
Praveen Kumar
February 17, 2025 at 11:07 AM
*Puja Ferro Alloys Pvt. Ltd. V. State of Goa (2025 SC)*
Relying upon *Pawan Alloys and Casting Pvt. Ltd. V. UP SEB (1997 SC)* and *Motilal Padampat Sugar Mills Co. Ltd. V. State of UP (1979 SC)*
1. Doctrine of Promissory Estoppel: Where the government makes a promise, knowing or intending that it would be acted upon by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the government would be held bound by the promise, and the promise would be enforceable against the government at the instance of the promisee, notwithstanding that there is no consideration for the promise, and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.
2. The law of promissory estoppel furnishes a cause of action to a citizen, enforceable in a court of law, against the government, if it or its officials in course of their authority, extend any promise which creates or is capable of creating a legal relationship, and it is acted upon by the promisee, irrespective of any prejudice.
3. The doctrine of Estoppel represents a principal evolved by equity to avoid injustice. The doctrine, however, cannot be pressed into aid to compel the government or the public Authority to carry out a representation or a promise, which is contrary to the law or which was outside the authority of the officer to make.
4. Hence, in equity, “public interest” is an exception to the principle of promissory estoppel.
5. Also, if the promisee would be restored to status quo ante and would be placed in the same position in which they were prior to the promise, there will be no promissory estoppel on the government.
In the present case, the state of Goa promised for 25% rebate in electricity consumption, which was later on withdrawn in public interest i.e. “financial crunch”. The Supreme Court accepted that the state of Goa can do so, and will not be bound by the promissory estoppel.
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