Andhra Pradesh High Court
Judges : A.GOPAL RAO, V.MADHAVA RAO
Rachapudi Subramanyam - Appellant
Versus
District Collector - Respondent
Decided On : 02-20-73
ESTOPPEL - GOVERNMENT - DOCTRINE OF ESTOPPEL - APPLICABILITY - ADMINISTRATIVE FUNCTIONS - REPRESENTATION BY GOVERNMENT AGENCY - CONDITIONS FOR APPLICATION - EXCEPTIONS.
Fact of the Case:
The Collector of Hyderabad District nominated 120 businessmen for allotment of fair price shops to be opened by them in Hyderabad and Secunderabad. The businessmen deposited Rs. 1,000 each, executed agreements, obtained licenses, and took mulgies on rent for opening the shops. However, the Minister concerned directed to keep the allotment of new shops in abeyance due to the limited sugar quota allotted to the State by the Central Government. 10 of the businessmen filed writ petitions challenging the decision, and the High Court issued a writ of mandamus directing the Government to allot the necessary sugar quota. The Government appealed against the decision.
Finding of the Court:
The Court held that the doctrine of equitable estoppel applies to cases where private citizens are concerned, but its application to the Government is limited. The Government is not bound by estoppel when the effect of its application is to override the clear words of a statute, in criminal proceedings, to obtain powers in excess of those given by the statute, to validate an act prohibited by statutory authority, to enable a person to do a thing he is legally disabled from doing, to fetter or barter statutory powers by estoppel, or when the administrative agency is estopped by its entry or acquiescence. The Court found that the Collector's proceedings did not constitute a clear and unambiguous representation that the petitioners would be supplied with levy sugar, and that the Government had the authority to keep in abeyance or cancel the provisional allotment. Therefore, the doctrine of estoppel could not be applied in this case.
Issues: 1. Whether the doctrine of equitable estoppel applies to the Government in the same manner as it does to private citizens? 2. Whether the Government is bound by representations made by its agencies, even if such representations are contrary to law or exceed the agency's authority? 3. Whether the petitioners were entitled to the allotment of sugar quota based on the provisional allotment of fair price shops by the Collector?
Ratio Decidendi: 1. The doctrine of equitable estoppel applies to the Government in a limited manner. It is not applicable when the effect of its application is to override the clear words of a statute, in criminal proceedings, to obtain powers in excess of those given by the statute, to validate an act prohibited by statutory authority, to enable a person to do a thing he is legally disabled from doing, to fetter or barter statutory powers by estoppel, or when the administrative agency is estopped by its entry or acquiescence. 2. The Government is not bound by representations made by its agencies if such representations are contrary to law or exceed the agency's authority. 3. The petitioners were not entitled to the allotment of sugar quota based on the provisional allotment of fair price shops by the Collector, as the Collector's proceedings did not constitute a clear and unambiguous representation that the petitioners would be supplied with levy sugar, and the Government had the authority to keep in abeyance or cancel the provisional allotment.
Final Decision: The writ petitions were dismissed.
( 1 ) THIS batch of writ petitions raised common questions. They can therefore be dispossed of by a common order.
( 2 ) THE facts lie in a narrow compass and are not in all in dispute.
( 3 ) ON 12-4-1972 the Collector, Hyderabad District nominated in all 120 businessman for allotment of fair price shops to be opened by them in twin cities of Hyderabad and Secunderabad. The said persons were directed to deposit Rs. 1,000. 00 each in the form of National Savings Certificates and to execute agreements and to complete other formalities.
( 4 ) THE petitioners are some of the persons who were nominated as above by the Collector. They deposited Rupees 1,000/- each, executed agreements, obtained licences and are alleged to have taken mulgies on rent for opening the shops. Some clerks are also alleged to have been engaged by some of them. Ration cards were, however, not registered. The Government had not given their consent nor approved of them for the purpose of allotting sugar quota to them.
( 5 ) ON the other hand on 25-4-1972 the Minister concerned took the view that in the cities more fair price shops are not required and in view of the quota of sugar allotted to the State by the Central Government, the Government will not be able to allot adequate sugar to all these shops. He therefore, directed to keep the allotment of new shops in abeyance. The Collector as a result took no further steps and allowed the matters to stand where they were.
( 6 ) 10 persons out of the said 120 consequently filed a writ petition No. 1878 of 1972. The petition cam for hearing before A. D. V. Reddy. J, By his judgment dated 15-9-1972, the learned Judge allowed the Writ petition and issued a writ of mandamus to do their statutory duty of allotting the necessary quota under the A. P. Rationing Order, 1966 in the matter of fair price shops of the petitioners. The learned Judge was of the view of that since the petitioners have done all what they were expected to do excepting the execution of agreements, they were entitled to the issue of quota. He said the petitioners hold licences and in order to exercise their right of business they must have stock of sugar, the Government cannot by withholding the issue of quota effect the right of the petitioners "especially when there is no scarcity of total of commodity in the country. "
( 7 ) ANOTHER writ petition by another ten of the said persons was also filed. It came before Kondaiah, J. Following the earlier decisions referred to above the learned Judge also issued similar writ of mandamus.
( 8 ) SOME of the Writ petitioners of Hyderabad have now filed these writ petitions for the same relief on almost the same grounds. There are some writ petitions from East Godavari and Nellore in which the facts though not similar grounds on which the relief is claimed are also similar. Whatever separate arguments were advanced, they are dealt with separately.
( 9 ) ALL these writ petitions came before C. Kondaiah, J. The learned Judge directed these petitions by his order to be posted before a Bench because it was contended that the matters raised are covered by a Bench decision in W. P. Nos. 3408 of 1972, etc. of 1972, dated 5-10-1972. That is how the cases have come before us.
( 10 ) THE principal contention raised by Sri P. A. Chowdary. the learned counsel for some of the petitioners, was inasmuch as the petitioners, relying upon the proceedings of the Collector communicated to them dated 12-4-1972 made deposits, executed agreements, obtained licences, took mulgies on rent and appointed clerks, they thus acted to their detriment spending money on the faith of the assurance given by the Collector, Hyderabad, the Government therefore is estopped from declining to issue sugar quotas to the petitioners. In support of his contention he placed reliance on the following Supreme Court decisions : Union of India v. Anglo Afghan Agencies, AIR 1968 SC 718 and Century Spinning and Municipality, AIR 1971 SC 1
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