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SUPREME COURT OF INDIA
M.N. VENKATACHALIAH, C.J.I. AND Dr. A.S. ANAND, J.
Kasinka Trading and another, etc. etc., Appellants
Versus
Union of India and another, Respondents.
Civil Appeal Nos. 4336 and 5340-41; 5593 to 5598, etc. of 1983 S. L. P. (C) Nos. 7370, 12304 of 1983 and 725 of 1984 and etc. etc.,
Decided on 18-10-1994.
Advocates appeared
Mr.Ashok H. Desai, Mr. Harish N. Salve, Mr. S. K. Dhokakia, Sr. Advocates, Mr. Ravindra Narain, Mr. Ashok Sagar, Ms.Amita Mitra, Mr. D. N.Mishra, Advocates, for J. B. D. & Co., Ms.Bina, Mr. P. H. Parekh, Mr. A. K. Agarwal, Mr. M. K. D. Namboodiry, Ms.Yasmin Tarapore, Mr. Jenendra Lal, Ms. Alpana Podar, Mr. Kailash Vasdev, Monika Mohil, Ms. Meenkashi, Ms. Mena Gupta, Mr. S. Ganesh, Mr. Rajiv Garg, Mr. N. D. Garg, Mr. U. A. Rana, Mr. Anand Prasad, Mr. Rajiv Tyagi, Advocates, for Gagrat & Co., Mr.G. L. Rawal Mr.Vimal Roy Jad, Mr. Anip Sachthey, Ms. Kamini Jaiswal, Mr. R. K. Metha, Mr.K. R. Nambiar, Mr. A. N. Kirpal, Mr. K. K. Gupta, Mr. Kishan Kumar, Ms. Poonam Madan, Advocates, for M/s. Khaitan & C0., for with them, for Appellants; Mr. D. N. Dwivedi, Mr. A. K.Ganguli, Sr. Advocate, Mr. A. Subba Rao, Ms. Sushma Suri, Mr. Dilip Tandon, Mr. P. Parmeswaran, Mr. C. V. S. Rao and Ms. A. Subhashini, Advocates with them, for Respondents.
* W. A. No. 1671 of 1980, D/- 16-3-1983 (Delhi).
Custom Act, 1962 - Section, 25 - General Clauses Act an 882 - Section, 25 - Promote industries and industrial productions - Payment of duty - Appeals invoking doctrine of promissory have urged that Central Government could not have withdrawn exemption Notification because relying on exemption Notification appellants had placed orders for import PVC resin on understanding that PVC resin was totally exempt from customs duty- It argued that Government must be held bound by representation it had made in exemption Notification and it was on basis of promissory to go back on its promise- Reliance has been placed on various judgments of this Court in support of argument that doctrine of promissory can be invoked to bind Government to its promise- Court shall refer to judgments at appropriate place in this judgment –Held, Court or even in this appeal to establish that notification was issued for any oblique or extraneous consideration and was not "in public interest" it is not possible to find fault with that notification for reasons we have already given while dealing with first batch of cases- appellants who are in business have to be prepared for tides in business- incentive to set up new industry in State with a view to boost that exemption had been granted and it was in that fact situation that doctrine of promissory was held available appellant rein was incentive to set up industries in a conforming area that exemption had been granted and Court held that Government could withdraw an exemption granted by it earlier only if such withdrawal could be made without offending rule of promissory and without depriving an industry entitled to claim exemption for entire specified period for which exemption had been promised to it at time of giving incentive- Both se cases therefore cannot advance case of appellant and are distinguishable on facts because exemption notification which was issued in this case did not hold out any incentive for setting up of any industry to use PVC resins and or hand had been issued in exercise of statutory powers in public interest and subsequently withdrawn in exercise of same powers again in public interest - Appeals dismissed
Promissory estoppel is a principle rooted in equity that prevents a party from going back on a clear and unequivocal promise if the other party has relied upon that promise to their detriment. For the doctrine to be invoked successfully, the promise must be intended to create a legal relationship and must have been acted upon by the party relying on it.
In the context of government actions, the application of promissory estoppel is generally limited. It can be invoked against the government to prevent manifest injustice or fraud, especially when the government has made a clear promise or representation that has been relied upon by others. However, the doctrine cannot be used to enforce promises or representations that are outside the scope of lawful authority or made without lawful basis.
Furthermore, the doctrine must be balanced against the public interest and the broader needs of society. If the government’s actions are in the public interest, or if the withdrawal or modification of a promise is necessary for public policy reasons, the courts may refuse to apply promissory estoppel, even if individual parties have relied upon the promise.
In summary, promissory estoppel can bind the government to its promises only when the promise is clear, intended to create legal relations, acted upon by the promisee, and not contrary to the public interest or lawful authority. When the government acts within its statutory powers and in the public interest, it retains the discretion to modify or rescind promises or policies, and the courts are less likely to enforce such promises through the doctrine of promissory estoppel.
JUDGMENT
Dr. ANAND, J.:—Leave granted in (C.A.Nos 6983, 6984 and 6985 of 1994), S.L.P. (C) Nos.7370, 12304/83 and 725/84.
2. These two batches of appeals by special leave are directed against the judgment of the High Court of Delhi dismissing the writ petitions filed by the appellants, challenging the action of the Union of India in withdrawing a time-bound exemption Notification No.66 dated 15-3-1979 for the import of PVC resins. Notification No.66 dated 15-3-1979 reads as follows :
NOTIFICATION
PVC resins are exempt from basic import duty. 66-Cus.dt.15-3-1979 as amended by 178-Cus. dt.29-8-79,37-Cus dt.25-3-80.
G. S. R. - In exercise of the powers conferred by sub-section (1) of Section 25 of the Custom Act, 1962 (52 of 1962), and in supersession of the Notification of the Government of India in the Ministry of Finance, Department of Revenue, No.145-Customs dated 27th July 1978, the Central Government, being satisfied, that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India, from the whole of the duty of customs leviable therein which is specified in the said First Schedule.
This Notification shall be in force up to and inclusive of 31st March, 1981."
3. Before the expiry of the time fixed in the Notification i.e 31-3-1981, the withdrawal Notification bearing No,205 dated 16-10-1980 was issued which reads as follows :
"New Delhi the 16th Oct.1980
24th Asvina 1902 (SAKA)
NOTIFICATION
CUSTOMS
G.S.R.- In exercise of the powers conferred by sub-section(1) of Section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the Notification of the Government of India in the Ministry of Finance, Department of Revenue No.66-Customs, dated the 15th March 1979, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of four per cent. ad valorem.
Sd/- (K.Chandramouli)
Under Secretary to the Govt.of India
No.205/F.No.355/141/89/Cus.I.
Attested
(V. K. Mulick)
Asstt.Collector of Customs,
Correspondence Deptt.
4. The appellants, in these appeals invoking the doctrine of promissory estoppel have urged that the Central Government could not have withdrawn the exemption Notification before 31-3-1981, because relying on the exemption Notification, the appellants had placed orders for the import of PVC resin on the understanding that the PVC resin was totally exempt from customs duty. It is argued that the Government must be held bound by the representation it had made in the exemption Notification and it was estopped on the basis of the promissory estoppel to go back on its promise. Reliance has been placed on various judgments of this Court in support of the argument that the doctrine of promissory estoppel can be invoked to bind the Government to its promise. We shall refer to the judgments at the appropriate place in this judgment.
5. The respondents have supported the judgment of the High Court and urged that though the doctrine of promissory estoppel can in appropriate cases be invoked against the Government to bind it to its promise, the doctrine, however, has no application to the present appeals because the exemption had been withdrawn in public interest and the individual interest must give way to the public interest. It is urged that the doctrine, being a product of equity, must give way when equity so demands. Argued Mr.Ganguli, learned senior counsel appearing for the respondents, that the doctrine of promissory estoppel cannot operate against the State to the detriment of the society at large. If the Government after a review of its policy finds that modification, alteration o
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