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M/S N.V. International, New Delhi v. State Of Assam
Structured Summary of the Provided Opinion
Factual and Procedural Background
The petitioner had been associated with the respondent State as Organising Agent of Assam State Lotteries since 1993 and entered into a distribution agreement with the State dated 12.6.1995 (Annexure-I). The petitioner furnished bank guarantees of Rs. 7,50,000/- covering the period of the first drawal of lotteries. The State issued an order/letter dated 30.12.1995 (Annexure-5) intimating the petitioner that it would discontinue State Lottery draws from 1.2.1996 and subsequently issued a notification dated 12.2.1996 (Annexure-IX(A)) withdrawing the Assam State Lottery Rules, 1994 and declaring them inoperative with immediate effect. The petitioner challenged these actions in a petition before the court.
Central factual context relevant to the dispute included: (a) the agreement Annexure-I was entered into in the wake of the Supreme Court's decision in State of Haryana v. Suman Enterprises (1994), which distinguished between lotteries "organised" and "authorised" by other States; (b) the petitioner alleged that the State's action in discontinuing the lotteries caused detriment and that no adequate hearing was afforded; (c) the respondents relied on public interest and alleged that an opportunity to be heard was provided.
Legal Issues Presented
- Whether the State Government had the power to terminate or revoke the agreement (Annexure-I) either under its terms or independently in the larger public interest, and whether that power could be exercised without compliance with principles of natural justice.
- Whether the State's discontinuance of the Assam State Lotteries (including issuance of the notification dated 12.2.1996 and the letter dated 30.12.1995) was arbitrary, unreasonable or violative of principles such as promissory estoppel and legitimate expectation.
- Whether the petitioner was afforded a fair and reasonable opportunity to be heard before the impugned decision was taken.
Arguments of the Parties
Petitioner's Arguments
- The petitioner asserted that the agreement dated 12.6.1995 (Annexure-I) was entered into in reliance on the legal context provided by the Supreme Court's decision in State of Haryana v. Suman Enterprises and that the State's sudden rescission harmed the petitioner who had acted to his detriment (bank guarantees, establishing distribution network, print orders, printers engaged).
- The petitioner contended that the State's action violated principles of natural justice because no adequate notice or hearing was afforded before the termination; the petitioner denied that any hearing was given despite the respondents' assertions.
- The petitioner invoked the doctrines of promissory estoppel and legitimate expectation, arguing that the State's promises/representations and consistent practice gave rise to an enforceable expectation that the agreement would be honored for its term.
- The petitioner argued that the State's claim of acting in the "larger interest" was illusory in the factual context (lottery tickets organised by other States were sold in Assam), and that the State abused its power in revoking a public contract without meeting standards of justness, fairness, and reasonableness.
Respondents' Arguments
- The respondents (State) asserted that, although not necessary, a fair and reasonable opportunity to be heard was in fact granted to the petitioner (relying on Annexure-B and the communications in the affidavit-in-opposition).
- They maintained that the State was exercising its legitimate power in the larger interests of the people of Assam and that such public interest justified discontinuance of the lotteries.
- The respondents contended that the doctrine of promissory estoppel did not apply because individual/private interests must yield when they clash with larger public interests. They asserted there was no violation of natural justice because the State had not initiated termination action in a way that required notice in their view (and in earlier pleadings had stated termination proceedings had not been initiated).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court (per the provided opinion) |
|---|---|---|
| State of Haryana v. Suman Enterprises, 1994 (4) SCC 217 | Held that a State cannot prohibit sale of lottery tickets "organised" by other States but can prohibit sale of lotteries "authorised" by other States. | The court recorded that the agreement Annexure-I was entered into in the wake of this decision and treated the judgment as direct motivation for the parties entering the agreement; the point provided contextual importance to the petitioner's position. |
| Express Newspapers Pvt. Ltd. v. Union of India, AIR 1986 SC 872 | Quoted for the principle that arbitrariness is antithetical to Article 14 and the reaffirmation of the Maneka Gandhi/Royappa approach to Article 14. | The court relied on the dictum to frame arbitrariness as a relevant standard in assessing State action under Article 14 (cited to support the ethical/legal test of State power). |
| Sangram Singh v. Election Tribunal, AIR 1955 SC 425 | Quoted for the principle of natural justice (audi alteram partem) and that proceedings affecting life and property should not continue in absence of the affected party. | Used to underscore the court's view that natural justice requires participation and hearing; supported the requirement that the petitioner should have been heard. |
| Kasinka Trading v. Union of India, AIR 1995 SC 874; 1995 (1) SCC 274 | Explained the doctrine of promissory estoppel in administrative law, including its limits and applicability against the Government. | The court relied on the exposition to assess whether promissory estoppel applied; it noted that promissory estoppel is available against the Government unless equity requires otherwise and that it cannot be invoked to compel unlawful promises. |
| Halsbury's Laws of England (cited for doctrine) | Definition/explanation of "Legitimate Expectation" (administrative law doctrine). | The court used the Halsbury's definition to explain and apply legitimate expectation in evaluating the petitioner's claim that the State's representations and past practice created an expectation enforcement of the agreement. |
| Baburam Prakash Chandra Maheswari v. Antarim Zila Parishad, AIR 1969 SC 556 | The opinion lists this case among authorities cited; specific rule not detailed in the provided excerpt. | The case is included in the list of authorities relied upon by the petitioner, but the excerpt does not specify how the court applied it. |
| Khudiram Das v. State of West Bengal and Ors., AIR 1975 SC 550 | Cited among authorities; specific rule not detailed in the excerpt. | Listed as authority; the provided text does not record an explicit application. |
| Ramana Dayaram Shetty v. Airport Authority of India and Ors., AIR 1979 SC 1628 | Cited among authorities; specific rule not detailed in the excerpt. | Included in the authorities list; no distinct application recorded in the excerpt. |
| Pournami Oil Mills v. State of Kerala and Ors., AIR 1987 SC 590 | Cited among authorities; specific rule not detailed in the excerpt. | Listed among the cited cases; the excerpt does not explain its application. |
| Union of India v. Godfrey Philips India Ltd. and Ors., AIR 1988 SC 806 | Cited among authorities; specific rule not detailed in the excerpt. | Mentioned in the authorities list without a specified application in the excerpt. |
| Vencil Pushpraj v. State of Rajasthan, AIR 1991 SC 536 | Cited among authorities; specific rule not detailed in the excerpt. | Included in the list; the excerpt does not state how it was applied. |
| Pine Chemicals Ltd. v. Assessing Authority and Ors., 1992 (2) SCC 683 | Cited among authorities; specific rule not detailed in the excerpt. | Mentioned among cited authorities; no explicit application described in the excerpt. |
| Sri Bakul Oil Industries v. State of Gujarat, 1987 (1) SCC 752 | Cited among authorities; specific rule not detailed in the excerpt. | Included in the authorities list; the excerpt does not explain application. |
| Mahavir Auto Stores and Ors. v. Indian Oil Corpn. and Ors., 1990 (3) SCC 752 | Cited among authorities; specific rule not detailed in the excerpt. | Listed among authorities; the excerpt does not specify how it was used. |
| Food Corporation of India v. M/s. Kamendu Cattle Feed Industries, 1993 (1) SCC 71 | Cited among authorities; specific rule not detailed in the excerpt. | Mentioned in the list; no particular application described in the excerpt. |
| Jugal K.P. Sharma v. Vijayendra P. Sharma, 1993 (1) SCC 115 | Cited among authorities; specific rule not detailed in the excerpt. | Included in the list of authorities; the excerpt does not set out its application. |
| Tata Cellular v. Union of India, 1994 (6) SCC 651 | Cited among authorities; specific rule not detailed in the excerpt. | Listed among authorities; the excerpt does not indicate specific application. |
| State of Orissa and Ors. v. Radheshyam Meher and Ors., 1995 (1) SCC 652 | Cited among authorities; specific rule not detailed in the excerpt. | Mentioned in the authorities list without an explicit application in the excerpt. |
| Union of India and Ors. v. B.C. Chaturvedi, 1995 (6) SCC 750 | Cited among authorities; specific rule not detailed in the excerpt. | Included among the cases relied upon; the excerpt does not spell out its usage. |
Court's Reasoning and Analysis
The court's analysis proceeded from the admitted or undisputed operative facts and from the contextual legal background. Key steps in the court's reasoning as reflected in the opinion are:
- Identification of admitted facts: The court noted the existence and terms of the agreement dated 12.6.1995 (Annexure-I), the bank guarantees furnished by the petitioner, and the subsequent communications from the State (letter dated 30.12.1995 and notification dated 12.2.1996 withdrawing the Lottery Rules).
- Contextual consideration: The court recorded that the agreement was entered into in the wake of the Supreme Court's decision in State of Haryana v. Suman Enterprises and treated that context as important to understanding why the parties entered the agreement.
- Assessment of parties' pleadings on hearing: The respondents asserted that the petitioner had been heard; the petitioner denied any hearing. The court examined the affidavits and earlier pleadings and found a contradiction: in an earlier affidavit-in-opposition (in another civil rule) the respondents had said that no action for termination had been initiated and thus the question of notice and hearing "has not arisen." The court treated this contradiction as significant and found that the respondents' current claim that a hearing was given was belied by their earlier stand.
- Standard of natural justice in public contracts: The court emphasized that the agreement was not an ordinary contract but a public contract where the State had held out promises and the petitioner had acted to his detriment. In these circumstances, the court held that the rules of natural justice (including at least a bare opportunity to be heard) could not be excluded merely because the contract was terminable, and audi alteram partem applied as a minimum requirement.
- Promissory estoppel and legitimate expectation: The court discussed the doctrines, citing Halsbury's on legitimate expectation and the Supreme Court's exposition in Kasinka Trading on promissory estoppel. It noted that promissory estoppel/equitable estoppel operates to avoid injustice when a party has made a clear promise on which another party has relied, and that while the doctrine has limits (it cannot enforce representations contrary to law or beyond authority), it is available against the Government where equity demands.
- Evaluation of the State's "larger public interest" case: The court found the respondents' plea of larger public interest to be illusory on the facts as presented (observing that tickets organised by other States were on sale in Assam and the State's claim of socio-ethical concern was unconvincing in that context). The court concluded that the State had not shown a legislative action or other clear basis that would displace promissory estoppel or the requirements of natural justice in this instance.
- Conclusion on procedural fairness and equitable relief: Given the absence of a genuine hearing and the petitioner's legitimate expectation and reliance, the court determined that the impugned actions were vulnerable to challenge and that equitable relief in the form of quashing the notification and letter and directing performance of the agreement was warranted.
Holding and Implications
Holding: The court allowed the petition. Specifically, it quashed the notification dated 12.2.1996 (Annexure IX(A)) and the letter dated 30.12.1995 (Annexure-V). The respondents were directed to give effect to the agreement dated 12.6.1995 (Annexure-I). The petition was disposed of and the parties were directed to bear their own costs.
Implications:
- Direct effect on the parties: The immediate consequence is that the State's notification withdrawing the Assam State Lottery Rules, 1994 and the earlier letter discontinuing the draws were set aside and the State was ordered to implement the distribution agreement dated 12.6.1995.
- On legal principle: The opinion reaffirms that (a) public contracts are subject to standards of natural justice and may give rise to legitimate expectation and promissory estoppel where a party has relied to its detriment on State representations; and (b) claims of "larger public interest" do not automatically defeat promissory estoppel or the requirement of a hearing unless supported by appropriate legal or legislative justification. The opinion did not purport to announce a novel legal principle beyond applying established doctrines to the facts of the case.
This summary has been prepared strictly from the material contained in the provided opinion. No information has been invented or inferred beyond what the opinion explicitly states.
(1.) Some operative facts, which have either been admitted or at any rate not disputed by the respondents in their affidavit-in-opposition, deserve to be noted, who has been associated with the respondent State, as Organising Agent of Assam State Lotteries ever since 1993 entered into an agreement with the Respondent State on 12.6.95 Annexure-I appointing the petitioner further as distributors of the State Lotteries. The respondents admit this agreement and its terms and conditions, furnishing of Bank guarantees to the tune of Rs. 7,50,000/- by the petitioner covering the period pf first drawal of lotteries.
(2.) The rest are peripheral facts such as the huge country wide net work of selling lottery tickets, which the petitioner was required to set up after showing equally hu|ge amount, appointing stockists and agents, incurring contractual obligations the filing an earlier petition challenging the order dated 30.12.95 Annexure-V, are either matters of record, or have been denied in a laconic manner by the respondents, following want of knowledge of arrangements and investments made by the petitioner, the circumstances compelling withdrawal of the earlier petition, the real controversy veers around the plea taken by the respondent State government its power to terminate or [reopen the contract, either under the terms of agreement, Annexure-I or even independent of it, as the power of the State, to act the larger interest of the people of Assam.
(3.) The dispute as; raised by the respondent, is with regard to the interpretation, of the terms of agreement, Annexure-I, its legal impact, binding effect on the State Government thus allowing the distributor (petitioner) an opportunity of being heard before passing final order is/was on the discretion of the Government 'the power of the State Government to revoke or terminate any contract, the agreement itself was terminable' if the Government considered that the State Lottery brought disrepute to the Government. The Government had power and authority to take a decision to discontinue the State lotteries which was opposed to public policy and public interest and the State Govt. had to take the impugned decision to discontinue the State Lottery as 'the effect of the State Lotteries on the people in the State of Assam, proved to be ruinous both financially and morally and state wide agitations were launced against the continuation of the Assam State Lotteries which had brought serious disrepute to the Govt. of Assam. Hence the impugned action of discontinuance of lottery culminating in the notification dated 12.2.96 as published in the Official Gazette of the Government of Assam, withdrawing the Assam State Lottery Rules 1994, and declaring the same to be inoperative with immediate effect. It is this notification marked as Annexure-IX A, (though erroneously mentioned as Annexure-X A in paragraph 27(A) of the petition) which is the subject matter of challenge along with the order/letter dtd. 30.12.95 (Annexure-5) intimating the petitioner the decision of the State Government to discontinue the State Lottery Draws with effect from 1.2.96. Yet another fact, which needs special mention, as it has a vital contextual bearing, is that the agreement Annexure-I was entered into, by the parties in the wake of the Supreme Court's order in State of Haryana Vs. Suman Enterprises, 1994 (4) SCC 217 wherein the Apex Court dealing with State Lotteries held that a State can not prohibit sale of lottery tickets 'organised' by other States, but can prohibit such sale of lotteries 'authorised' by other States. Mr. Goswami learned counsel appearing for the petitioner, as a first approximation to his systematic chain of arguments attaching the State action, has focussed and concentrated attention, on this contextual aspect, to highlight the importance of the agreement Annexure-I, resulting from the direct motivation provided by the aforesaid judgement. Exploding the unrealistic approach of the State Government to socio-ethical and moral well being of the people of Assam, and its pleaded concern therefore, learned counsel pointed out the stark reality and rightly so, that tickets organised by other States are on sale in the State of Assam, and roaming sale, for that, and its own lottery tickets are not to be sold in the State of Assam, they are to be sold in other States, the concern shown by the State Government holds no water. It does not help maintaining socio-ethical equilibrium of the community, when other disturbing factors, in the shape of a concrete system of sale of lottery tickets organised by other States is not only present on the soil of Assam but also rampant, which does not conform to the professed object and ideal of. the State Government, who is not only helpless but also powerless in the present set of circumstances in banning or prohibiting the sale of lottery tickets within the State of Assam organised by other States.
(4.) Taking up the clue from the socio-ethical moral well-being of the people, as shown by the State, learned counsel for the petitioner mounting a scathing attack on the State action in abusing its power in revoking the contract argued, supported by host of authorities, that ethics and power are not two circles which cross one another. The power of the State in the realm of public contract, as manifested in its administrative action, is also to be judged by certain well established standards. The justness, fairness and reasonableness of State action are the ethical tests to judge the exercise of power by the State. The ethics and power are to be coordinated and not to be subordinated.
(5.) Discussing all the authorities cited by the learned counsel as noted below, would be nothing but an idle parade of familiar learning.
(1) Baburam Prakash Chandra Maheswari Vs. Antarim Zila Parishad, AIR 1969 SC 556; (2) Khudiram Das Vs. State of West Bengal and Ors. AIR 1975 SC 550 (3) Ramana Dayaram Shetty Vs. Airport Authority of India and Ors., AIR 1979 SC 1628; (4) Pournami Oil Mills Vs. State of Kerala and Ors, AIR 1987 SC 590; (5) Union of India and Ors. Vs. Godfrey Philips India Ltd. and Ors., AIR 1988 SC 806; (6) Vencil Pushpraj Vs. State of Rajasthan, AIR 1991 SC 536; (7) Pine Chemicals Ltd. Vs. Assessing Authority and Ors., 1992 (2) SCC: 683; (8) Sri Bakul Oil Industries Vs. State of Gujrat, 1987 (1) SCC 752; (9) Mahavir Auto Stores and Ors. Vs. Indian Oil Corpn. and Ors., 1990 (3) SCC 752; (10) Food Corpn of India Vs. M/s. Kamendu Cattle Feed Industries, 1993(1) SCC 71; (11) Jugal K.P. Sharma Vs. Vijayendra P. Sharma, 1993 (1) SCC 115; (12) Tata Cellular Vs. Union of India, 1994 (6) SCC 651; (13) State of Orissa and Ors. Vs. Radheshyam Meher and Ors., 1995 (1) SCC 652 (14) Union of India and Ors. Vs. B.C.Chaturvedi, 1995 (6) SCC 750.
Suffice it to note, as has been held by the Supreme Court in Express Newspapers Pvt. Ltd. Vs. Union of India, AIR 1986 SC 872 :
"The dictum of Bhagwati, J. in International Airport Authority case that 'arbitrariness was the antithesis of Art. 14' is no more open to be condemned on ground that it would mean that all governmental actions which are not supportable by law were per se be violative of Art. 14. It is rather late in the day to question the correctness of the landmark decision in Maneka Gandhi case and the innovative construction placed by Bhagwati, J. on Art. 14 in the three cases of Royappa, Maneka Gandhi and International Airport Authority which have evolved new dimensions in judicial process."
(6.) The impugned action has been assailed as violative of the principles of natural justice, sufffering from the vice of unreasonableness and in breach of the principles of promissory estoppel and denounced as arbitrary, unreasonable and illegal.
(7.) Learned Additional Advocate General, Mr. Borah, referring to Annexure-B, as filed by the respondents along with their affidavit-in- opposition, submitted that although not necessary yet, a fair reasonable opportunity of being heard was in fact granted to the petitioner before passing the impugned order. He also maintained that State action being in the larger interests of the people of Assam was well within the power of the State, the impugned notification Annexure-IX(a), as issued by the State Govt. is beyond the pale of promissory estoppel as, the individual interests, when it clashes with the larger interest of the people, must yield to it. The doctrine of promissory estoppel is not attracted to the present case.
(8.) Now coming to the question of affording an opportunity of hearing, the respondents pleaded case is :
"That with regard to the statements made in para 10 of the writ petition, the deponent begs to state that the State Govt. decided to discontinue the Assam State Lotteries draw with effect from 1.2.96 and the said decision was communicated to the petitioner vide letter No. FTX-146/93/100 dated 30.12.95 issued by the Secretary to the Govt. of Assam, Finance Department. In reply to the aforesaid notice dated 30.12.95 the petitioner filed an application on 31.1.96 before the Secretary, Finance, Govt. of Assam, requesting for holding of the draws of the Assam State Lottery upto 10.2.96. On receipt of the application the petitioner was heard on the matter regarding discontinuance of holding the State Lottery draw as well as on the prayer for extension of time till 10.2.96."
The petitioner in his affidavit-in-reply filed on 21st August, 1996 has explained the circumstances in which the letter dated 31.1.96 was written, they are reproduced below:
"In view of the fact that the Government issued print orders for different lotteries for different dates upto 15th February, 1996, by the said letter, it was requested to ensure the holding of the draws of the Assam State Lotteries atleast upto 10.2.1996 to avoid further complication for the time being. It was not in reply to the letter of 30.12.1995 as it is categorically and specifically denied that on receipt of the aforesaid letter dated 31.1.1996, the petitioner was heard in the matter rqgarding discontinuance of holding State lottery draws as well as on the prayer for extension of time till 10.2.1996. It is asserted that no hearing of any kind was given at any stage to the petitioner. The impugned order dated 10.12.1995 was passed without giving any notice and/ or hearing to the petitioner."
Further it is averred by the petitioner :
"As regards letter dated 31.1.1996 the deponent begs to state that the petitioners experienced considerable difficulties as the respondents had been trying to frustrate the order of this Hon'ble Court passed in earlier Civil Rule on 10.1.1996. Prior to issuance of the impugned order, the Directorate of State Lotteries having been issuing the printing and release orders to the press for 30 days at a time and that also well ahead of the dates of draws. This practice had been going for the last 2 years. Such procedure ensures orderly holding of different lotteries at different places. After the interim order of this Hon'ble Court was passed in the earlier Civil Rule, the respondents started issuing printing and release orders for 20 days or even less only and that too without any uniformity. Even after issuance of print order on 6th, 8th, 13th and 15th January, 1996, the respondents by communication dated 30.1.96, informed the concerned presses that the said orders were cancelled on the ground that further scrutiny of the scheme is necessary. The concerned printers brought this order of cancellation to the notice of petitioners and the petiaioners are faced with a great crisis by such abrupt cancellation. Under these circumstances, the petitioners had no option but to write to respondents on 31.1.1996, with a request that as print orders upto 15.2.1996 have already been issued, the State may allow holding of all the draws atleast upto 10.2.1996 to avoid complications as a temporary measure. Such a letter was written with the hope that since the earlier Civil Rule was to come for consideration of this Hon'ble Count before 10.2.1996 that request would solve the major crisis. The petitioners had to write the said letter under coercing conditions deliberately created by the respondents even after knowing the interim order of this Hon'ble Court dated 10.1.1996."
The above quotation in extenso has become necessary to decide the contention as advanced by the respondents that the petitioner was in fact given an opportunity of being heard before taking the impugned decision and action.
(9.) Referring to the faulty nature of the affidavit, as sworn by the respondents, learned counsel was critical about it. But keeping aside his criticism for a while, and going by the affixiavit-in-opposition filed by the respondent Nos 1, 2 and 3 in the earlier petition Civil Rule No. 116/96, there remains no doubt whatsoever that no such opportunity of hearing, as now being claimed by the respondents, was given to the petitioner as is evident from paragraph 11 as quoted below :
"That with regard to the statements made in paragraphs 12 and 13, the deponent states that the State Government have not initiated any action for termination of the contract/ agreement with the petitioner. And as such the question of giving notice for termination of the contract with an opportunity to the petitioner of being heard has not arisen in the present case. There is no violation of the principles of natural justice."
It is one thing to contend that there was no need, no legal necessity or requirement to give notice or afford an opportunity of hearing before termination of the contract and altogether a different thing to say that an opportunity was given. This assertion on Jhe part of the respondent State stands contradicted and belied by its own stand taken in the earlier petition.
(10.) This opportunity of hearing, in the circumstances of the case was the bare minimum that was expected of the respondents. The contradicting questions cannot be viewed in isolation of the concerning circumstances and the contextual background as already noted above. It is not an ordinary contract which could be revoked any moment, it is in the realm of public contract where the State held out certain promises to the petitioner but in pursuance to those promises has acted to his detriment, in such circumstances the agreement, Annexrure-I, if it was to be revoked or terminated, would not exclude the rules of natural justice and which could also not be excluded in the circumstances of the present case. The need for affording an opportunity has been propounded even in cases where there is no such provision of hearing. The ensuring consequences of the State action, can well be gauged and envisaged. The aim and object of the principle of natural justice is to prevent miscarriage of justice, to secure justice. If everything was with fair ideal and perfect, so as to exclude an opportunity before taking the impugned action, it could as well have been left to the robots and the enforcement of laws made automatons. Audi alteram partem is a sound rule and their importance lies, as has been held by Bose, J. in Sangram Singh Vs. Election Tribunal, AIR 1955 SC 425 :
"Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decision should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them."
(11.) Leaving aside actual participation, the petitioner was not even afforded any opportunity of being heard. The documents relied upon by the learned counsel for the respondents in support of his argument even if taken on their face value us correct, and construed in the most liberal manner, yet do nut meet the bare minimal requirement of elementary rules of affording an opportunity, let alone a reasonable opportunity of being heard. The doctrine of promissory estoppel as invoked in the instant case goes hand in hand with legitimate expectation. Learned counsel for the petitioner has cited several judgments in support of his argument, and urged that the petitioner is entitled to relief based on legitimate expectation that the agreement entered into by the State would be carried out and continued for its full term.
(12.) The Doctrine of Legitimate Expectation has been explained in 'Halsbury's Laws of England', Fourth Edition Volume 1(1) page 151 paragraph 81 to the effect that:
"A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment The expectation may arise either from a representation or promise made by the authority, including an implied representation or from consistent past practice."
(13.) Explaining the doctrine of promissory estoppel in the context of withdrawal of a time-bound exemption notification before expiry of period of its operation by another notification issued under the same statutory provision in public interest, the Supreme Court in one of its recent judgment in Kasinka Trading Vs. Union of India, AIR 1995 SC 874:1995(1) SCC 274 has, even while dismissing the appeal, held :
"The doctrine of promissory estoppel or equitable estoppel is well established in the administrative law of the country. The doctrine represents a principle evolved by equity to avoid injustice. The basis of the doctrine is that where any party has by his word or conduct made to the other party an unequivocal promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance or the promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties. The doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority 'to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". To invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine. Bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the Court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation."
The only exception to the doctrine of promissory estoppel is the legislative action and may possibly be the larger public interests. The impugned notification is not the result of any legislative action, it is essentially an executive act in resiling the contract and discontinuing or withdrawing the Assam State Lottery Rules, 1994. This action is not immune from promissory estoppel and as already discussed above, the so called larger public interest, as pleaded by the respondents, is merely illusory.
(14.) In the light of the foregoing discussion, was it really too much for a common man to Expect of the mighy State, to follow the rules of natural justice even while resiling from its held out promises? The answer is to be an emphatic, 'No'.
(15.) In view of the foregoing discussion, this petition deserves to be allowed, it is accordingliy allowed. The notification dated 12.2.96, Annexure IX(A) and so also the letter dated 30th December, 1995, Annexure-V to the petition are quashed. The respondents are directed to give effect to the agreement dated 12th June, 1995, Annexure-I. The petition is disposed of. The parties are left to bear their own costs.
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