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PETITIONER: JIT RAM SHIV KUMAR AND ORS. ETC.

       Vs.

RESPONDENT: STATE OF HARYANA AND ANR. ETC.

DATE OF JUDGMENT16/04/1980

BENCH: KAILASAM, P.S. BENCH: KAILASAM, P.S. FAZALALI, SYED MURTAZA

CITATION:  1980 AIR 1285            1980 SCR  (3) 689  1981 SCC  (1)  11  CITATOR INFO :  R          1983 SC 848  (10)  O          1986 SC 806  (12,13)  RF         1986 SC 872  (181)  E          1991 SC  14  (11)

ACT:      Punjab Municipal  Act, 1911 as amended by Punjab Act 48 of 1953, Section 62A-Power of State Government to direct the Municipality to  impose any  tax under  section 61-Exemption from payment of octroi duty not within the competence of the Municipality and  ultra vires of its powers-Whether any such act  which  is  void  ab  initio,  enforceable-Principle  of Promissory Estoppel,  ingredients  of-Applicability  to  the instant case.

HEADNOTE:      The Municipal  Committee of Bahadurgarh, respondent No. 2 established Mandi Fateh in Bahadurgarh Town with a view to improve trade  in the  area. The Municipal Committee decided that the purchasers of the plots for sale in the Mandi would not be  required to pay octroi duty on goods imported within the said  Mandi. A  resolution (No.  8) dated 20-12-1916 was passed by  the  Municipality to this effect. Hand bills were issued for  the sale  of the  plots  on  the  basis  of  the resolution and  it was  proclaimed that  Fateh  Mandi  would remain  exempt  from  payment  of  octroi.  Subsequently  by resolution No.  4 dated  20-5-1917, the  Municipal Committee decided that  the term  No. 14  to the  conditions of  sale, namely, that  the purchasers  of plots would not be required to pay octroi, be amended to the effect that the Mandi shall remain immune from payment of octroi duty for ever. When the resolution was  received by  the Commissioner  of Ambala, in paragraph 3  of his  letter dated 26-6-1917, he minuted that the undertaking  by  the  Municipal  Commissioner  never  to impose  octroi  duty  in  the  Mandi  was  ultra  vires  and therefore the  purchasers of the plots should be informed so that they  may withdraw  from the  purchases. On  receipt of this letter  the President  of the  Municipal Committee made representations that  if octroi duty was to be levied, there would be  no purchasers  for the plots and the entire scheme would fall  through. On  this, the  Commissioner revised his earlier view and withdrew his objection by further observing

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that "as  soon as  the market  is  established  it  will  be necessary to consider what form of taxation is best to cover the market  share  of  municipal  expenses".  The  Municipal Committee on  10-3-1919 imposed  house-tax of Rs. 3-14-6 per cent per  annum on  the shopkeepers to cover the expenditure of the market.      This state  of affairs continued till 4-9-1953 when the Municipal  Committee  by  notification  No.  9697-C-53/63830 dated 4-9-1953 included Fateh Mandi, Bahadurgarh, within the octroi limits.  The Examiner of Local Funds pointed out that the Municipal Committee is under obligation to charge octroi on goods  imported into  Fateh Mandi.  The President  of the Municipal Committee  made a  representation  to  the  Deputy Commissioner on  24-2-1954. The  Municipal  Committee  again passed another  resolution No.  1 dated  2-3-1954  that  the Fateh Mandi  will remain  free from octroi duty according to the terms  of the  proclamation of  the sale relating to the sale of plots. The matter was referred to Punjab State which after  thoroughly  examining  the  whole  matter,  confirmed Resolution No.  1   passed  by  the  Municipal  Committee on 2-3-1954, Subse- 690 quently, the Municipal Committee changed its mind and by its resolution dated  8-5-1954, resolved that octroi duty should also be  levied on  the goods imported into Fateh Mandi. But this resolution  was annulled by the Punjab Government under s. 236  of the  Punjab Municipal  Act. The Examiner of Local Funds Accounts  in the  meantime insisted  on  the  levy  of octroi duty  on the  goods imported into Fateh Mandi and the Punjab Government  after discussing  the issue  on  9-4-1956 informed the  President of  the Municipal Committee that the Government’s action in confirming the resolution No. 1 of 2- 3-1954 of  the Municipal  Committee,  Bahadurgarh  exempting goods imported  into Fateh  Mandi from  levy of  octroi duty under s.  70(2)(c) of  the Municipal  Act, 1911, is quite in order and  that no  separate notification to this effect was necessary under the rules. Again on 21-7-1965, the Municipal Committee  Bahadurgarh   resolved  that  the  Government  be requested to  cancel Resolution  No. 1  dated 2-3-1954.  The State of  Haryana Respondent No. 1 which came into existence on 1-11-64  under the Punjab Reorganisation Act, by its memo dated 13-10-1967 approved the resolution No. 6 dated 21-7-65 of the  Municipal  Committee  and  cancelled  the  Municipal Resolution No. 1 of 2-3-1964. As a result of the decision of the Government,  the Municipal  Committee  started  charging octroi duty  on the  goods imported into the Mandi. On these facts, the  petitioners  submitted that the resolution No. 6 of the  Municipal Committee dated 21-7-1965 (Annexure 6) and approval granted by the Haryana State as per its order dated 30-10-1967 (Ann. H) were illegal and ultra vires and without jurisdiction.      A Full  Bench of  the High  Court rejected the petition mainly on  three grounds.  Firstly, it  found that the State Government is  entitled under S. 62-A of Punjab Act, 48/1953 to direct  the Municipal Committee to impose octroi duty and as such  even if  the municipality is found to have erred in imposing the  Octroi Duty,  the legislative  powers  of  the State cannot  be questioned. Secondly, it found, that it was not within  the competence  of the Municipality to grant any exemption from payment of octroi duty and this act was ultra vires of  its powers  and cannot  be enforced.  Thirdly,  it found that  the Court  cannot go  into the  question  as  to whether the  petitioners’ plea  based  on  equity  that  the Municipality is  bound, cannot  be gone  into  far  want  of adequate facts.  The High Court however granted certificates

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to the appellants.      Dismissing the appeal, the Court ^      HELD: 1.  Under section  62-A of  the Punjab  Municipal Act. 1911  as  amended  by  Punjab  Act  43/1958  the  State Government is  empowered to impose octroi duty and under sub clause (b)  if the committee fails to carry cut the order of the Government, the State Government may impose octroi Duty. Under S.  70(2)(c), a  Municipal Committee  by a  resolution passed at  a special  meeting and  confirmed  by  the  State Government may  exempt in  whole or  in part from payment of any such  tax any person or class of persons or any property or description of property. In exercise of those powers, the State Government  had by  its order dated 4-5-1954 confirmed resolution No.  1 passed  by the  Municipal Committee in its special meeting  held on 2-3-1954 regarding the exemption of goods imported  into Fateh  Mandi from  levy of octroi Duty. Subsequently, in  reply  to  the  objection  raised  by  the Examiner of  Local Funds,  the Government pointed out by its letter dated  9-4-1956 (Ann. F) that the Government’s action confirming the  resolution  No.  1  dated  2-3-1954  of  the Municipal Committee   exempting  Goods imported  into  Fateh Mandi, under s. 70(2)(c) of 691 the Punjab  Municipal Act,  1911, was quite in order. By the impugned order  dated 20-10-1967 the Government approved the resolution No.  6 of the Municipal Committee dated 21-7-1965 and permitted  the Municipality  to levy  the  octroi  Duty. Therefore, the  action taken  by  the  State  Government  is strictly in conformity with the powers conferred on it under s. 70(2)(c)  of the  Act. It  exempted the  petitioners from payment  of   octroi  Duty   for  a  particular  period  and ultimately  withdrew   the  exemption.  The  action  of  the Government cannot  be questioned as it is in exercise of its statutory functions.  The plea  of estoppel is not available against the  State in  the exercise  of its  legislative  or statutory functions. The Government have power to direct the Municipality to  collect the  octroi Tax if the Municipality fails to  take action by itself under s. 60(A)-(3). Further, even on  facts, this  plea is  not available  as against the Government as  it is  not the  case of  the petitioners that they acted  on the representation of the Government. [698 E- H, 699 A-C]      2. The  Municipality is  not estopped  from levying  or recommending the  levy of  the tax  to the  Government  even though in  the proclamation  of sale it was notified that no octroi duty  would be levied and it was only in pursuance of such representation  the appellants  purchased the  property because the  Municipal Committee  had no authority to exempt the Fateh  Market from  the levy  of  Octroi  duty.  If  the Municipal Committee  had passed  a resolution  or  issued  a notification that  no octroi duty will be levied, it will be ultra vires of the powers of the Municipal Committee. When a public authority  acts beyond the scope of its authority the plea of  estoppel is  not available to prevent the authority from-acting according  to law. It is in public interest that no such  plea should  be allowed.  Further, in  the  instant case, the  appellants are  not entitled  to any  enforceable legal right  under the terms of the Municipal Act, since non production of  any  sale  deed  executed  by  the  Municipal Committee in  favour  of  the  purchasers  raises  the  only presumption that  the  contract between the parties have not been proved  to have been reduced in writing and executed in the manner  prescribed under  section 47 of the Municipality Act, 1911 (Act 3 of 1911). [699 C-E 700 B-D]

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    3.  Article   299(1)  of   the  Constitution  of  India corresponding to  Section 175 (3) of the Government of India Act, 1935  provides that  all contracts made in the exercise of executive  powers of  the Union  or of  a State  shall be expressed to  be made by the President or by the Governor of the State,  as the  case may  be, and all such contracts and assurances of  property made  in the  exercise of that power shall be executed on behalf of the President or the Governor by such  persons and  in such  manner as  he may  direct  or authorise. The  provisions of  this Article is mandatory and not directory,  is enacted as a matter of public policy that the  State   should  not   be  saddled  with  liability  for unauthorised  contracts   and  is   enacted  in  the  public interest. The  provisions are  embodied  on  the  ground  of public policy-on the ground of protection of general public. [700 F-H, 701 A-B]      Seth Bhikraj  Jaipuria v.  Union of India, [1962] 2 SCR 880; Mulam  Chand v.  State  of  M.P.,  [1968]  2  SCR  214. Karamshi Jethabhiai  Samrayya v.  State of  Bombay, [1964] 6 SCR 984; referred to.      4. The  scope of  the plea  of doctrine  of  promissory estoppel against the Government is as follows:      (a) The  plea of  promissory estoppel  is not available against  the   exercise  of  the  legislative  or  executive functions of the State. There could not be estoppel 692 against express provisions of the law nor could the State by its action  waive its rights to exercise powers entrusted to it for the public good. [721 F]      Antonio Buttigieg  v. Captain Stephen H. Cross and ors. AIR 1907 PC; Adants v. London Improved Motor Coach Builders, [821] 1 K.B. 495, York Corporation v. Henry Leethan and Sons Ltd., [1924] 1 Ch. 557; William Cory and Sons Ltd. v. London Corporation, [1951]  2 K.B.  476; Howell  v.  Falmouth  Boat Construction Co.  Ltd., [1951]  A.C.  837;  Commissioner  of Crown Lands  v. Page,  [1960] 2  K.B. 274;  South-end-on-Sea Corporation v.  Hodgson (Wickrord)  Ltd., [1962] 1 Q.B. 416; Federal Insurance  Corpn. v.  Marril, 382  U.S. 380;  quoted with approval.      Robertson v.  Minister of  Pensions, [1949] 1 K.B., 227 dissented from.      Assistant Custodian  of E.P.  and ors.  v. Brij Kishore Agarwala, [1975] 2 SCR 359; Bihar Eastern Gangetic Fishermen Cooperative Society v. Sipahi Singh & ors. AIR 1977 SC 2149; applied.      Union of  India v.  Indo Afghan  Agencies, [1968] 2 SCR 366; Century  Spinning &  Manufacturing Co. Ltd. and Anr. v. Ulhas Nagar  Municipal Council  and anr.,  [1970] 3 SCR 854; Turner Morrison  Co. Ltd.  v.  Hungerford  Investment  Trust Ltd., [1972] 3 SCR 711; explained and distinguished.      Collector of  Bombay v.  Municipal Corporation  of  the City of  Bombay and  ors.,[1952] SCR  p. 43;  Excise  Commr. U.P., Allahabad  v. Ram  Kumar, [1976]  Supp.  SCR  532;  M. Ramanatha Pillai v. State of Kerala, [1974] 1 SCR 515; State of Kerala  and Anr.  v. The Gwalior Manufacturing (Wvg.) Co. Ltd., [1974] 1 SCR 671; followed.      (b) The  doctrine cannot  be invoked for preventing the Government from  discharging its  functions under  the  law. [721 G]      (c) When  an officer of the Government acts outside the scope of  his authority,  the plea of promissory estoppel is not available.  The doctrine  of ultra  vires will come into operation and  the Government  cannot be  held bound  by the unauthorised acts of its officers. [721 G-H]      (d) When  the officer  acts within  the  scope  of  his

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authority under  a scheme  and enters  into an agreement and makes  a   representation  and   a  person  acting  on  that representation puts  himself in  a disadvantageous position, the Courts  is  entitled  to  require  the  officer  to  act according to the scheme and the agreement or representation. The officer  cannot arbitrarily  act on  his mere  whim  and ignore his promise on some undefined and undisclosed grounds of necessity  or change  the conditions  to the prejudice of the person  who had  acted upon  such representation and put himself in a disadvantageous position. [721 G-H, 722 A-B]      Union of  India v.  Indo Afghan Agencies Ltd., [1968] 2 SCR 366; discussed and followed.      (e) The  officer would  be justified  in  changing  the terms of  the agreement  to the prejudice of the other party on special considerations such as difficult foreign exchange position or  other matters  which have  a bearing on general interest of the State. [722 B-C]      Union of India v. M/s Indo Afghan Agencies Ltd., [1968] 2 SCR 366 applied. 693      5. It  is only in public interest that it is recognised that an  authority acting  on behalf of the Government or by virtue of statutory powers cannot exceed his authority. Rule of ultra  vires will  become applicable  when he exceeds his authority and  the Government  would not  be bound  by  such action. Any  person who  enters into an arrangement with the Government has  to ascertain  and satisfy  himself that  the authority who  purports to  act  for  the  Government,  acts within the  scope of  his authority and cannot urge that the Government is  in the  position of any other litigant liable to be charged with liability. [705 G-H, 706 A]      6. The doctrine of estoppel which burst out into sudden blaze in  1946 and  ever since continuing to smoulder due to the consistent maintenance of the original author’s interest in its further development, now in this direction and now in that, though  interesting is  not relevant  in administering Indian Law.  Section 63  of the  Contract Act which provides that when a creditor accepts a lesser sum in satisfaction of the whole  debt, the whole debt becomes discharged is a wide departure from  the English  law as  laid down  in Jordan v. Monye. The  doctrine of  estoppel referred  to in High Trees case is to some extent taken care of by section 65 and 70 of the  Indian  Contract.  Section  65  provides  that  when  a contract becomes  void, any  person  who  has  received  any advantage under  such agreement  or  contract  is  bound  to restore it  or to  make compensation  for it,  to the person from whom  he received  it. Under section 70 of the Contract Act. an obligation is cast on the person enjoying benefit of a non-gratutious  act to  compensate the person who lawfully performed the Act. [707 A, 708 B, D-F]      Foakes v.  Beer, [1884]  9 A.C.  605; Jordan  v. Money, [1854] 5  H.L. Cas  185; Fenner v. Blake, [1900] 1 Q.B. 426; Woodhouse Ltd. v. Nigerian Produce Ltd., [1932] A.C. 431, In Re. Wickham  William Porter and Co. Ltd., [1937] 2 All. E.R. 361; Central  London Property Trust Ltd. v. High Trees House Ltd., [1956] 1 All. E.R. 256; referred to.      7. The  provisions of Section 70 of the Indian Contract Act are  applicable to  contract which  is not  according to Section 175  of the  Government of India Act and Article 299 of the Constitution of India. [708 G-H]      State of  West Bengal  v. B.  K. Mondal and Ors., [1962 Supp. SCR  p. 876;  New Marine  Coal Co.  Ltd. v.  Union  of India. [1964] 2 SCR 859; referred to.      8. All that the Indo-Afghan Agencies case laid down was that a  public authority  acting on behalf of the Government

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cannot on  its own  whim and  in an arbitrary manner seek to alter the conditions accepted by him to the prejudice of the other side.  The decision in terms accepts that after taking into   consideration    the   exigencies   and   change   of circumstances the  authority can  modify the  conditions  in exercise of  his powers  as a  public policy. Apart from not noticing Howell’s  case, the Court in Indo Afghan’s case did not say  that the  law as  extracted from  the  judgment  in Robertson’s case by Denning J. was applicable to India. [719 D-E, 721 A]      9. The Judgment in M/s Motilal Padampat Sugar Mills Co. (P) Ltd.  v. State  of Uttar Pradesh, [1979] 2 SCR p. 641 is not in  accordance with  the view  consistently taken by the Supreme Court in following respects : [722 F]      (i) The  decision in the case of Union of Indian v. M/s Indo Afghan  Agencies Ltd.,  [1968]  2  SCR  366  cannot  be constructed in the manner in which it was 694 done. All  that the Indo Afghan case purports to lay down is that the  Court can  enforce an  obligation incurred  by  an authority on which another has acted upon and put himself in a  disadvantageous  position,  when  the  authority  resiles arbitrarily or  on  mere  whim  or  on  some  undefined  and undisclosed grounds of necessity. [722 F-G]      (ii) The decision of this Court in Century Spinning and Manufacturing Co.  Ltd and  Anr. v. The Ulhasnagar Municipal Council and  Anr.,  [1970]  3  SCR  854  was  understood  as refusing  to   make  a   distinction  between   the  private individual and  public  body  so  far  as  the  doctrine  of promissory estoppel is concerned. [723 F]      (iii)  The  three  decisions  of  this  Court,  two  by Constitution Benches M. Ramanatha Pillai v. State of Kerala, State of  Kerala v.  The Gwalior  Rayon Silk Mfg. (Wvg.) Co. Ltd. and  the third  by a  Bench of  four judges  in  Excise Commissioner, U.P.  Allahabad v. Ram Kumar cannot be ignored on the  ground that  the observations  are in  the nature of obiter dicta  and that it cannot be insisted as intending to have laid  down any  proposition of  law different from that enunciated in  the Indo  Afghan Agencies  case. It  was  not necessary for  this Court  in the  three cases  to refer  to Union of India & others v. Indo-Afghan Agencies. If properly understood it only held that the authority cannot go back on the agreement arbitrarily or on its own whim. [723 H, 724 A- B]      (iv) The  case of  the House  of  Lords  in  Howell  v. Falmouth Boat  Construction Co.  Ltd. cannot  be read as not having overruled  the view  of Denning  J. and as not having expressed its  disapproval of  the  doctrine  of  promissory estoppel against  the crown  in  Robertson  v.  Minister  of Pensions. [724 B-C]      (v) The  Indian Constitution as a matter of high policy in public interest has enacted Article 299 so as to save the Government from  liability arising  out of unauthorised acts of its officers and contracts not duly executed. Sections 65 and 70  of the  Indian  Contract  Act  provide  for  certain reliefs in  void contracts  and in  unenforceable  contracts where a person relying on a representation has acted upon it and put  himself in a disadvantageous position. The activist jurisprudence and  the wide implications thereof, propounded in the Motilal Padampat, Sugar case doubted. [724 E, F, G]      (vii) The  Indian Contract  Act regulates  the right of parties and  expressly insists  on the  necessity for lawful consideration which  cannot be  dispensed with  by  invoking some  new  equitable  doctrine.  Under  Section  10  of  the Contract Act, for a contract to be valid, it should be for a

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lawful consideration  and Section  25 of  the  Contract  Act provides that  an agreement  made without  consideration  is void unless  it satisfies one of the conditions mentioned in that section. [725 B-C, D]      (viii) Sankaranarayan  v. State  of  Kerala,  [1971]  2 S.C.C. 361;  Narendra Chand Hem Ram and Ors. v. Lt. Governor Administration, Union  Territory of Himachal Pradesh, [1972] 1 SCR  940; State  of Tamil  Nadu and  Ors. etc.  v.  S.  K. Krishnamurthi  etc.,  [1972]  3  SCR  104;  and  M/s  Andhra Industrial Works  v. Chief  Controller of  Imports and Ors., [1975] 1  SCR 327 indicate that the Rule of estoppel against Government cannot be invoked against the Government. [725 F] 695      10. What  are the  moral values  of the  society  is  a complex question  because    the  concept  of  moral  values amongst different  persons and  classes of  persons  is  not always the same. Being not a state one, it differs from time to time  and from  society to society. It is hazardous for a Court to  attempt to  enforce what  according to  it is  the moral value. Before embarking on the mission of "closing the gap between  the law and morality and bring about as near an approximation between  the two as possible", it is necessary for the  Court to  understand clearly  its limitations.  The powers of  the  Court  to  legislate  is  strictly  limited. "Judges ought  to remember  that their  office is jus dicere and not  jus dare  to interpret the law, and not to make law or give law". [727 F, G, 728 A-C]      The courts  by its  very nature  are most ill suited to undertake the task of legislating. There is no machinery for the Court  to ascertain  the condition   of  the people  and their requirements  and to  make laws  that  would  be  most appropriate. Further  two judges may think that a particular law would,  be desirable  to meet  the requirements  whereas another two  judges may  most  profoundly  differ  from  the conclusions arrived at by two judges. [728 G-H, 729 A]      Shri Gurbaksh  Singh Sibbia  etc.  v.  State  of  U.P., [1908] 3 SCR p. 383 followed.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos. 1237- 1238/1970.      From the  Judgment and  Order dated  15-12-1969 of  the Punjab and  Haryana High  Court in  Civil Writ  Appeal  Nos. 444/68 and 2975/67.      Hardayal Hardy,  Mahinder Narain and Rameshwar Nath for the Appellants in both the Appeals.      S. M.  Ashri and  M. N.  Shroff for  the Respondents in both the Appeals.      The Judgment of the Court was delivered by      KAILASAM, J.  These  two  appeals  are  by  certificate granted by  the Punjab  and Haryana High Court at Chandigarh in  C.   W.  No.444/1968   and  C.   W.  No.  2975  of  1967 respectively. The petitions were disposed of by a full Bench of the High Court on 15-12-1969.      The appellants who were the petitioners before the High Court prayed  for a  writ of  certiorari or  mandamus or any other appropriate  writ for  quashing the  resolution No.  6 dated 21st  July, 1965 of the Municipality and letter of the Government of  Haryana to  the President  of  the  Municipal Committee Bahadurgarh  dated 30-10-1967.  The facts  of  the case briefly are as follows:-      The Municipal  Committee of Bahadurgarh, Respondent No. 2, established  Mandi Fateh in Bahadurgarh Town, with a view

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to improve  trade  in  the  area.  The  Municipal  Committee decided that  the purchasers  of the  plots for  sale in the Mandi would not be required 696 to pay  octroi duty on goods imported within the said Mandi. In   pursuance   of   this  decision, resolution No. 8 dated 20-12-1916 was  passed by  the Municipality.  Handbills were issued for  the sale  of the  plots  on  the  basis  of  the resolution and  it was  proclaimed that  Fateh  Mandi  would remain  exempt  from  payment  of  octroi.  Subsequently  by resolution No.  4 dated  20-5-1917, the  Municipal Committee decided that  the term  No. 14  to the  conditions of  sale, namely, that  the plots would not be required to pay octroi, be amended  to the effect that the Mandi shall remain immune from payment  of Octroi  Duty for  ever. When the resolution was received  by the  Commissioner of Ambala, in paragraph 3 of his  letter dated  26-6-1917 marked  as Annexure A in the writ petition, he  noted:-           "I note that by its resolution No. 4 of 20-5-1917,      the Municipal  Committee  has  undertaken  that  Octroi      shall never  be imposed  in the  Mandi. This  is  ultra      vires, the  Municipal Committee  cannot  make  such  an      undertaking  and   this  should  be  explained  to  the      purchasers of  sites before they begin building so that      if they wish they may withdraw from the purchase".      Of course, it is unlikely that Octroi will be imposed."      On  receipt  of  this  letter,  the  President  of  the Municipal Committee made representations that if octroi duty was to  be levied, there will be no purchasers for the plots and the  entire scheme will fall through. On receipt of this representation on  20-9-1917 (Annexure  B), the Commissioner revised his view and stated that he was cancelling para 3 of his letter  dated  26-6-1917,  that  is  to  say,  "that  in deference to the strong views of the Municipal Committee and to your  own opinion  that the  market will  collapse  if  I insist upon  it, I  withdraw my objection to the undertaking made by  the Municipal  Committee that  Octroi will  not  be imposed on  the market. As soon as the market is established it will  be necessary  to consider  what form of taxation is best to  cover the  market share of Municipal expenses". The Municipal Committee on 10-3-1919 imposed house-tax of Rs. 3- 14-6 per  cent per  annum on  the shopkeepers  to cover  the expenditure of the market.      This state  of affairs continued till 4-9-1953 when the Municipal  Committee  by  notification  No.  9697-C-53/63830 dated 4-9-1953 included Fateh Mandi, Bahadurgarh, within the Octroi limits.  The Examiner of Local Funds pointed out that the Municipal Committee is under obligation to charge octroi on goods  imported into  Fateh Mandi.  The President  of the Municipal Committee  made a  representation  to  the  Deputy Commissioner on  24-2-1954. The  Municipal  Committee  again passed another resolution No. 1 dated 2-3-1954 that the 697 Fateh Mandi  will remain  free from octroi duty according to the terms  of the  proclamation of  the sale relating to the sale of  plots. The  matter was referred to the Punjab State which after thoroughly examining the whole matter, confirmed Resolution No.  1 passed  by the Municipal Committee on 2-3- 1954. Subsequently, the Municipal Committee changed its mind and by  its resolution  dated 8-5-1954, resolved that octroi duty should  also be levied on the goods imported into Fateh Mandi. But  this  resolution  was  annulled  by  the  Punjab Government under  S. 236  of the  Punjab Municipal  Act. The Examiner of Local Funds Accounts in the meantime insisted on the levy  of octroi  duty on  the goods  imported into Fateh

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Mandi and  the Punjab  Government after discussing the issue on  9-4-1956   informed  the   President  of  the  Municipal Committee that  the Government’s  action in  confirming  the resolution No.  1 of  2-3-1954 of  the Municipal  Committee, Bahadurgarh exempting  goods imported  into Fateh Mandi from levy of octroi duty under S. 70(2) (c) of the Municipal Act, 1911, is quite in order and that no separate notification to this effect  was necessary  under the  rules. Again on 21-7- 1965, the  Municipal Committee Bahadurgarh resolved that the Government be  requested to cancel Resolution No. 1 dated 2- 3-1954. The  State of  Haryana Respondent  No. 1  which came into existence  on 1-11-1964 under the Punjab Reorganisation Act, by  its memo  dated 13-10-1967  approved the resolution No. 6  dated 21-7-1965  of Municipal Committee and cancelled the Municipal  Resolution No.  1 of 2-3-1954. As a result of the decision  of the  Government,  the  Municipal  Committee started charging  octroi duty on the goods imported into the Mandi. On  these facts,  the petitioners  submitted that the resolution No.  6 of the Municipal Committee dated 21-7-1965 (Annexure G)  and the  approval granted by the Haryana State as per  its order  dated 30-10-1967 (Ann. H) are illegal and ultra vires and without jurisdiction.      A Full  Bench of  the High  Court rejected the petition mainly on  three grounds,  Firstly, it  found that the State Government is  entitled under S. 62-A of Punjab Act, 48/1953 to direct  the Municipal Committee to impose octroi duty and as such  even if  the municipality is found to have erred in imposing the  Octroi Duty,  the legislative  powers  of  the State cannot  be questioned. Secondly, it found, that it was not within  the competence  of the Municipality to grant any exemption from  payment of octroi duty and this act is ultra vires of  its powers  and cannot  be enforced.  Thirdly,  it found that  the Court  cannot go  into the  question  as  to whether the  petitioners’ plea  based  on  equity  that  the Municipality is  bound, cannot  be gone  into  for  want  of adequate facts. 698      Dealing with  the first  contention,  relating  to  the legislative powers of the State, it will be seen that Punjab Act 48/1953, introduced s.62A which runs as follows:-           "62-A.           (1)  The  State  Government  may,  by  special  or      general order notified in the official Gazette, require      a Committee  to impose  any tax  mentioned in S.61, not      already imposed  at such rate and within such period as      may be  specified in the notification and the Committee      shall thereupon act accordingly.           (2) The  State Government  may require a Committee      to modify  the rate  of any  tax  already  imposed  and      thereon the  committee shall modify the tax as required      within such period as the State Government may direct.           (3) If  the Committee fails to carry out any order      passed  under   Sub-section  (1)   or  (2)   the  State      Government, may  by a  suitable order  notified in  the      official gazette,  impose or  modify the tax. The order      so passed shall operate as if it were a resolution duly      passed by  the Committee  and as  if the  proposal  was      sanctioned in  accordance with  the procedure contained      in S.62."      It is  admitted that  the State Government is empowered under S.  62A to  require the  Municipal Committee to impose octroi Duty  and under  sub-s. (3) if the Committee fails to carry out  the order of the Government, the State Government may impose  octroi Duty.  Under S.  70(2) (c),  a  Municipal Committee by  a resolution  passed at  a special meeting and

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confirmed by  the State Government may exempt in whole or in part from the payment of any such tax any person or class of persons or  any property  or  description  of  property.  In exercise of  these powers,  the State  Government had by its order dated  4-5-1954 confirmed  resolution No.  1 passed by the Municipal  Committee in its special meeting held on 2-3- 1954 regarding  the exemption  of goods  imported into Fateh Mandi from  levy of  Octroi Duty.  Subsequently, in reply to the objection  raised by  the Examiner  of Local  Funds, the Government pointed out by its letter dated 9-4-1956 (Ann. F) that the Government’s action confirming the resolution No. 1 dated 2-3-1954  of the  Municipal Committee  exempting Goods imported into  Fateh Mandi, under S. 70(2) (c) of the Punjab Municipal Act,  1911, is  quite in  order. By  the  impugned order  dated   20-10-1967  the   Government   approved   the resolution No.  6 of the Municipal Committee dated 21-7-1965 and permitted  the Municipality to levy the Octroi Duty. The action  taken   by  the  State  Government  is  strictly  in conformity with  the powers  conferred on  it under S. 70(2) (c) of the 699 Act. It exempted the petitioners from payment of Octroi Duty for  a   particular  period   and  ultimately  withdrew  the exemption. The action of the Government cannot be questioned as it is in exercise of its statutory functions. The plea of estoppel is  not available against the State in the exercise of its  legislative or  statutory functions.  The Government have powers to direct the Municipality to collect the Octroi Tax if the Municipality fails to take action by itself under S. 60(A)  (3). Further,  even on  facts, this  plea  is  not available as against the Government as it is not the case of the petitioners that they acted on the representation of the Government. We,  therefore, agree  with the view of the Full Bench that the plea of estoppel is not available against the Government for  questioning the  validity  of  the  impugned Government order.      The second  contention  is  that  the  Municipality  is estopped from levying or recommending the levy of the tax to the Government  as  in  the  proclamation  of  sale  it  was notified that  no Octroi Duty will be levied and it was only in  pursuance   of  such   representation,  the  petitioners purchased the  property. We feel this plea should also fail, because the  Municipal Committee  had no authority to exempt the Fateh  Market from  the levy  of  Octroi  Duty.  If  the Municipal Committee  had passed  a resolution  or  issued  a notification that  no Octroi Duty will be levied, it will be ultra vires of the powers of the Municipal Committee. When a public authority  acts beyond the scope of its authority the plea of  estoppel is  not available to prevent the authority from acting  according to law. It is in public interest that no such plea should be allowed.      The third  contention that  was raised  by the  learned counsel  for  the  appellants  before  the  High  Court  and reiterated before  us, is  that  the  Municipality  and  its successors are  bound by the doctrine of promissory estoppel and as  such are  estopped from levying the Octroi Duty. The High Court rejected the plea on the following grounds:-      1.   The Petitioners are not the original purchasers of           the  plots   in  Fateh   Mandi.  They  are  either           descendants of  or transferees  from the  original           purchasers of the plots.      2.   No  sale-deed   was  executed   by  the  Municipal           Committee in  favour of  the  original  purchasers           undertaking that no octroi duty will be levied.      3.   No allegation  has been  made  that  the  original

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         purchasers would  not have purchased the plots, if           condition no.  14 about  immunity from  payment of           Octroi had not been there.      The learned  counsel by  reference to  the names of the list of  the purchasers  was able to satisfy us that some of the appellants are the 700 original purchasers  and as  such the first objection raised before the  High Court  is not sustainable. Again, regarding the third  objection, that  there is  no allegation that the original purchasers  would not  have purchased  the plots if condition 14  about immunity  from payment of Octroi had not been  there,  it  was  submitted  as  erroneous  as  in  the affidavit  filed  in  support  of  the  writ  petition,  the petitioners had  pleaded in paragraph 2 that on the faith of the representation,  the petitioners purchased the plots and constructed  establishments.   The   learned   counsel   is, therefore, right  in his submission that the third objection raised before  the High  Court is without substance. But the High Court  was right  in pointing out that none of the sale deeds executed  by the  Municipal Committee in favour of the purchasers   was    produced   before   the   Court.   These circumstances would  show  that  the  contract  between  the parties have not been proved to have been reduced in writing and executed  in the  manner prescribed  under S.  47 of the Act. Strictly,  therefore, under  the terms of the Municipal Act, the  appellants are  not entitled  to  any  enforceable legal right.  But it  was submitted  that  even  though  the contract had  not been  executed in due form, the appellants would  be   entitled  to   relief  under,  the  doctrine  of promissory estoppel.      The question  that arises  for consideration  in  these cases is  whether the  proclamation of  sale which  notified that there  would be no octroi levy in the market relying on which statement  the petitioners  bid at  the auction, would estop the  Municipality by  operation  of  the  doctrine  of promissory estoppel  from recommending to the Government and the Government levying octroi duty under S. 61 of the Punjab Municipal Act.  To answer  this question  it is necessary to examine at  some length  the rights  and liabilities  of the State under a contract entered into by it with third parties and in  transactions carried  on by  it in  exercise of  its executive and statutory functions.      Art. 299 (1) of the Constitution of India provides that all contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or  by the Governor of the State, as the case may be, and  all such  contracts and  all assurances of property made in  the exercise  of that  power shall  be executed  on behalf of  the President or the Governor by such persons and in such  manner as  he may direct or authorise. This Article in  the   Constitution  corresponds  to  S.  175(3)  of  the Government of  India Act,  1935. In cases, that arose out of S. 175(3)  of the  Government of India Act, 1935, this Court starting from Seth Bikhraj Jaipuria v. Union of India, has 701 repeatedly held  that the  provision is  mandatory  and  not directory, that  the provision  is enacted  as a  matter  of public policy,  that the  State should  not be  saddled with liability for  unauthorised contracts and that the provision is enacted in the public interest. In Mulamchand v. State of M. P.,  the earlier  decisions of  this Court were relied on and it  was held that the reasons for enacting the provision is not  for the  sake of  some form but for safeguarding the Government against  unauthorised contracts.  The  provisions

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are embodied on the ground of public policy-on the ground of protection of general public-and these formalities cannot be waived or dispensed with. The Court clearly observed that if the  plea   of  the   respondent   regarding   estoppel   or ratification is  admitted that  would mean,  in effect,  the repeal of an important constitutional provision intended for the protection  of the  general public. That is why the plea of estoppel  or ratification  cannot be  permitted in such a case." (emphasis Ours)      It  was   contended  before   this  Court  in  Karamshi Jethabhai Somayya  v. State  of Bombay, that in an agreement entered  into  under  the  Act  by  statutory  authority  in pursuance of  a statutory  power, that consequences provided under the statute would follow and would not fall within the ambit of  S. 175(3)  of the  Government of  India Act.  This Court after  examining the  terms of the contract found that it did  not fall within the provisions of the Act and, found it unnecessary to deal with the contention.      The scope  of the  doctrine of equitable estoppel arose for consideration  before this  Court in Collector of Bombay v. Municipal  Corporation of  the City of Bombay and Ors. In 1865, the  Government of  Bombay called upon the predecessor in title of the Corporation of Bombay to remove some markets from a certain site and vacate it, and on the application of the then  Municipal Commissioner  the  Government  passed  a resolution approving  and authorising  the grant  of another site to the Municipality. The resolution stated further that "the Government  do not  consider that  any rent  should  be charged to  the Municipality  as the  markets will  be, like other  public  buildings,  for  the  benefit  of  the  whole community". The  Corporation gave  up the sites on which the old markets were situated and spent a sum of over 17 lacs in erecting and  maintaining markets  on the new site. In 1940, the Collector  of Bombay,  overruling the  objection of  the Corporation, assessed  the new  site under S.8 of the Bombay City Land  Revenue Act  to  land  revenue  rising  from  Rs. 7,500/- to Rs. 30,000/- 702 in 50 years. The Corporation sued for a declaration that the order of assessment was ultra vires and that it was entitled to hold the land for ever without payment of assessment. The Supreme Court  held by a majority of four Judges to one that the Government  was not  entitled to assess land revenue for the land  in question.  Three of the Judges who were parties to the  majority judgment  found that  the  Corporation  had taken possession  of the  land in  terms of  the  Government resolution  and   continued  in   such  possession   openly, uninterruptedly and  as of  right  for  over  70  years  and acquired limited  title it  had been  prescribing for during the period,  that is  to say,  the right to hold the land in perpetuity free  of rent,  but only  for the  purpose  of  a market  and  for  no  other  purposes.  The  right  acquired included as  part of  it an  immunity from  payment of  rent which constituted  a right in limitation of the Government’s right to  assess in excess of the specific limit established and  preserved  by  the  Government  Resolution  within  the meaning of  S.8 of  the Bombay City Land Revenue Act. Before the Court  there was considerable discussion as to the scope and effect  of the principle of equity enunciated in Ramsden v. Dyson, as to whether such principle should be extended to the facts  of the  case and  as to  whether the facts of the case attract  the application  of the  equity established in Ramsden v.  Dyson  or  attract  the  equity  established  in Maddison v.  Alderson, and Walsh v. Lonsdale, and finally as to whether  the decision  of the  Privy Council  in Ariff v.

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Jadunath the  equity in Ramsden v. Dyson can prevail against the requirement  of formalities  laid down  in the Victorian Statute referred  to above  any  more  than  the  equity  in Maddison v.  Alderson can do against the requirements of the Transfer of Property Act. The majority of the judges did not express any  opinion on this question but decided the appeal on a  narrower and  shorter ground  stated above. One of the judges, Chandrasekhara  Aiyar, J.  constituting the majority expressed his view thus:-           "Whether it  is the equity recognised in Ramsden’s      case, or  it is  some other  form of  equity, is not of      much  importance.   Courts  must   do  justice  by  the      promotion of  honesty and  good faith so far as it lies      in their  power. As  pointed out  by Jenkins  C. J.  in      Dadoba Janardhan’s case a different conclusion would be      opposed to  what is reasonable, to what is probable and      what is fair."      The other  judges of  the Court who spoke for the Court refrained  from  going  into  this  question.  The  view  of Chandrasekhara Aiyer, J. 703 being the  view of one of the judges of the majority, cannot be taken  as the  view of the Court. Patanjali Sastri, J. as he then was dissented with the majority and stated:-           "The principle  of Ramsden v. Dyson cannot prevail      against statutory requirements regarding disposition of      property or  making of  contract by Government * * *The      right  to   levy  land   revenue  is  no  part  of  the      Government’s right to property but a prerogative of the      Crown and  adverse possession  of the  land  could  not      destroy the Crown’s prerogative to impose assessment on      the land."      A Bench  of four  judges of  this Court  in a  decision Excise Commissioner.  U. P.  Allahabad v.  Ram Kumar,  after examining the  case law  on the subject observed that "it is now well-settled  by a catena of decisions that there can be no question  of estoppel  against the Government in exercise of its  legislative, sovereign  or  executive  powers."  The earlier decisions  of this  Court in M. Ramanathan Pillai v. State of Kerala, and State of Kerala and Anr. v. The Gwalior Rayon Silk  Manufacturing (Wvg.)  Co. Ltd. were followed. It may, therefore,  be stated  that the  view of this Court has been that the principle of estoppel is not available against the Government  in exercise  of  legislative,  sovereign  or executive power.      On behalf  of the  petitioners, it was submitted that a liberal view  was taken  by this Court in the decision Union of India  v. M/s. Indo-Afghan Agencies Ltd. which recognised the principle  of promissory  estoppel and held that whether the agreement  is executive  or administrative in character, the  courts  have  power  in  appropriate  cases  to  compel performance of  the obligations  imposed by the schemes upon the departmental  authorities. At this decision is relied on as the  sheet anchor of the doctrine of promissory estoppel, the facts  of the  case and  the decision  rendered therein, have to  be examined  carefully. M/s.  Indo-Afghan  Agencies Ltd. the  respondents before  this  Court  exported  woollen goods to  Afghanistan and  were issued an Import Entitlement Certificate by  the Textile  Commissions not for the full F. O. B. value of the goods exported, but for a reduced amount. By virtue  of the  powers conferred under S.3 of the Imports and Exports  (Control) Act,  1947,  the  Central  Government issued the  Imports (Control)  Order, 1955  setting out  the policy governing  the grant  of import  and export  licence. During the  relevant period, it provided for the grant to an

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exporter, certificates to import raw materials of a 704 total amount  equal to  100% of  the F.  O. B.  value of his exports. Cl.10  of the  Scheme  provided  that  the  Textile Commissioner could  grant an import certificate for a lesser amount if  he is satisfied after holding an enquiry that the declared value of the goods is higher than the real value of the goods. It was contended, amongst other grounds, that the Government on  grounds of  executive necessity  was the sole judge of  the validity  of its action in matters relating to import and  export policy,  because the policy depended upon the economic climate and other related matters and had to be in its  very nature flexible with power in the Government to modify  or   adjust  it   as   the   altered   circumstances necessitate. It  was pleaded that if the Government was held bound by  every representation  made  by  it  regarding  its intentions, it  would amount  to holding  the Government  as being bound by contractual obligations even though no formal contract  in   the  manner  required  by  Art.  299  of  the Constitution was  executed. Regarding  the objection  on the ground of contravention of Art. 299 of the Constitution, the Court held  that the respondents were not seeking to enforce any contractual right but were seeking to enforce compliance of  the   obligation  which   is  laid   upon  the   Textile Commissioner by the terms of the Scheme and the claim of the respondents was founded upon the equity which arose in their favour as  a result  of the representation made on behalf of the Government  in the  Export Promotion  Scheme.  (emphasis supplied). It  may be  noted that no finding was recorded by the Textile  Commissioner, that  there was  any infringement which entitled  him to  reduce the quota under Cl. 10 of the scheme.      The facts  of the case disclose that the defence of the executive necessity  was not  relied upon  in the  affidavit filed on  behalf of  the Union  of India.  It was  also  not pleaded that the representation in the Scheme was subject to an implied term that the Union of India will not be bound to grant the import certificate for the full value of the goods if they  deem it  inexpedient to  grant the certificate. The Court after  referring to  earlier decisions  of this  Court accepted  the   view  expressed   in  those  decisions  that reduction  in  the  amount  of  import  certificate  may  be justified on  the ground  of misconduct  of the exporters in relation to  goods exported or on such considerations as the difficult foreign  exchange position  or other matters which have  a  bearing  on  the  general  interest  of  the  State (emphasis supplied).  Summing up  the law  laid down  by the earlier cases,  the Court  found that  in each  of the three cases this  Court held that it was competent to grant relief in appropriate  cases,  if,  contrary  to  the  Scheme,  the authority declined  to grant a licence or import certificate or the  authority acted  arbitrarily and  that the  Union of India and  its Officers  are not entitled at their mere whim to ignore the promises made by the Government (emphasis 705 supplied). It  rejected the plea on behalf of the Government that the  Textile Commissioner  is the  sole  judge  of  the quantum of  the import  licence to be granted to an exporter and that  the Courts  were powerless  to grant relief if the promised import  licence is not given to an exporter who has acted in  his prejudice relying upon the representation. The decision is,  therefore, an  authority for  the  proposition that in  the absence  of a  plea of executive necessity, the Court in appropriate cases is entitled to compel performance of the obligations imposed by the Scheme on the departmental

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authority.  The   right  of   the  Government   on  relevant considerations such  as difficult  foreign exchange position or other  matters  which  have  a  bearing  on  the  general interest of  the State,  to  reduce  the  amount  of  import certificate was  recognised. But the authorities have to act according to  the terms of the scheme and not arbitrarily or at their  mere whim  to ignore  the  promises  made  by  the Government (emphasis  supplied). On  the facts  of the case, the Court  gave relief  as the  authorities declined  to act according to  the terms  of the Scheme and acted arbitrarily and at  their mere  whim ignoring  the promises  made by the Government. The  question as  to the  applicability  of  the doctrine of  promissory estoppel  against the legislative or executive acts  of the  Government did not strictly arise in the case.  The decision  was thus  generally  understood  as stated above  is seen  from the  view expressed  by Mr. H.M. Seervai on Constitution of India, 2nd Edn. Vol. I, paragraph 11 at para 146-B, p. 433:           "The authorities  considered by the Supreme Court,      and the conclusions drawn from them, by Shah, J. in the      present case,  merely affirm  the proposition  that the      Government could  not go back upon promises made in the      exercise  of  discretionary  power  as  embodied  in  a      scheme, merely on a whim (emphasis by Mr. Seervai) x            x            x           x           x        X           A promissory  estoppel cannot  stand on  a  higher      footing than  a contract entered into between a citizen      or subject  and a public authority and it is settled by      numerous decisions  that no  public authority entrusted      with discretionary power to be exercised for the public      can bind  itself by  a contract  not to  exercise  that      discretion when the public good demands its exercise".      It is  only in  public interest  that it  is recognised that an  authority acting  on behalf of the Government or by virtue of statutory powers cannot exceed his authority. Rule of ultra  vires will  become applicable  when he exceeds his authority and  the Government  would not  be bound  by  such action. Any person who enters into an arrangement 706 with the  Government has  to ascertain  and satisfy  himself that the  authority who  purports to act for the Government, acts within  the scope of his authority and cannot urge that the Government  is in  the position  of any  other  litigant liable to be charged with liability.      In  refuting   the  contention  that  the  contract  is unenforceable on  the ground  that there  had been no strict compliance  of   the  requirement   of  Art.   299  of   the Constitution, the  Court observed  that the respondents were not seeking  to enforce  any  contractual  rights  but  were seeking to  enforce compliance with the obligation which was laid upon  the Textile  Commissioner by  the  terms  of  the Scheme. Thus,  the relief  that was granted by the Court was by enforcing the compliance of the obligation which was laid upon the  Textile Commissioner  by the  terms of the Scheme. The  Court   proceeded  to  state  that  the  claim  of  the respondents  is   appropriately  founded   upon  the  equity (emphasis ours)  which arises in their favour as a result of the representation  made on  behalf of the Union of India in the Export  Promotion Scheme,  and the  action taken  by the respondents acting upon that representation under the belief that the  Government would carry out the representation made by it.  Thus the equity which the Court was enforcing was to direct compliance  of the  obligation which is laid upon the Textile Commissioner  by the terms of the scheme. The equity cannot be understood as barring the authority from modifying

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the scheme  on  special  considerations  such  as  difficult foreign exchange  position or  other matters  which  have  a bearing on  the general interest of the State (vide p. 380). The purport  of the  judgment  is  made  clear  by  its  own observation:-           "Under our  jurisprudence the  Government  is  not      exempt from  liability to  carry out the representation      made by  it as  to its  future conduct and it cannot be      some undefined  and undisclosed  ground of necessity or      expediency fail  to carry out the promise solemnly made      by it,  nor claim to be the judge of its own obligation      to the  citizen on  an ex  parte  appraisement  of  the      circumstances in which the obligation has arisen."      The observations  of the  Court that  the claim  of the respondents is  properly founded  on the  equity  should  be understood on  the facts  and findings  of the  Court in the case. The Court relying on the observations of Chief Justice Jenkins, observed  that even  though the  case does not fall within the  terms of  S.115 of the Evidence Act, it is still open to  a party  who has  acted on a representation made by the Government  to claim  that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the from of a formal contract as required by the Constitution. The Court 707 would be  bound when the officer made the promise within the scope of his authority and failed to act upon it at his mere whim and acted arbitrarily on some undefined and undisclosed grounds of necessity.      Before proceeding  further with the case, we will refer briefly  to  the  purport  of  the  doctrine  of  promissory estoppel. The  doctrine of  promissory estoppel  burst  into sudden blaze  in 1946  when Denning. J. sitting in the Court of Kings  Bench delivered  the judgment  in  Central  London Property Trust  Ltd. v.  High Trees House Ltd. which has now become famous  as the High Trees Case. The facts of the case are: During  the  war  many  people  left  London  owing  to bombing. Flats  were empty.  In one  block, where  the flats were let  on 99  years leases  at  $  2,500/-  a  year,  the landlord agreed to reduce it by half and to accept $ 1,250/- a year.  When the  bombing was  over, and  the tenants  came back, the  landlord sought  to recover  the full  rent at  $ 2,500/- a year. Denning, J. held that the landlord could not recover the  full amount  for the  time when  the flats were empty. The  lease was  a lease under seal which according to English Common  Law, could  not be varied by an agreement by parole, but  only by  deed. The learned judge invoked equity to his  aid and said that if there has been a variation of a deed by  simple contract  the courts  may give effect to it. The counsel  for the  lessee pleaded  that  the  lessor  had agreed though  without consideration to accept the rent at a reduced rate,  and set  up a  plea of  estoppel  by  way  of defence to the claim for arrears of rental calculated at the full rate.  Faced with  Foakes v.  Beer, if  the defence was raised as  a matter  of contract  and Jorden v. Money, if it was raised  as estoppel.  Denning. J. held that the estoppel sustained although  based on  an assurance as to the future, because the  promisor  intended  to  be  legally  bound  and intended his  promise to be acted upon, with the result that it was  so acted upon. In Jordan v. Money (supra), the House of Lords  held that  a promise to pay a smaller sum of money in discharge  of larger amount which was due, was void since such  a  promise  was  without  consideration.  Denning,  J. relying on Fenner v. Blake, Re: Wickhem William Porter & Co. Ltd.   and Buttery  v. Pickard observed that they were cases

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of estoppel  in the  strict sense. They are really promises- promises intended  to be  binding-intended to be acted upon, and in  fact acted on and in the circumstances the plaintiff company will  be bound  by the  arrangement in  its  letter. Though the observations of 708 Denning, J.  in High Trees case were in the nature of obiter dicta, the decision became the starting point of the several shades  of   opinion  regarding   the  scope  of  promissory estoppel. It  is unnecessary  for our purpose to go into the development of law of promissory estoppel starting from High Trees case.  It is  sufficient to  state that since the High Trees decision  was rendered,  many elaborations and glosses have appeared in the reports. Turner in his book Estoppel by Representation,  has   a  separate   chapter  dealing   with promissory estoppel. The doctrine, as observed by the author at the  conclusion of  the chapter,  "burst out  into sudden blaze in 1946 has ever since continued to smoulder, and that its original  author has  constantly maintained his interest in its  further development,  now in  this direction, now in that".  But   there  has   been  high   places   counselling conservatism  ***  Lord  Hailsham  of  St.  Marylebone,  has expressed his  views in  Woodhouse Ltd.  v. Nigerian Produce Ltd. as follows:-           "I desire  to add that the time may soon come when      the  whole   sequence  of  cases  based  on  promissory      estoppel since the war *** systematically explored".      This subject  though interesting may not be relevant in administering Indian Law. S. 63 of the Contract Act provides that when a creditor accepts a lesser sum in satisfaction of the whole  debt, the  whole  debt  become  discharged.  This provision is  a wide  departure from the English Law and the discussion about  Jordan v. Money wherein it was held that a promise to  accept a smaller sum is devoid of consideration, becomes pointless. So also the doctrine of estoppel referred to in  the High  Trees case is, to some extent taken care of by Ss.  65 and  70 of the Indian contract Act. S.65 provides that when  a contract  becomes  void,  any  person  who  has received any  advantage under  such agreement or contract is bound to  restore it  or to make compensation for it, to the person from whom he received it. Under S. 70 of the Contract Act, an obligation is cast on the person enjoying benefit of a non  gratuitous act  to compensate the person who lawfully performed the act. As to whether the provisions of S. 65 and 70 of  the Indian  Contract Act,  are applicable to contract which is  not according to S. 175 of the Government of India Act and  Art. 299  of the  Constitution of India, there is a difference of  opinion. Sir Maurice Gwyer expressed his view that when  a contract  is void,  recourse to  S.70 cannot be had. Later,  the Supreme  Court held in State of West Bengal v. B.  K. Mondal  & Sons, that S.70 was applicable to such a case. This decision was 709 followed in  New Marine Coal Co. Ltd. v. Union, and in later cases by the Supreme Court.      In discussing  the scope  of the doctrine of promissory estoppel, and  its applicability  against the Government and Government Officers in their dealings with the subject, Lord Denning J. in Robertson v. Minister of Pensions observed :-           "The Crown  cannot escape by saying that estoppels      do not  bind the  Crown for that doctrine has long been      exploded. Nor  can the  Crown escape  by praying in aid      the doctrine  of  executive  necessity,  that  is,  the      doctrine that  the Crown  cannot bind  itself so  as to      fetter its  future executive  action. That doctrine was

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    propounded  by   Rowlett  J.,   in   Redariaktiebolaget      Amphtrite v.  The King  but it  was unnecessary for the      decision because  the statement there was not a promise      which was intended to be binding but only an expression      of intention.  Rowlett, J.,  seems have been influenced      by the  cases on  the right  of the  Crown dismiss  its      servants at  pleasure, but  those cases must now all be      read in  the light  of the  judgment of  Lord Atkin  in      Reilly v.  The King-(1954)  A. C.  176, 179)  *** In my      opinion  the  defence  of  executive  necessity  is  of      limited scope.  It only avails the Crown where there is      an implied  term to  that effect  or that  is the  true      meaning of the contract."      Lord Denning  was dealing with a case of a serving army officer who  wrote to  the War Office regarding a disability and received  a reply  that his disability had been accepted as attributable  to  "military  service".  Relying  on  that assurance, he  forbore  to  obtain  an  independent  medical opinion.  The  Minister  of  Pensions  took  the  view  that appellant’s  disability  could  not  be  attributed  to  war services. Lord  Denning held  that between the subjects such an assurance would be enforceable because it was intended to be binding,  intended to  be acted  upon, and it was in fact acted upon;  and the assurance was also binding on the Crown because no  term could  be implied  that the  Crown  was  at liberty to revoke it.      The  decision   in  Robertson’s  case  is  quoted  with approval in the Indo-Afghan case but before we revert to the Indo-Afghan  case,   we  will   follow  the   course   which Robertson’s case  took. The  correctness of the case came up for consideration  before the  House of  Lords in  Howell v. Falmouth Boat Construction Co. Ltd. The appeal was preferred to the 710 House of Lords from the Court of Appeal against the judgment of Bucknil, Singhleton and Denning, L.JJ. In his judgment in the Court of Appeal, Denning L. JJ. pressed the principle in the following terms:-           "Whenever Government  Officers, in  their dealings      with a  subject, take on themselves to assume authority      in a  matter with which he is concerned, the subject is      entitled to  rely on  their having  the authority which      they assume. He does not know and cannot be expected to      know the limits of their authority, and he ought not to      suffer if  they exceed it. That was the principle which      I applied  to Robertson v. Minister of Pensions, and it      is applicable in this case also."      Commenting on  the view  taken by  Denning, L.  J. Lord Simonds observed :-           "My Lords,  I know of no such principle in our law      nor was  any authority  for it cited. The illegality of      act is  the same  whether or  not the  actor  has  been      misled by  an assumption  of authority on the part of a      government  officer   however  high   or  low   in  the      hierarchy.*** The  question is whether the character of      an  act  done  in  face  of  statutory  prohibition  is      affected by  the fact  that it  has been  induced by  a      misleading assumption  of authority. In my opinion, the      answer is  clearly "no".  Such an  answer may make more      difficult the  task of  the citizen  who is  anxious to      walk in  the narrow  way, but  that does  not justify a      different answer being given."      Lord Normand  referred to  the principle  laid down  by Denning L. J. and observed :-           "As I  understand this  statement, the respondents

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    were in  the  opinion  of  the  learned  Lord  Justice,      entitled  to   say  that   the  Crown   was  barred  by      representations made  by Mr.  Thompson and  acted on by      them  from  alleging  against  them  a  breach  of  the      statutory order,  and further that the respondents were      equally  entitled   to  say  in  a  question  with  the      appellant that  there had  been no  breach. But  it  is      certain that  neither a  Minister nor  any  subordinate      officer  of   the  Crown   can  by   any   conduct   or      representation bar  the  crown  enforcing  a  statutory      prohibition or  entitle the  subject to  maintain  that      there has been no breach of the contract."      The view  expressed by the House of Lords and the Privy Council has been followed in English cases. 711      The Privy  Council  in  Antonio  Buttigieg  v.  Captain Stephen H. Cross and Ors, has ruled that it is not competent for the  Government to  fetter its  future executive action, which must  necessarily be  determined by  the needs  of the community when  the  question  arises,  that  it  cannot  by contract hamper  its freedom  of  action  in  matters  which concern the  welfare of  the State.  The competent  Military Authority approached  the appellant  for opening  a club for officers serving  in his  Majesty’s  forces.  The  appellant stated his willingness to take on lease certain premises and asked the  Military authorities  to procure him a licence to continue the  club after  the termination  of the  war.  The military authorities  failed to  obtain a  licence  and  the appellant was  informed of  their inability  to  obtain  the licence and an officer on behalf of the military authorities stated that  the appellant  should have  a guarantee  seeing that the  war was  not likely  to come to an end quickly and that the  club would  be kept  open throughout  the war. The rules for  the conduct  of the  club were  drawn up and were approved by  the Military Authorities. Rule 18 provided that the club  should  endure  during  the  time  when  the  said hostilities existed.  The club  was placed out of bounds for service members by order of the Military Authorities because the club  was being  mismanaged by  the sale  of liquor long after permitted  hours. As  the club  was a  purely  Service Club, it was subsequently wound up. The appellant complained of the loss to which he had been put by placing the club out of bounds  and  sought  to  hold  the  Military  Authorities responsible for  such loss. The Court of Appeal while giving judgment in favour of the Military Authorities observed :-           "It  is  a  settled  principle  and  it  has  been      constantly held  by this  Court and  in local case-law,      that those  two functions  of the civil or the military      Government   are   totally   distinct.   The   Military      Authorities could  not have  renounced those rights, in      as much as it would have been immoral and against every      fundamental principle  of  Constitutional  Law  if  the      Authorities, in order to open a club, which is a purely      administrative act-were  to sacrifice  interests  which      are far  more important  and therefore of a much higher      order, whether  political, moral  or  affecting  public      order. Consequently  when,  within  the  administrative      sphere, the  Government enters  into a  contract with a      private individual,  the Government is bound to respect      that contract,  but it  does not thereby deprive itself      of its  political power to issue orders that may become      necessary by  reason of public order, jure imperii-even      though, in  consequence of  such orders,  the  contract      itself becomes impossible of fulfilment." 712

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    During the  arguments before  the Privy Council, it was conceded  on   behalf   of   the   appellant   taking   into consideration the decision in Adams v. London Improved Motor Coach Builders and Redariaktiebolaget Amphtrite v. The King, that it  was not  open to  the Crown  to bind  itself not to close the club if that course became necessary in the public interest and  the order  placing the  club out of bounds was justified in  the circumstances  which existed.  Having thus observed the Privy Council quoted the following passage from the Judgment  of Rowlatt, J. in Rederiaktiebolaget Amphtrite case that  "it is not competent for the Government to fetter its future  executive  action,  which  must  necessarily  be determined by  the needs  of the community when the question arises. It  cannot by  contract hamper the freedom of action in matters  which concern  the welfare  of  the  State"  and stated that  these words  appear to their Lordships to cover that aspect  of the  present case.  While House  of Lords in Howell’s  case  disagreed  with  the  observations  of  Lord Denning J.  in Robertson’s  case, the Privy Council approved the law  laid down  by  Rowlatt,  J.  in  Rederiaktiebolaget Amphtrite case  which was  dissented to  by Denning,  J.  in Roberston’s case.  It may be noted that in Indo-Afghan case, the Court  quoted the  passage from Denning’s judgment which did not  approve the  view of  Rowlatt, J. The Privy Council approved the view taken by Rowlatt, J. in Rederiaktiabolaget Amphtrita case.      In William  Cory &  Son  Ltd.  v.  London  Corporation, London Corporation  acting as  sanitary authority  under the Public Health  (London) Act,  1936 made  a contract with the claimants, barge  and lighter  owners, for  the  removal  of refuse from a wharf in the City of Horn church, Essex, where it was  to be dumped. In April, 1948, the Corporation acting as port  health authority for the Port of London, sealed by- laws concerning  the disposal  of refuse  in the area of the port one  of which  relating to  co-amings and  coverings of barges, was  far more  onerous on  the  claimants  than  the requirements in  the contract  of 1936. It was provided that this by-law  was not  to come  into effect until November 1, 1950.  It  was  contended  by  the  claimants  that  by  the provisions of  the contract of 1936, there was an implied or an express  term that the corporation should not impose more onerous burden  on the  claimants as  to  the  coamings  and coverings of  their  barges  than  those  contained  in  the contract of 1936. The plea of the claimants was rejected and the Court  held relying on a decision in York Corporation v. Henry Leethem & Sons Ltd. that the Corporation being under a 713 duty  under   the  Act  of  1936,  expressed  in  imperative language, to  make by-laws for the disposal of refuse within the area  of the  port, the  term for  which  the  claimants contended, whether  express or  implied was  ultra vires the corporation.      In York  Corporation v.  Henry Leetham  & Sons (supra), the Corporation  made two  contracts with  the defendants to which they  agreed to  accept, in consideration of the right to navigate  the Oues,  a regular  annual payment of $ 600/- per annum,  in place  of the  authorised tolls.  It was held that the  contracts were  ultra vires and void because under them the  corporation had disabled itself whatever emergency might  arise,   from  exercising  its  statutory  powers  to increase tolls  as from time to time might be necessary. The decision was  based on the incapacity of a body charged with statutory powers for public purpose to divest itself of such powers or to fetter itself in the use of such powers.      In Commissioner  of Crown  Lands v.  Page, in 1945, the

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Minister of  Works, acting  on behalf  of the  Crown and  in exercise  of  powers  conferred  by  the  Defence  (General) Regulations, 1939  requisitioned  premises  which  had  been demised in  1937 by  the Commissioners  of Crown Lands for a term of  25 years.  The  premises  were  derequisitioned  on September 5,  1945 until  July  5,  1955  and  the  landlord brought proceedings  claiming arrears  of rent.  The  lessee alleged that  she had been evicted by the requisitioning and that, accordingly,  payment of  rent has  been suspended. It was conceded  that the  Crown was  one  and  indivisible  as lessor and  requisitioning authority. It was held that since the entry  was by  the Crown  in the  proper exercise of its executive authority,  it did  not amount  to an eviction and rent,  accordingly,   continued  to  be  payable.  The  view expressed by  Lord Denning,  J. in  Robertson v. Minister of Pensions (supra)  that in the present day age no distinction should be  drawn as  to the  legal effect  of its  or  their actions between the Crown and the ordinary subjects, so that the effect  of a  representation made  by the Crown could no longer be  qualified so  as to  be  subject  to  the  future exercise by the Crown of its Executive authority, was relied on. Lord  Evershet M.  R. while  observing that the facts of the case  were different  held that  the general proposition laid down  by Denning L. J. was not accepted by the House of Lords in  Howell v.  Falmouth  Boat  Construction  Co.  Ltd. (supra). Devlin,  J. stated  the principle  in the following terms :-           "When  the   Crown,  or   any  other   person,  is      entrusted, whether  by virtue  of the prerogative or by      statute, with  discretionary powers to be exercised for      the public  good, it  does not  when making  a  private      contract in general terms, undertake (and 714      it may  be that  it could  not even  with  the  use  of      specific language  validly undertake)  to fetter itself      in the  use of those powers, and in the exercise of the      discretion."      Referring to the view of Denning, L. J. in Robertson v. Minister of Pension (supra), the learned Judge observed :-           "The observations  of Denning,  L. J. in Robertson      v. Minister  of Pensions  on the doctrine of ‘executive      necessity’, were  I think,  directed to  a case of that      sort. Here  we are  dealing with  an  act  done  for  a      general executive purpose, and not done for the purpose      of achieving  a particular result under the contract in      question."      In Southend-on-Sea  Corporation v.  Hodgson  (Wickford) Ltd. a  company wished  to establish  a builder’s  yard  and found suitable premises. They wrote to the borough engineer, a Chief  Official employed  by the  local planning authority asking for  a lease  of the  premises for  20 years  for the purpose  of  establishing  a  builders  yard.  The  engineer replied that  the premises  had an  existing user right as a builders’  yard   and  that   no  planning  permission  was, therefore, necessary.  Relying  on  the  borough  engineer’s letter, the  company bought  the premises and started to use them as builder’s yard. They would not have done so if, as a consequence of  the letter,  they had  not thought  that  no further planning  permission was  required. Later, the local planning authority  notified the company that a considerable amount of  evidence had  been presented to them showing that the premises  had not  been used as a builder’s yard and had no existing  user as  such; that  they had  decided that the premises could  not be used without planning permission. The Court on  the  above  facts  held  that  assuming  that  the

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statement that  the premises had an existing user right as a builder’s yard  was a  pure representation of fact, estoppel could not  operate to  hinder or prevent the exercise by the local planning authority of their statutory discretion under S. 23 of the Act in deciding whether to serve an enforcement notice, since  this discretion  was intended to be exercised for the benefit of the public or section thereof.      The decisions  of the  English Courts referred to above clearly indicate  that the English Courts did not accept the view of  Denning, J.  in Robertson  v. Minister  of Pensions (supra). The  house of  Lords in  Howell  v.  Falmouth  Boat Construction Co.  Ltd.  disagreed  with  the  view  of  Lord Denning, J  holding that  there could  not  be  an  estoppel against express provisions of the law nor could the State by its action  waive its rights to exercise powers entrusted to it for the public good. The 715 Privy Council  in Antonio Buttigieg’s case approved the view of Rowlatt.  J. in  Raderiaktiabolaget Amphtrits’s case with which Denning, J. did not agree.      We may  now revert  back to  Indo-Afghan Agencies case. The Court  after quoting  a  passage  from  Rowlatt,  J.  in Rederiakiabolaget Amphtrte  v. The  King (supra) agreed that the view  expressed by  Anson’s English Law of Contract 22nd Ed. p.  174 that the observation is clearly very wide and it is difficult to determine its proper scope. The Court quoted the passage  of Denning,  J. at  p. 231  wherein the learned Judge expressed the disagreement with the view of Rowlatt, J :-           "The Crown  cannot escape  by saying that estoppel      do not  bind the  Crown for that doctrine has long been      exploded. Nor  can the  Crown escape  by praying in aid      the doctrine  of  executive  necessity,  that  is,  the      doctrine that  the Crown  cannot bind  itself so  as to      fetter its  future executive  action. The  doctrine was      propounded  by   Rowlatt,  J.   in   Rederiaktiebolaget      Amphitrite v.  The King  but it was unnecessary for the      decision because  the statement there was not a promise      which was intended to be binding but only an expression      of  intention.   Rowlatt,  J.,   seems  to   have  been      influenced by  the cases  on the  right of the Crown to      dismiss its  servants at pleasure, but those cases must      now all  be read  in the  light of the judgment of Lord      Atkin in Reilly v. The King- (1954) A.C. 176, 179).           In my  opinion the  defence of executive necessity      is of  limited scope.  It only  avails the  Crown where      there is  an implied term to that effect or that is the      true meaning of the contract."      After quoting  the above  passage, the Court summarised the facts  and decision rendered by Denning, J. The decision of the  House of Lords in Howell’s case or that of the Privy Council was not brought to the notice of the Court.      The law  laid down  by the  House of  Lords in Howell’s case has  been accepted  as correct  by this Court in recent decision of  this Court  by a Bench of four Judges in Excise Commissioner, U.  P. Allahabad v. Ram Kumar. The respondents before this Court were the highest bidders in an auction for exclusive manufacture  and selling of liquor in the State of U. P.  Before holding  the auction, the rates of excise duty and prices of different varieties of country liquor and also the conditions  of licence  were announced.  No announcement was made  as to  whether the  exemption from  sales  tax  in respect  of   sale  of   country  liquor   granted  by   the notification dated 6-4-1959 was or was not likely 716

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to be  withdrawn. On  the day  following the  day  when  the licences were  granted, the  Government of  U. P.  issued  a notification under  S. 3A and 4 of U. P. Sales Tax Act, 1948 superseding the  earlier notification  exempting the payment of sales  tax and  imposing sales  tax on  the  turnover  in respect of country liquor at the rate of 10 paise per rupee. The respondents  challenged the validity of the notification issued under  the Sales Tax Act on the ground that the State Government did  not announce  at the  time  of  the  earlier auction that  the earlier  notification  was  likely  to  be withdrawn. This  Court on  a consideration  of the  question whether the  State Government  is estopped  from levying the Sales Tax,  after referring to the earlier decisions of this Court held  that the  State Government  is not  estopped  or precluded from  subjecting the  sales of liquor to tax if it felt impelled  to do  so in  the interest  of revenue of the State. The  Court followed  two earlier  decisions  of  this Court viz.  M. Ramanathan  Pillai v. State of Kerala (supra) and State  of Kerala v. The Gwalior Rayon Silk Manufacturing (Wvg.) Co.  Ltd. (supra).  In Ramanathan Pillai’s case, Ray, Chief Justice  while dealing  with the  question whether the Government has  a right  to abolish  a post  in the service, observed that  the power  to create or abolish a post is not related to  the doctrine  of pleasure.  It is  a  matter  of governmental policy.  Every sovereign  Government  has  this power  in   the   interest   and   necessity   or   internal administration. The  creation or  abolition  of  a  post  is dictated by policy decision, exigencies of circumstances and administrative necessity.  The creation, the continuance and the abolition  of post  are all decided by the Government in the interest  of  administration  and  general  public.  The learned Chief  Justice after  quoting a  passage in American Jurisprudence 2d.  at p.  783, paragraph  123, observed that the estoppel  alleged by the appellant Ramanathan Pillai was on the  ground that he entered into an agreement and thereby changed his  position  to  his  detriment.  The  High  Court rightly held  that the  Courts exclude  the operation of the doctrine of  estoppel, when  it is  found that the authority against whom  estoppel is  pleaded has  owed a  duty to  the public against whom the estoppel cannot fairly operate.      In State  of Kerala v. Gwalior Rayon Silk Manufacturing (Wvg.) Co.  Ltd. (supra),  Palekar,  J.  who  delivered  the opinion with which Krishna Iyer, J. and Bhagwati, J. agreed, rejected the  contention that  an agreement  entered into by the Government with the parties, excluded the legislation on the subject.  The plea of equitable estoppel was put forward on the  ground that the company established itself in Kerala for the  production of  rayon cloth pulp on an understanding that the  Government would  bind itself  to supply  the  raw material. Later  Government was  unable to  supply  the  raw material and by an 717 agreement undertook  not to legislate for the acquisition of private forests  for a  period of  60 years  if the  company purchased forest lands for the purpose of its supply of raw- materials. Accordingly, the company purchased 30,000/- acres of private  forests from  the Nilabhuri  Kovila Kanna Estate for Rs.  75 lacs  and, therefore,  it was  argued  that  the agreement would  operate as  equitable estoppel  against the State. This  Court agreed  with  the  High  Court  that  the surrender by  the Government of its legislative powers to be used for  public good  cannot avail  the company  or operate against the Government as equitable estoppel.      In Assistant  Custodian of  E.  P.  and  Ors.  v.  Brij Kishore Agarwala,  it was  pleaded that the first respondent

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made an  enquiry from  the Assistant  Custodian whether  the property was  evacuee property and was told that it was not. As the first respondent acted on this representation, it was pleaded that  the  Assistant  Custodian  was  estopped  from contending that  the property  was evacuee  property.  Thus, dismissing this plea, the Court observed :           "We do  not consider  that the  fact that  the 1st      respondent had  made  an  enquiry  from  the  Assistant      Custodian whether  the  property  in  question  was  an      evacuee property  and was  told that  it would not make      any difference to the question."      Reliance was  placed on  the observations of Denning L. J. in  Robertson v.  Minister of  Pensions (supra),  holding that the  letter by  the war  office which  assured that the appellant’s disability  had been accepted as attributable to the military  service, was  binding on the Crown and through the Crown  the Minister  of Pensions.  The Court pointed out that the  decision in  Robertson v. Minister of Pensions had been disapproved  by the  House of  Lords in  Howell’s case. After referring  to the  passage from  the judgment  of Lord Denning, Lord  Simonds and  Lord  Normand  which  have  been extracted earlier, this Court expressed its opinion that the view taken  by the House of Lords it correct and not that is taken by Lord Denning.      In Excise  Commissioner U.  P., Allahabad  v. Ram Kumar (supra), the  Court after  consideration of  the case law on the subject,  held that  it was settled by a catena of cases that there  could be  no question  of estoppel  against  the legislative and sovereign functions.      A passage  in American  Jurisprudence 2d.  at page  783 paragraph 123  was extracted  by Ray  C.  J.  in  Ramanathan Pillai’s case and Jaswant 718 Singh J.  in Excise  Commissioner’s case.  The passage at p. 123 is as follows :-           "Generally, a  State is not subject to an estoppel      to the  same extent  as  an  individual  or  a  private      corporation. Otherwise,  it might  be rendered helpless      to assert  its powers  in Government.  Therefore, as  a      general rule  the doctrine  of  estoppel  will  not  be      applied against  the State  in its Governmental, Public      or sovereign  capacity. An  exception however arises in      the application  of estoppel  to the  State where it is      necessary to prevent fraud or manifest injustice."      But  the  learned  Judges  did  not  include  the  last sentence :           "An exception however arises in the application of      estoppel to  the State where it is necessary to prevent      fraud or manifest injustice."      In  Bihar   Eastern  Gangetic   Fisherman  Co-operative Society Ltd.,  v. Sipahi  Singh &  Ors. this Court held that the respondent  could not  invoke the doctrine of promissory estoppel because  he was  unable to show that relying on the representation  of   the  Government,  he  had  altered  his position to  his prejudice.  The Court  accepted the view of this Court expressed in Ram Kumar’s case and held that there cannot  be  any  estoppel  against  the  Government  in  the exercise  of   its  sovereign,   legislative  or   executive functions.      The leading  case of  the Supreme  Court of  the United States cited and relied upon in Ram Kumar’s case (supra), is Federal Crop  Insurance Corporation  v. Marril, in which the United States Supreme Court observed as follows :-           "It is  too late  in the  day  to  urge  that  the      Government is  just another  private litigant,  for the

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    purposes of  charging it  with liability,  whenever  it      takes over  a business theretofore conducted by private      enterprises or  engages  in  competition  with  private      ventures  *   *  *  Whatever  the  form  in  which  the      Government   functions,   anyone   entering   into   an      arrangement with  the  Government  takes  the  risk  of      having accurately  ascertained that  he who purports to      act for  the Government  stays within the bounds of his      authority *  * *  And this  is so even though, as here,      the  agent   himself  may  have  been  unaware  of  the      limitations upon  his authority*  * *  ‘Men  must  turn      square corners when they deal with the Government’ does      not reflect a callous outlook. It merely 719      expresses  the  duty  of  all  courts  to  observe  the      conditions defined  by congress for charging the public      treasury". The Court  also relied  on the views of the text book writer Melville M.  Bigelow and concluded that the plea of estoppel does not operate against the Government or its assignees.      The  extract  from  the  American  Jurisprudence  which summarises the  American Law,  and the  decision in  Federal Crop Insurance Corporation case, make it clear that the plea of estoppel  is not available against the Government and its legislative or  executive functions  except  for  preventing fraud or manifest injustice.      It was  submitted that  the cases cited above cannot be relied on  as an  authority for  the  proposition  that  the doctrine of  promissory estoppel  is not  applicable against the Government  in  the  exercise  of  its  legislative  and statutory functions  as they  were in  the nature  of obiter dicta and  that on  the facts  the  present  case  could  be distinguished. The  Indo-Afghan Agencies,  Century  Spinning and Manufacturing  Co.  and  Turner  Morisson  Co.  Ltd.  v. Hungerford Investment  Trust Ltd.,  were strongly relied on. We have  pointed out  that all that the Indo-Afghan Agencies case laid down was, that a public authority acting on behalf of the Government cannot on its own whim and in an arbitrary manner seek  to alter  the conditions accepted by him to the prejudice of  the other  side. The decision in terms accepts the view  expressed in  earlier cases that after taking into consideration the  exigencies and  change of  circumstances, the authority  can modify  the conditions in exercise of his powers as a public authority.      In Century Spinning and Manufacturing Co. Ltd. and Anr. v. The  Ulhasnagar Municipal  Council and Anr., the facts of the case  is set  out in  the head  note and  may be briefly stated. The  State of Maharashtra on the representation made by certain  manufacturers proclaimed  the exclusion  of  the Industrial  Area   from  the   Municipal  Jurisdiction.  The Municipality made  representations to  the State  requesting that the  proclamation be  withdrawn, agreeing to exempt the factories in the industrial area from payment of octroi from the date  of levy.  The State  acceded to the request of the Municipality.  The   appellants  expanded  their  activities relying on  the Municipality’s  assurance.  The  Maharashtra Municipalities Act  was enacted  and the  municipality  took over the administration. Thereafter, the Municipality sought to levy  octroi duty on the appellant amounting to about Rs. 15 lacs per 720 annum. The High Court dismissed the petition in limini filed by the  Industrialists against  the levy  of octroi.  In  an appeal to this Court it was held that the High Court had not given any  reason for  dismissing the petition in limini and

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that on a consideration of the averments in the petition and the materials  placed before  the High Court, the appellants were entitled to have its grievance heard against the action of  the  Municipality  which  was  prima  facie  unjust.  In remanding the  matter to the High Court, this Court observed :-           "A representation  that something  will be done in      future may  involve an  existing intention  to  act  in      future in the manner represented. If the representation      is acted  upon by  another person  it may,  unless  the      statute governing  the person making the representation      provides otherwise,  result in an agreement enforceable      at law;  if the  statute requires  that  the  agreement      shall be in a certain form, no contract may result from      the representation  and acting thereupon but the law is      not powerless  to raise in appropriate cases an enquiry      against him  to compel  performance of  the  obligation      arising out of his representation". In dealing with the question as to how far the public bodies are bound  by representation  made by  them on  which  other persons have  altered their position to their prejudice, the Court held that the obligation arising against an individual out of  his representation  amounting to  a promise  may  be enforced ex contractu by a person who acts upon the promise; when the  law requires  that a  contract enforceable  at law against a  public body  shall  be  in  certain  form  or  be executed in the manner prescribed by statute, the obligation may be  if the  contract be  not in  that form  be  enforced against it in appropriate case in equity. The Court read the decision in  Union of India and Ors. v. Indo-Afghan Agencies (supra) as  holding that  the Government  is not exempt from the equity arising out of the acts done by citizens to their prejudices, relying  upon  the  representations  as  to  its future conduct made by the Government. This observation will have to be read alongwith the conditions that were laid down in the  Indo-Afghan case  and cannot be read as holding that the  rule   of  estoppel  will  be  applicable  against  the Government in  the exercise of its legislative and statutory powers. The  Court quoted the following passage from Denning J. :-           "Crown cannot  escape by  saying that  estoppel do      not bind  the Crown  for that  doctrine has  long  been      exploded. Nor  can the  Crown escape  by praying in aid      the doctrine  of  executive  necessity,  that  is,  the      doctrine that  the Crown  cannot bind  itself so  as to      fetter its future executive action". 721 and observed that the Court in Indo-Afghan case held that it was applicable to India. It may be noted that apart from not noticing Howell’s  case, the  Court in  Indo-Afghan case did not say that the law as extracted from Denning J’s. judgment was applicable  to India.  The Court  after considering  the Indo-Afghan case and Howell’s case, expressed thus :-           "If our  nascent democracy  is to thrive different      standards of  conduct for  the people  and  the  public      bodies cannot  ordinarily be  permitted. A  public body      is, in our judgment, not exempt from liability to carry      out its  obligation arising  out of representation made      by it  relying upon  which a  citizen has  altered  his      position to his prejudice".      The third  decision on  which reliance  was placed, for the proposition  that doctrine  of  promissory  estoppel  is applicable against  the State  acting  in  exercise  of  its legislative or executive function is Turner Morrison and Co. Ltd. v.  Hungerford Investment  Trust Ltd. (supra). The case

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related to  the payment of tax due from Hungerford by Turner Morrison. The  Court observed  that if for any reason Turner Morrison had  not undertaken any responsibility to discharge the liability  of Hungerford,  the latter  could have  taken recourse to  voluntary liquidation.  Hence there could be no doubt that acting on the basis of the representation made by Turner   Morrison,    Hungerford   placed    itself   in   a disadvantageous position.  Hungerford raised  the plea  that the resolution was of the company, afforded a good basis for raising  a  plea  of  promissory  estoppel.  This  plea  was accepted by the Court relying on the observations of Denning J. in  High Trees  case (supra).  The later  decision of the House of  Lords in  Howell’s  case  which  disapproved  Lord Denning’s judgment was not brought to its notice.      The  scope  of  the  plea  of  doctrine  of  promissory estoppel against  the Government may be summed up as follows :-      (1) The  plea of  promissory estoppel  is not available against the  exercise of  the legislative  functions of  the State.      (2) The  doctrine cannot  be invoked for preventing the Government from discharging its functions under the law.      (3) When the officer of the Government acts outside the scope of  his authority,  the plea of promissory estoppel is not available.  The doctrine  of ultra  vires will come into operation and  the Government  cannot be  held bound  by the unauthorised acts of its officers.      (4) When  the officer  acts within  the  scope  of  his authority under  a scheme  and enters  into an agreement and makes a representation 722 and a person acting on that representation puts himself in a disadvantageous position,  the Court  is entitled to require the officer to act according to the scheme and the agreement or representation. The Officer cannot arbitrarily act on his mere whim  and ignore  his promise  on  some  undefined  and undisclosed grounds of necessity or change the conditions to the  prejudice  of  the  person  who  had  acted  upon  such representation  and   put  himself   in  a   disadvantageous position.      (5) The  officer would  be justified  in  changing  the terms of  the agreement  to the prejudice of the other party on special considerations such as difficult foreign exchange position or  other matters  which have  a bearing on general interest of the State.      Before we conclude, we would refer to a recent decision of this Court in M/s. Moti Lal Padampat Sugar Mills Co. (P.) Ltd. v.  State of  Uttar Pradesh  and Ors.  It has been held that  there  can  be  no  promissory  estoppel  against  the exercise of  legislative power and the legislature cannot be precluded  from  exercising  its  legislative  functions  by resort to  the doctrine  of promissory estoppel. It has also held that  when the  Government owes a duty to the public to act differently, promissory estoppel could not be invoked to prevent the Government from doing so. The doctrine cannot be invoked  for   preventing  the  Government  from  acting  in discharge of  its duty  under the  law. The Government would not be bound by the acts of its officers and agents, who act beyond the  scope of  their authority. A person dealing with an agent  of the Government must be held to have noticed all the limitations of his authority.      With respect, we are in complete agreement with the law as  stated  above  but  we  find  the  judgment  is  not  in accordance with the view consistently taken by this Court in some respects.  We have  read the  Judgment of  Bhagwati, J.

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with considerable  care and  attention  which  it  deserves. Firstly, with  great respect  we are  unable to construe the decision in  Union of  India  &  Ors.  v.  M/s.  Indo-Afghan Agencies Ltd.  case in the manner in which it has been done. As pointed out by us, all that the case purports to lay down is that  the court  can enforce an obligation incurred by an authority on which another has acted upon and put himself in a  disadvantageous  position,  when  the  authority  resiles arbitrarily or  on  mere  whim  or  on  some  undefined  and undisclosed grounds of necessity.      With respect,  we feel  we are unable to agree with the interpretation put  by Bhagwati, J. Bhagwati, J. states "The defence of executive necessity was thus clearly negatived by this Court and it was pointed 723 out  that  it  did  not  release  the  Government  from  its obligation to  honour the promise made by it, if the citizen acting in reliance on the promise, had altered his position. The doctrine  of promissory  estoppel was  in  such  a  case applicable against  the  Government  and  it  could  not  be defeated by  invoking the  defence of  executive necessity." The same view has again been reiterated at page 682 where it is stated"  The law  may, therefore,  now  be  taken  to  be settled  as  a  result  of  this  decision  that  where  the Government makes  a promise  knowing or  intending  that  it would be acted on by the promises 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 promisee,  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 Article 299  of the  Constitution." These observations would be right if they are read with the qualifications, laid down in the Indo Afghan-Agencies case and other cases.      The further  observations of  the learned  Judge  that: "Every one  is subject to the law as fully and completely as any other  and the  Government is no exception. It is indeed the pride  of constitutional  democracy and rule of law that the Government  stands on  the same  footing  as  a  private individual so far as the obligation of the law is concerned, the former  is equally  bound as  the latter." Again "but if the Government makes such a promise and the promises acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like  any other  private individual do not appear to convey the  true effect  of the  decision." The  decision of this Court  in Century  Spinning and  Manufacturing Co. Ltd. and Anr.  v.  The  Ulhashagar  Municipal  Council  and  Anr. (supra) was  understood by  Justice Bhagwati  as refusing to make a distinction between the private individual and public body so  far as  the  doctrine  of  promissory  estoppel  is concerned. These  observations would be correct only if they are read  with the exceptions recognised by Justice Bhagwati himself  elsewhere   in  his   judgment  along   with  other restrictions imposed by Judgments of this Court.      We find  ourselves unable to ignore the three decisions of this  Court, two  by Constitution  Benches  M.  Ramanatha Pillai v.  The State of Kerala and Anr. (supra) and State of Kerala and  Anr. v.  The Gwalior  Rayon  Silk  Manufacturing (Wvg.) Co.  Ltd. etc.  (supra) and  the third  by a Bench of four Judges  of this  Court in  Excise Commissioner,  U.  P. Allahabad v.  Ram Kumar  (Supra)  on  the  ground  that  the observations are  in the  nature of obiter dicta and that it cannot be insisted as intend-

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724 ng to  have laid  down any proposition of law different from that enunciated in the Indo Afghan Agencies case. It was not necessary for  this Court  in the cases referred to above to refer to  Union of  India  and  Ors.  v.  M/s.  Indo  Afghan Agencies Ltd.,  or if  properly understood it only held that the authority cannot go back on the agreement arbitrarily or on its  mere whim.  We feel  we  are  bound  to  follow  the decisions of  the three  Benches of  this Court which in our respectful opinion  have correctly  stated the  law. We  are also unable to read the case of the House of Lords in Howell v. Falmouth Boat Construction Co. Ltd. (supra) as not having overruled the view of Denning, J and as not having expressed its disapproval  of  the  doctrine  of  promissory  estoppel against the Crown nor overruled the view taken by Denning, J in Robertson  v. Minister of Pensions that "the Crown cannot escape the  obligation  under  the  doctrine  of  promissory estoppel."      We find  ourselves unable  to share  the  view  of  the learned Judge  that the  Constitution Bench of this Court in Ramanathan Pillai’s  case (supra)  heavily relied  upon  the quotation from  the American  jurisprudence para  123 p. 873 Vol. 28.  Again we  feel to  remark that "unfortunately this quotation  was   incomplete  and   had  overlooked   perhaps inadvertently" is unjustified (emphasis supplied).      We  feel   we  are   in  duty   bound  to  express  our reservations regarding  the "activist" jurisprudence and the wide  implications  thereof  which  the  learned  Judge  has propounded in  his judgment.  The first part of the judgment relates to  the development  of law  relating to  promissory estoppel in  England  following  the  High  Trees  case.  As pointed  out  by  us  earlier  the  doctrine  of  promissory estoppel is  not very  helpful as  we are  governed  by  the various provisions  of the  Indian Contract  Act Sections 65 and 70  provide for certain reliefs in void contracts and in unenforceable  contracts   where  a   person  relying  on  a representation has  acted upon  it  and  put  himself  in  a disadvantageous position.  Apart from  the case in Robertson v. Minister of Pensions, the House of Lords in Howell’s case and the  Privy Council  in Antonio  Buttigieg’s case and the other English  Authorities do  not agree  with the view that the plea  of promissory  estoppel is  available against  the Government. Further  we have to bear in mind that the Indian Constitution as  a matter of high policy in public interest, has enacted  Article  299  so  as  to  save  the  Government liability arising  out of  unathorised acts  of its officers and contracts not duly executed.      The learned  Judge has  considered at  some length  the doctrine of  consideration and  how it has thwarted the full development of  the new  equitable principle  of  promissory estoppel. After  discussing the American Law on the subject, he has observed that the leading text book 725 writers  view   with  disfavour   the  importance  given  to "consideration". The  learned Judge proceeds to observe that : "having  regard to  the general  opprobrium to  which  the doctrine of  consideration has  been subjected to by eminent jurists, we  need not  be unduly  anxious  to  project  this doctrine against assault of erosion nor allow it to dwarf or stultify the  full development  of the  equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice." Here again we have to bear  in mind  that the Indian Contract Act regulates the right of parties, and expressly insists on the necessity for lawful consideration  which  cannot  be  dispensed  with  by

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invoking some equitable doctrine. Section 10 of the Contract Act provides :-           "All agreements  are contracts if they are made by      the free  consent of parties competent to contract, for      a lawful  consideration and  with a  lawful object, and      are not hereby expressly declared to be void."      It will  be seen  that for  a contract  to be valid, it should be  for a  lawful consideration.  Section 25  of  the Contract  Act   provides  that  an  agreement  made  without consideration  is  void  unless  it  satisfies  one  of  the conditions mentioned in this section.      The learned Judge has held that if the Government is to resist its  liability it  will have to disclose to the Court what are the facts and circumstances on account of which the Government claims  to be  exempted from the liability and it would be  for the  Court to  decide whether  these facts and circumstances are  such  as  to  render  it  inequitable  to enforce the liability against the Government. This statement will have  to be  read with  the exceptions  stated  by  the Learned Judge  himself and those recognised by the decisions of this  Court. In C. Sankaranarayanan v. State of Kerala it was held  that the power of the Government under Article 309 to make  rules  regulating  the  conditions  of  service  of Government employees  or of teachers of aided schools cannot in any  way be  effected by  any agreement. Rule of estoppel against Government  cannot be  invoked  in  such  cases.  In Narendra  Chand   Hem  Ram   and  Ors.   v.   Lt.   Governor Administrator Union  Territory, Himachal  Pradesh and  Ors., this Court  has laid  down that  the power  to impose tax is undoubtedly a  legislative power and that no Court can issue mandate to  a legislature  to enact  a  particular  law  and similarly no Court can direct a subordinate legislative body to enact  or not to enact a law which it may be competent to enact. Again in State of Tamil 726 Nadu and  Ors. etc.  v. S.  K. Krishnamurthi  etc. etc. this Court held  that the  policy of  State to  nationalise  text books cannot  be challenged  by the publishers on the ground that the  rules were  in derogation  of their rights. It was held that  the rules  were in  the  nature  of  Departmental instructions and  do not  confer any right on the publishers nor  are   they  designed   to  safeguard  the  interest  of publishers  and  that  the  policy  of  nationalisation  was conceived in  public interest  and as  the Government  is at liberty to  change the text books and delete from and add to the list  of approved text books and the publishers can have no grievance.  In M/s.  Andhra  Industrial  Works  v.  Chief Controller of  Imports and Ors., a four judges Bench of this Court held that an applicant for a permit under Import Trade Policy has  no absolute right to the grant of import licence and that  the applicant  cannot complain  that the  existing instructions or  orders made  in pursuance of the Import and Export Control  Act place "unreasonable restrictions" on the petitioners’ right  to carry  on trade  or  business.  These restrictions obviously have been imposed in the interests of the  general  public  and  national  economy  and  with  the development of  imports, regulating  foreign  exchange  have necessarily to be appropriately controlled and regulated.      Professor S.  A. De  Smith in  his Judicial  Review  on Administrative Action,  3rd Edn. p. 279 sums up the position thus: "Contracts and Covenants entered into by the Crown are not to  be construed  as being subject to implied terms that would exclude  the exercise  of general discretionary powers for the  public  good:  On  the  contrary  they  are  to  be construed as  incorporating an implied term that such powers

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remain exercisable.  This is  broadly true  of other  public authorities also.  But the status and functions of the Crown in this  regard are  of a  higher order. The Crown cannot be allowed to tie its hands completely by prior undertakings is as clear as the proposition that the Courts cannot allow the Crown  to   evade   compliance   with   ostensibly   binding obligations whenever  it thinks  fit: If  a public authority lawfully repudiates  or departs  from the terms of a binding contract in  order to  exercise its overriding discretionary powers, or  if it is held never to have been bound in law by an ostensibly  binding  contract  because  the  undertakings would improperly  fetter its  general discretionary  powers, the other  party to the agreement has no right whatsoever to damages or compensation under the general law, no matter how serious the damages that party may have suffered." Professor H. W.  R. Wade in Administrative Law Fourth Edn. pp. 329-330 has pointed  out that  the doctrine  of estoppel  cannot  be allowed to impede the proper exercise 727 of public  and statutory  functions by  the State and public authorities. In  Public Law  the most  obvious limitation on the doctrine  of estoppel is that it cannot be invoked so as to give  an authority  powers  which  it  does  not  in  law possess. In  other words,  no estoppel can legitimate action which is  ultra vires.  As has  been amply  illustrated  the Court is  normally extremely  careful to  prevent any  legal doctrine from  impeding the exercise of statutory discretion in the public interest.      On a consideration of the decisions of this Court it is clear that  there can  be no promissory estoppel against the exercise of  legislative power  of the  State. So  also  the doctrine cannot  be invoked  for preventing  the  Government from acting  in discharge  of its  duty under  the law.  The Government would not be bound by the act of its officers and agents who  act beyond  the scope  of their  authority and a person dealing with the agent of the Government must be held to have  notice of  the limitations  of his  authority.  The Court can  enforce compliance  by a  public authority of the obligation laid on him if he arbitrarily or on his mere whim ignores  the   promises  made   by  him  on  behalf  of  the Government. It  would be  open to the authority to plead and prove  that   there  were   special   considerations   which necessitated  his   not  being   able  to  comply  with  his obligations in public interest.      In a  fervent plea for the doctrine to speak in all its activist magnitude  the learned  Judge observes  "that is no reason why  this new  principle, which  is a child of equity brought into  the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters  and not  allowed to  operate in all the activist magnitude, so  that it  may fulfil  the purpose for which it was conceived  and born". It is no doubt desirable that in a civilised society  man’s word  should be as good as his bond and his fellow men should be able to rely on his promise. It may be an improvement if a cause of action would be based on a mere  promise without consideration. The law should as far as possible accord with the moral values of the society, and efforts should  be made  to bring the law in conformity with the moral values. What are the moral values of the Society ? This is a very complex question because the concept of moral values amongst  different persons  and classes of persons is not always  the same.  The concept  of moral  values is  not static one. It differs from time to time and from society to society. It  is hazardous  for a Court to attempt to-enforce what according  to it  is the moral value. As pointed out by

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Roscoe Pound:  "It leads  to an  attempt to enforce overhigh ethical standards  and to  make legal  duties out  of  moral duties which  are not  sufficiently,  tangible  to  be  made effective by  the machinery  of  the  legal  order.  A  more serious difficulty is that the attempt to identify 728 law  and   morals  gives   too  wide  a  scope  to  judicial discretion". The question is how should it be brought about. The learned  Judge says  that  it  should  be  the  constant endeavour of the Courts and the legislature to close the gap between the  law and  morality and  bring about  as near  an approximation between  the two  as  possible.  Lord  Denning might have  exhorted the Judges not to be timorous sours but to be  bold spirits, ready to allow a new cause of action if justice so requires. These are lofty ideals which one should steadfastly pursue. But before embarking on this mission, it is  necessary  for  the  Court  to  understand  clearly  its limitations.  The  powers  of  the  Court  to  legislate  is strictly limited.  "Judges  ought  to  remember  that  their office is  jus dicere and not jus dare to interpret law, and not to  make law  or give  law." Chandrachud, C. J. Speaking for a  Constitution Bench in Shri Gurbaksh Singh Sibbia etc. v. State  of Punjab,  has clearly  pointed out  the  limited powers  of  the  Courts  to  make  laws  in  construing  the provisions of  the statutes.  The Learned  Chief Justice has observed:-           "The true  question is  whether by  a  process  of      construction,  the  amplitude  of  judicial  discretion      which is  given to  the High  Court and  the  Court  of      Session, to  impose such  conditions as  they may think      fit while  granting anticipatory  bail, should  be  cut      down by  reading into  the statute conditions which are      not to  be found  therein ***  Our answer,  clearly and      emphatically is in the negative."      Again the  Learned Chief Justice warned "Judges have to decide cases  as they  come before them, mindful of the need to keep  passions and prejudices out of their decisions. And it will  be strange  if, by employing judicial artifices and techniques, we  cut down  the discretion so wisely conferred upon the  Courts, by  devising a  formula which will confine the power  to  grant  anticipatory  bail  within  a  strait- jacket."-"Therefore, even  if we  were to  frame a ’code for the  grant  of  anticipatory  bail’,  which  really  is  the business of  the legislature,  it can  at best furnish broad guide-lines and cannot compel blind adherence".      The Courts  by its  very nature  are most ill-suited to undertake the task of legislating. There is no machinery for the Court  to ascertain  the conditions  of the  people  and their requirements  and to  make laws  that  would  be  most appropriate. Further  two Judges may think that a particular law would  be desirable  to meet  the  requirements  whereas another two  Judges may  most  profoundly  differ  from  the conclusions arrived  at by  two Judges.  Conscious of  these handicaps, the  law requires  that even  an amendment of the Supreme Court Rules which 729 govern the  procedure to be adopted by it for regulating its work, can  only be  effected by  the whole Court sitting and deciding.      The result  is that so far as the recommendation of the Municipal Committee  to the  Government to levy octroi duty, is concerned  though it is contrary to the representation it made  to   the  buyers  of  the  sites  in  the  Mundi,  the Municipality is  not estopped  as the representation made by it was  beyond the  scope of  its authority. The levy of tax

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being for  a public purpose i.e. for augmenting the revenues of the  Municipality as  laid down  in Ram Kumar’s case, the plea  of  estoppel  is  not  available.  The  order  of  the Government directing  the levy of octroi in pursuance of the resolution of  the Municipality cannot also be challenged as it is in the exercise of its statutory duty.      The result  is both  the appeals fail and are dismissed with costs  of one  set to  be  borne  equally  by  the  two appellants. S. R.                                     Appeals dismissed. 730