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1961 Supreme(P&H) 1
PUNJAB & HARYANA HIGH COURT
G.D.Khosla and Tek Chand JJ.
Sat Narain
Versus
Union Of India
First Appeal No. 34 of 1951,
Decided On : JANUARY 2, 1961
A promise made in the expectation that it would be acted upon and is in fact acted upon creates an estoppel, and the promisor cannot be allowed to back out of it.
Headnote:
ESTOPPEL - PROMISSORY ESTOPPEL - REQUISITES - REPRESENTATION OF FUTURE INTENTION - RELIANCE AND DETRIMENT - GOVERNMENT'S RELEASE OF REQUISITIONED PREMISES BASED ON OWNER'S PROMISE TO FORGO COMPENSATION - OWNER ESTOPPED FROM CLAIMING COMPENSATION.
Fact of the Case:
The plaintiffs, owners of a three-storeyed building requisitioned by the Government under the Defence of India Rules, sought compensation for the period of requisition. The Government denied liability, claiming that the plaintiffs had undertaken to forgo compensation in exchange for the release of the premises.
Finding of the Court:
The trial court found that the plaintiffs were estopped from claiming compensation based on their representation in a letter to the Government that they would forgo compensation if the premises were released. The court held that the Government had acted upon this representation by releasing the premises and not exercising its right to requisition them again for three years.
Issues: 1. Whether the plaintiffs' suit was barred by time. 2. Whether the suit was barred under Section 19 of the Defence of India Act read with Act II of 1948. 3. Whether the plaintiffs were estopped from claiming any compensation.
Ratio Decidendi: 1. The court held that the plaintiffs' suit was not barred by time, as the relationship between the parties was not contractual and thus Article 115 of the Indian Limitation Act, which applies to ex contractu actions, did not apply. Instead, the residuary Article 120, which prescribes a period of six years for suits for which no period of limitation is provided elsewhere, applied. 2. The court held that the jurisdiction of the civil courts had not been excluded by Section 19 of the Defence of India Act, as the main controversy in the case was whether the plaintiffs were estopped from claiming compensation, which was a justiciable issue. 3. The court held that the plaintiffs were estopped from claiming compensation based on the principle of promissory estoppel. The court found that the plaintiffs' representation in their letter to the Government that they would forgo compensation if the premises were released was intended to be acted upon and was in fact acted upon by the Government, which released the premises and did not exercise its right to requisition them again for three years. The court held that it would be unfair to allow the plaintiffs to go back on their promise and claim compensation.
Final Decision: The appeal was dismissed, and the parties were left to bear their own costs.
Tek Chand, J.
1. This is a plaintiffs appeal from the judgment and decree of Sub-Judge, 1st Class, Delhi, dismissing their suit in which they had claimed Rs. 60,000/- from the Dominion of India, the defendant. The facts giving rise to the suit are that the plaintiffs are owners of a three storeyed building in Delhi, covering an area of about 30 bighas. The Government of India, acting under Rule 75-A of the Defence of India Rules, requisitioned that building on 6th of June, 1944, and required the owners to deliver possession on 16th of June, 1944, to the Estate Officer, Central Public Werks Department
The formal possession was taken on 20th of June, 1944. After the Government took over the possession of the premises it required the owners to make arrangement for water supply, drainage and some other amenities. On 31st of May, 1945, an overseer of the Estate Officer furnished to the owners the details of the requirements. The owners plead that they spent about Rs. 10.000/- in order to provide the amenities required of them. On 11th June, 1945, a release order was passed in respect of this building and on 20th June, 1945, the plaintiffs were informed of the decision of the Government of India to release the house which had been requisitioned. The plaintiffs have claimed compensation amounting to Rs.50,000/- on account of their having been deprived of the use of the building etc. for the period during which the property remained under requisition, which is about one year. A sum of Rs. 10,000/- was claimed on account of the amenities provided at the Governments request. Thus, in all, a suit for the recovery of Rs. 60,000/- was filed on 23rd of August, 1948, after giving two months statutory notice under section 80 of the Code of Civil Procedure.
2. In the written statement the defendants contention was that the suit was not maintainable in view of the provisions of Rule 75-A of the Defence of India Rules and that compensation could be settled only under Section 19 of the Defence of India Act by negotiations failing which reference was to be made to arbitration. It was, therefore, contended that the suit was barred in view of the above provisions.
It was also pleaded that this suit had been filed beyond the period of limitation. It was next pleaded that the owners of the building had undertaken that they would forgo compensation for the period the house remained under requisition if the premises were released in their favour and the house was released on that specific condition and undertaking. It was, therefore, said that the plaintiffs were estopped from claiming any compensation.
(3) The above pleas gave rise to the following issues:
(1) Is the suit barred by time?
(2) Is the suit barred under Section 19 of the Defence of India Act read with Act II of 1948?
(3) Are the plaintiffs estopped from claiming any compensation?
(4) Relief.
The first and the third issues were answered in the affirmative and the second in the negative. In consequence of the above findings, the suit was dismissed.
3 The parties had relied, in the main, upon documentary evidence though some witnesses had also been examined. P. W. 4 is Udhe Singh, who is plaintiffs attorney and besides proving several documents he had stated that the building could fetch a monthly rental of Rs.6,000/- to Rs.7,000/-. He also stated that sanitary fittings etc. had been provided at a cost of Rs.10,000/-. Plaintiff, Sat Narain, appeared as P. W. 6, and in his cross-examination he stated that on one occasion he had written to the Government that if the building was derequisitioned he would not claim any compensation. He, however, said that on his request the property in suit had not been derequisitioned.
4. The defendant examined only one witness, Mata Prashad (D. W. 1), who is Assistant Estate Officer, New Delhi. He was at the relevant time a second division clerk and he produced certain documents.
5. The learned counsel for the plaintiff-appellants has questioned the fin
