Explain the doctrine of Estoppel? What are the kinds of Estoppel?
Estoppel is a rule by which a party to litigation is stopped from asserting and denying a fact. It means estoppel is a principle of law by which a person is held bound by the representation made by him or arising out of his conduct
An estoppel maybe said to arise when a person executes some deed, or is concerned in or does some act, either of record or in pais, which will preclude him from averring anything to contrary.
So in simple words, a person shall not be allowed to say one thing at one time and the opposite of it another time. The estoppel extends not only to a man's own declaration and acts but also those of all persons through whom he claims. Thus estoppel binds both parties and privies. Estoppel deals with the question of fact, not of rights. Estoppel is a rule of exclusion, making evidence in proof or disproof of a relevant fact inadmissible
For example, Rahul offers Suresh to buy his property, Suresh believes upon Rahul makes all documents to purchase, "Now Rahul turns down to sell his property, here estoppel will apply upon Rahul. this is the principle of estoppel, you cannot deny from your own word.
The word Estoppel is derived from a French word which means to stop. Estoppel is only a rule of evidence and cannot found an action upon estoppel. An estoppel can never be a cause of action. But Supreme Court in B.L. Shreedhar VS Muinreddy, AIR 2003 SC 57 observed that estoppel through a branch of the law of evidence is also capable of being viewed a substantive rule of law in so far as it helps to make or defeat rights, which might not exist or be removed except for that doctrine.
As per Indian Evidence Act section 115 when a person, by his declaration, act or omission, knowingly permits another person to believe upon something or making him to believe a thing to be true, upon such or truth if he acts something, Now neither he nor his representative shall be allowed to deny from the statement in any suit or proceeding
A person who sends his goods through transport by declaring his cargo value of RS 1000, during transit an accident occurred, now claims from insurance company damages of RS 2,00,000 he said in his statement that the original value of the cargo was 2,00,000. The insurance company will apply estoppel upon him that you cannot turn down from his own word, you have submitted a paper stating RS 1000 cargo value so our liability to pay 1000 only.
Essential Element of Estoppel
- Representation is made by a person to another
- Other person believes it and acts upon such believe thereby altering his position
- Then in a suit between the parties, the person who represented shall not to be allowed to deny the truth of his representation
Types of Estoppel
Estoppel by record- This is also called estoppel by judgment. Estoppel by record is nothing but a principle of resjudicata, which is a matter adjudicated by a competent court cannot be reopened by the same parties or their representative in interest.
Example If The hon'ble court has given judgment already then no party can urge to reopen in the same matter and party, Parties have already given their statement and the court has decided matters, no party can seek to reopen the decided matter. Parties have the right to review and appeal in superior court.
Estoppel by deed- Estoppel by deed is that a party who executes a deed is estopped in a court of law from saying that the facts stated In the deed are not truly stated. Where there is a statement of fact in a deed made between the parties and the same is accepted by them, an estoppel result and it is called estoppel by deed". It is supported the principle that when an individual has entered into a solemn agreement by deed on certain facts, he won't be permitted to deny any matter which he has so asserted. it's a rule of evidence consistent with which certain evidence is to be taken high and conclusive in nature so on admit no contrary proof
For example an individual who knows the reality of the circumstances under which a document has been executed, cannot later came upon estoppel in his favour.
Estoppel by conduct- This is often called estoppel in pias, which suggests within the country or before the general public, the complete expression is "estoppel pais dehors the instruments" that's estoppel with reference to matters which they're outside a record or deed. This arises from the act or conduct of the party.
For example A, intentionally and falsely results in B to believe that certain land belongs to A, and thereby induces B to shop for and buy it. The land afterward becomes the property of A, and A seeks to line aside from the sale on the bottom that, at the time of sale, he had no title, he must to not be allowed to prove his want of title.
Sarad Chander Dev Vs Gopal Chander (1891-92) I.A 203.
A person died leaving behind some property. He had a wife, son, and daughter. The Wife had possession of that property and also the agency of her son. She sold it to Sharad Chander. Subsequently, the wife’s claim over the property was discovered to be enormous; her children subsequently sold the property to Gopal Chander for possession of the property. Sharad Chander claimed estoppel against the son and Gopal Chander has he has acted on Son’s representation which would also bound Gopal Chander
Held that the son was estopped so was the plaintiff to the extent of their shares. No estoppels against the daughter as her representation was not clear, but the son has represented the mother in the whole transaction even as a mukhtar on her behalf
Estoppel will arise when the failure to perform one’s duty has misled another and also the duty should be a sort of legal obligation
Mercantile Bank of India ltd vs Central Bank of India 1937 65 I.A 75 A
A firm of merchants has railway receipt of goods booked which they pledged to get loans from two banks. The question arose between the two banks as to who had a prior claim on goods. The second bank contented that by returning the receipt to the merchants without impressing upon the stamp of the pledge the bank had made a representation by omission and that the receipts were free from all claims and that the second bank was misled by the act of the first bank
Observed that there was not a legal duty on the part of the bank to deface the receipt with their receipts with their stamp. It was only a prudent commercial practice and not a legal obligation the existence of the duty is essential particularly when there is an omission. Representation should be a fact not of law or opinion
It can also arise from waver
It cannot arise expression of opinion
It cannot arise from the invitation of tenders
TATA Iron and Steel Co Ltd vs Union of India AIR 2000 SC 3706
The Hon’ble Court succinctly laid down that the essential principle constituting an estoppel
- To bring the case within the scope of the concept of estopped" as defined in section 115 of Indian Evidence Act.
- There must be a representation by a person or his authorized agent to another in any form a declaration, act, or omission.
- The representation must have meant to be relied upon, ie, have been made under circumstances which amounted to an intentioned causing or permitting belief in another. The proof of the intent may be direct or circumstantial, or by conduct. It is not necessary that there should be a design to mislead or any fraudulent intention of that the representative should be false to the knowledge of the maker. Representation, even when made any innocently or mistakenly, may operate as an estoppel.
- There must be a belief on the part of the opposite party in its truth There must be action on a belief of that declaration act or omission, i.e., the declaration, act or omission must have actually caused another to act on a belief of it, and to change his former position to his prejudice or detriment.
- The misrepresentation or conduct or negligence must be the proximate reason behind leading to the opposite party to act to his prejudice.
- The person claiming the advantage of estoppel must show that. He wasn't conscious of the true state of things. If he was attentive to the important state of affairs or had means of information, there will be no estoppel.