Holding

Reimbursement under the IPRS is available only for expenses actually incurred; since the appellant did not pay the JPC levies, it is not entitled to reimbursement, and the specific refund undertaking precludes estoppel.

Summary

Tata Iron and Steel Co. Ltd. (the appellant) exported engineering goods using its own steel, which was not procured at the Joint Plant Committee (JPC) price that includes several levies. The Engineering Export Promotion Council (EEPC) later held that the appellant was not entitled to the International Price Reimbursement Scheme (IPRS) benefit and demanded repayment of an excess amount paid under a bona‑fide mistake, invoking an undertaking to refund any over‑payment. The appellant contended that the IPRS did not require actual payment of the JPC price, that it was entitled to the price‑difference subsidy, and that the government’s conduct was estopped by its earlier representations. The Supreme Court examined the meaning of “reimbursement” in the scheme, held that reimbursement presupposes a prior expense actually incurred, and noted that the appellant had never paid the JPC levies; therefore no reimbursement was payable. It also observed that the specific undertaking to refund any excess payment negated any claim of estoppel by conduct. Consequently, the appeal was dismissed.

Issues considered

Whether the International Price Reimbursement Scheme entitles a exporter to reimbursement when it has not paid the JPC levies incorporated in the domestic price.
Whether the doctrine of estoppel by conduct can be invoked to prevent the government from demanding repayment of excess IPRS payments.
Interpretation of the term ‘reimbursement’ within the IPRS scheme.
Whether the appellant’s undertaking to refund excess payments bars the operation of estoppel.

Legislation cited

Constitution of Indias. Article 136, s. Article 226
Indian Evidence Act, 1872s. 115

Subjects

International Price Reimbursement SchemereimbursementJoint Plant Committee priceestoppel by conductadministrative lawunjust enrichmentexport subsidyConstitutional remedyArticle 226Article 136

Judgment

A °TATA IRON AND STEEL CO. LTD.
v.
UNION OF INDIA AND ORS.

NOVEMBER 30, 2000

B [M. JAGANNADHA RAO AND U.C. BANERJEE, JJ.]

Constitution of India, 1950: Article 226 and 136.

International Price Reimbursement Scheme (!PRS)-Applicability of-
C IPRS introduced to curb the ascending trend for demand of imported steel
due to higher price of domestic steel-IPRS aimed at protecting exporters of
engineering goods, who, by use of domestic steel, were exposed to additional
expenditure and suffered loss due to price difference-IP RS also provided for
reimbursement of the price difference between domestic and international
D prices-Manufacturer exported engineering goods by using its own
111anufactured steel without involving the price elements declared by Joint
Plant Committee (JPC)-Engineering Export Promotion Council (EEPC)
refused to recognic manufacturer's entitlement to avail benefit of IPRS-
Therefore, EEPC demanded refund of excess IPRS payment made to the
manufacturer-Validity of-Held: On a true reading of the IPRS, the
E manufacturer is not entitled to any reimbursement as it has not paid various
levies declared by JPC.

Evidence Act, 1872: Section JJ5.

F Estoppel-Estoppel by conduct-Doctrine-Invoking of-Amount
erroneously paid or paid in excess-Undertaking to refund excess amount
existed-Held: Under such circumstance question of applying doctrine of
estoppel by conduct does not arise.

Words and Phrases:
G
'"Reimbursement"-Meaning of-In the context of International Price
Reimb11rsement Scheme.

Doctrines:

Doctrine of Estopped by conduct.
H 228
TATA IRON AND STEEL CO. LTD. v. U.0.1. 229
The respondent introduced a Scheme known as International Price A
Reimbursement Scheme (IPRS) to curb the ascending trend for demand of
imported steel ilue to higher domestic price structure of indigenous steel.
The domestic price structure as fixed by the Joint Plant Committee (JPC)
included a number of levies resulting in JPC pricing being higher than the
International pricing. The IPRS was aimed at protecting exporters of B
engineering goods, why, by use of domestic steel were exposed to additional
expenditure and thus suffered a loss due to the price difference. The IPRS
also provided for reimbursement of the difference between the domestic and
international prices.

The appellant exported engineering goods by using its own C
manufactured steel without involvement of any of the price elements as
declared by JPC. It is on this score that the Engineering Export Promotion
Council in 1992 refused to recognize the appellant's entitlement to avail of
the benefit of the IPRS and demanded refund of a certain amount with interest,
which was paid in excess under a bona fide mistake. There was a specific
undertaking by the appellant to refund any amount erroneously paid or paid D
in excess. The High Court dismissed the appellant's writ petition challenging
the aforesaid demand. Hence this appeal.

On behalf of the appellant it was contended that the IPRS did not require
actual payment of domestic price; that the appellant was entitled to the price
difference between the domestic and international prices; and that by E
conferment of the benefit in terms of IPRS the conduct of the respondent was
hit by the doctrine of estoppel by conduct.

Dismissing the appeal, the Court

HELD : I. The International Price Reimbursement Scheme (JPRS) F
without dc.·~bt stands attracted for reimbursements only. The issue, therefore,
arises having regard to the meaning attributed to the word 'reimbursement'
as to whether there is any entitlement for the appellant It needs to be adverted
that the appellant in fact has been receiving the money in the past and the
entitlement thereof is challenged only since 1992 and this payment has been
effected by mistake and immediately on detection thereof and, in order to G
rectify the mistak~, a notice was sent as regards the excess payment on
account of price difference between the domestic and international prices.
(238-G-Hl
2.1. In common acceptation the word 'reimburse' means and implies 'to
. pay back or refund'. It denotes restoration of something paid in excess; as H
230 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A regards the respondent it cannot but mean to indemnify having regard to the
common grammatical meaning of the word 'reimbursement' Reimbursement
has to mean and imply restoration of an equivalent of something paid or
expended. Reimbursement pre-supposes previous payment. 1239-E]

2.2. The expression used in IPRS is reimbursement to the extent of the
B difference lietween the domestic and international prices and in the event of
non-payment thereof question of claiming any price difference would not arise
as otherwise it would amount to obtaining double benefit. 1239-81

R v. Mills, (1963)1 All ER 202, referred to.

C 3.1. On a true reading qf the Scheme and various clauses thereunder
together with the available meaning on the basis of the language used, the
IPRS Scheme cannot possibly cover a situation as is in the present context.
In the event the appellant is permitted and allowed to enjoy the benefits in
terms of the Scheme, the situation would be rather not only of unjust
D enrichment by entertainment ofa totally wrong claim. 1240-A, BJ

3.2. The appellant admittedly has not paid the Joint Plant Committee
(JPC) price, which includes various levies of raw material used for the
product. The appellant cannot have any reimbursement for expenses, which it
has never incurred. (239-G)

E 3.3. The correspondence unmistakably divulges an obligation to pay
certain compensation in the event there is a payment of certain levy by the
appellant. The appellant admittedly has not made the payment. Doctrine of
unreasonableness is opposed to doctrine of fairness and reasonableness will
have its play, if allowed. The happening of an event has not taken place and,
F therefore, it cannot be said that irrespective of such an event reimbursement
is to be allowed. (243-D]

4. The issue of an estoppel by conduct can only be said to be available in
the event of there being a precise and unambiguous representation and on
that score a further question arises as to whether there was any unequivocal
G assurance prompting the assured to alter his position on status. In the event
of there being a specific undertaking to refund any amount erroneously paid
or paid in excess, question of there being any estoppel would not arise.
(242-D, G]

Sarai Chunder Dey v. Gopal Chunder Laha, (1898) LR 19 IA 203;
H Pi:;kard v. Sears, 1873; 6 Ad. & El. 469; Seton Laing Co. v. Lafone, (1887) 19
TATA IRON AND STEEL CO. LTD. v. U.0.L [BANERJEE. J.] 231
QBD 68; Craine v. Colonial Mutual Fire Insurance Co. Ltd. (1920) 28 CLR A
305; Grundt v.The Great Boulder Pty. Gold Mines Ltd., (1938) 59 CLR 641
and Central Newbury Car Auctions Ltd. v. Unity Finance Ltd., (1956) 3 All
ER 905, and Phipson On Evidence 14th Edn., referred to.

Lyon v. Reed (1844) 13 M & W 285; Freeman v. Cooke, (1848) 2 Exch.
654; Mercantile Bank v. Central Bank, (1938) AC 287; National Westminster B
Bank v. Barclays Bank International, (1975) QB 654; Moorgate Mercantile
Co. Ltd. v. Twitching (1977) AC 890 (HL) and Square v. Square (1935) P. 120,
cited.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6962 of2000. C
From the Judgment and Order dated 26.4.99 of the Calcutta High Court
in A. No. 385 of 1996.

Soli J. Sorabjee, Attornery General, Altaf Ahmad, Additional Solicitor
General, T.R. Andhyarujina, Ravindra Naraian, Ms. Deepa Das, Ms. Bhavana D
Ahuja, Gaurav, Sanjiv Sen, for Ms. Padmini Kumar, Surajit K. Mitra, K. Chandra,
Ms. Sangeeta Manda!, Ms. Varsha Caudhary, Kapil Kr. Chaudhary, Jaideep
Gupta and Shreekant N. Terdel for the appearing parties.

The Judgment of the Court was delivered by

BANERJEE, J. Leave granted. E

This appeal against the judgment of the High Court at Calcutta is
addressed on two counts: The first involving the true purport of International
Price Reimbursement Scheme (IPRS) as introduced by the Government of
India and the second pertains to the doctrine of estoppel by conduct.
F
Background Facts:

By the Government Notification No. SC (A)-24 (113)/63 Dated 29.2.1964
issued by the Department of Iron & Steel in the Ministry of Steel, Mines and
Heavy Engineering, the Government of India to give effect to the proposal G
for fixation of steel prices for de-controlled categories, constituted the Joint
Plant Committee consisting of representatives of all me.. ..,roducers of steel
along with Government representative. It is the Joint Plant Committe'
(hereinafter referred to as 'JPC') with whose concurrence, the main producer.s,
being its members control the prices of similar categories of steel, though
however, the same is restrictive in its application and is made applicable to H
232 SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R.

A supplies effected by the main steel producers only, viz. Tata Iron & Steel Co. ·
Ltd., Indian fron & Steel Co. Ltd. and Hindustan Steel Ltd. - (Presently Steel
Authority of India Ltd.).

The records depict that consequent on the increase in excise duty in
steel materials· under Government of fndia Notification dated 17th March,
B 1972, the prices of steel materials were directed to be inclusive of JPC
contribution to the re-roller Freight Differential Fund, Equalised Freight Element
and provision for JPC Engineering Goods Export Assistance Fund. The
inclusion of the above were made applicable to various categories of materials
including Bar, Rods, Slabs Blooms, Coil, Billets etc. as appears from JPC
C announcement No. 81 dated March 20, 1972. It is, however, significant to note
that by reason of the inclusion of the JPC price elements as above, the
domestic price for iron and steel materials has always been higher than the
international price of steel and resultantly demand for imported steel rather
than the indigenous manufacture was on an ascending trend and it is to
combat and curb such a trend and having regard to the higher domestic price
D structure, the Government of India introduced the International Price
Reimbursement Scheme (hereinafter referred to as the 'Scheme') so as to
provide some protection to exporters of engineering goods who would
otherwise by reason of user of domestic steel, would be exposed to an
additional expenditure and thus suffer a loss for the price difference as
E noticed above. Incidentally, be it noted that the protection scheme came into
force by reason of the price increase effected on 9 .2 .1981 by the Government
of India, Ministry of Commerce Notification dated 23rd July, 1981. One
redeeming feature of the Scheme however, is reimbursement (emphasised)
and it is in this context that Clauses 2.4, 2.5, 2. 7 and 2.8 of the Scheme are
relevant and thus ought to be noticed in extenso and relevant extracts of
F which are as below:
2.4. Supplies of Steel made under release orders issued by Iron &
Steel Controller will be made at the prevailing plant/stockyard
price. After the export are effected, price difference between its
"domestic price" and the relevant "international price" will be
G reimbursed to the exporter. Contracts eligible for reimbursement
... .
under this scheme (including fresh contracts) would have to be
got registered with the concerned Regional Office of the EEPC
within 45 days from the date of the contract.
2.5. For reimbursement purposes, the "domestic price" for these
H categories would be the "JPC plant price for those categories
TATA IRON AND STEEL CO. LTD. v. U.0.1. [BANERJEE, J.] 233
where JPC price control exists and SAIL price for other ite1ris A
prevailing on the date of exports. The domestic price will be
exclusive of taxes like sales tax, octroi, etc.

2.7. Procedure for Reimbursement:

(A) The application for reimbursement will be made to the Regional B
Offices of the EEPC, with whom the exporter is registered;

(B) The following documents will be submitted by the exporter for
claiming the reimbursement of price difference between domestic ,
and international prices of steel;

(i) Application in the prescribed form marked Annexure-Vl in C
triplicate;

(vi) A claim bill indicating categorywise consumption of steel
and the price difference payable based on domestic price D
prevalent on the date of export and the international prices
for the second preceding month as explained in paragraphs
............. (Emphasis supplied).

(vii) Sale voucher for purchase of steel/pig iron from Main
Producers in original or the following documents: E
I. Auditor/chartered Accountant's Certificate in the prescribed format
to the effect that no imported steel/pig iron has been utilised in
the goods exported by the company.

2 An indemnity Bond in prescribed format indemnifying Government F
against any wrong payment on account of wrong calculation and
I or for use of imported steel materials.

(C) ................ the reimbursement benefit may be claimed by any one of
the two parties provided the claimant is a registered exporter and
otherwise eligible to get reimbursement benefit under this scheme; G
(Emphasised)

2.8 ····························
(v) The claim for reimbursement would be made only in respect of
consumption of indigenous steel and pig iron procured from the
main producer or other sources. Claims for reimbursement would H
234 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A not be admitted against co1.sumption of Steel I pig iron imported
against Advance License under the Duty Exemption Scheme cmd
against imprest I REP license or under OGL. No claims will be
admitted in case Customs duty refund has been claimed I will
be claimed under brand rate of duty drawback for such steel I
pig iron. (Emphasised)
B
Further facts are as below:

(a) Application paper being Annexure VI to the Scheme pertaining to
reimbursement of difference between the domestic and international
price of steel contain details pertaining to total quantity of steel
c consumed for the manufacture of the product fo;· export during a
particular month together with a statement of the amount of claim.

(b) Annexure VI to the Scheme itself provides for furnishing of an
undertaking recording therein an obligation to refund the amount of
Bill in full or part against application for reimbursement of price
D difference between domestic and international prices in case the
declaration/certificate furnished by the appellant against the claim are
found to be incorrect at any time. The undertaking further recorded
that the refund would be effected within a period o~ 10 days from the
date of receipt of notice asking for the refund failing which the
E amount paid erroneously or in excess shall be recovered from the
appellant or to be adjusted against any other claim.

(a) Incidentally Annexure VI also contained an Indemnity Bond as
well which records as below:

" ......................................Such payments are to be made on demand
F and without demur. Our liability for payment under the bond
being irrevocable and unconditional. (Emphasized).
The Indemnity Bond further provides
Now the condition of this bond is such that if as a result of the
details scrutiny of the above said application (s) the amount
G finally payable to obliger is detennined to be (the decision of the
government being final and binding) nil/less because the obliger
has been paid in excess on wrong calculations or has used
imported steel/pig iron in the manufacture of items thus exported
and also received the price difference claim from the Disbursing
H Authority, the eligibility of receiving further amounts by way of
TATA IRON AND STEEL CO. LTD. v. U.O.l. [BANERJEE, J.] 235
difference in the price between the domestic and international A
prices for steel/pig iron used in the manufacture of items exports,
will be withdrawn and Government shall be at liberty to claim
upon the obliger to return back the amount already paid by the
disbursing authority within seven (7) days of the receipt of the
notice from the disbursing authority failing which the government B
shall be free to take any action against the obliger without
prejudice to the Government claim including security deposits
and earnest money deposits lying with any other department of
the Government or by attachment of our assets, shareholding
and goodwill as also to stop all further payment/assistance to the
obliger as available to the exporters." C
The facts in issue:

The factual score depicts that in terms of the Scheme as above, the
appellant claimed benefits on the basis thereof and payments have also been
made to the extent of differential element involved in the price structure. The . D
factual score however disclose that the appellant while exporting engineering
goods did use its own manufactured steel items without involvement of any
of the price elements as declared by JPC and as noticed above. It is on this
score however, the Engineering Export Promotion Council subsequently by its
letter dated 23rd November, 1992 refused to recognise the appellant's
entitlement to avail of the benefit of the Scheme. The Council expressly E
communicated that a sum of Rs. 10,37,96,604 was paid in excess under a bona
fide mistake being discovered later. The Council in addition to the claim
above-said also claimed interest at the rate of 18% per annum. The appellant
however, in turn by its letter dated 19th January, 1993 while recording
acceptance of the factum of user of 'own materials' placed on record that the F
JPC guidelines exempt main producers from having levies on steel manufactured
by them but used for either captive consumption or for manufacture of down
stream products and this proves that the JPC had accepted the unique
position of an integrated steel producer who also manufactures other down
stream products and by reason of such an acceptance, the appellant is not
precluded from deriving the benefits under the Scheme. G
It has been the specific stand of the appellant that the Scheme for Price
Reimbursement from the time of its introduction is applicable universally to
all exporters since the export would not have been viable without the benefits
under the Scheme. Further the appellant contended that the EEP Council did
not find any fault with the claims lodged for all these years, evidently because H
236 SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R.

A the Council was also satisfied about the eligibility of the company, nor there
was any violation or circumvention of any of the provisions of the Scheme.

Subsequently, however, the Council by a letter dated 19th May, 1994
directed an adjustment of a sum of Rs. 10,37,96,604 being the excess IPR -
Scheme payment to the Appellant herein and hence the Writ Petition before
B the High Court which was ordered in favour of the Appellant herein by the
learned Single Judge though however, reversed in Letters Patent Appeal by
the Appellate Bench of the High Court and hence the appeal before this
Court.

Contentions in support:
c In support of the Appeal, the learned senior counsel, Mr. Andhiyarujina
contended that the scheme by itself if read in its entirety does not require
actual payment of domestic price and in support thereof it has been contended:

(I) The Scheme does not require the applicant to state the actual
D domestic price paid by it to make the claim, after the 1985
amendment.

(2) After the 1985 amendment it was not necessary, nor a requirement
in the matter of submission of sales voucher.

(3) A claimant has only to state the price difference payable between
E the domestic price prevalent on the date of export and the
international price of the preceding month.

(4) . The JPC price is not applicable to the steel purchased from
producers other than the main producers i.e. "other sources".
Exporters who obtain steel from "other sources" do not have to
·p
pay JPC price or JPC levies. Nevertheless the price difference is
payable between the JPC prices and the international prices.

(5) There is no provision in the Scheme for diminishing or altering
tlie JPC prices to conform to a price actuallr paid by the
manufacturers/exporters for the steel.
G
(6) For non-JPC categories of steel to be used in the manufacture,
the domestic price would be the SAIL price. SAIL prices do not
include JPC levies.

(7) The Scheme disregards the actual price paid by the manufacturer/
H exporter for the domestic steel. He may have paid to the producer
TATA IRON AND STEEL CO. LTD. v. U.0.1. [BANERJEE, J.] 237

of steel a higher or lower price than the JPC price. This is ignored A
by the Scheme and the uniform JPC price is taken.

(8) Though the Scheme uses the word "reimbursement", in the context
of the Scheme, there is no repayment to the exporter. The word
'reimbursement' here truly means the payment to the exporter of
the price difference between the higher domestic price and the B
lower international price, i.e. to say a subsidy for exports.

Mr. Andhyarujina, learned senior counsel, very strongly commented
that after the commencement of the Amendment on 17th of October, 1985 the
exporters of the engineering steel product could procure the indigenous steel C
and pig iron from any source in the country since there was existing no
obligation to procure materials from only the main producers but from other
sources as well and it is in this context, strong reliance was placed on clause
2.8 (v) pf the Scheme. Mr. Andhyarujina contended that the very use of the
words 'other sources' being an alternate to the main producer depicts the
intent of the framers of the Scheme that though primarily reimbursement D
would be effected in respect of consumption of indigenous steel and pig iron
procured from the main producer but this procurement may be had from other
sources as well, such as Mukand Iron, Jindal, Orient etc .. It has been contended
rather strongly that other sources cannot but mean other manufacturers
producing indigenous steel and contra view would run counter to the intent E
of the framers of the Scheme. It has been contended that the words 'procured
from ... other sources', as a matter of fact, cannot but mean other sources than
the main producer. The word 'procure' in common English parlance mean and
imply 'to obtain' or to get possession from someone else. It is, as a matter
of fact, obtaining the possession of someone which one has not already got.
This attribution however stands accepted by Lord Parker, CJ. in R. v. Mills, F
(1963) !All ER202: 204. Old English however, referred to the word as a 'sinister
move' but having regard to the common acceptation of the word, the
submission of Mr. Andhyaujina seem to be rather attractive.

Incidentally, prior to 17th October, 1985 the price protection was available G
to exporters who used indigenous raw material procured from the main
producers. On 17th October, 1985 the Scheme was amended so as to record
that the production of sale vouchers, for the purchase of steel, pig iron from
the main producers, ceased to be a requirement though, however, in lieu
thereof an Audit Certificate has been demanded by the Union of India for
certification that no foreign steel has been used in the concerned manufactured H
238 SUPREME COURT REPORTS [2000) SUPP. 5 S.C.R.

A item.

During the course of submissions Mr. Andhyarujina in no uncertain
terms contended that JPC prices are the prices which are announced by the
JPC from time to time for supplies from member steel plants, namely, the main
B producers (SAIL and TISCO) and the JPC prices applied for purchases from
the main producers but not to purchases from other sources or other producers
as noted above. TISCO, admittedly, is a main producer of steel in the country
and admittedly further TISCO was captively consuming steel manufactured
by it in the export product being steel tubes and it is on this score that they
claimed the benefits of the IPRS from 1985 onwards and allowed till I 992 when
C the respondents said to have illegally denied the appellant the full benefits
on the ground that it has not paid the special levies in the JPC price structure.

Contentions raised on behalf of the Respondents:

D It is in this perspective that learned Attorney General contended that
IPRS was evolved to avoid financial sufferance to the Indian manufacturer of
iron and steel products from out of indigenous steel having the four basic
price elements known in common English parlance as the JPC price namely,
(i) Engineering Goods Export Assistant Fund (EGEAF) (ii) Steel Development
E Fund (SDF) (iii) Freight Equalisation Fund (FEF) and (iv) JPC Cess. Admittedly,
JPC pricing is higher than international pricing as is available in the steer
market in the country but in order to make sure utilisation of the indigenous
steel from the main producers, the quality of which stands tested , and to curb
and combat the financial stress on the manufacturers, the IPRS was brought
into existence as otherwise Indian manufacturers would be completely out of
F the trade by reason of availability of international steel at a lesser rate.

The IPRS leaves no manner of doubt stands attracted for reimbursement
only. The issue therefore, arises having regard to the meaning attributed to
the word 'reimbursement' as to whether there is any entitlement for the·
G appellant herein. It needs to be adverted that the appellant-petitioner in fact
have been receiving the money in the past and the entitlement thereof is
challenged only since 1992 and this payment as stated by Mr. Attorney
General has been effected by mistake and immediately on detection thereof
and in order to rectify the mistake, a notice was sent as to the excess payment
on account of price difference between the domestic and the international
H prices.
TATA IRON AND STEEL CO.LTD. v. U.0.1. [BANERJEE, J.] 239

Observations: A
Under the International Price Reimbursement Scheme (IPRS) supplies of
steel raw materials required by the Engineering exporters were made available
at the International prices by reimbursing the difference between the JPC
prices and the relevant international prices. The expression used is
reimbursement to the extent of the difference between the domestic and B
international prices and in the event of non-payment thereof question of thus
claiming any price difference would not arise as otherwise it would amount
to obtaining double benefit - This has been the contention of both Attorney
General of India as also the Additional- Solicitor General of India appearing
for the respondents. C
Admittedly, Tata Iron has not paid the JPC price which includes a
number of levies rendering it more than the international prices but the factum
of non-payment of the levies, since the materials in question have been
consumed at the factory itself without payment of any duty, the submissions
of the respondent seems to have been placed at a rather stronger footing. D
In common acceptation the word 'reimburse' mean and imply 'to pay
back or refund': As a matter of fact it denotes restoration of something paid
in excess: as regards the respondent Union of India it cannot but mean to
indemnify having regard to the common grammatical meaning of the word
'reimbursement'. Reimbursement has to mean and imply restoration of an E
equivalent for something paid or expended. Reimbursement pre-supposes
previous payment.

The contextual facts depict that the intention of the Government while
framing the IPRS was to protect the interest of exporters of the engineering
goods where the JPC or the domestic price (which includes a number of F
levies) was more than the international pricing. The appellant TISCO admittedly
has not paid the JPC price which includes various levies of the raw materials
used for the product. As a matter of fact they cannot have any reimbursement
for expenses which they have never incurred. As per the calculation made by
the respondents an amount of Rs. 10,37,96,604 is recoverable from TISCO on G
account of over payment of which a sum of Rs. 6, 75,00,298 stands adjusted
by the Union of India against the payments respectively and a balance
amount of Rs. 3,62,96,306 is yet to be recovered as contended by the
respondents.

' clauses thereunder together H
On a true reading of the Scheme and various
240 SUPREME COURT REPORTS [2000) SUPP. 5 S.C.R.

A with the available meaning on the basis of the language used, the IPRS
Scheme cannot possibly cover a situation as is in the present context. We are
afraid that in tbe event the appellant is permitted and allowed to enjoy the
benefits in terms of the scheme, the situation would be rather not only cif
unjust enrichment but entertainment of a totally wrong claim.

B Second Count:

In support of the Appeal, the learned senior counsel Mr. Andhiyarujina
by way of an alternative submission contended that conferment of benefit in
terms of IPRS and continuance thereof in the matter of payment of price
C difference in terms of the IPRS the conduct of the respondent is hit by the
doctrine of estoppel by conduct.

Estoppel by conduct in modern times stands elucidated with the
decisions of the English Courts in Pickardv. Sears, (1837) 6Ad. & El. 469 and
its gradual elaboration until placement of its true principles by the Privy
D Council in the case of Sarat Chunder Dey v. Gopal Chunder Laha, (1898) L.R.
19 I.A. 203 whereas earlier Lord Esher in the case of Seton, Laing Co. v.
Lafone, (1887) 19, Q.B.D.68 evolved three basic elements of the doctrine of
Estoppel to wit:

Firstly, where a man makes a fraudulent misrepresentation and another
E man acts upon it to its true detriment: Secondly, another may be where a man
makes a false statement negligently though without fraud and another person
acts upon it: And thirdly there may be circumstances under which, where a
mis-representation is made without fraud and without negligence, there may
be an Estoppel: Lord Shand, however, was pleased to add one further element
to the effect that there may be statements made, which have induced other
F party to do that from which otherwise he would have abstained and which
cannot properly be characterised as mis-representation. In this context,
reference may be made to the decisions of the High Court of Australia in the
case of Craine v. Colonial Mutual Fire Insurance Co. Ltd. (1920) 28 C.L.R.
305 Dixon, J. in his judgment in Grundt v. The Great Boulder Pty. Gold Mines
Ltd., (1938) 59 C.L.R. 641 stated that: "in measuring the detriment, or
G demonstrating its existence, one does not compare the position of the
representee, before and after acting upon the representation, upon the
assumption that the representation is to be regarded as true, the question of
estoppel does not arise. It is only when the representor wishes to disavow
the assumption co~tained in his .representation that an estoppel arises, and
H the question of detriment is considered, accordingly, in the light of the
TATA IRON AND STEEL CO. LTD. v. t.:.O.l. [BANERJEE, J.] 241
position which the representee w9uld be in if the representor were allowed A
to disavow the truth of the representation." (In this context see Spencer
Bower and Turner: Estoppel by Representation 3rd Ed.). Lord Denning also
in the case of Central Newbury Car Auctions Ltd. v. Unity Finance Ltd.,
('. 956) 3 All ER 905 - appears to have subscribed to the view of Lord Dixon,
J. pertaining to the test of 'detriment' to the effect as to whether it appears B
unjust or unequitable that the representator should now be allowed to resile
from his representation, having regard to what the representee has done or
refrained from doing in reliance on the representation, in short, the party
asserting the Estoppel must have been induced to act to his detriment. So
long as the assumption is adhered to, the party who altered the situation
upon the faith of it cannot complain. His complaint is that when afterwards C
the other party makes a different state of affairs, the basis of an assertion of
right against him then, if it is allowed, his own original change of position will
operate as a detriment. (vide Grundts: High Court of Australia (supra)).

Phipson on Evidence (Fourteenth Edn.) has the following to state as
regards estoppels by conduct. D
"Estoppels by conduct, or, as they are still sometimes called, estoppels
by matter in pais, were anciently acts of notoriety not less solemn and
formal than the execution of a deed, such as livery of seisin, entry,
acceptance of an estate and the like; and whether a party had or had
not concurred in an act of this sort was deemed a matter which there E
could be no difficulty in ascertaining, and then the legal consequences
followed. [Lyon v. Reed, (1844) 13 M & W. 285, 309] The doctrine has,
however, in modem times. been extended so as to embrace practically
any act or statement by a party which it would be unconscionable to
permit him to deny. The rule has been authoritatively stated as follows: F
"Where one by his words or conduct willfully causes another to
believe the existence of a certain state of things and induces him to
act on that belief so as to alter his own previous position, the former
is concluded from averring against the latter a different state of things
I
as existing at the same time." [Pickard v. Sears (1837) 6 A.& E.
\ 469,474] And whatever a man's real intention may be, he is deemed G
to act willfully "if he so conducts himself that a reasonable man would
take the representation to be true and believe that it was meant that
he should act upon it. (Freeman v. Cooke: (1848) 2 Exch. 654, 663.

Where the conduct is negligent or consists wholly of omission, there
must be a duty to the person misled. Mercantile Bank v. Central H
242 SUPREME COURT REPORTS [4000] SUPP. 5 S.C.R.

A Bank, (1938) AC 287, 304 and National Westminster Bank v. Barclays
Bank International, (1975) Q.B. 654 This principle sits oddly with the
rest of the law of estoppel, but it appears to have been reaffirmed, at
least by implication, by the House of Lords comparatively recently.
[Moorgate Mercantile Co. Ltd. v. Twitchings, (1977) AC 890 (H.L.)]
The explanation is no doubt that this aspect of estoppel is properly
B to be considered a part of the law relating to negligent representations,
rather than estoppel properly so-called. If two people with the same
source of information assert the same truth or agree to assert the same
falsehood at the same time, neither can be estopped as against the
other from asserting differently at another time. [Square v. Square,
c (1935) P.120"

A bare perusal of the same would go to show that the issue of an
estoppel by conduct can only be said to be available in the event of there
being a precise and unambiguous representation and on that score a further
question arises as to whether there was any unequivocal assurance prompting
D the assured to alter his position or status .. The contextual facts however,
depict otherwise. Annexure 2 to the application form for benefit of price
protection contains an undertaking to the following effect:-

"We hereby undertake to refund to EEPC Rs.-- the amount
paid to us in full or part thereof against our application for price
E
protection. In terms of our application dated against exports made
during In case any particular declaration/certificate furnished by us
against our above referred to claims are found to be incorrect or any
excess payment is determine to have been made due to oversight/
wrong calculation etc. at any time. We also undertake to refund the
F amount within IO days of receipt of the notice asking for the refund,
failing which the amount erroneously paid or paid in excess shall be
recovered from or adjusted against any other claim for export benefits
by EEPC or by the licensing authorities of CCI & C."

G and it is on this score it may be noted that in the event of there being a
specific undertaking to refund for any amount erroneously paid or paid in
excess (emphasis supplied), question of there being any estoppel in our view
would not arise. In this context correspondence exchanged between the
parties are rather significant. In particular letter dated 30th November, 1990
from the Assistant Development Commissioner for Iron & Steel and the reply
H thereto dated March 8, 1991 which unmistakably record the factum of non-
TATA IRON AND STEEL CO.LTD. v. U.0.1. [BANERJEE . .1.J 243
payment of JPC price. A
Opinion of the Court:

The contextual facts therefore in no unambiguous language depict that
the four JPC price elements have not been paid by the appellant herein.
Further factual score depicts recording of an undertaking to repay in the B
event of excess payments and on the wake of the findings as noticed
hereinbefore, it would neither be fair nor reasonable or in consonance with
the concept of justice, equity and good conscience directing entitlement of
the appellant as is being claimed. Doctrine of fairness and the duty to act
fairly is a doctrine developed in the administrative law field to ensure the rule C
of law and to prevent failure of justice. It is a principle of good conscience
and equity since the law courts are to act fairly and reasonably in accordance
with the law. The correspondence unmistakably divulge an obligation to pay
certain compensation in the event there is a payment of certain levy by the
appellant herein: The appellant admittedly has not made the payment : Doctrine
of unreasonableness is opposed to doctrine of fairness and reasonableness D
will have its play, if allowed. The happening of an event has not taken place,
can it be said irrespective of such an event reimbursement is to be allowed?
The answer, however, cannot but be in the negative.

In that view of the matter, we record our concurrence with the Judgment
of the Calcutta High Court. The appeal therefore, fails and is dismissed. No E
order as to costs.

v.s.s. Appeal dismissed.