Section 115 of the Indian Evidence Act, 1872

The Doctrine of Estoppel under Section 115 of the Indian Evidence Act, 1872: A Comprehensive Analysis

Introduction

Section 115 of the Indian Evidence Act, 1872 (hereinafter "the Act") codifies the common law principle of estoppel by representation. Estoppel is a rule of evidence that precludes a person from denying the truth of a statement previously made by him, or from denying the existence of a state of facts which he has by his conduct, act, or omission, led another to believe in. This doctrine is founded on principles of equity, justice, and good conscience, aiming to prevent fraud and secure justice between parties by promoting honesty and good faith. This article undertakes a comprehensive analysis of Section 115, its constituent elements, judicial interpretations, and its interplay with related legal principles, drawing heavily upon the provided reference materials and established Indian jurisprudence.

The Principle of Estoppel: Conceptual Moorings

The essence of estoppel is that a person is precluded from asserting something contrary to what is implied by a previous action or statement of that person or by a previous pertinent judicial determination. Section 115 of the Act states:

"When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing."[8], [9]

The Supreme Court in B.L Sreedhar And Others v. K.M Munireddy (Dead) And Others (hereinafter "B.L Sreedhar (2002)") reiterated that estoppel is a rule of evidence where a person is prevented from denying the truth of a previous representation if another has acted upon it to their detriment.[12] The doctrine is based on the maxim allegans contraria non est audiendus (a person alleging contradictory facts should not be heard), a salutary principle of common law.[8] While the rigour of the Evidence Act may not apply to all proceedings, such as those under the Income-tax Act, the principles enshrined, like estoppel under Section 115, are often invoked.[8]

Elements of Estoppel under Section 115

For the doctrine of estoppel under Section 115 to apply, certain conditions must be fulfilled:

  • Representation: There must be a representation by one person to another. This representation can be by a "declaration, act or omission."
  • Intention: The representation must have been made with the intention of causing or permitting the other person to believe a thing to be true. The word "intentionally" was explained by the Judicial Committee in Sarat Chunder Dey v. Gopal Chunder Laha, indicating that it is enough if the declaration is such that the declarant, in the ordinary course, permits someone else to believe in its truth.[18]
  • Belief: The other person must have believed the representation to be true.
  • Action upon Belief: The other person must have acted upon such belief. This implies a change in position by the person relying on the representation.
  • Detriment (often implied): While Section 115 does not explicitly use the word "detriment," the concept is often judicially read into "to act upon such belief." The detriment is the prejudice or harm that the promisee suffers as a result of relying on the promisor's assurance.[6]

The representation must be of an existing fact, not a mere promise of future conduct, although the latter may give rise to promissory estoppel. The state of knowledge of the person to whom the representation is made is material; if he knew the truth, he cannot be said to have been led "to believe a thing to be true" within the meaning of Section 115.[17]

Judicial Interpretation and Application of Section 115

Indian courts have extensively interpreted and applied Section 115 in diverse factual scenarios.

Promissory Estoppel

While Section 115 primarily deals with estoppel by representation of existing facts, the doctrine of promissory estoppel has evolved through judicial pronouncements, particularly concerning promises made by the government or public authorities. Promissory estoppel prevents a promisor from going back on a promise if the promisee has altered their position in reliance on it, even if the promise is not supported by consideration.

In Motilal Padampat Sugar Mills Co. Ltd. v. State Of Uttar Pradesh And Others (hereinafter "Motilal Padampat"), the Supreme Court affirmed that the State was bound by promissory estoppel.[1] The Court held that an unequivocal assurance by the government, leading a company to alter its position (investing significantly), rendered it inequitable for the State to renege on its promise. Key elements identified were a clear promise intended to be acted upon, alteration of position by the promisee, and resulting inequity if the promise were disregarded. This case expanded promissory estoppel as a tool for enforcing equity against the State.

Similarly, in Union Of India And Others v. Indo-Afghan Agencies Ltd., the Supreme Court held that government representations within export promotion schemes create enforceable equitable obligations, preventing arbitrary administrative actions.[5] The Court emphasized that even if a case does not fall within the terms of Section 115, a party who has acted on a government representation can claim that the government is bound by its promise, even if not a formal contract.[24]

However, promissory estoppel is not absolute. In Sharma Transport v. Govt. Of A.P., the Supreme Court held that promissory estoppel could not be invoked against the State's legislative or sovereign functions, such as taxation, unless a clear and unequivocal promise inducing detrimental reliance was established.[3] The Court in Delhi Cloth & General Mills Ltd. v. Union Of India further clarified that mere reliance without demonstrable prejudice or detriment is insufficient to invoke promissory estoppel, especially if the assurance was provisional or contingent.[6] The doctrine cannot compel public bodies to act contrary to law or exceed their authority.[6], [14]

Estoppel by Conduct and Representation

Section 115 is frequently applied where a party's conduct or representation leads another to act upon it. In B.L Sreedhar (2002), the Supreme Court upheld the High Court's application of estoppel in a property dispute where the plaintiff's prior conduct and involvement in litigation implicitly indicated consent to certain transactions, estopping him from later challenging them.[7], [12] The Court noted that estoppel prevents a party from denying the truth of a previous representation if the other party has acted upon it.

The principle of "approbate and reprobate" is related to estoppel. In Nagubai Ammal & Others v. B. Shama Rao & Others, the Supreme Court clarified that this maxim (a person cannot approbate and reprobate the same transaction) does not prevent a party from altering their stance in separate litigations, provided no estoppel or prejudice is involved.[4]

Attestation of a document can also give rise to estoppel. In Kandaswmy Pillay v. Rangaswamy Nainar And Ors., it was observed that attestation by a person having an interest in the property covered by the document is prima facie a representation that the title and facts recited are true and will not be disputed by him against the obligee.[15]

In VIJAY KUMAR G. SULAKHE v. STATE OF KARNATAKA, citing Ashok Kumar v. State of Bihar, the Karnataka High Court noted the principle that a candidate appearing in an examination without objection and subsequently being unsuccessful is precluded from challenging the process.[9] This is an application of estoppel by conduct.

The Punjab & Haryana High Court in SUNIL KUMAR & ORS. v. ASHOK KUMAR & ORS. held that a plaintiff was estopped from reclaiming possession on the ground of an invalid (unregistered) sale deed, as Section 115 estopped the claim.[23]

Knowledge of Truth and Estoppel

A crucial aspect of estoppel under Section 115 is the belief induced in the person to whom the representation is made. If such a person knows the real truth, they cannot claim to have been misled. In Seth Parma Nand v. Champa Lal, the Allahabad High Court observed that the knowledge of the person acting on the representation regarding the real truth has a bearing on estoppel. If he knew the truth, he cannot be said to have been led "to believe a thing to be true."[17] This was contrasted with Section 43 of the Transfer of Property Act, 1882, where the representation is a term of the contract. Similarly, in Brijgopal Lumani Another v. Mothey Anja Ratna Rajkumar (Died) Others, it was noted that a person who knows the true position relating to title cannot plead that they were induced to hold an erroneous belief by the conduct of the real owner; the doctrine of acquiescence or estoppel would not aid such a person.[22]

Estoppel and Minors

The application of estoppel against minors is complex. Generally, a minor cannot be estopped by their false representation, especially concerning contracts that are void ab initio. However, the Bombay High Court in Gadigeppa Bhimappa Meti v. Balangauda Bhimangauda discussed the nuances, particularly where there is no fraud on the part of the minor and the other party might be aware of the minority.[16] The reference suggests that if the mortgagee's agent was informed of the mortgagors' minority, there could be no question of estoppel.

Estoppel and Admissions

While admissions are dealt with under Sections 17-23 and 31 of the Act, an admission can form the basis of a "declaration" under Section 115. However, an erroneous admission by counsel on a point of law does not create an estoppel and does not preclude the party from asserting their legal rights. This was affirmed in Shiv Singh And Others v. State Transport Appellate Tribunal And Others.[21]

Estoppel as a Rule of Evidence, Not a Cause of Action

It is a well-established principle that estoppel is a rule of evidence and cannot, by itself, form the basis of a cause of action. It is a shield, not a sword. This was noted in Kandaswmy Pillay v. Rangaswamy Nainar And Ors.[15] Its primary function is to prevent a party from denying a state of affairs they previously represented as true.

Distinction from Other Legal Principles

Res Judicata

Estoppel is distinct from res judicata. Res judicata, as discussed in Amalgamated Coalfields Ltd. And Another Etc. v. Janapada Sabha Chhindwara And Others, prevents the re-litigation of issues already decided between the same parties.[2] Estoppel, on the other hand, prevents a party from denying a fact they induced another to believe and act upon.

Waiver

Waiver involves the intentional relinquishment of a known right. Estoppel arises from a representation leading to an alteration of position. In Motilal Padampat, the Supreme Court distinguished promissory estoppel from waiver, noting that waiver is a voluntary relinquishment, whereas estoppel can arise even if the promisor did not intend to relinquish a right but made a representation that was acted upon.[1]

Section 43 of the Transfer of Property Act, 1882

Section 43 of the Transfer of Property Act, 1882, embodies the principle of "feeding the estoppel by grant." It applies where a person fraudulently or erroneously represents that they are authorized to transfer certain immovable property and professes to transfer such property for consideration. If such a transferor subsequently acquires any interest in the property, the transferee can compel them to make good the transfer. The Allahabad High Court in Seth Parma Nand v. Champa Lal distinguished this from Section 115 of the Evidence Act, noting that the representation under Section 43 TPA is a term of the contract or transfer, which is not necessarily so under Section 115.[17]

Section 116 of the Indian Evidence Act, 1872

Section 116 of the Act creates a specific estoppel against tenants, preventing them from denying the landlord's title at the beginning of the tenancy, during its continuance. As discussed in Venkata Chetty v. Aiyanna Gounden, this estoppel is absolute as long as the tenancy subsists and possession has not been openly restored to the landlord.[13] While a specific application, it shares the foundational principle of precluding a party from denying a previously acknowledged state of affairs.

Limitations and Exceptions to Estoppel

The doctrine of estoppel, though wide, is subject to certain limitations:

  • No Estoppel Against Statute: A party cannot be estopped from asserting a right or obligation imposed by a statute. Public authorities cannot be estopped from performing their statutory duties.
  • No Estoppel Against Fundamental Rights: There can be no estoppel against the exercise of fundamental rights.
  • Truth Known to Both Parties: If the truth of the matter is known to both parties, there can be no estoppel.[17], [22]
  • Erroneous Admission on Point of Law: An admission on a point of law does not create an estoppel.[21]
  • Promissory Estoppel Against Government: This is subject to limitations, such as overriding public interest, or where it would fetter the government's sovereign, legislative, or executive functions.[3], [6]

Conclusion

Section 115 of the Indian Evidence Act, 1872, embodies a crucial equitable principle that underpins the integrity of dealings and representations in legal and commercial spheres. The judiciary in India has interpreted this provision expansively, applying it to diverse situations ranging from property disputes and commercial transactions to administrative actions. While estoppel by representation under Section 115 primarily acts as a rule of evidence, its offshoot, promissory estoppel, has evolved into a significant equitable remedy, particularly against governmental bodies. The courts have carefully balanced the application of estoppel with the need to uphold statutory provisions and public interest. The comprehensive jurisprudence surrounding Section 115 highlights its enduring relevance in ensuring fairness, preventing injustice, and promoting good faith in human interactions governed by law.

References