The Government of Tamilnadu vs DCW Limited
- Court
- Madras High Court
WA(MD) No. 1436 of 2025
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 03-11-2026
CORAM
THE HON'BLE MR. JUSTICE G.R.SWAMINATHAN
AND
THE HON'BLE MRS.JUSTICE M.D.SUMATHI
WA(MD) No. 1436 of 2025
CNR:{HCMD015384382024}
&
C.M.P.(MD)No.8545 of 2025
1. The Government of Tamilnadu
Represented by its Secretary,
Revenue Department,
Fort St.Geroge, Chennai - 9
2. The Principal Secretary and Commissioner
of Land Administration,
Ezhilagam, Chepauk, Chennai -5.
3. The District Collector
Collectorate, Tuticorin District.
4. The District Revenue Officer
Tuticorin District.
5. The Tahsildar, Taluk Office,
Tiruchendur.
..Petitioner(s)
Vs
DCW Limited
Sahupuram Arumuganeri,
Tuticorin District,
Tamil Nadu -628 229.
..Respondent(s)
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PRAYER: Writ Appeal filed under Clause 15 of Letters Patent, praying
to prefer this Memorandum of Grounds of Writ Appeal against the order
of this Court dated 26.02.2024 in WP(MD). No.11192 of 2017 on the
following grounds.
For Petitioner(s) :Mr.J.Barathan
Additional Advocate General
assisted by Mr.M.Kannan
Special Government Pleader
For Respondent(s) :Mr.P.R.Raman, Senior Counsel
assisted by Mr.Anupam Raghuraman
JUDGMENT
(By G.R. SWAMINATHAN J.)
The Government is on appeal challenging the order dated
26.02.2024 passed by the learned single Judge in WP(MD)No.11192 of
2017.
2. The Government of Tamil Nadu granted lease of an extent of
978.38 acres of land in Punnakayal, Sernthamangalam, Kayalpattinam
North and Authoor Cusba villages in Tiruchendur Taluk vide G.O
Ms.No.76 dated 07.01.1959. The value of the lands were to be fixed on
the basis of the then market value. The lease rent to be fixed at an amount
calculated at 6% of the capital value of the land. The lessee was also to
pay certain other charges. The period of lease was thirty years. The lessee
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was obliged to purchase the leased lands either during the lease period or
within six months from the date of expiry of the lease. The purpose of
the lease was to facilitate the establishment of a Caustic Soda factory.
3. Disputes arose between the company and the Government over
the years. The bone of contention was whether the company was liable to
pay local cess and local cess surcharge. WP No.3151 of 1978 filed by
the company in this regard was dismissed on 21.01.1980. WA No.236 of
th
1980 was also dismissed on 30 September 1980.
4. Even during the currency of the lease, the company called upon
the government on multiple occasions to permit them to pay the land cost
so that they can continue to be in possession. There was however no
response to this request. Instead, the accent was more on collection of the
arrears of local cess and local cess surcharge due from the company.
According to the local administration, the company was in arrears of
lease rent. There were also issues regarding the interest payable on
account of the belated payment of certain dues. The lease expired in the
year 1989. The government had determined the land cost at
Rs.3,91,233.91/-, in the communication dated 18.05.1973 sent by the
Board of Revenue. This amount was deposited by the company in the
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year 1989. They then filed WP No.8369 of 1993 for directing the
Government to assign the leased lands. The stand of the company was
that since they had remitted the land cost, assignment should follow.
This writ petition was disposed of on 27.04.1993 with a direction to the
Government to consider the company’s request for assignment. Nine
years later, the Tahsildar by notice dated 27.07.2002 called upon the
petitioner to remit the lease amounts for the lands along with local cess
and local cess surcharge for the period between 1989 and 1993 with
interest. The lessee was threatened with eviction in the event of failure
on their part to pay the amount demanded. Challenging the said demand,
the said company filed WP No.33008 of 2002. The writ petition was
disposed of on 13.03.2003 with a direction to the Government to dispose
of the lessee’s appeal dated 23.07.1992 seeking assignment within a
period of four weeks. The authorities were restrained from enforcing
their demand for payment of lease rental arrears in the meanwhile.
5. Correspondence between the Government and the lessee
continued. Finally, vide G.O Ms.No.85 Revenue Department dated
31.03.2017, the Government rejected the request for the assignment of
lands. Not only collection of the rental arrears with interest but also
resumption of 793 acres of land was ordered. Assailing the same, the
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lessee filed WP(MD)No.11192 of 2017. The learned Single Judge vide
order dated 26.02.2024 disposed of the writ petition in the following
terms :
“14. In view of the above observations and discussions,
this Court is issuing the following directions:-
a) The impugned order is set aside and the matter is
remanded back to the respondents for fresh consideration.
b) The respondents shall provide sufficient opportunity to
the petitioner and fix the land cost for the lands required by the
petitioner Company within a period of six months from the date
of receipt of a copy of this order, depending upon the market
value of the land as on date, as per the order of grant and the
existing Rules.
c) The petitioner is at liberty to make a fresh request to
the first respondent to the exact extent of lands required by them
at Punnakayal, Sernthamangalam, Kayalpatnam, identify the
survey numbers, within a period of eight weeks from the date of
receipt of a copy of this order.
d) The respondents shall also provide sufficient
opportunity to the petitioner to make the payment of the land
cost by providing easy instalments to the petitioner, considering
the fact that this petitioner has made huge investments in the
Government lands, believing the words of the Government in
G.O.Ms.No.76, Revenue Department, dated 07.01.1959.”
Challenging the said order of the learned Single Judge, the Government
has filed this writ appeal. It means that the writ petitioner/lessee has
accepted the direction that the land cost will have to be determined with
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reference to the current market value. They have thus given up their plea
that the land cost will have to be reckoned on the basis of the market
value of the lands obtaining on the date of the grant of lease.
6. The learned Additional Advocate General appearing for the
Government stands by the decision to resume the lands. Relying on the
decisions reported in (2023) 20 SCC 747 (State of Rajasthan Vs.
Sharwan Kumar Kumawat) , (2024) 9 SCC 680 (Rewa Tollway Private
Limited Vs. State of Madhya Pradesh) & (1996) 5 SCC 273 (State of
Haryana Vs. Rajpal Sharma) , he submitted that the rule of legitimate
expectation will not come to the writ petitioner’s rescue. This is more so
because the writ petitioner was in fact heard before the impugned
decision was taken. According to him, it is open to the Government to go
back on its original stand and resume the land, possession of which was
given to the writ petitioner. Since a policy decision has been taken, the
writ court cannot interfere. He called upon us to set aside the order of the
learned Single Judge and allow this writ appeal.
7. Per contra, the learned Senior Counsel appearing for the writ
petitioner submitted that the order of the learned Single Judge is well
reasoned and that it does not call for any interference.
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8. We carefully considered the rival contentions and went through
the materials on record. Before we discuss further, let us delineate the
conceptual contours of the doctrine of legitimate expectation and
promissory estoppel. The doctrine of legitimate expectation presupposes
a clear and unambiguous representation by the State followed by reliance
and detriment. It is essentially a shield against arbitrariness (State of H.P
v. OASYS Cybernatics (P) Ltd., (2026) 3 SCC 348) . It is rooted in the
ideals of fairness, non-arbitrariness and transparency in executive action.
It arises when a public authority, either through a consistent past practice,
an express promise or a statutory policy, creates an expectation in the
mind of an individual or class of persons that a certain course of action
will be followed. While such expectations does not amount to a legal
right in the strict sense, courts have consistently held that it may
nonetheless warrant judicial protection where its denial results in
manifest unfairness or arbitrariness, thereby violating the fundamental
principles of natural justice. However, the doctrine cannot override an
express provision of law or the Constitution. It is not a rigid rule and
must be conceded where a superseding public interest or a statutory or
constitutional bar exists. While legitimate expectation may guide how
discretionary powers are exercised, it cannot be invoked to compel an
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authority to act contrary to a binding legal or constitutional command. It
does not clothe a party with an enforceable right in itself ( K.Purushottam
Reddy v. UOI (2025) 9 SCC 722) . The doctrine does not impede or
hinder the power of the public authorities to lay down a policy or
withdraw it. Courts are cautious in interfering with a bona fide decision
of public authorities which denies legitimate expectation provided such a
decision is taken in the larger public interest. Public interest serves as a
limitation on the application of the doctrine of legitimate expectation.
Courts have to determine whether the public interest is compelling and
sufficient to outweigh the legitimate expectation of the claimant. It is a
balancing exercise that has to be performed. There are issues of burden
and standard of proof required to dislodge the claim of legitimate
expectation ( Tej Prakash Pathak v. High Court of Rajasthan (2025) 2
SCC 1 . The doctrine grants an applicant the right to a fair hearing before
a decision that negates a promise or withdraws an undertaking from
which an expectation of certain outcome or treatment arises. But it does
not create an absolute right to the expected outcome. It is only an
expectation of a benefit, relief or remedy. It must be reasonable, logical
and valid. But it no way vests any enforceable legal right (Rewa
Tollway (P) Ltd., v. State of M.P (2024) 9 SCC 680 .
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9. In Army Welfare Education Society v. Sunil Kumar Sharma
(2024) 16 SCC 598 , the following features were culled out :
“ 63.1. First , legitimate expectation must be based on a right
as opposed to a mere hope, wish or anticipation;
63.2. Secondly , legitimate expectation must arise either from
an express or implied promise; or a consistent past practice or
custom followed by an authority in its dealings;
63.3. Thirdly , expectation which is based on sporadic or
casual or random acts, or which is unreasonable, illogical or
invalid cannot be treated as a legitimate expectation;
63.4. Fourthly , legitimate expectation operates in relation to
both substantive and procedural matters;
63.5. Fifthly , legitimate expectation operates in the realm of
public law, that is, a plea of legitimate action can be taken
only when a public authority breaches a promise or deviates
from a consistent past practice, without any reasonable basis.
63.6. Sixthly , a plea of legitimate expectation based on past
practice can only be taken by someone who has dealings, or
negotiations with a public authority. It cannot be invoked by
a total stranger to the authority merely on the ground that the
authority has a duty to act fairly generally.”
The Hon’ble Supreme Court added that the doctrine does not extend to
and cannot govern the operation of contracts between private parties
wherein the doctrine of promissory estoppel holds the field.
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10. The Constitution Bench of the Hon’ble Supreme Court in
Sivanandan C.T. v. High Court of Kerala (2024) 3 SCC 799 declared
the position as follows :
“ 27. A claim based on the doctrine of procedural
legitimate expectation arises where a claimant expects the
public authority to follow a particular procedure before
taking a decision. This is in contradistinction to the
doctrine of substantive legitimate expectation where a
claimant expects conferral of a substantive benefit based
on the existing promise or practice of the public
authority...
46. From the above discussion, it is evident that the
doctrine of substantive legitimate expectation is
entrenched in Indian administrative law subject to the
limitations on its applicability in given factual situations.
The development of Indian jurisprudence is keeping in
line with the developments in the common law. The
doctrine of substantive legitimate expectation can be
successfully invoked by individuals to claim substantive
benefits or entitlements based on an existing promise or
practice of a public authority. However, it is important to
clarify that the doctrine of legitimate expectation cannot
serve as an independent basis for judicial review of
decisions taken by public authorities. Such a limitation is
now well recognised in Indian jurisprudence considering
the fact that a legitimate expectation is not a legal right.
[ Union of India v. Hindustan Development Corpn. , (1993)
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3 SCC 499; Bannari Amman Sugars Ltd. v. CTO , (2005) 1
SCC 625; Monnet Ispat & Energy Ltd. v. Union of India ,
(2012) 11 SCC 1; Union of India v. P.K. Choudhary ,
(2016) 4 SCC 236 : State of Jharkhand v. Brahmputra
Metallics Ltd. , (2023) 10 SCC 634.] It is merely an
expectation to avail a benefit or relief based on an existing
promise or practice. Although the decision by a public
authority to deny legitimate expectation may be termed as
arbitrary, unfair, or abuse of power, the validity of the
decision itself can only be questioned on established
principles of equality and non-arbitrariness under Article
14. In a nutshell, an individual who claims a benefit or
entitlement based on the doctrine of legitimate expectation
has to establish : ( i ) the legitimacy of the expectation; and
( ii ) that the denial of the legitimate expectation led to the
violation of Article 14.”
11. In a recent decision reported in 2026 SCC OnLine SC 932
(State of H.P v. M/s.Kundlas Loh Udyog) , the principles governing the
doctrine of promissory estoppel have been culled out as follows :
“ 59. Upon a conspectus of the above authorities discussed in IFGL
Refractories Ltd. (supra) and other cases as dealt above, the following
principles governing the doctrine of promissory estoppel may be regarded
as well-settled:
(i) The doctrine of promissory estoppel is a principle evolved by equity to
avoid injustice. It operates not in the realm of contract, nor within the
technical confines of estoppel under the law of evidence, but upon the
broader considerations of fairness, justice and good conscience;
(ii) Where one party, by words or conduct, makes to another a clear,
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unequivocal and unambiguous promise, intended to create legal relations
or affect a legal relationship to arise in the future, knowing or intending
that it would be acted upon, and it is in fact so acted upon, the promise
becomes binding upon the promisor;
(iii) The doctrine of promissory estoppel is a doctrine whose foundation is
that an unconscionable departure by one party from the subject matter of
an assumption which may be of fact or law, present or future, and which
has been adopted by the other party as the basis of some course of
conduct, act or omission, should not be allowed to pass muster. And the
relief to be given in cases involving the doctrine of promissory estoppels
contains a degree of flexibility which would ultimately render justice to
the aggrieved party;
(iv) The doctrine is not merely defensive in nature. Under Indian law, it
may itself furnish a cause of action and can be affirmatively enforced
where equity so requires;
(v) It is not necessary, in order to attract the doctrine, that the promisee
should prove actual detriment. It is sufficient that the promisee has altered
his position, acting in reliance upon the promise;
(vi) The alteration of position may consist in making substantial
investments, incurring liabilities, establishing industrial infrastructure,
entering into agreements, or otherwise rearranging one's affairs on the
faith of the representation;
(vii) The doctrine applies with full force against the State, its departments,
statutory corporations and instrumentalities, including authorities falling
within Article 12 of the Constitution , which cannot arbitrarily resile from
a solemn representation upon which another has acted;
(viii) Where the State or its instrumentalities frame industrial or fiscal
incentive schemes with the avowed object of attracting investment and
establishing industries, the representations contained therein are intended
to induce entrepreneurs to act upon them, and such representations are
enforceable. Once an entrepreneur, relying upon such representation,
establishes an industrial unit, commences commercial production, or
otherwise satisfies the eligibility conditions during the currency of the
scheme, and the State agencies recognise them as being eligible, the
promise crystallises, and an enforceable equity arises in its favour.
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Whether a benefit has accrued or not in such cases depends on the facts
and circumstances of each case;
(ix) The grant of an exemption, concession or incentive under a statutory
scheme is ordinarily defeasible, and the Government is competent to
modify or revoke the same in exercise of the very power under which it
was granted. Thus, what is granted can ordinarily be withdrawn.
However, the Government may be precluded from doing so on the ground
of promissory estoppel, which principle itself remains subject to
considerations of equity and public interest.
(x) Where a specific sanction or approval of incentive, or eligibility
certificate has been issued in favour of an individual enterprise, and the
enterprise has acted thereon by making a substantial investment, the
promisor is all the more firmly bound by its representation;
(xi) The doctrine rests upon the larger constitutional principle that State
action must be fair, non-arbitrary, and consistent; governmental
assurances are not empty declarations, but solemn representations on the
faith of which citizens regulate their affairs; and
(xii) The ultimate object of the doctrine is to prevent manifest injustice
and to ensure that a party, particularly the State, does not act
inconsistently to the prejudice of one who has relied upon its promise and
altered his position irretrievably.”
We should however bear in mind the doctrine being an equitable one
must yield when equity so requires (2020) 20 SCC 698 .
12. In K.B. Tea Product Pvt.Ltd v. CTO, Siliguri (2023 SCC
Online SC 615) , the Hon’ble Supreme Court noted that the doctrine of
legitimate expectation and the doctrine of promissory estoppel are two
separate principles and as such the blanket ban on promissory estoppel
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against statute cannot be applied to legitimate expectation. The doctrine
of promissory estoppel is a remedy in private law. The doctrine of
legitimate expectation is a remedy in public law rooted in Article 14.
When a law enters the public sphere and affects the rights of the society,
it becomes liable to a stricter level of scrutiny and as such becomes more
susceptible to judicial review. In State of Jharkhand v. Brahmputra
Metallics Ltd (2020 SCC OnLine SC 968 ), the doctrinal difference
between the concepts of promissory estoppel and legitimate expectations
was clarified. The doctrine of legitimate expectation, a public law
concept, is premised on the principles of fairness and non-arbitrariness in
State action. The doctrine is a facet of Article 14. On the other hand,
promissory estoppel, being a private law concept, can be invoked if the
State has entered into a private contract with another entity but is
inapplicable where a representation has been made by the State in the
discharge of its public functions.
13. While breach of legitimate expectation by itself cannot serve
as a cause of action, the doctrine of promissory estoppel is not limited in
its application only to defence but it also furnish a cause of action. In
other words, it can by itself be the basis of action. To invoke the doctrine
of promissory estoppel, the claimant must show that by acting on the
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promise made by the other party, he altered his position. The alteration
of position by the promisee is a sine qua non for the applicability of the
doctrine. He need not prove damage, detriment or prejudice. On the
other hand, in the case of legitimate expectation, detriment must be
established (Monnet Ispat and Energy Ltd v. UOI (2012) 11 SCC 1).
14. Though it has been highlighted more than once by the Hon’ble
Supreme Court that the doctrine of legitimate expectation and the
doctrine of promissory estoppel are distinct and cannot be conflated, the
writ petitioner has interchangeably invoked both. A brief note on the
pleadings in writ proceedings may be in order. In a writ petition or in the
counter affidavit not only the facts, but also the evidence and proof of
such facts have to be pleaded and annexed to it (vide Bharat Singh v.
State of Haryana (1988 AIR SC 2181 ). Pleading of a party may be
alternative and inconsistent, but once the party has taken a definite stand
and the court has proceeded to decide on that basis, he cannot turn
around and take an inconsistent plea. Law does not permit a person to
both approbate and reprobate. This is based on the doctrine of election.
(vide R.N.Gosain v. Yashpal Dhir (1992) 4 SCC 683 ). No amount of
proof can substitute pleading which are the foundation of claim of a
litigating party ( Abubakar Abul Inamdar v. Harun Abdul Inamdar
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(1995) 5 SCC 612 ). Though this strict rule regarding pleading is
somewhat relaxed when it comes to writ proceedings, when a party
proposes to rely on the doctrine of legitimate expectation or promissory
estoppel, pleading is absolutely essential. Mere pleading would not do.
The affidavit filed in support of the writ petition will have to spell out as
to how the essential ingredients of the doctrine relied upon are met. In
M.P Jain and S.N.Jain’s Principles of Administrative Law, it has been
opined that a clear, sound and positive foundation is laid in the petition.
Bald assertions, averments or allegations without any supporting material
are not sufficient to press into aid the doctrine of promissory estoppel.
15. The writ petitioner must take a definite stand at some point of
time. Even in the first instance, he must clarify if he is projecting his case
in the alternative. He must demonstrate the presence of all the essential
ingredients of whatever type of estoppel he relies on. Borrowing the
language from an English decision [ Crabb v. Arun District Council
(1975) ], he cannot manufacture a third and new hybrid type of estoppel
by an eclectic application of some of the ingredients of each. In a writ
petition, the time for election would arrive at the time of arguments since
by then pleadings would have been complete.
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16. The writ petitioner appears to invoke both the doctrines in the
same breath. That in our view may not be in order. The learned
Additional Advocate General tried to impress upon us that neither of the
doctrines can prevail over the paramount power of the Government. We,
however, intend to anchor our decision on a more nuanced principle. We
are of the view that the principle of proprietary estoppel is more apposite.
th
17. This principle was formally named in the 26 Edition (1966) of
Snell’s Equity. The foundation was laid by Lord Kingsdown in Ramsden
v. Dyson [(1866) LR 1 HL 129 : 14 WR 926] as follows :
“The rule of law applicable to the case appears to me to
be this : If a man, under a verbal agreement with a landlord
for a certain interest in land, or what amounts to the same
thing, under an expectation, created or encouraged by the
landlord that he shall have a certain interest, takes possession
of such land, with the consent of the landlord, and upon the
faith of such promise or expectation, with the knowledge of
the landlord, and without objection by him, lays out money
upon the land, a Court of equity will compel the landlord to
give effect to such promise or expectation.”
Snell’s Equity was cited in E. R. IVES INVESTMENT LTD. v. HIGH,
[1967] 2 Q.B. 379. Two ingredients of the doctrine were alluded to. The
party relying on this principle must have relied on the arrangement with
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the opposite party. There must have been acquiescence on the part of the
other.
18. In re Basham, Decd. (1986) 1 WLR 1498 , the principle was
explained in the following terms :
“...The plaintiff relies on proprietary estoppel, the
principle of which, in its broadest form, may be stated as
follows: where one person, A, has acted to his detriment on
the faith of a belief, which was known to and encouraged by
another person, B, that he either has or is going to be given a
right in or over B's property, B. cannot insist on his strict legal
rights if to do so would be inconsistent with A's belief. The
principle is commonly known as proprietary estoppel, and
since the effect of it is that B. is prevented from asserting his
strict legal rights it has something in common with estoppel...”
19. The next leading decision is Thorner v. Major and others,
[2009] 1 WLR 776. One of the Law Lords identified three main
elements as requisite for a claim based on proprietary estoppel (i) a
representation made or assurance given to the claimant (ii) reliance by the
claimant on the representation or assurance and (iii) some detriment
incurred by the claimant as a consequence of that reliance. It was laid
down that the representation or assurance would need to have been
sufficiently clear and unequivocal ; the reliance reasonable in all
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circumstances ; and the detriment sufficiently substantial to justify the
intervention of equity. Another Law Lord qualified the first element that
the assurance must be clear and unequivocal. The effect of words or
actions must be assessed in their context. Proprietary estoppel is based
on silence and inaction, rather than any statement or action. It is
sufficient for the claimant to establish that he reasonably understood the
statement or action to be an assurance on which he could rely.
20. In Andrew Morris Davies v. Debra Ann Davies, [2012]
EWCA Civ 1641 , the following principles have been laid down :
“i) Deciding whether an equity has been raised and, if so,
how to satisfy it is a retrospective exercise looking backwards
from the moment when the promise falls due to be performed
and asking whether, in the circumstances which have actually
happened, i t would be unconscionable for a promise not to
be kept either wholly or in part: Thorner v. Major, [2009]
UKHL 18
ii) The ingredients necessary to raise an equity are (a) an
assurance of sufficient clarity (b) reliance by the claimant on
that assurance and (c) detriment to the claimant in
consequence of his reasonable reliance: Thorner v. Major at.
iii) However, no claim based on proprietary estoppel can be
divided into watertight compartments. The quality of the
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relevant assurances may influence the issue of reliance;
reliance and detriment are often intertwined, and whether
there is a distinct need for a “mutual understanding” may
depend on how the other elements are formulated and
understood: Gillett v. Holt, [2001] Ch. 210 at 225 ;
iv) Detriment need not consist of the expenditure of money or
other quantifiable financial detriment, so long as it is
something substantial. The requirement must be approached
as part of a broad inquiry as to whether repudiation of an
assurance is or is not unconscionable in all the
circumstances.
v) There must be a sufficient causal link between the
assurance relied on and the detriment asserted. The issue of
detriment must be judged at the moment when the person who
has given the assurance seeks to go back on it. The question is
whether (and if so to what extent) it would be unjust or
inequitable to allow the person who has given the assurance
to go back on it. The essential test is that of unconscionability:
Gillett v. Holt at 232.
vi) Thus the essence of the doctrine of proprietary estoppel is
to do what is necessary to avoid an unconscionable result:
Jennings v. Rice, [2002] EWCA Civ 159.
vii) In deciding how to satisfy any equity the court must weigh
the detriment suffered by the claimant in reliance on the
defendant's assurances against any countervailing benefits he
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enjoyed in consequence of that reliance: Henry v. Henry at
[51] and [53].
viii) Proportionality lies at the heart of the doctrine of
proprietary estoppel and permeates its every application. In
particular there must be a proportionality between the remedy
and the detriment which is its purpose to avoid: Jennings v.
Rice. This does not mean that the court should abandon
expectations and seek only to compensate detrimental
reliance, but if the expectation is disproportionate to the
detriment, the court should satisfy the equity in a more limited
way.
ix) In deciding how to satisfy the equity the court has to
exercise a broad judgmental discretion. However the
discretion is not unfettered. It must be exercised on a
principled basis, and does not entail what HH Judge Weekes
QC memorably called a “portable palm tree”: Taylor v.
Dickens, [1998] 1 FLR 806 (a decision criticised for other
reasons in Gillett v. Holt) .”
21. Those academically inclined may usefully consult the decision
of the Hon’ble Supreme Court of England in Guest v. Guest (2022)
UKSC 27 . The historical evolution of the doctrine has been exhaustively
captured. All the noted authorities have been referred to. We also would
invite the attention of those interested to the scholarly article titled
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“Estoppel Advent” written by Sri Salman Khurshid, Senior Advocate in
(1981) 3 SCC J-33. The learned author succinctly captures the difference
between the equitable estoppel of the promissory kind and the equitable
estoppel of the proprietary kind as follows :
“Equitable estoppel of the promissory kind where there is an
existing legal relationship and a promise not to enforce all rights
under it
Equitable estoppel of the proprietary kind where there is a
promise to grant an interest in land and consequent expenditure on
the land by the other party. This estoppel comes closest to the
rules of unjust enrichment.”
22. There are conceptual differences between promissory and
proprietary estoppel. Promissory estoppel arises only out of a
representation or promise that is clear or precise and unambiguous.
Proprietary estoppel, on the other hand, can arise where there is no actual
promise. Proprietary estoppel comes into play if the assurance relates to
an identified property owned by the opposite party. Proprietary estoppel
is based on an existing legal relationship, usually a contract, but not
necessarily one relating to land. Proprietary estoppel need not be based
on an existing legal relationship but it must relate to an identified
property (land).
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23. Let us conclude the discussion on the law by citing Chitty on
Contracts. It is opined therein that proprietary estoppel arises in certain
situations in which a person has done acts in reliance on the belief that he
has or that he will acquire rights in or over another’s property. Where the
requirements of the doctrine are satisfied, the land owner is precluded
from denying the existence of the rights in question and may indeed be
compelled to grant them. Because the estoppel precludes him from
denying the existence of rights in property, it has come to be known as
proprietary estoppel.
24. The Hon’ble Supreme Court of India in Motilal Padampat
Sugar Mills Co. Ltd. v. State of U.P (1979) 2 SCC 409 makes a reference
to the aforesaid concept. But under the influence of CRABB v. Arun
District Council, the Hon’ble Supreme Court also observed that there is
qualitative difference between the concepts of proprietary and promissory
estoppel since both are offsprings of equity. Subsequent decisions
including State of Jharkhand v. Brahmputra Metallics Ltd. (2023) 10
SCC 634 merely quote some of the English decisions.
25. Let us now apply the principles to the facts on hand. Lease was
granted in favour of the writ petitioner vide G.O.Ms.No.76, Revenue
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Department, dated 07.01.1959. It does not appear to be a contract. Any
government contract will have to conform to certain formalities which are
absent in this case. The grant was subject to certain conditions. The
grantee, namely, the writ petitioner was obliged to purchase the lands
during the currency of the lease or within six months from the date of
expiry of the lease. Though the Government had not explicitly promised
to sell the land, the language set out in the G.O must be appropriately
construed. The purpose of grant was to enable the grantee to set up
caustic soda factory. The raw material for the company is salt. The
leased lands were meant to be used as salt pans.
26. The company had written to the Government to determine the
land cost so that they can remit the same and take the land on assignment.
There has been extensive correspondence between the parties. The
earliest letter addressed by the writ petitioner to the Government is dated
08.01.1981. The Government did not respond. It remained silent . That
is why, the writ petitioner on their own remitted the cost of land which
was determined by the Government in the year 1973. They filed WP
No.8369 of 1993 for directing the Government to assign the land since
the land cost has already been remitted. Though the High Court directed
the Government to take a call within four weeks, the Government did
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nothing. Instead, it was focussed more on collecting the rental arrears.
The order directed to be passed within four weeks came some twenty four
years later. The writ petitioner placing reliance on the assurance and
promise given by the Government vide G.O.Ms.No.76, Revenue
Department, dated 07.01.1959 set up their factory. It is still functioning.
It employs a few thousand people. It is generating foreign exchange. It
is a profitable unit. If the lands are resumed, certainly, it will have an
adverse impact on the company. The writ petitioner has thus shown that
they would suffer detriment if the Government were to go back on their
promise which in this case was precise and unambiguous. What can be
put against the petitioner is that they did not purchase the property within
six months after the lease period was over. But then, they cannot be
blamed. They had expressed their intention to buy even before the expiry
of the lease. They even deposited a certain sum though it represented the
land value of the year 1973. It is the government that has to be blamed for
having been inactive. They cannot thus take advantage of their own
wrong.
27. The learned Single Judge has in clear terms held that the writ
petitioner must pay the market value for the lands as determined by the
Government. Of course, the company has to be put on notice and
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associated in the process of valuation. We are however of the view that
there is no need to grant the facility of payment in easy instalments. Even
as on date the land value does not appear to be on the high side. The
company can very well afford to pay at one go.
28. All the ingredients of the principle of proprietary estoppel stand
fulfilled in this case. There is unequivocal promise on the part of the
Government to assign/sell the lands. The writ petitioner set up their
factory by placing reliance on the said promise. They would suffer
detriment if the Government goes back on its assurance. As already
noted, the detriment is to be measured at the moment when the person
was given the assurance seeks to go back on it.
29. High Court while acting in exercise of jurisdiction under
Article 226 of the Constitution of India also exercises equitable
jurisdiction (vide Prestige Lights Ltd. v. SBI (2007) 8 SCC 449) .
Whenever the question of enforcing equity arises, the court will apply the
test of unconscionability. Applying the said test, we come to the
conclusion that permitting resumption of the leased lands will lead to an
unjust result. That is why, the learned Single Judge rightly quashed the
impugned G.O. We endorse the reasons assigned by the learned Judge.
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During the course of arguments, the learned AAG submitted that the
company is in possession of very large tracts of land in the vicinity and
that the resumption will not impair their functioning. This ground was
not set out in the impugned G.O. Long ago, the Hon’ble Supreme Court
observed that a public order must speak for itself and that reasons cannot
be supplemented during arguments.
30. Looked at from any angle, we do not find any merit in this writ
appeal. It stands dismissed. No costs. Consequently, connected
miscellaneous petition is closed.
(G.R.S.,J.) (M.D.S.,J.)
03-11-2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
SKM
To
1. The Represented by its Secretary,
Revenue Department,Fort St.Geroge, Chennai - 9
2. The Principal Secretary and Commissioner
of Land Administration, Ezhilagam, Chepauk,
Chennai -5.
3. The District Collector
Collectorate, Tuticorin District.
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4. The District Revenue Officer
Tuticorin District.
5. The Tahsildar, Taluk Office,
Tiruchendur.
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G.R.SWAMINATHAN, J.
AND
M.D.SUMATHI, J.
SKM
WA(MD) No. 1436 of 2025
03-11-2026
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