1. Allotment of land by industrial corporation — Highest bid not accepted — Fresh tender — Litigation — Allotment letter — Lease deed not executed — Cancellation of allotment. (Para 2 , 3 , 4 )
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2026 Supreme(Raj) 708
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
SANJEEV PRAKASH SHARMA, CJ, SANGEETA SHARMA, J.
Rajasthan State Industrial Development And Investment Corporation Ltd. - Appellant
Versus
M/s Karam Bhoomi Estates - Respondent
D.B. Civil Special Appeal (Writ) No. 833 of 2018 In S.B. Civil Writ Petition No.11728 of 2015, D.B. Civil Special Appeal (Writ) No. 726 of 2019 In S.B. Civil Review Petition No.182 of 2018 In S.B. Civil Writ Petition No.11728 of 2015
Decided On : 08-01-2026
Advocates Appeared:
For the Appellant : Mr. Rajendra Prasad, Sr. Adv. Assisted by Mr. Ashish Sharma
For the Respondent: Mr. R.N. Mathur, Sr. Adv. assisted by Mr. Utkarsh Dubey, Mr. Abhishek Mewara
For the Appellant : Mr. Rajendra Prasad, Sr. Adv. Assisted by Mr. Ashish Sharma
For the Respondent: Mr. R.N. Mathur, Sr. Adv. assisted by Mr. Utkarsh Dubey, Mr. Abhishek Mewara
A public authority is bound by the doctrine of promissory estoppel and the principle of "approbate and reprobate" when it makes an unequivocal promise leading a party to alter their legal position to their prejudice, thereby preventing the authority from unilaterally cancelling the obligation.
Headnote:(A) Administrative Law - Promissory Estoppel - Public bodies are bound by representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice - Where one party has made a clear and unequivocal promise intended to create legal relations, and the other party acts upon it, the promise is binding if it would be inequitable to allow the promisor to go back (Paras 11-13).
(B) Principle of Approbate and Reprobate - No party can be allowed to accept and reject the same thing, or "blow hot and cold" - A party who knowingly accepts the benefit of an order or contract is estopped from denying its binding effect (Paras 15-17).
Facts of the case:
An industrial development corporation invited bids for land allotment for industrial and non-industrial purposes. The respondent firm emerged as the highest bidder. After initial delays and subsequent litigation, the allotment was accepted and the entire consideration was deposited. Following a series of legal disputes and a status quo order from the High Court, the corporation's committee promised to execute the lease deed provided the respondent withdrew its pending second appeal. Relying on this assurance, the respondent withdrew the appeal. However, the corporation subsequently cancelled the allotment and directed a refund of the amount. The Single Judge set aside the cancellation, and the corporation challenged these orders in appeal.
Findings of Court:
The court found that the respondent withdrew the second appeal specifically based on the assurance and a formal letter from the corporation. Since the entire consideration had been paid and the respondent acted upon the promise by abandoning its legal remedy, the contract stood concluded. The subsequent cancellation was an attempt to wriggle out of a binding promise.
Issues: Whether a public authority can cancel a land allotment after prompting a bidder to withdraw legal proceedings based on a promise to execute the lease deed, particularly after the bidder has already altered their legal position.
Ratio Decidendi: The court ruled that the doctrine of promissory estoppel applies to public bodies, making them liable for representations that lead a citizen to change their position to their detriment. Additionally, the principle of "approbate and reprobate" prevents an authority from altering its stand to avoid an obligation after the opposite party has acted upon a specific promise. The authority cannot use administrative changes or subsequent reasons to frustrate a concluded contract and a solemn promise.
Result: Appeals dismissed. The appellant shall execute the lease deed without any further delay.
Legal Category Hierarchy
Table of Contents
2. Appellant asserts allotment based on interim order and merger in decree; respondent claims promise, out-of-court settlement, and estoppel against cancellation. (Para 6 , 7 , 8 , 9 , 10 )
3. Withdrawal of second appeal based on unequivocal promise; subsequent cancellation is an attempt to wriggle out; doctrine of promissory estoppel and approbate and reprobate apply. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 21 )
4. Public bodies are bound by promises and representations; party cannot approbate and reprobate; unequivocal promise acted upon creates binding obligation. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 )
5. Appeals dismissed; appellant directed to execute lease deed without delay. (Para 24 )
6. Is the doctrine of promissory estoppel applicable against public bodies in India?
Yes, the doctrine of promissory estoppel is well-established in Indian administrative law and can found a cause of action, binding public bodies to their promises if inequitable to go back. (Para 11 , 12 , 13 )
7. Can a party be allowed to approbate and reprobate or blow hot and cold?
No, a party cannot accept and reject the same thing; the principle of election and estoppel by conduct prevents a party from taking advantage of one part while rejecting the rest. (Para 15 , 16 , 17 )
8. Is cancellation of allotment justified when based on an interim order that merged in a final decree later set aside?
No, where the allotment was made pursuant to an interim order and subsequently affirmed by a decree, and the party withdrew appeal based on a promise, cancellation is an impermissible wriggling out of the promise. (Para 6 , 9 , 14 , 21 )
JUDGMENT :
1. These are two appeals preferred by the Rajasthan State Industrial Development and Investment Corporation Ltd. (for short, 'RIICO'). D.B. Special Appeal Writ No.833/2018 is preferred against the order dated 22.02.2018 passed by the learned Single Judge whereby, the writ petition has been disposed of in favour of the respondent/writ petitioner, while D.B. Civil Special Appeal Writ No.726/2019 has been preferred assailing the order passed by the learned Single Judge dated 22.02.2019 whereby, the review petition was disposed of correcting the statement of fact in its earlier order dated 22.02.2018 and last two paras of the judgment were corrected and the direction of payment of interest on the delayed amount was recalled while maintaining the rest of the order. In order to understand the controversy involved, it would be apposite to notice some of the facts which have been carved out from the arguments advanced before the Court, as under:
Facts of the case
2. An invitation of bid was advertised by the RIICO for allotment of 13 acres undeveloped land situated in Akera Doongar, Tehsil Amer, District Jaipur on 22.03.2001. The land was to be allotted for industrial and non-industrial purposes. The highest bid received for industrial purpose was of Rs.1,14,000/- per acre and Rs.1,30,500/- per acre for non-industrial purposes. The RIICO having found the bids as deficient against the market price, decided to issue a fresh bid invitation notice on 31.03.2001 with a clause that those who have already deposited the security amount would be eligible to participate for price higher than the earlier highest bids. The writ petitioner-firm deposited earnest money of Rs.2,00,000/- and proposed a bid for Rs.4,26,000/-. It may be noticed that the reserve price was fixed as 1,14,000/- per acre for industrial use and 1,30,500/- for non-industrial use. The highest bid of the petitioner was for Rs.4,26,000/- per acre for non- industrial purposes. The writ petitioner also deposited the earnest money of Rs.2,00,000/- on 07.04.2001. In spite of the highest bid, the RIICO did not accept the bid and did not issue the allotment letter to the writ petitioner-firm and a fresh tender notice was issued on 24.04.2001 for non-industrial purposes with a reserve price of Rs.4,26,000/- per acre. The RIICO again changed the tender condition. Aggrieved thereto, the writ petitioner-firm filed a civil suit before the Additional Civil Judge (Senior Division), challenging the approach in inviting fresh tender and not finalizing the writ petitioner's tender. The Trial Court issued a temporary injunction on 19.05.2001, restraining the respondents from proceeding with fresh tender notice dated 24.04.2001. The appellant-Corporation vide its decision dated 30.5.2001 decided not to file any appeal against the order dated 19.05.2001 and on 13.06.2001, the RIICO accepted the bid of the writ petitioner-firm and directed the writ petitioner-firm to deposit 25% of the total amount along with security deposit of Rs.55,380/- within 24 hours. The writ petitioner deposited the DD on 14.06.2001. Rest of the amount of Rs.41,96,960 was deposited on 31.08.2001 and 03.09.2001. The land was demarcated by the Patwari on 03.10.2001 and the RIICO was requested to execute the lease deed vide letter dated 21.11.2001 in favour of the writ petitioner, a reminder was also issued on 18.12.2001 and 14.10.2002.
3. The writ petitioner was informed about the decision of the Committee constituted by the Corporation vide letter dated 04.07.2003, and decided not to issue the lease deed until the civil suit attains finality. Thereafter, on 29.07.2004, the learned Trial Court decreed the suit in favour of the petitioner-firm and directed the appellant herein to execute the lease deed. First appeal was preferred before the ADJ No.6, Jaipur City. On 09.08.2005, the first appeal was allowed in favour of the appellant, whereafter the petitioner-firm filed the second appeal before the High Court assailing
