Promissory Estoppel

Doctrine of promissory estoppel does not operate against the legislature.

Pre-requisites for lodging a right or entitlement under the doctrine of promissory estoppel stated.

Petitioner filed application under S.12(2), C.P.C., for setting side said dismissal/withdrawal order and restoration of the suit for deciding the same on merits

Application was contested by the respondent and consequently dismissed by the Trial Court

Petitioner contended that compromise was effected inter se the parties and in pursuance of the same, the petitioner had withdrawn the suit, but the respondents stepped back of the said alleged compromise

Validity

Petitioner filed appeal against dismissal of application under S. 12(2) of Civil Procedure Code, 1908, which was treated as revision petition and was converted into Constitutional petition

Petitioner had appended with his application affidavits of the witnesses in order to show that fact of alleged compromise

Such was a factual controversy which could not be decided summarily without framing issues and recording evidence, especially when the petitioner's application was adorned with affidavits of the witnesses

After the alleged out of Court settlement, the parties could not go aside and the petitioner could only prove the allegation of respondent's stepping back from compromise by leading evidence

Constitutional petition was allowed, application was deemed to be pending before the Trial Court and the Trial Court was directed to decide the application after framing issues and recording evidence.

Appellant assailed an office order issued by the authorities directing her repatriation to the parent department and the dismissal of her constitutional petition

Petitioner claimed the repatriation order to be back dated and pressed into service the doctrine of legitimate expectation to be absorbed as a deputationist

Validity

Single Judge of High Court had noted that the office order was a public document and the assertion that it was back dated was tantamount to raising a factual controversy which could not be resolved by the Court in its constitutional jurisdiction

Deputation order itself had clearly stated that the petitioner would not be eligible for absorption in view of her academic credentials

Question of authorities' conduct generating a legitimate expectation of absorption in favour of appellant did not arise

Authorities had made no representation or promise that attracted the principle of promissory estoppel or legitimate expectancy

Deputationist had no vested right to seek absorption in a borrowing department

Intra Court Appeal was dismissed.

Where Government controlled functionaries made a promise which ensued a right to anyone who believed in it and acted under the same, then such functionaries were precluded from acting detrimental to the rights of such person/citizen.

Where Government controlled functionaries made a promise which ensued a right to anyone who believed in it and acted under the same, then such functionaries were precluded from acting detrimental to the rights of such person/citizen.

Plaintiffs were owners of suit properties leased in their favour by Cantonment Board (Board) through registered deeds which deeds were cancelled subsequently

Validity

Registered instrument could only be cancelled by a civil court of competent jurisdiction on ground of fraud or otherwise

All leases in question were ownership leases conferring proprietary rights and interests upon plaintiffs which were guaranteed under Arts. 23 & 24 of the Constitution

Such kinds of rights and interests could not be interfered with by merely communicating to plaintiffs decision that their leases had been cancelled either through public notice which had already been set aside by High Court in an earlier decision or through notice to plaintiffs in support of which no evidence was led by the Cantonment Board

Board had wrongly cancelled registered ownership leases of plaintiffs through two notices in question

Controversy of suit was hit by doctrine of promissory estoppel and locus poenitentiae because after issuance of ownership leases in their favour, plaintiffs had taken substantial steps and made investments in raising residential structure at suit plots and an attempt to deprive them of their ownership rights and interest resorting to such procedure was patently illegal

Suit was decreed in circumstances.

To obtain promissory estoppel against Government, one had to specifically plead and furnish materials as to how he had been induced and then altered his position by virtue of said representation from Government

Sine qua non for invoking doctrine of promissory estoppel or legitimate expectation for issuance of a writ of mandamus directing the Government to fulfill its commitment under a policy was that in reliance on such representation or promise in said policy, the person seeking estoppel altered his position to his detriment.

When in exercise of administrative power conferred under a statute, a concession was granted as regards customs duty and other Government dues for a fixed period and afterwards it was sought to be withdrawn in exercise of a similar power, the said concession or benefit could not be withdrawn by virtue of S. 21 of the General Clauses Act, 1897, unless the statute itself had conferred such a power on the executive authority, otherwise, the same shall be protected under the principle of promissory estoppel

However, in order to bring the case within the four corners of the principle of promissory estoppel, it was mandatory upon the person claiming the benefit under it, to show that the offer was validly made by the competent authority and thereafter permission/approval was granted/made in a rightful, judicious and transparent manner, without there being any hint of mala fide, arbitrariness, excessive jurisdiction, favoritism or non-transparency therein

In the present case, after thorough examination of the record the High Court rightly held that the procedure of the grant of permission to import tractors at zero rated duty suffered from arbitrariness, excessive jurisdiction, favoritism, lack of transparency, subjectivity and was also not in accordance with the decision of Economic Coordination Committee; therefore, the principles of promissory estoppel were not attracted in the facts and circumstances of the present case

Appeal was dismissed accordingly.

When in exercise of administrative power conferred under a statute, a concession was granted as regards customs duty and other Government dues for a fixed period and afterwards it was sought to be withdrawn in exercise of a similar power, the said concession or benefit could not be withdrawn by virtue of S. 21 of the General Clauses Act, 1897, unless the statute itself had conferred such a power on the executive authority, otherwise, the same shall be protected under the principle of promissory estoppel

However, in order to bring the case within the four corners of the principle of promissory estoppel, it was mandatory upon the person claiming the benefit under it, to show that the offer was validly made by the competent authority and thereafter permission/approval was granted/made in a rightful, judicious and transparent manner, without there being any hint of mala fide, arbitrariness, excessive jurisdiction, favoritism or non-transparency therein

In the present case, after thorough examination of the record the High Court rightly held that the procedure of the grant of permission to import tractors at zero rated duty suffered from arbitrariness, excessive jurisdiction, favoritism, lack of transparency, subjectivity and was also not in accordance with the decision of Economic Coordination Committee; therefore, the principles of promissory estoppel were not attracted in the facts and circumstances of the present case

Appeal was dismissed accordingly.

If action of Government while dealing with the people was unfair or unreasonable then same could be corrected by the Constitutional Court on the principles of legitimate expectations and promissory estoppel

Government could not refuse to abide by its promise

Petitioners had performed their duties as house officer against stipend and authorities could not refuse the stipend to them

Impugned order whereby stipend to the petitioners was disallowed was declared illegal

Authorities were directed to pay stipend to the petitioners as offered

Constitutional petition was allowed, in circumstances.

Scope.

Authorities alleged that taxpayer was not entitled to claim adjustment or refund of input tax in respect of such purchases unless he had paid the amount of additional tax or penalty

Validity

Nobody could be allowed to approbate and reprobate in the same breath

After allowing instalments without making it conditional to payment of additional tax and penalty, vested right was created in favour of taxpayer on the theory of 'promissory estoppel' and doctrine of vested rights

Authorities could not be allowed to go against its own conduct and representations/concessions

Once the taxpayer had discharged its liability by way of depositing principal amount of sales tax within the time frame in installments, nothing remained payable as an additional amount on the account of any additional tax/default surcharge and penalty

High Court declined to interfere in the order passed by Appellate Tribunal Inland Revenue and proposed questions were decided against the authorities

Reference was dismissed in circumstances.

Plaintiffs were different HGOs who were aggrieved of reduction in quota of Hajj allocated to them by Government of Pakistan

Reduction in quota was made on account of expansion work by Government of Saudi Arabia and same compelled to reduce quota of HOAP members from 50% to 40%

Validity

Hajj quota was granted to Pakistan and not to any individual or HGOs so that they could dictate their terms to Government within realm and sphere of policy making domain

Government of Pakistan had discernably sovereign and independent right to frame Au Fait, equitable and evenhanded Hajj policy for utilization of quota fair and square amongst citizens of Pakistan

Plaintiffs could not claim any vested rights that their 50% quota could not be reduced nor any case of promissory estoppel was made out on basis of Memoranda of Understanding

Plaintiffs failed to make out any prima facie case nor balance of convenience in their favour and there was no question of irreparable injury arising to them

High Court declined to interfere with the quota fixed by the authorities

Application was dismissed in circumstances.

Where government functionaries make promises/representations to anyone who believes them and acts under them, those functionaries are precluded from acting to the detriment of such persons/citizens

Doctrine of Promissory Estoppel is applicable in circumstances.

Contract Act, 1872 and any other law did not provide anything which might prohibit the parties from varying and/or altering the terms of the original contract by executing a new contract on basis of mutually agreed terms and conditions

Novation/substitution of the old contract by new one for rescheduling, restructuring and/or renewal of facilities was permissible upon fresh terms and conditions if the same were mutually and voluntarily agreed upon between the parties

Financial security documents including the Musharaka Investment Agreement in question thus were not only valid but the same were also absolutely binding upon the parties thereto on basis of the promissory estoppel in terms of Art. 144 of Qanun-e-Shahadat, 1984.

Doctrine of promissory estoppel cannot be invoked for directing to do a thing that was against the law, when the representation was made or the promise was held out

No authority can be made bound by a promise or representation not lawfully extended or given.

Suit filed by Bank was resisted by defendant on various pleas including factor of roll-over of mark-up over mark-up at the time of rescheduling of finance

Validity

On account of defendant's default, renewal/rescheduling was not only requested by defendant but also accepted by plaintiff Bank

Defendant under the doctrine of promissory estoppel could not be permitted to allege that documents duly signed and executed were void and/or otherwise not enforceable under the law

Bank could recover `Purchase Price' [mark-up price] as mark-up was charged on `outstanding due amount' which included mark-up as such the 'sale price' and 'purchase price', both were polluted one

Defendant was fully aware of charging `mark-up' on renewed/rescheduled amounts, and despite such knowledge and awareness, defendant not only executed finance agreements but also got itself benefited therefrom

Defendant could not be permitted to allege that `mark-up' in terms of finance agreements were `Haram' or otherwise were prohibited

Defendant if really did not want to pay mark-up on renewed/ rescheduled amounts then it should have not requested for renewal/ rescheduling of the subject facilities

High Court declined the leave to appear and defend the suit as it failed to raise any substantial questions of facts and law which needed recording of evidence

Suit was decreed in circumstances.

Promissory estoppel is an equitable doctrine with the object of pre-empting the suffering of any loss arising out of a promise made and is invoked so as to prevent violation of and to safeguard rights accrued pursuant to such promise

Promise was essentially to be made by a person competent to represent the Authority on behalf of which a promise was being made and the person to whom representation had been made changed his position to his detriment took a decisive step and entered into a binding contract or incurred a liability.

Promissory estoppel is an equitable doctrine with the object of pre-empting suffering of any loss arising out of a promise made and is invoked so as to prevent violation of and to safeguard rights accrued pursuant to such promise

Essentially promise be made by a person competent to represent the Authority on behalf of which a promise is being made and the person to whom representation has been made changes his position to his detriment takes a decisive step and enters into a binding contract or incurs a liability.

Doctrine of promissory estoppel is based on equitable principles.

Acceptance of job by the petitioner on contract basis could not be made basis of withholding of permanent appointment, as due to prevailing circumstances of un-employment in the country, the petitioner had no other option but to accept the same

Petitioner had not lost her constitutional right to invoke the jurisdiction of the High Court under Art.199 of the Constitution and in the same manner the High Court was not precluded from exercising powers of judicial review against such-like arbitrary actions of the executive

Constitution petition was allowed.

After discovery of gas by the petitioner, respondent executed a development and commercial lease in favour of the petitioner and nominated Sui Northern Gas Pipelines Limited as purchaser of gas from petitioner/company

Dispute arose over fixation of well-head price resulting from different interpretations of the relevant Article of the Petroleum Concession Agreement

Parties, by mutual consent, referred the issue to the Attorney-General for Pakistan who supported the version of petitioner/company

Petitioner contended that the controversy was resolved by the opinion of the Attorney-General which was binding on the Government/respondent which refused to fix the price of gas

Petitioner further contended that the reference having been proposed by respondent (Government) itself, opinion of the Attorney-General was binding on the government/respondent on account of promissory estoppel

Respondent contended that constitutional petition was not maintainable as numerous remedies were available to the petitioner viz. arbitration, suit for specific performance that petitioner was not an 'aggrieved party'; writ of mandamus could not be issued in the absence of any lapse on the part of any public functionary and that opinion of the Attorney-General was not binding on the Government as the same was not the opinion of an expert of petroleum industry

Validity

Rules 4(213) of the Federal Rules of Business, 1973 attached primacy to the Attorney General's opinion which could only be overruled by the Prime Minister or the Cabinet

Record showed that the Prime Minister had not overruled the opinion of the Attorney General

Dispute of gas price was, admittedly, referred to the Attorney General by the Prime Minister with promise and understanding given to the petitioner company that the opinion/advice of the Attorney-General would be binding on both the parties which agreed to seek the opinion of Attorney General as a mode or means to settle the dispute

Opinion of the Attorney General given in pursuance of mutual agreement, therefore, qualified to be regarded as an amicable settlement in the Petroleum Concession Agreement which did not prescribe any specific means to settle the disputes

Attorney General's opinion was binding on the Government on account of promissory estoppel

Whenever a person had acted on representation on promise made by the Government, he could not resile from such promise

Remedies of arbitration and suit for specific performance could be sought by the petitioner if the dispute pertained to the interpretation of the relevant articles of the Petroleum Concession Agreement

Dispute/ grievance, in fact, arose out of Federal Government's refusal to abide by the opinion of the Attorney General

Grievance though pertained to contractual matter, yet the same arose out of Federal Government's failure to follow the opinion of the Attorney General

Dispute did not involve determination of questions of fact of a contractual matter, therefore, constitutional jurisdiction could be exercised even in contractual matters where no controversial questions of fact required detailed inquiry were involved

Opinion of the Attorney General was held to be binding on the Government which was directed to fix the well-head price of gas in the light of Attorney General's opinion which amounted to settlement contemplated under the Petroleum Concession Agreement

Constitutional petition was allowed.

After discovery of gas by the petitioner, respondent executed a development and commercial lease in favour of the petitioner and nominated Sui Northern Gas Pipelines Limited as purchaser of gas from petitioner company

Dispute arose over fixation of well-head price resulting from different interpretations of the relevant article of the Petroleum Concession Agreement

Parties, by mutual consent, referred the issue to the Attorney General for Pakistan who supported the version of petitioner company

Petitioner contended that the controversy was resolved by the opinion of the Attorney-General which was binding on the Government/respondent which refused to fix the price of gas

Petitioner further contended that the reference having been proposed by respondent (Government) itself, opinion of the Attorney General was binding on the Government/respondent on account of promissory estoppel

Respondent contended that constitutional petition was not maintainable as numerous remedies were available to the petitioner viz. arbitration, suit for specific performance that petitioner was not an `aggrieved party'; writ of mandamus could not be issued in the absence of any lapse on the part of any public functionary and that opinion of the Attorney General was not binding on the Government as the same was not the opinion of an expert of petroleum industry

Validity

Rules 4(2)(3) of the Federal Rules of Business, 1973 attached primacy to the Attorney General's opinion which could only be overruled by the Prime Minister or the Cabinet

Record showed that the Prime Minister had not overruled the opinion of the Attorney General

Dispute of gas price was, admittedly, referred to the Attorney General by the Prime Minister with promise and understanding given to the petitioner company that the opinion/advice of the Attorney General would be binding on both the parties which agreed to seek the opinion of Attorney General as a mode or means to settle the dispute

Opinion of the Attorney General given in pursuance of mutual agreement, therefore, qualified to be regarded as an amicable settlement in the Petroleum Concession Agreement which did not prescribe any specific means to settle the disputes

Attorney General's opinion was binding on the Government on account of promissory estoppel

Whenever a person had acted on representation on promise made by the Government, he could not resile from such promise

Remedies of arbitration and suit for specific performance could be sought by the petitioner if the dispute pertained to the interpretation of the. relevant articles of the Petroleum Concession Agreement

Dispute/grievance, in fact, arose out of Federal Government's refusal to abide by the opinion of the Attorney General

Grievance though pertained to contractual matter, yet the same arose out of Federal Government's failure to follow the opinion of the Attorney General

Dispute did not involve determination of questions of fact of a contractual matter, therefore, constitutional jurisdiction could be exercised even in contractual matters where no controversial questions of fact required detailed inquiry were involved

Opinion of the Attorney-General was held to be binding on the government which was directed to fix the well-head price of gas in the light of Attorney General's opinion which amounted to settlement contemplated under the Petroleum Concession Agreement

Constitutional petition was allowed.

Doctrine of promissory estoppel cannot be invoked against Legislature or laws framed by it because Legislature cannot make a representation.

Doctrine does not extend to legislative and sovereign functions but executive actions are not excluded from its operation.