Doctrine of promissory estoppel #indianlaws – The Chambers of Law, New Delhi

In the judgment as passed by Privy Council in the matter namely Kumar Krishna Prosad Lal Singha Deo vs. Baraboni Coal Concern, Ltd. and Ors., reported as AIR1937PC251 (decided on 04.06.1937) , the Court dealt with the law or Doctrine of estoppel as laid down in Section 116 of the Indian Evidence Act, 1872 as applicable in case of tenants.

The Court observed that the provision also disclosed the answer given by English law to the objection that an assignee being liable upon the covenants only by privity of estate cannot be made liable if the lessor has no estate, an objection which serves only to emphasize the importance of this estoppel.

Section 116, Evidence Act provides that no tenant of Immovable property or person claiming through such tenant shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such Immovable property; and no person who came upon any Immovable property by the license of the person in possession thereof shall be permitted to deny that such person had a title to such possession at the time when such license was given.

It was held that the section does not deal or profess to deal with all kinds of estoppel or occasions of estoppel which may arise between landlord and tenant. It deals with one cardinal and simple estoppel and states it first as applicable between landlord and tenant and then as between licensor and licensee, a distinction which corresponds to that between the parties to an action for rent and the parties to an action for use and occupation.

Whether during the currency of a term the tenant by attornment to A who claims to have the reversion, or the landlord by acceptance of rent from B who claims to be entitled to the term is estopped from disputing the claim which he has once admitted are important questions, but they are instances of cases which are outside Section 116 altogether; and it may well be that as in English law the estoppel in such cases proceeds upon somewhat different grounds and is not wholly identical in character and in completeness with the case covered by the section. The section provides that neither a tenant nor anyone claiming through a tenant shall be heard to deny that that particular landlord had at a relevant date a title to the property. The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversion, though in such cases there may be other grounds of estoppel, e.g., by attainment, acceptance of rent, etc. and this sense the principle only applies to the title of the landlord who “let the tenant in” as distinct from any other person claiming to be reversioner. The principle also does not apply to prevent a tenant from pleading that the title of the original lessor has since come to an end.

The tenancy under Section 116 does not begin afresh every time the interest of the tenant or of the landlord devolves upon a new individual by succession or assignment. In India, where tenants may have occupancy right and permanent or unlimited tenures are well known, the application of Section 116 may not always be clear.