INTRANS SYSTEMS PRIVATE LIMITED Vs. STATE OF KERALA

JUDGEMENT

(1.) The scheme floated by the State Government popularly known as "Tax for Growth Fund" by the G.O. No 717/91-ID Taxes, was discontinued by the G.O. No. (MS) 14/94/TD dt. 15-2-1994. The subject matter of these two petitions is a challenge to this sudden discontinuance of the scheme urging for a writ of mandamus directing the State Government to continue the scheme taking resort to the principles of "promissory estoppel" against the State Government.

(2.) The guidelines relating to the principle and application of "promissory estoppel" are well settled by the decisions of the Supreme Court. The doctrine is a principle evolved by equity, to avoid injustice and though commonly named "promissory estoppel", it is neither in the realm of contract, nor in the realm of estoppel. The true principle of promissory estoppel is that where one party has by his words or conduct made to the other, a clear and unequivocal promise which is intended to create a legal relationship to arise in the future, knowing or intending that it would be acted upon the other party to whom the promise is made, and it is in fact so acted upon by the other party, the promise would be bindling on the party making it and he would not be entitled to go back upon it, if that would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and, this would be so irrespective of whether there is any pre-existing relationship between the parties or not. Though the doctrine has been variously described as "equitable estoppel", "quasi-estoppel" and "new estoppel", it is a doctrine evolved by equity in order to prevent injustice.

(3.) The doctrine of promissory estoppel has also been applied against the Government and defence based on executive necessity has been categorically negatived. Where the Government makes a promise knowing or intending that it would be acted upon by the promisee and, in fact, the promisee acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promise, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Art.299 of the Constitution. But since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires.