The word estoppel has been derived from the French word stoupe which means “stopper” Simply speaking it is a disability that prevents a person from pleading the contrary of a fact or state of thing which he has formerly asserted by words or conduct.
The rule of estoppel is based on the maxime allegan antar non est audendus ie. a person alleging contrary facts should not be heard. The object is also to prevent fraud and secure justice between parties by promotion of honesty and good faith. A man cannot be allowed to approbate and reprobate, blow hot and cold.
There are three different opinions with respect to the nature of estoppel.
(a) As a rule of evidence- Theris augh authority for the view that estoppel is only a rule of evidence preventing a pary from stating contradictory facts. Estoppel deals with questions of facts and not of rights.
(b) As a substantive rights best wrote that doctrine of estoppel belongs rather to substantive than to adjective law. Estoppel can even create substantive rights as against the person estopped.
(c) As a matter opleading- Estoppel is also viewed as a matter of pleading as the party relying upon the doctrine of estoppel is required to plead it This requirement involves an exception to the rule that evidence should not be pleaded.
KINDS OF ESTOPPEL .
(1) Estoppel by matter of record
Estoppel by record is estoppel of parties from reopening and relitigating the matter which has been finally settled between them by a Court of competent jurisdiction. It is covered under by res judicata under Section 11, CPC, Section 300 of Cr.P.C. and Sections 40-44 of the Evidence Act. This is also called estoppel by judgment. It is a manifestation of the principle of res judicata. Estoppel by record applies not only to the entire case (” Cause of action estoppel”) but also to a particular issue settled inter partes by an earlier judgment (” issue estoppel”).
A judgment obtained by fraud/collusion etc. will not work as estoppel. A compromise decree does not amount to res judical but creates an estoppel by conduct.
Estoppel by deed/writing
Under the English Law parties to a formally executed and sealed deed and their privies are precluded from denying the truth of the contents contained therein. However, for the doctrine to apply upon the true construction of the document the statement should be of both the parties. However, the Indian Law does not favour this. As per Section 31 of the Evidence Act any statement contained in a document made by a party would only be an admission and it would not be conclusive. Rather a party would be estopped from denying the truth of the representations contained in the document only when the conditions of Section 115 of the Evidence Act are fulfilled. Representations contained in a document per se would not be operative as an estoppel against the party making it. Also, the party to the document is not bound by the inferences which may be drawn from the statements in the deed. But if the party does not rely on the estoppel by recital and enters into an issue he cannot rely on the doctrine of estoppel. If the deed is void on the ground that it was obtained foul practice, or forgery, no estoppel would arise. on the ground of fraud, force or other
Estoppel in pais or by conduct
It simply means that when one person either words or by conduct made a misrepresentation to another with the intuition that it should be acted upon and that the other has acted accordingly and thereby altered his position, an estoppel arises against the person who made such representation is also freely translated as estoppel by conduct/representation. It is neither based on record nor deed. It may exist in writing not being under seal Other species of conduct includes silence, acquiescence, connivance, negligence or laches or delay.
Estoppel by election
This arises in cases where there is plurality of gifts or rights which are inconsistent or alternative and the party who makes the gifts or creates the rights, shows by an express or implied intention that the person taking the gift or claiming the rights should enjoy one of them, but not both of them. For example, as per Section 234 of the Act, a person may either sue the principutoragent. Another example would be Section 125 of the Transfer of property
In them and Steel Co. Ltd. versus Linion of India, AIR 2000 SC 3706, In order to bring a case within the domain within the scope of Section 115 of the Evidence Act the following conditions have to be fulfilled
(a) One party should make a representation to the other party about an existing fact as distinct from a mere promises de futuro.
(b) The representation must be made with the intention to be acted upon. It must have been made under circumstances which amounted to an intentioned causing or permitting belief in another.
(c) The other party should accept and rely upon the aforesaid factual representation there must have been belief on the part of that other; and
(d) There must have been action arising out of the belief ie. the representation must have been acted upon. The other party must have altered his former position to his prejudice or detriment.
(e) The misrepresentation or conduct or negligence must have been the proximate cause of leading the other party to act to his prejudice.
(f) The person claiming the benefit of estoppel must show that he was not aware of the true state of things.
(g) The burden of proving the estoppel lies on the person who claims the benefit thereof.
The main ingredients of estoppel as defined under section 115 are as follows:
Representation is the foundation of estoppel under Section 115 of the Act Representation may be by statement or conduct. Conduct includes negligence or silence. The representation must be clear and unambiguous. Conduct by negligence or silence, when there is a duty to speak the truth, may lead to estoppel. Representation must be companicated. A mere statement of intention to do something in future does not amount to a representation.
Representation must be made with the intention to be acted upon:
Section 115 requires that the person making the statement must have intentionally caused or permitted another person to believe his statement. The term intentionally means wilfully and qualifies the inducement and not the statement. The determining element is neither the motive with which the representation has been made, nor the state of knowledge of the party making it, but the effect of the representation as having caused another to act on the faith of it.
Representation must have been acted upon:
It should have been necessary that the other person should have acted on the belief of it and altered his position by acting and the alteration is such that it would be iniquitous to require him to revert back to his original position.
Though earlier case laws do seem to suggest that suffering detriment is necessary for the applicability of the principle of estoppel, however, Section 115 of the Act only requires that the other party should have changed his position on the basis of the representation. Suffering of any detriment is not required. So, any injury, loss, harm or deprivation as such is not required for invoking Section 115 of the Act.
In Md. Alma v. Rourffie, AIR 1960 Cal 146, it has been held that the rule of estoppel being a rule of evidence, it should be clearly pleaded. If it has not been set up in the pleading, it cannot be availed of later on.
Estoppel can only be pleaded by the party for whom the representation was made or for whom it was intended. However, a person pleading estoppel cannot take advantage of his own concealment of fact or some breach of duty.
In Bhopal Singh versus Chatter Singh and Ors, AIR 2000 P& 34, it has been held that if the representation is clear and unequivocal the person to whom it has been made need not make an enquiry to ascertain whether the representation is true..
The general propositions of law is that there can be no estoppel against the law. However, in order to apply the maxim of no estoppel against statute, (1) the parties must by bilateral agreement seek to contract out of the statutory provisions of some act (2) The statutory provisions must have some express prohibition of the agreement entered into by the parties. (3) The provision of law must be made for the public interest. (iv) It must not be meant purely for the benefit of particular class of persons. (5) The agreement of the parties should not have been merged into an order of the Court which by the conduct of the paties had been dissuaded from performing its statutory obligations.
From the above discussion it is quite clear that there is a difference in the situation wherein the Statute has conferred some benefit upon the person and the one wherein the statute prohibits doing of a certain act or entering into a kind of agreement. In the former class of cases it is upon the party to either take advantage of the benefit of waive of the same. However, in the latter case, the agreement would not be enforamble and the party seeking its enforcement cannot say that estoppel would apply. It would be a case wherein the maxim that estoppel cannot apply against the law would be applicable
Also, there can be no estoppel in the way of the Court in aetermining the question whether the estoppel would apply or if it would apply would it be against the law.
The true principle of promissory estoppel seems to be that where one party has by his words or conduct made to the other, a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding upon the party making it and he would not be entitled to go Back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre-existing relationship between the parties or not.
DIFFERENCE BETWEEN PROMISSORY ESTOPPEL AND ESTOPPEL
(i) In case of estoppel, the representation must be to an existing fact while in case of promissory estoppel, the representation is to future intention ie the representation relied upon need not be one of the present fact.
(ii) The traditional estoppel can only be used as a shield and not as a sword. It means it cant only be used as a defence in a suit. Promissory estoppel, on the other hand, can be used both as a sword and a shield. It can even be a basis of cause of action.
(iii) Doctrine of estoppel is only a rule of evidence, whereas, the doctrine of promissory estoppel is a rule of equity.