Promissory Estoppel II

In M/s. Motilal Padampt Sugar Mills Company, (1979) 2 SCC 409 this Court, on an exhaustive survey of the law pertaining to the Doctrine of Promissory Estoppel held that the same was an equitable doctrine that would yield when equity so required. While propounding that the same had been evolved to avoid injustice where it is demonstrated that a party acting on the words or conduct of another, amounting to clear and unequivocal promise and intended to create legal relations or effect legal relationships to arise in the future, had altered his position, then the promise would be binding on the promisor and he would not be permitted to renege there from unless it would be inequitable to compel him to do so. While extending this doctrine to the Government as well, it was enunciated that if it can be shown that having regard to the facts as had subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise the equity in favour of the promisee and enforce the promise against the Government. Their Lordships held that the Doctrine of the Promissory Estoppel would be displaced in such a case, because on the facts, equity would not require that the Government should be held bound by the promise made by it.

Hon’ble Justice Amitava Roy, UOI v. Shri Hanuman Industries, [Civil Appeal Nos. 3962-3969 of 2011].