Report No. 185

Section 115

This Section and Sections 116, 117 are in Ch. VIII and deal with 'estoppel'.

Section 115 refers to 'Estoppel' and reads as follows:

"115. When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing."

There is an illustration below Section 115 and it reads as under:

"Illustratio.- A intentionally and falsely leads B to believe that certain land belongs to A, and thereby induces B to buy and pay for it.

The land afterwards becomes the property of A, and A seeks to set aside the sale on the ground that, at the time of the sale, he had no title. He must not be allowed to prove his want of title."

This Section deals with a very important principle of law and is broadly in use in a larger number of cases not only in civil cases but also in public law issues. Principles of 'Promissory estoppel' have also become our law on account of several rulings of the Supreme Court and the High Courts.

In the 69th Report, after considerable discussion of the principle of estoppel and promissory estoppel, it was recommended in para 57.24 that an Explanation be added dealing with the position of 'minors'.

Section 115 has been the subject of numerous decisions of the Supreme Court and the High Courts before the 69th Report was submitted in 1977 and afterwards. We do not think it necessary to refer to them. Most of the aspects arising out of Section 115 are covered by judgments of the Supreme Court and there does not appear to be any area where either there is some conflict of views or some thing to be corrected in the language of the Section.

There are different types of estoppel.- estoppel by deed, estoppel by record or judgment, estoppel by conduct in the UK. In our country, it is only of one kind, estoppel by conduct. The crucial words in Section 115 are 'declaration, act or omission'. The word 'intentionally' was used (see Lord Shand in Sarat v. Gopal ILR 20 Cal. 296 (PC)) to mean the same thing as 'wilfully' used by Lord Denman CJ in Pickard v. Sears: 6 A&E 469. Question is whether a reasonable person could have taken the representation to be true and believe that it was meant to be acted upon.

So far as 'promissory estoppel' is concerned, the principle was first laid down in the High Trees case viz. Central London Property Trust Ltd. v. High Trees House Ltd. 1947 (1) KB 130. It was applied first in Union of v. Anglo Afghan Agencies: AIR 1968 SC 716. The views expressed rather widely in 1979 in Motilal Padampat Sugar MIllustration Ltd. v. State of UP: AIR 1979 SC 621 were deviated from in Jit Ram Shiv Kumar v. State of Haryana: AIR 1980 SC 1285 and in Union of India v. Godfrey Philips Ltd.: AIR 1986 SC 806.

It is sufficient to refer to the recent cases in State of HP v. Ganesh Wood Products: AIR 1996 SC 149; STO v. Shree Durga Mills: AIR 1998 SC 591; State of Rajasthan v. Mahaveer Oil Industries: AIR 1999 SC 2302. The principle is one of equity and the court's jurisdiction to grant relief is guided by principles now well settled. On grounds of public interest, relief can be refused. Further, the principle has been developed more as a principle in Administrative Law. We do not think that any special proviso be made in the Evidence Act, dealing with 'promissory estoppel'.

In regard to the applicability of Section 115 to 'minors', it was pointed out in para 57.11 to 57.17 in the 69th Report, that the word 'person' in Section 115 must, according to one view, was referable only to persons who have a capacity to contract. It was noticed that the Privy Council had left this question open in Mohori Bibee v. Dharmo Das Ghosh: (1903) ILR 30 Cal 539 (PC). In Sadiq Ali Khan v. Jai Kishore: AIR 1928 PC 152 the Privy Council held that a deed made by a minor was a nullity and incapable of finding a place in estoppel.

Now the Supreme Court, in Sales Tax Officers v. Kanahayyalal: AIR 1959 SC 135 approved the observations of Lord Portam in Thurston v. Nottingham P.B. Society: 1903 AC 6 that "....a court of equity cannot say that it is equitable to compel a person to pay moneys in respect of a transaction which, as against that person, the legislature has declared void".

Same view was expressed in the Full Bench decision in Ajudhia v. Chandan: 1937 All 610 (FB); Gadigeppa v. Balangowda: AIR 1921 Bom 561 (FB); Hari v. Roshan: 71 IC 161 (FB); Khan Gul v. Lakha: AIR 1928 Lah 609 (FB). Same view was expressed in Koduri v. Thumuluri: AIR 1926 Mad. 607; Gulab Chand v. Seth Chuni: AIR 1929 Nag 156; Nakul v. Sasadhat : 45 CWN 906; Ganganand v. Raameshwar: AIR 1927 Pat 271. There are also cases of fraudulent representation by a minor that he was a major.

The law in England is the same: Leslie v. SheIllustration 1914(3) KB 607. See Phipson (1999, 15th Ed, para 5.04). The principle is also applied to a married woman under coverture Cannam v. Farmer: (1849) (3 Ex. Ch. 698), or a trustee in bankruptcy Re v. Ashwell: 1912 (1) KB 300 and to a Corporation in regard to acts which are ultra-viras (British Mutual Banking Co. v. Charnwood (1887) 18 QBD 714; Rhyl UDC v. Rhyl Amusements Ltd.: 1959(1) WLR 465.

That is why the proposal in para 57.24 for adding an Explanation is made applicable to "minor or other persons under disability". But, in para 57.15, while it was accepted that in matters not relating to contracts or transfers of property (i.e. where Section 11 of Contract Act did not apply), the principle of estoppel must apply. Sub-para (c) in para 57.17 says:

"(c) But this does not mean that a minor can never be estopped.- Under Section 116, for example, (estoppel between landlord and tenant), a minor can be estopped. This is because Section 11 of the Contact Act does not come in the way where the original tenancy was not entered into by a minor, who has now succeeded to the tenancy."

It was to cover such cases also that in para 57.24, a recommendation was made to add the following Explanation:

"Explanation.- This Section applies to a minor or other person under disability; but nothing in this Section shall affect any provision of law whereby the minor or other person under disability becomes incompetent to incur a particular liability."

Going back to sub-para (c) of para 57.17, we do not really see why it is necessary to make a further qualification. In the example that is given, if the tenancy was with his father, the minor, as successor to his father cannot 279 deny the tenancy. He is estopped not because cases of landlord and tenant are an exception but because the contract of tenancy was entered into by his father, who was not suffering from any disability. In fact, Section 116 which deals with estoppel of tenants also uses the words 'or person claiming through such tenant'.

We, therefore, think that the first part of the Explanation "This Section applies to a minor or other person under disability" is not necessary. In fact, it gives a wrong notion about the proposed Explanation.

The second part, in our view, requires some re-drafting. We, therefore, recommend that instead of an Explanation, a proviso be added below Section 115 as follows:

"Provided that nothing contained in this Section shall apply to minors or other persons under disability for the purpose of enforcing any liability arising out of a representation made by such persons, where a contract entered into by such persons incurring a like liability would have been null and void."

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