legislating. There is no:machiuery for the Court to ascertain tli'.e
conditions of the people and their requirements and to make law~
that would be most appropriate. Further two Judges may think that :a •
)-·
particular law would be desirable to meet the requirements whel-eas
another two Judges may most profoundly differ from the conclusio~s
H arrived at by two Judges. Conscious of these handicaps, the law re~'
quires that even an amendment of the Supreme Court Rule.s wltich
(I) [1980! 3 S.C.R. 383.
I
JIT RAM v. HARYANA (Kailasam, 1.)

I
govern the proced11r~ to l;>e adopted by it fo~ re~Iating its work, can
-0nly be effected by·the whole Court sitting and deciding.

The result is that so far as !]le recommendation of the Municipal
Committee to the Government to levy octroi duty, is concerned though
H is contrary to the. representation it made to the buyers of the sites

.,
...
•

~
in the Mundi, the Municipality is not estopped as the representation
made by it was beyond the scope of its authority. The levy of tax being
for a public purpose i.e. for augmenting the revenues of the Muni-
cipality as laid down in Ram Kumar's case, the plea of estoppel is not
available. The order of the Government directing the levy of octroi
B

r in pursuance of the resolution elf the Municipality cannot also be
challenged as it is in the exercise of its statutory duty. c
The result is both the appeals fail and are dismissed with costs
of one set to be borne equally by the two appellants .

• S.R. Appeals dismissed. .Q

r
••

8-463SCI/80