Promissory estoppel applies to public sector entities like LIC when applicants have altered their position relying on a published housing scheme and remitted substantial payments; subsequent changes in policy after removal of legal impediments cannot defeat such claims. The Orissa High Court declines to treat the principle of alternate remedy as an absolute bar to writ jurisdiction in such circumstances. This judgment clarifies and sustains earlier principles rather than overruling precedent, strengthening protection for allottees under government-backed housing schemes.
Summary
| Category | Data |
|---|---|
| Case Name | WP(C)/6240/2015 of DR.SWAPNA KABIRAJ Vs STATE OF ORISSA; CNR ODHC010235972015 |
| Date of Registration | 02-04-2015 |
| Decision Date | 10-09-2025 |
| Disposal Nature | Disposed Off |
| Judgment Author | MR. JUSTICE DIXIT K.S. |
| Court | Orissa High Court |
| Bench | Single Judge Bench (Mr. Justice Dixit Krishna Shripad) |
| Precedent Value | Binding within Orissa; persuasive for other High Courts |
| Overrules / Affirms | Affirms existing principles of promissory estoppel and writ jurisdiction |
| Type of Law | Administrative Law, Constitutional Law, Property Law |
| Questions of Law |
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| Ratio Decidendi | The Court held that once applicants alter their position and suffer detriment relying on a clear housing scheme published and acted upon by the LIC (a public authority), promissory estoppel applies and binds the authority to complete the allotment unless barred by statutory provision. A change in policy or drive to maximise commercial benefit cannot defeat the legitimate expectation created by the initial scheme, particularly where the legal impediment (absence of ROR due to forest status) was later removed. The Court also held that the doctrine of alternate remedy does not pose an inflexible bar where core facts are settled and delay would cause undue hardship. Equitable relief can be moulded to balance equities—here by permitting the LIC to collect an additional 10% towards updated market conditions. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
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Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Orissa |
| Persuasive For | Other High Courts, Supreme Court |
| Follows | Union of India v. Indo-Afghan Agencies; Motilal Padampat Sagar Mills v. State of Uttar Pradesh; Ramana Dayaram Shetty v. International Airport Authority of India |
| Distinguishes | Bareilly Development Authority v. Ajai Pal Singh (where the authority had retained explicit right to change policy) |
What’s New / What Lawyers Should Note
- Reiterates that promissory estoppel is enforceable against public sector undertakings (such as LIC), especially when applicants have altered their position in reliance on an unambiguous promise or scheme.
- Clarifies that the doctrine of alternate remedy is not an absolute bar to writ jurisdiction when facts are largely undisputed and relegation to civil suit would cause undue hardship or delay.
- Holds that a public authority cannot unilaterally shift to a more lucrative policy (auction) after applicants fulfilled original conditions and legal bar (here, lack of ROR) is subsequently removed.
- Distinguishes cases where token application money is paid from cases like the present where substantial consideration has been remitted and action taken in furtherance of allotment.
- Establishes that where market circumstances have changed due to delay beyond control, equitable adjustment (e.g., additional payment) is permissible but does not nullify original rights of allottees.
Summary of Legal Reasoning
- Maintainability of Writ Petitions: The Court rejected the argument that the doctrine of alternate remedy or existence of factual disputes bar writ jurisdiction. It held that where the facts are substantially on record and delay would lead to injustice, the writ court may intervene.
- Applicability of Promissory Estoppel: The Court applied Union of India v. Indo-Afghan Agencies and Motilal Padampat Sagar Mills, reiterating that promissory estoppel can give rise to an enforceable cause of action against State and its instrumentalities unless enforcing the promise is contrary to law.
- Distinction Between Estoppel and No Estoppel Against Law: Citing Jit Ram Shiv Kumar, the judgment accepts that there can be no estoppel against statutory provisions but clarifies that in the present case, after the legal impediment (non-entry in ROR due to forest law) was removed, no statutory bar remained.
- Policy Change and Executive Action: The Court found that the LIC’s shift to an auction model, after applicants’ reliance and payment, was arbitrary and inequitable—especially since a similar policy was not reserved at the outset, and most similar flats had already been allotted through lottery.
- Distinguishing Earlier Bench Decision: The present facts were distinguished from those of Nihar Ranjan Biswal’s case, noting substantial monetary payments and active reliance here, as against only token fees in the prior matter.
- Balancing Equities: While protecting the rights of allottees under promissory estoppel, the Court acknowledged rising market value and allowed for an additional 10% payment by petitioners, balancing interests.
- Substantial Reliance on Established Authorities: The Court relied on Indo-Afghan Agencies, Motilal Padampat, Ramana Dayaram Shetty, and distinguished Bareilly Development Authority, reinforcing the obligation of fairness and consistency by public authorities.
Arguments by the Parties
Petitioners:
- Acted upon the LIC’s express promise through brochure and lottery, paid Rs. 1,00,000/- each.
- Delay due to absence of LIC’s name in the ROR was not their fault.
- When legal impediment (ROR) was removed, LIC could not unilaterally cancel and shift to auction.
- Sought direction to formalize allotment as per original promise, invoking doctrines of estoppel and promissory estoppel.
LIC/Respondent:
- Defended cancellation of allotments and decision to auction, claiming changed policy is lawful and aimed at maximizing statutory corporation’s returns.
- Claimed estoppel and promissory estoppel don’t apply against law or public interest.
- Pointed to earlier decision (WP(C) No. 9180/2025) where similar challenge was dismissed.
- Offered to refund applicants’ deposits with interest; asserted that no property interest was created by mere allotment.
Factual Background
The case centered around the allotment of flats to policyholders under LIC’s “Policy Holders’ Housing Scheme” in Bhubaneswar. After land was leased to LIC by the State, a large majority of flats were allotted in Phase-I. The remaining flats in Phase-II were offered via a January 2014 brochure, for which applicants paid Rs. 1,00,000/- and were allotted flats through a lottery. Registration of leases was delayed due to legal impediment (land records not in LIC’s name as land was earlier classified reserve forest). Once the ROR issue was resolved and LIC became eligible to convey, it instead cancelled prior allotments, deciding instead to auction. Aggrieved, allottees filed writ petitions seeking enforcement of the original scheme.
Statutory Analysis
- The Court discussed the statutory amendments to Section 22 of the Registration Act, 1908, making updated Record of Rights mandatory for registration of conveyances.
- The bar under the Forest (Conservation) Act, 1980, against transfer of forest land for non-forest use was addressed and found to have been resolved in the petitioners’ favor.
- The Court analyzed Section 115 of the Indian Evidence Act (estoppel) and the jurisprudence of promissory estoppel in administrative law.
- The distinction between executive policy (which may be subject to estoppel where acted upon) and statutory provisions (where no estoppel lies) was emphasized.
Procedural Innovations
- Clarifies that the mere existence of an alternate remedy (such as civil suit) is not a rigid bar to writ jurisdiction, especially where the record is clear and denial of writ could prolong hardship.
- Adopts (and rationalizes) a balancing of equities approach: directs further payment to address market value change while also ensuring specific performance of original allotment.
Alert Indicators
- ✔ Precedent Followed – Affirms (rather than overrules) existing principles on promissory estoppel and writ maintainability against State instrumentalities.
- 🔄 Distinguishes Prior Decision – Explains why the earlier coordinate bench’s ruling on similar facts does not control the present outcome.