ESTOPPEL

Adv. Usha Andewar

CHAPTER VIII

SECTIONS 121 TO 123

Introduction

Section 121 to 123 of the Bharatiya Sakshya Adhiniyam, 2023 deals with
Estoppel. Estoppel refers to a legal principle that prevents a person from alleging
facts which are contrary to past claims or actions. Doctrine of Estoppel is that
provision which prohibits a person from giving false evidence by preventing them
from making contradicting statements in a Court of Law. The objective of this
doctrine is to avert the commission of fraud by one person against another
person. This doctrine holds a person accountable for false representations made
by him, either through his words or through his conduct.

It is based on the maxim ‘Allegens contraria non est audiendus’ which

means ‘a person alleging contradictory fact should not be heard’.

In simple words, estoppel means one cannot contradict, deny or declare to be

false the previous statement made by him in the Court.

The object of estoppel is to prevent fraud and secure justice between parties
by promotion of honesty and good faith.

For example

1. A, an agent of C, mortgaged his property to B which he was in possession of

but was not the owner. B, the mortgagee, in good faith, believing the
representation to be true took the mortgage. Thereafter, he obtained a

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 decree and the property was sold. The real owner of the property, C,
claimed that it was his property and that A had no power to mortgage
them. The court would stop A from making such a claim under the doctrine
of estoppel.
2. Simran, a leading entrepreneur, wants to buy a car. Raj is her good friend
who owns a classic car of great worth. When Simran contacts Raj to help
her in purchasing a car, he says that she can buy his car which he has
been planning to sell for some time now. Simran buys his car. Later on,
the car becomes Raj’s property. Raj takes the defense that when he sold
that car to Simran, he had no title over it. The court held that Raj would
be liable and will have to prove his want of title.
3. If Thanos is an employee of company XYZ but in court, he denies to be an
employee of that company, then, later on he could not claim the salaries
and emoluments from that company.
4. M, a tenant in the house of N, falsely representing to Q that he had
transferable rights over the property and thereafter transferring property
to N, later on, cannot claim that he had no transferable interest in the
property. He would be estopped from doing so under the doctrine of
estoppel.

It could be explained by an illustration. A person accepts his liability to make

payment under an arbitration award. Such a person cannot later challenge the
award. Section 121 gives a good example. ‘A’ intentionally and falsely leads ‘B’ to
believe that certain land belongs to A, and thereby induces B to buy and pay for
it. The land afterwards becomes the property of A, and A seeks to set aside the
sale on the ground that, at the time of the sale, he had no title. He must not be
allowed to prove his want of title.

In respect of estoppels, the case of ‘Shammim Beg Vs. Najmunnissa Begum is

quotable. In this case, a document was executed between the husband and wife
an intention that the wife has begotten before the marriage with the husband.

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The husband had accepted the fact of knowing the child. The wife gave birth to
a child on the day of marriage. The husband could not challenge the legitimacy
of this child. He is bounded by his previous statements.

Essential Elements of Estoppel

From the above definition of estoppels, the following essential elements of it

reflect :-
I. A person misrepresents by his act, omission or declaration,
II. Such misrepresentation is regarding the existence of any fact;
III. Such misrepresentation is intentionally caused to make a person believe
a thing;
IV. The other person believes such misrepresentation to be true;
V. The other person does some act believing such misrepresentation;
VI. Such act causes injury to the other person; and
VII. Such a person is unaware of the actual situation.

Types of Estoppel

Estoppel by record – It is created by the decision of any competent court. When

any court decides finally over a subject then it becomes conclusive and the
parties, their representative, executor, administrator, etc. become bound to that
decision. They can neither bring another suit on the same subject nor can make
the same subject disputed. They are stopped from doing so. It is like res judicata.

Estoppel by deed – When any person becomes bound to another person on the
basis of a record regarding a few facts, neither that person nor any person
claiming through him shall be allowed to deny it.

Estoppel by conduct – Also known as Estoppel in Pais. It is such estoppel

which arises due to act, conduct or misrepresentation by any party. When any
person causes another person to believe by his word or conduct encourages them

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to believe and the other person acts upon that belief and causes a change in
their situation, then the first person is stopped from denying the truthfulness of
his statements made earlier. Actually, this is an estoppel of general nature.

Estoppel by election – Meena Malhotra offers her maid Kantabai her second-
hand car. Kantabai out of generosity says that she would not take it for free.
Meena Malhotra says to Kantabai that she has the freedom to take it as a gift or
to make a payment as per her willingness. Kantabai has the option to either take
it as a gift or claim a right over it by purchasing the car. Now, Kantabai makes
the payment and takes the car in her possession. After a year, Kantabai becomes
bankrupt and asks Meena Malhotra to return the money which she had given to
her as the payment for buying the car, as she now wants it as a gift.

According to the doctrine of estoppel by election the person receiving the gift or
claiming the right can enjoy one of them and not both of them. So Kantabai
cannot now go back upon it and take the other option.

Equitable Estoppel – When a person tries to take a legal action that would
conflict with his previously given statements, claims or acts, this legal principle
would prohibit him from doing so. So, the plaintiff would be stopped from
bringing a suit against the defendant who acted pursuant to the commands of
the plaintiff. The best examples of equitable estoppels are there in Sections 41
and 43 of the Transfer of Property Act, 1882.

Tetanus gives his gold jewellery to Vaccine, the most famous jeweller in the town,
for repairing. Vaccine, while handing over the jewellery to Tetanus after repair
informed that a mark has been made by mistake at the back of the jewellery.
Tetanus didn’t mind that and took the jewellery happily with her. Later on if she
brings a suit against Vaccine, she would be stopped under this principle as her
suit would run counter to her earlier statement of forgiveness for the damages
caused to her jewellery by mistake.

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Promissory Estoppel – It has originated as an exception to consideration in the
field of contract law. When any person promises another to lend him certain
relief or profit and the other changes his position on the basis of such promise,
then the person making the promise shall be stopped from stating that his
promise was without any consideration.

Exceptions to Estoppel

a) No estoppel against a minor.

b) It does not apply to those matters where both parties have the knowledge
of truthfulness.
c) It does not apply against statutes. It cannot contradict the provision of
statutes. It cannot also remove the condition of statues.
d) It does not apply to regulations.
e) It does not apply to ultra-virus orders and decisions.
f) It does not apply to questions of law.
g) It does not apply to sovereign acts of the government.
h) No estoppel in case of mistake – Where both parties acted under common
misapprehension, there could be no estoppel until the position is cleared
up.
i) Fraud, Misrepresentation, Negligence on the part of other party – If there
is a fraud on the part of the other party, which could not be detected by
the promisor with ordinary care, the estoppel will not operate.
j) Mere attestation will not create an estoppel – Attestation does not involve
the witness of any knowledge of the contents of the deed, it can at the best
be used for the purpose of cross-examination, but it will neither create
estoppel nor imply consent.

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Section 121 - Estoppel

It defines estoppel as a principle which prohibits a person from denying what

was earlier said by him in the Court. The court in Pickard Vs. Sears said that
estoppel is where ;
• One party by his words or actions makes a representation
• The other party believing in his words acts on that
• Or alters his position then the party would not be allowed to deny the
things he previously said.
In the third clause, the altering of the position should be such that going back
would be unjust or unfair in the eyes of law, as established in the case of Pratima
Chowdhury Vs. Kalpana Mukherjee.

Necessary Elements of Representation under Section 121

The representation made can be done in two ways:
• By words
• Through conduct which includes negligence

In Bhagwati Vanaspati Traders Vs. Senior Superintendent of Post Offices,

Meerut, the plaintiff purchased one N.S.C. for which he paid only a certain
amount and not the entire amount of money. The defendant closed the account
of the plaintiff and refunded the amount without any interest on the ground that
it was not opened according to the rules and regulations. On the plea of estoppel,
the court said that the plaintiff himself had purchased the N.S.C. and that no
misrepresentation was made to him by the defendant.

Case Laws
Tata Iron and steel Co. Ltd. v. Union of India (2000)
The Supreme Court succinctly laid down the essential principles for constituting
the doctrine of estoppel i.e. …………. the issue of an estoppel by conduct can
only be said to be available in the event of there being a precise and unambiguous
representation and on that score a further question arises as to whether there

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was any unequivocal assurance prompting the assured to alter his position or
status.

Life Insurance Corporation Vs. O.P. Bhalla and Ors., in this case, the assured
failed to pay the second instalment and the policy lapsed. Later, the corporation
accepted the 3rd and 4th instalments and also the 2nd instalment with an interest.
This policy ultimately came to an end with the death of the assured. The nominee
of the assured claimed the insured amount from the corporation. It was found
that before entering into a contract with the corporation, the assured had
undergone an operation about which he didn’t inform the insurer. The court said
that the assured’s act of keeping the information with him would not allow him
to take the plea of estoppel. The defense was that disclosing it would not have
made any difference if it was not accepted.

Sanatan Gauda Vs. Bharampur University, in this case, the student took
admission to a law college and successfully complete his two years. In his final
year university objected to releasing his result of the pre and intermediate
examinations on the ground that he is not eligible to do so. The student had
submitted all the required documents at the time of admission and also obtained
the card for writing his final examination. The court declared that the university
would be estopped from doing so, i.e. declaring the result of that student.

Kumar Nilofar Insaf (Dr.) Vs. State of Madhya Pradesh, in this case, while
taking admission to the medical college, the college released a merit list for
house-job. When the same merit list was released for admission to the M.D.
course, the plaintiff filed a suit. The court estopped the plaintiff since he had
consented to the first merit list.

Dataram S. Victore Vs. Tukaram S. Victore, in this case, the tenant while
filling out the form for an agreement clearly stated that he would be living along
with his brother and his wife and it was accepted. The court dismissed the order

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of eviction and estopped the landlord from terminating the tenancy on the
ground of the lease.

Section 122 – Estoppel of tenant and of licensee of person in possession

Tenant cannot deny the title of landlord - "A tenant may not dispute the right of
his landlord saying that he had nothing in the property". The section provides
that a person who comes into an immovable property taking possession from a
person whom he accepts as the landlord, is not permitted to say as against his
landlord that he had no title to the property at the commencement of the
tenancy. The ground of the doctrine is that in as much as the parties have
approved that they should stand in the relation of landlord and tenant, and the
one accordingly receives possession from the other and enters premises, so long
as he continues in possession, he cannot be heard to deny the State of facts
which he had agreed shall be taken as the basis of the arrangement; in other
words he cannot set up that the landlord had no legal title. A tenant cannot
deny the right of the person from whom he took the tenancy.

Further, the Section also explains that a person who came upon an immovable
property by license cannot deny the fact that the person from whom he got the
license, that is, in whose possession the immovable property, had the title at the
time when he got his license.

Scope of Section 122

It is concerned with those estoppels which occur between ;
➢ Tenant and his landlord
➢ Licensor and licensee
Title of the landlord cannot be denied

Once a tenant enters into a relationship of landlord and tenant, receives the
possession of the property and finally enters into the premise, during the period
of such possession may deny to things or course of action by the landlord which

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is against what was mentioned in the agreement. A tenant in no case claims that
the landlord has no title over the property.

Case Laws

Udai Pratap Vs. Krishna Pradhan, in this case, the continuance of tenancy was
defined as a period during which the tenant enjoys the possession of the property
and is seeking benefits from it.

Moti Lal Vs. Yar Md, in this case, the judge said that the tenant cannot say that
the landlord has no more interest in the property when the landlord filed a suit
for default payment and ejectment. It is only after leaving the possession can the
holding of title by the landlord be questioned.

Sri S.K. Sharma Vs. Mahesh Kumar Verma, in this case, the defendant upon
attaining a higher post was allotted a premise by the railway company. In this
case, it was said that even when it was not known whether the land belonged to
the railway company or not, the officer will have to evacuate the premises after
retirement.

Section 123 – Estoppel of acceptor of Bill of Exchange, bailee or licensee

The section states that the acceptor of the bills of exchange cannot deny the
person who is supposed to draw the bills, from drawing it or endorsing it. Also,
no bailee or licensee can deny the fact that at the time when the bailment and
license began, the bailor and the licensor had the authority to make bailment or
to give license.

The person accepting the bills of exchange can deny that the bills of exchange
were really drawn by the very person who showed to have drawn them. If the
bailor mistakenly delivers the goods to some third party instead of the bailee, he
can prove that a third party has the right over the goods bailed against the bailor.

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This section demarcates that the person who accepts the bills of exchange
although cannot deny that the person drawing the bills has the authority to draw
or to endorse it but can deny that the bills were actually drawn by the person by
whom it appeared to have been drawn.

The bailee or the licensee cannot deny the fact that at the beginning of bailment
or grant, the bailor or the licensor had the authority to perform it. But a bailee
can prove that the third party to whom the goods were delivered instead of the
bailor had the right against the bailee.

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