ERNAKULAM MILLS LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) THE Ernakulam Mills Ltd. , the petitioner, was the owner of 69-58 cents of land comprised in Sy. Nos. 1178/2,1195/2 and 1103/4 of ernakulam village. THE land was acquired in 1122 ME. (1947) for the formation of the Fore-shore Road , ernakulam. THE petitioner states that the land was high level land not required for the formation of the road and that the Dewan of Cochin on inspection of the spot was satisfied about the inequity of the acquisition. During the course of the. acquisition the Government of Cochin sent a communication to the petitioner, Ext. P1 dated 13 11947, apparently in reply to a letter sent by the petitioner on 10 11947, informing it that "portions of high level parambas not required for the Road, foot-paths or drains to be constructed will be returned to the present owners". On 3101957 the petitioner made a representation to the District Collector of Trichur for return of the land acquired from it in view of the assurance in Ext. P1. THE Collector informed the petitioner that the matter was under consideration of government. When the ernakulam District was formed the petitioner renewed its request to the collector of Ernakulam to return the land to it on 3121945 and 12 61958, but the petitioner was informed by the original of Ext. P2 that the request can be considered only after the completion of the work of the Foreshore Road and directed it to renew the request in June 1960. THE petitioner accordingly filed another application in June 1960, but getting no reply, the petitioner requested the government for reconveyance of the land to it. Government rejected the request. THE petitioner then made an application to review the order. That was rejected by Ext. P3 order dated 10 111966.

(2.) THE petitioner contends that the decision of the government not to reconvey the land to it is wrong and prays for a writ of mandamus or other appropriate writ or order directing the government to reconvey the land to it. THE petitioner submits that the government was estopped by the representation in Ext. P1 from denying its right to get a reconveyance of the land, and that another plot of land acquired under similar circumstances was returned to its former owner on the basis of the representation in Ext. P1, and therefore, the decision of the government not to return the land to the petitioner is discriminatory and offends Art. 14 of the constitution.

(3.) THE doctrine of promissory estoppel, though traceable to the decision of the House of Lords in Hughes v. Metropolitan Rail Co. , 1877-2 AC. 439, was given its comprehensive modern shape by the decision of Denning l. J. , in Central London Property Trust Ltd. v. High Trees House Ltd. 1947 KB. 130. In that case in September 1939, the plaintiffs there leased a block of flats to the defendants at a ground rent of 2,500 per annum. In January 1940, the plaintiffs agreed in writing to reduce the rent to 1250, plainly because of war conditions, which had caused many vacancies in the flats. No express time limit was set for the operation of this reduction. From 1940 to 1945 the defendants paid the reduced rent. In 1945 the flats were again full, and the receiver of the plaintiff company then claimed the full rent both retrospectively and for the future. He tested his claim by suing for rent at the original rate for the last two quarters of 1945. Denning L. J. , thought that there was no consideration for the plaintiff's promise to reduce the rent. It. 'therefore, the defendants had themselves sued upon the promise they must have failed. THEir claim would have depended upon a contract of which one of the essential elements was missing. But where the promise was used merely as a defence the presence or absence of consideration was irrelevant. THE defendants were not seeking to enforce a contract and therefore, they need not have one. It was decided by the House of Lords in Jorden v. Money 1854-5 H. L. Cas. 185 that a representation as to the intention of a party cannot found an estoppel. But Denning L. J. , said in High Trees case 1947 KB. 130 that "the law has not been standing still since Jorden v. Money. THEre has been a series of decisions over the last 50 years which, although they are said to be cases of estoppel, are not really such. THEy are cases in which a promise was made which was intended to create legal relations, and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made, and which was in fact so acted on. In such cases the courts have said that the promise must be honoured". In Lyle-Mellor v. A. Lewis & Co. 1956 I-All E. R. 247, Denning L. J. , had occasion to consider the matter afresh, and he said: "i do not think it necessary to go into these refinements about law and fact. I am clearly of opinion that this assurance was binding, no matter whether it is regarded as a representation of law or of fact or a mixture of both, and no matter whether it concerns the present or the future. It may not be such as to give rise to an estoppel at common law, strictly so called, for that was confined to representations of existing fact; but we have gone far beyond the old common law estoppal now. We have reached a new estoppel which affects legal relations. " In Emmanuel Ayedeji Ajyi (THE Colony Carrier Co.) v. R. T. Briscoeltd. 1964-3 All E. R. 556 Hodsonl. J. said: "the principle, which has been described as quasi estoppel, and perhaps more aptly as promissory estoppel, is that when one party to a contract in the absence of fresh consideration agree not to enforce his rights, an equity will be raised in favour of the other party This equity is, however, subject to the qualification (a) that the other party has altered his position, (b) that the promisor can resile from his promise on giving reasonable notice, giving the promise a reasonable opportunity of resuming his position, and (e) the promise only becomes final and irrevocable if the promise cannot resume his position. " THE question immediately arises whether this new estoppel is limited to cases where the parties are already Bound contractually one to the other. THE principle as stated by Lord Cairns L. C. is Hughes v. Metropolitan Rail Co. ,1877-2 AC. 439 and by Bowen L. J. , in Birmingham & district Land Co. v. London & North Western Rail Co. , 1888-40 Ch. D. 268 would limit the application of the doctrine to "persons who have contractual right against others induced by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before". But the judgment of Denning L. J. , in High Trees case 1947 KB. 130 contains no such limitation. THE learned judge would have the principle restated as being that "a promise intended to be binding' intended to be acted upon, in fact acted upon, is binding so far as its terms properly apply". And the principle has been applied in several cases where there was no previous contractual rights between the parties, as in this case.