It’s a human tendency to make claims, some true, some false. The problem arises when a person hearing this claim acts the same, to discover that the claim is wrong. This is where the Doctrine of Estoppel comes into play. This principle was established in the landmark case of Pickar vs Sears. Estoppel as a principle of equity has stopped many claimants from going back on their words especially in situations where the person who “acted on these claims” has suffered losses. The word ‘Estoppel’ is derived from an Old French word ‘estoupail’ which means ‘stopper, bung’. This term is derived from the legal maxim, “allegans contraria non-est audiendus” which implies that a person alleging contradictory facts is not to be heard, and this is the species of presumptio Juris et de jure, the fact presumed is taken to be true against the party stating it.
Chapter 8, Section 115 to 117 of the Indian Evidence Act 1872 provides the Doctrine of Estoppel. This Doctrine under Section 155 is not as per the rule of equity rather is as per the rule of evidence which is applied in the court of law.
Types of Estoppel
Now, Let’s discuss the Types of Estoppel.
Estoppel by record
Also known as the Quasi record. Estoppel, by the record, is created when a judgement on a particular matter is delivered by a competent court. This Doctrine is not similar to Res Judicata. Once the court delivers its judgment, the parties, representative, etc are bound by this judgement decision. They are ‘estopped’ from filing another suit in the same subject matter nor are they allowed to dispute the facts of the case unless it is set aside by procedure constituted to do the same. (Appeal to H.C and S.C.). The judgement should be delivered by a competent court, failure of this will attract. Section 44 of the Indian Evidence Act, 1872 states that in case the party wants to avoid the application of the doctrine of estoppel, he/she can plead that the court delivering the judgement has no jurisdiction over the matter.
Estoppel by Deed
As the title itself indicates, when an agreement deed is entered into by 2 parties based on a record regarding few facts, mentioned and agreed, then neither the parties nor any person claiming through representatives shall be allowed to deny it. This principle is applicable only between parties and privies. No estoppel rises from material that is non-binding and irrelevant to the matter. If a deed is tainted or fraudulent, no estoppel arises from it.
When a party is given two options related to one subject matter and the party elects (chooses) option 1. Hence the party trade-offs option 2 and are estopped from later claiming the same.
When a person tries to bring legal action against his statement which was a basis of action for the other person then this legal principle prohibits the same. So, such a plaintiff is stopped from bringing a suit against the defendant who had acted according to the commands of the plaintiff.
Estoppel on a Point of law
The principle of estoppel can never be invoked to defeating the provisions of law.
For example under Contract Act, any minor (under 18 years) is not authorised to enforce a contract if not represented by a guardian. So, if a minor misrepresenting himself as a major enters a contract later cannot take the defence of estoppel in its absolute sense as the contract will be void ab initio.
The court held that the doctrine of estoppel of evidence which is pleaded under certain circumstances, cannot be used to discharge a party from the obligation to obey a law.
Section 115 of Evidence Act 1872
Section 115 defines estoppel under the Evidence Act as – when any person deliberately declares something or causes to believe because of some act or omission and other person acts on the same declaration or belief then such person (1st one) is prohibited from denying the declaration or belief later in a suit or proceeding. This section gives force to the fact that whatever is admitted in the court of law cannot be denied. In rare cases, the admission of the same will depend on logical reason (condonation) and the discretion of the court.
Conditions for application under Section 115
In the case of Chhaganla Mehta vs. Haribhai Patel, the Supreme Court has laid conditions that are to be satisfied for application of Section 115:
- The representation/declaration must be made by one person to another person.
- The representation made must be based on existing facts and not as to the law.
- The representation must be made in a manner that makes the other person believe that it is true and he must act upon that belief.
- The person to whom the representation/declaration would be made should suffer a loss because of this.
Some Exceptions – Section 115
- Not applicable to matters where both parties have the knowledge of truthfulness.
- Not applicable against statutes.
- Not applicable to ultra vires orders and decisions.
Section 116 of Evidence Act 1872
This section stops a tenant from denying that at the time of commencement of the tenancy the landlord did not have the title of the property. It also applies to the licensee of a property.
The tenant estopped from denying the title to the landlord, neither at the beginning of the tenancy nor during its continuance. Once the tenancy ceases to exist, the tenant will have the right to deny title to the landlord.
Section 117 of Evidence Act 1872
This section demarcates that the person who accepts the bills of exchange cannot deny that the person drawing the bills has the authority to endorse but can deny that the bills were actually drawn by the person by whom it appears to have been drawn.
The bailee or the licensor 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.
This is a unique principle that safeguards the right of the innocent person who because of a false representation by the accused suffers losses. It casts a liability on the parties to be careful of their representation since the interest of the other party is protected. Only parties and no strangers can take advantage of this. The Doctrine of Estoppel is only a rule of law. It does not give rise to a cause of action.