R.C. Lahoti, J. -- 1. The plaintiff/appellants have come up in appeal aggrieved by the judgments and decrees of the Courts below dismissing their suit for specific performance of a contract for sale.

2. The case of the plaintiffs is that their predecessors-in-interest namely late Shri Motilal and late Shri Prahlad Das had applied for purchase of a piece of land from the then Municipality of Gwalior in the year 1448. The Municipal Council resolved in favour of the prospective purchasers requiring them to deposit Rs. 58-6 Annas, which was done. The property was under litigation al that time. When the litigation was over and demand was made for executing the sale-deed, the municipality took up the plea that the land was Nazul land, the ownership vesting in the State and hence the municipality was not competent to execute the deed of sale.

3. On suit being filed, the defendant municipality did not file any written statement but the case was contested by the State Government. It was submitted that not only the title vested in the State but also that the Municipal Council now constituted under M.P. Municipalities Act, 1961 was not obliged to fulfil the obligations incurred by the Gwalior Municipality. It was also submitted that no contract having been entered into between the plaintiffs' predecessors-in-interest and the Municipal Council, specific performance could not be claimed. Plea as to limitation was also taken.

4. The lower Appellate Court while affirming the decree of the trial Court has observed that the alleged agreement is said to have been made in the year 1948 when Quanoon Municipality Hai Riyasat Gwalior Samvat 1983 was in force. Section 45 thereof provided for any contract (including one for the sale of land) by Municipal Council being made only in the prescribed manner. Section 46 thereof provided that the contract entered into should be in writing signed by two members of the Council one of which should be either the President or the Vice President and the Secretary should also sign the same. The contract should bear the seal of the municipality. Section 46(2) of the Act enacted that any contract not executed in accordance with section 46(1) would not be binding on the Municipal Council. Admittedly, such a contract with the prescribed legal formalities was not entered into. The contract was not, therefore, binding on the municipality and could not have been enforced.

5. The learned counsel for the appellants placing reliance on the leading authority of the Union of India and others v. M/s. Anglo Afghan Agencies etc. (AIR 1968 SC 718) submitted that even if the existence of contract with all its formalities was not made out, still this Court should hold the defendant bound by its promise by applying the doctrine of promissory estoppel and decree the suit. He relied on the following passage:-

"........ even though the case did not fall within the terms of S. 115 of the Evidence Act, it was still open to a party who had acted on a representation that the Government shall be bound to carry out the promise made by it, even recorded in the form of a formal contract as required by Art. 299 of the Constitution."

6. The doctrine of promissory estoppel has been very recently explained by their Lordships of the Supreme Court in Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay (AIR 1991 SC 14). Their Lordships have said as to the doctrine of promissory estoppel:-

"It is neither in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its form to mitigate the rigour of strict law".

"The promissory estoppel cannot be used compelling the Government of a public authority to carry out a representation or promise which is prohibited by law of which was devoid of the authority or power of the officer of the Government or the Public authority to make".

"Before making the public authority responsible for acts of its subordinate, it must be established that the