3. PROMISES ARE THE UNIQUELY HUMAN WAY OF ORDERING THE
FUTURE, MAKING IT PREDICTABLE AND RELIABLE TO THE
EXTENT THAT THIS IS HUMANLY POSSIBLE
HANNAH ARENDT ( GERMAN- AMERICAN HISTORIAN AND PHILOSOPHER)
4. PETITIONER: M/S MOTILAL PADAMPAT SUGAR
MILLS CO. (P.) LTD. VS
RESPONDENT: STATE OF UTTAR PRADESH AND ORS.
BENCH: JUDGE 1
P.N. Bhagwati was a prominent Indian jurist who served as the Chief Justice of India
from July 1985 to December 1986. He was known for his contributions to
constitutional and human rights law.
BENCH: JUDGE 2
V.D. Tulzapurkar was also a respected Indian judge, known for his work in the legal
field. He may have been another judge on the bench hearing the case.
5. Doctrine Of
Promissory Estoppel
Meaning- The Doctrine of Promissory Estoppel is
basically an equitable doctrine. The Doctrine of
Promissory Estoppel means whereone party byhis
words orconduct madeto the othera clear promise
which is intended to createlegal relations oreven
affect a legal relationship
6. Despite traditional limitations of Promissory Estoppel to pre-existing
contracts, the court ruled in Motilal Padampat Sugar Mills that a
government's clear promise (tax exemption) inducing reliance and action
(factory built) cannot be unfairly revoked, even without a formal
contract.
Introductio
n
7. Issues Raised
1) Whether the plaintiff’s acceptance of a partial
exemption renderedhis entitlement to have a cause
of action?
2) Whether the plaintiff has a claim based on
promissory estoppel?
3) Is it possible to takes uch action against the
government when it is functioning in such
capacities as government, sovereign, or
administrative?
4) Given that the plaintiff did not experience any
harm,would the theory of Promissory Estoppel
apply in the current situation?
8. Arguments of Petitioner
The state clearly assured
exemption, knowing the
company would rely on it
(theydid).
Argument 1: Government
promised tax exemption
Argument 2: Company
acted in reliance
They built a factory based
on the promise.
9. Arguments of Petitioner
This defense wasn't raised earlier and lacks evidence.
Even if considered, the company didn't waive its right
knowingly.
Agreement 3: Government
cannot claim waiver later
10. Arguments of Respondent Side
Argument 1: (Waiver through letter) The company's letter on June 25th implied
they waived full exemption.
Argument 2: (No binding assurance) The 4th respondent's promise (Chief
Secretary) wasn't binding on the State.
Argument 3: (Policy flexibility) Promissory estoppel can't restrict the State's
ability to change policies for public good.
Agreement 4: (Tax obligation remains) No notification under section 4A, so tax
payment mandatory.
11. Supreme Court’s Judgement
• The Supreme Court overruled the High Court's
decision on promissory estoppel.
• Waiver must be intentional and with full
knowledge of rights.
• Promissory estoppel prevents injustice from
broken promises.
• It applies to both private parties and government
entities.
• It cannot be used to circumvent legal obligations
or prevent legislative power.
• It is an equitable doctrine that promotes justice
and fairness.
13. • Promissory Estoppel as a Defense:
Acknowledged by the court as a valid defense against breaches, providing protection for parties
facing contractual violations.
• Integration with Doctrine of Consideration:
While a powerful tool, it must complement the doctrine of consideration, emphasizing the
foundational role of consideration in contracts.
• Preventing Fraud and Injustice:
Plays a crucial role in maintaining fairness and justice, holding parties accountable for promises
even in the absence of a formal contract.
• Potential Impact on Established Doctrines:
The court's recognition suggests potential implications for established legal doctrines, indicating
possible evolution in the interpretation and application of contract law principles..
Conclusion
