Holding

The Railway Board was not bound by the provisional rate, the rate charged was not unreasonable, and there was no violation of Section 28; thus the appeal was dismissed.

Summary

Delhi Cloth & General Mills Ltd. set up a fertilizer plant at Kota and sought a concessional railway freight rate for transporting naptha from the Koyali refinery. The Railway Board, in a 1966 letter, offered a special rate of 85‑B but qualified it as subject to review when traffic began. When the company later requested to charge that rate, the Board refused and conditioned any concession on proof of uneconomic production. The company filed a complaint under Sections 41(1)(a) and (b) of the Railways Act, 1890, which was dismissed by the Railway Rates Tribunal. On appeal, the Supreme Court examined three questions: whether the Board was bound by its earlier assurance (promissory estoppel), whether the rate charged was unreasonable, and whether the Board violated Section 28 by giving undue preference. The Court held that the assurance was provisional, not binding; the rate was not unreasonable; and there was no breach of Section 28. Consequently, the appeal was dismissed.

Issues considered

Whether the Railway Board was bound to grant the concessional rate of 85‑B (Special) offered in its 1966 letter, invoking promissory estoppel.
Whether the freight rate charged for the carriage of naptha between Bajuva and Dadhevi was unreasonable under Section 41(1)(b) of the Railways Act, 1890.
Whether the Railway Board contravened Section 28 of the Railways Act, 1890 by showing undue preference or advantage to any traffic.

Legislation cited

Indian Railways Act, 1890s. 28, s. 41
Railways Act, 1980s. 41

Subjects

promissory estoppelrailway freight ratesunreasonable rateSection 28concessional ratefertilizer industrynaptha transportationpublic authority equity

Judgment

~· DELHI CLOTH & GENERAL MILLS LTD.
A
v.
UNION OF INDIA

OCTOBER 8, 1987

[SABY ASACHI MUKHARJI AND B

--
K. JAGANNATHA SHETTY, JJ.]

Refusal of permission by the Railway Board to charge conces-
sional station to station freight rate for the carriage of Naptha for a
fertilizer factory-complaint under section 41(1)(a) and (b) of the Rail-
ways Act, 1980, against.
c
- ~- The appellant, a company, set up a fertilizer factory at Kota in
Rajasthan. The factory manufactures urea for which the main raw
material is Naptha, which has to be transported from the Koyali Refin·
ery of the Indian Oil Corporation.
D
Before the actual setting up of the factory, the appellant requested
the Railway Board by letter for a concessional frieght rate for the
carriage of Naptha to the factory. The Railway Board by its letter EX C
S dated November 5, 1966, quoted station to station rate equal to 85-B
(special) as against the rate equivalent to classification 62.S·B requested
~ for by the appellant, and also stated that as the special rate was being E
quoted ahead of the actual setting up of the factory, the frieght rate

- would be reviewed when the traffic actually began to move.

When the factory was almost ready for operation, the appellant
again requested the Railway Board by letter for charging the rate under
classification 62-S·B instead of 85-B (special) quoted by it. The Railway F
Board refused to oblige. The appellant wrote another letter to the
•...i,
Board, requesting it to permit charging the rate equivalent to 85-B
(special) pending its final decision, as the movement of naptha was to
commence from June/July, 1968. The Railway Board refused to grant
that request also, saying that it could reconsider the question if on the
basis of the facts and figures of the cost of production vis-a-vis the sale G
price of the fertilizers, it could be established that the production of the
fertilisers at Kota was uneconomical unless freight concession on the
'i- ~ movement of naptha was granted.

The appellant filed a complaint under section 41(1)(a) and (b) of
the Railways Act, 1890, before the Railway Rates Tribunal. The Tri· H
383
384 SUPREME COURT REPORTS [1988] 1 S.C.R.

A bunal decided against the appellant. Aggrieved, the appellant appealed ~
to this Court by special leave for relief against the order and judgment
of the Tribunal.

Dismissing the appeal, the Court

B HELD: Three questions arise for consideration of the Court: (1)
whether the Railway Board was bound to allow the concessional rate
offered to the appellant, that is, 85-B (special) quoted in its letter Ex. C
5 dt. November 5, 1966, to the appellant, (2) whether the rate charged
for the carriage of the naptha between the stations concerned was un-
reasonable, and (3) whether the Railways were showing undue prefer-
ence or advantage in respect of other traffic in contravention of the
C provisions of section 28 of the Railways Act. [389E-Fl

Dealing with the third question first, which relates to the contra-
vention of section 28 of the Railways Act, the scope of the section was
considered by this Court in Rajgarh Jute Mills Ltd v. Eastern Railway
D and another, [1959] SCR 236 at 241, and the Railway Rates Tribunal,
considering the material on record in the light of the decision of the
Court in case, held that there was no evidence produced by the appel-
lant to justify any grievance under section 28. This conclusions ts per·
fectly justified. [390E; 391Cl
E
The second question above-said relates to the rate charged by the
Railway Administration being per se unreasonable. Even assuming, as
argued by appellant's counsel, that the Railways are earning some surp-
lus income, that by itself is no ground to hold that the frieght charged is
per se unreasonable. In the case of commodities of national needs such
-
F as foodgrains, crude oil etc., it may be necessary for the Railways to
charge below the operation cost, and to offset the loss, the Railways
may charge higher freight for some other classified commodities. The
cost of operation cannot by itself be the basis for judging the reason-
ableness of the rate charged. Counsel for the appellant also argued that
crude oil and naptha were comparable commodities for the purpose of
G carriage but there was disparity in the rates charged in respect of the
two, naptha being charged at a much higher rate. The Tribunal re-
jected the demand of the appellant for parity in frieghts, and the Court
cannot interfere with the finding to the Tribunal in this appeal under
Article 136 of the Constitution. On merits also, there is no justification
to demand that neptha should take the same freight rate as that of the
H crude oil. [391D, F-H; 3928, D-E]
. D.C.M. v. U.0.1. 385

Lastly, the firs.I question: H relates to the correctness of the view , A
taken by the Tribunal on doctrine of promissory estoppel consequent
upon the letter Ex. C 5 of the Railway Board. The Tribunal rejected this
claim of the appellant. Considering the conclusion of the Tribunal on
this question, it appears the Tribunal has not correctly understood the
doctrine of promissory estoppel: The party asserting the estoppel must
. have relied and acted upon the assurance given to him. It means the B
party has changed or altered the position by relying on the assuranc.e or
I ,,J. representation. The alteration of position by the party is the only indis-
pensable requirement of the doctrine. It is not necessary to prove
further any damage, detriment or prejudice to the party asserting the
' estoppel. "A promise intended to be binding, intended to be acted
I, - upon, and In fact acted upon, is binding", said Lord Denning, sitting as C
a trial judge in Central London Properties Ltd. v. High Trees House

k .
·
Ltd., [1947] K.B. 130. If the promisee has acted upon the promise, the
promisor is precluded from receding from his promise. The concept of
detriment as it is understood now is whether it appears unjust, un-
reasonable or inequitable that the promisor should be allowed to reslle
from his assurance or representation, having regard to what the pro- D
misee has done or refrained from doing in reliance on the assurance or:
representation. It is, however' quite fundamental that the doctrine or
promissory estoppel cannot be used to compel the public bodies or the
Government to carry out the representation or promise which is con·
trary to law or which is outside their authority or power. Secondly, the
estoppel stems from equitable doctrine. It requires that he who seeks E
equity must do equity. The doctrine, therefore, cannot also be invoked
if it is found to be Inequitable or unjust in its enforcement. For the
purpose or invoking the doctrine, it is not necessary for the appellant to
show that the insurance contained in Ex. C 5 was mainly responsible for
the establishing or the factory at Kola. There may he several represen-
tation to one party from different authorities in regard to different F
matters, or there m.1y he several representations from the same party in
regard to different matters. In the instant case, there was one represen-
tation by the Rajasthan government to snpply power to. the appellant's
_ factory at concessional rate. There was another representation from the
same government to exempt the appellant from payment of tax for a
certain period; If those representations have been relied upon by the G
appellant, the Court would compel the authorities to adhere to their
representations. What is required is the fact that the appellant was
induced to act on the representations. ·

The assurance given by the Railway Board in the letter Ex. C 5
was not clear and unqualified. It was subject to revie>y to be undertaken H
386 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

when the appellant started moving the raw material. Accordingly,
A
appellant was put to notice that it has to approach the Railway
administration again when it would review the whole matter. From the
tenor of Ex. C 5, the railways are entitled to say that they have reviewed
the matter and found no justification for a concessional frieght rate for
naptha; that does not amount to resiling from the earlier assurance. No
B question of estoppel arises in favour of the appellant in the case out of
the representation made in Ex C 5. The Court agreed with the conclu-
sion of the Tribunal but not for all the reasons stated.
y
Rajgarh Jute Mills Ltd. v. Eastern Railway &-Anr., [1959] SCR
234 at 241; Central London Properties Ltd. v. High Trees House Ltd.,
[1947] KB 130; Central Newbury Car Auctions Ltd. v. Unity Finance
c Ltd., [1956] 3 All ER 905 at 909; Article "Recent Development in the
Doctrine of Consideration"- Modern Law Review, Vol. 15, P. 5,
-(_
Grundt v. The Great Boulder Ptv. Gold, Mines Ltd., [1938] 59 CLR
641; Motilal Padampet Sugar Mills Co. Ltd. v. State of UP and Ors.,
[1979] 2 SCR 641at695= [1979] 2 SCC 409; Union of India and Ors. v.
D Godfrey Philips Ltd., [1985] 4 SCC 369= [1985] Sopp. 3 SCR 123 and
Halsbury's Laws of England- 4th Edn., Vol. 16, P. 1071, para 1595,
referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 223
of 1974.
E
From the Judgment and Order dated 13.7.1973 of the Railways
.!fates Tribunal, Madras in Complaint No. 2 of 1969.
...
K.K. Jain, Bishamber Lal, Pramod Dayal and A.D. Sanger for
the Appellant.
f
F
Bed Brat Barna, Ms. A. Subhashini, C.V. Sobba Rao, Mrs. S.
Suri, P. Parmeswaran and Anil Katiyar for the Respondent.
).-..
The Judgment of the Court was delivered by

G JAGANNA TIIA SHETTY, J. This appeal, with Special Leave, is
against the order and judgment dated July 13, 1973, of the Railways
Rates Tribunal Madras, in complaint filed by the appellant under Sec-
tion 41( 1) of the Indian Railways Act No. 9 of 1890. The background k~
facts are these:

H The appellant is a Company. It has set up a fertilizer factory at
;
D.C.M. v. U.O.I. [SHEITY, J.] 387

Kota in Rajasthan. It is said to be an industrially backward area. The
factory manufactures Urea for which the main raw material is Naptha. A
Naptha has to be transported from Koyali Refinery of Indian Oil
Corporation. The nearest railway station is Bajuva near Baroda. Tue
nearest railway station serving Company's factory is Dadhevi in
Rajasthan. The distance between Bajuva and Dadhevi is about 520
kms. For transportation, the Naptha has been classified by the Rail- B
way under Clause 110-B of the tariff.

Before the actual setting up of the factory, the Company, by its
Jetter dated September 5, 1966 requested the Railway Board for a
concessional frieght rate for the carriage of Naptha. It requested the
Railway Board for fixed Station to Station rate equivalent to classifica-
-. \_. tion 62.5-B. That would have meant reduction of about 43% in the C
J normal tariff under clause 110-B. In that letter it was pointed out that
if such concessional rate was not fixed, the Company would be put to
disadvantageous position as against the other factories located at ports
or near the refineries. The Railway Board by its letter Ex. C5 dated
November 5, 1966 agreed to quote station to station rate equal to 85-B o
(Special). In the said letter it was also stated that as the special rate
was being quoted ahead of the actual setting up of the factory the
freight rate need to be reviewed when the traffic actually begins to
move.

When the factory was almost ready for operation the company E
wrote a letter dated June 5, 1967 requesting the Railway Board for

- charging the rate under classification 62.5-B instead of 85-B(Special).
The Railway Board did not accede to the request. On May 31, 1968 the
company wrote another letter informing the Railway Board that the
movement of Naptha would commence from June/July 1968 and pend-
ing decision of the company's earlier request, the Railway Board may F
··~ permit charging the rate equivalent to 85-B (Special) alrea<)y offered
in terms of the letter Ex. C 5. The Railway Board refused to grant that
request also. The Railway Board, however, informed the Company in
the letter dated July 11, 1968 as follows:

"However, if on the basis of facts and figures your cost of G
production (date to be furnished for at least one complete
year) vis-a-vis the sale price of fertilizers, it can be estab-
lished that production of fertilizers at Kota is uneconomi-
cal, until freight concession on the movement of Naptha
from Bajuva/Trombay to Kola is granted, the Railway
Board would be prepared to reconsider the question." H
388 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

A On April 19, 1969, the company filed a complaint under Section ~
41(1)(a) and (b) of the Railways Act, 1890 before the Railway Rates
Tribunal Madras. The principal contentions raised in the complaint
are as follows:

"(i) The Railway Board was estopped and/or precluded
B from going back on the assurance of quoting station to
station concessional rate 85-B when the company had in-
vested a large amount of capital in setting up the factory at
a place away from the refinery or port (ii) The rate charges
by the Railway for the carriage of Naptha between two
stations-Bajuva and Dadhevi was unreasonable under
Section 4l(l)(b) of the Indian Railways Act, 1980, and (iii)
c The Railways were showing undue preference or advantage
in respect of other traffic and contravening the provisions
of Section 28 of the Indian Railway Act, 1890."
-(-
D With these and other contentions, the company requested the
tribunal to declare the rate charged for the carriage of Naptha as
unreasonable and to fix a reasonable rate for such carriage.

The Railway Board in its reply maintained that while quoting the
concessional rate equal to 85-B (Special) it was made clear to the
company that the rate was subject to review when the traffic starts \.--
E moving and that concessional rate was provisional in character. The
company did not construct the factory relying solely on the conces-
sional rate offered by the Railway Board. There was no scope for any
such understanding since the Railway reserved its right to determine
the correct rate when,the traffic started moving. It was later found that
the chemicals have been advisedly given low class rate with a view to
F encourage fertilizer industry and no further concession was necessary )oooo. .
to the company. It was further stated that the question of any undue _
prejudice or undue favour to any party does not arise when charging
the respective class rates for specified commodities.

G On these pleadings the Tribunal considered among others, the
following issues:

1. Whether freight charges, now charged, for the carriage of a
Company's traffic in Neptha from Bajuva to Dadhevi station
are unreasonable under Section 41(1) of the Indian Railways
I
H Act, 1890?
D.C.M. v. U.0.1. [SHE1TY, J.J 389

2. Whether the Railways are contravening Section 28 of the A
Indian Railways Act in charging the respective class rates for
commodities naptha, chemical manures, divisions A & B,
Urea and Gypsum?

3. Whether the Railways are es topped by the doctrine of promis-
sory estoppel in view of the assurance given in the letter Ex. B
CS?

< The Tribunal determined all these questions against the com-
pany. It was held that there was no unreasonableness in the rate
charged for the carriage of Naptha from Bajuva to Dadhevi. The
Railways are not contravening Section 28 of the Railways Act. The rate C
charged has not caused any prejudice to the company. On the question
of promissory estoppel, the Tribunal held that the assurance given by
the Railway Board in the letter Ex. CS was not mainly responsible for
setting up of fertilizer factory at Kota. It was further held that even if
Ex. CS was an assurance to the Company the withdrawal of that assur- D
ance has not adversely affected the interests of the company.

Upon the submissions made by learned counsel on both sides,
the following questions arise for our consideration:

(1) Whether the Railway Board was bound to give the conces- E
sional rate offered to the company under Ex. CS dated
November S, 1966?

(2) Whether the rate charged for the carriage ofNaptha between
Bajuva and Dadhevi is unreasonable?
F
(3) Whether the Railways are showing undue preference or
advantage in respect of other traffic and contravening the
provisions of Section 28 of the Railways Act?

We may conveniently take up third question first for consi-
deration. G

~ -;l The relevant provisions of the Railways Act, 1890, which have a
material bearing on the question are these:

Section 41 provides for filing complaints against Railway Administra-
tion. The Section provides as follows, so far as it is material: H
390 SUPREME COURT REPORTS [1988] 1 S.C.R.

41(1) Any complaint that a railway administration
A
(a) is contravening the provisions of Section 28 or

(b) is charging for the carriage of any commodity between two
stations a rate which is unreasonable, or
B
(c) x x x x x

may be made to the Tribunal and the Tribunal shall hear and
decide any such complaint in accordance with the provisions
of this chapter.
c Se~tion 28 provides:

"28. A Railway administration shall not make or give any
undue or unreasonable preference or advantage to, or in
favour of, any particular person or railway administration,
D or any particular description of traffic, in any respect what-
soever, or subject any particular person or railway admini>-
tration or any particular description of traffic to any undue
or unreasonable prejudice or disadvantage in any respect
whatsoever."

E The third question formulated by us relates, to the contravention
of Section 28 of the Railways Act. The scope of this Section has been
considered by this Court in Rajgarh Jute Mills Ltd. v. Eastern Railway
and another, [ 1959] SCR 236 at 241. There it was observed that a party
who complains against the railway administration that the provisions
of Section 28 have been contravened must establish that there has been
-
F preference between himself and his goods on the one hand and his
competitor and his goods on the other. Gajendragadkar, J. (as he then
was) observed:

"Section 28 is obviously based on the principle that the
power derived from the monopoly of railway carriage must
G be used in a fair and just manner in respect of all persons
and all descriptions of traffic passing over the railway area.
In other words, equal charges should normally be levied
against persons or goods of the same or similar kinds pas-
sing over the same or similar area of the railway lines and
under the same or similar circumstances; but this rule does
H not mean that, if the railway administration charges un-
D.C.M. v. U.0.1. (SHETIY, J.] 391

equal rates in respect of the same or similar class of goods A
travelling over the same or similar areas, the inequality of
rates necessarily attract the provisions of S. 28. All cases of
unequal rates cannot necessarily be treated as cases of pre-
ference because the very concept of preference postulates
competition between the person of traffic receiving prefer-
ence and the person or traffic suffering prejudice in conse- B
quence. It is only as between competitors in the same trade
that a complaint-0f preference can be made by one in refer-
ence to the other."
In the light of these principles, the Tribunal considering the
material on record held that there is no evidence produced by the
Company to justify any grievance under Section 28. We see no reason C
to disagree with this conclusion. It is, in our opinion, perfectly justi-
fied. In fact Mr. K.K. Jain learned counsel for the appellant also did
not seriously dispute the correctness of that finding recorded by the
Tribunal.
We may now turn to the second question.Mr. K.K. Jain urged D
that the rate charged by the Railway Administration is per se un-
reasonable. Here again the onus to prove the alleged unreasonable-
ness of the freight rests on the company. It is for the company to
establish that the rate charged by the Railway Administration for the
carriage of Naptha is unreasonable. Of course, this onus could be
discharged by relying upon the material produced by the Railways. E
Mr. Jain, therefore, relied upon a statement Ex. C46 in support of his
case. Ex. C46 is a statement of surplus "working cost" in respect of
carriage of Naptha from Bajuva to Dadhevi. It is, in our opinion, not
necessary to analyse the statement. Even assuming that the railways
are earning some surplus income after deducting the operation cost
that by itself is no ground to hold that the freight charged is per se F
unreasonable. It must be born in mind that the railways are run as
commercial undertaking and at the same time it being an instrumen-
tality of the State, should serve the national interest as well. There is
however, no obligation on the railways to pass on the extra amount
realised by the carriage of goods to customers. Nor it is necessary to
share the profit with the commuters. As Mr. Barna learned counsel G
for the Railways said that in the case of commodities of national needs
such a foodgrains, crude oil etc., it may be necessary for the Railways
to charge below the operation cost. To off set such a loss the Railways
may charge higher freight for certain other classified commodities.
Therefore, it seems to us, that the cost of operation cannot by itself be
the basis for judging the reasonableness of the rate charged. H
392 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

It was next urged by Mr. K.K. Jain that the crude oil and Naptha
A
are considered as comparable commodities for the purpose of car- ~-
riage. The crude oil carries the rate equal to class 85-B(old), 85(new)
while Naptha carries rate 110-B(old), 105-B(new). In terms of
amounts it works out at Rs.59.45 for crude oil as against Rs. 73.13 for
Naptha. The counsel urged that there is no justification shown for this
fl wide disparity in the first place. Secondly, the freight rate of crude oil
was the rate offered to the company under Ex. C5 and the denial of
that rate without any good reason is arbitrary. This argument though
attractive does not carry conviction if one analyses the evidence on
record. Crude oil has been clubbed with Glycerine, fruit juices and
syrups, fibres, flax etc. Naptha has been clubbed with Aviation Spirit,
Petrol, Petroleum, Ether and solvent oil. From the evidence produced
c by the Railways Naptha has been classified as a dangerous commodity
with the flash point below 24.4°C spontaneously. The crude oil has no
such dangerous characteristics. It is also on record that Naptha re-
quires special type of tank wagons and the Railways have to take
special precautions for transportation. These and other relevant
D factors have been taken into account by the Tribunal for rejecting the
demand of the company for parity in freights. This Court cannot,
interfere with such a finding in this appeal under Article 136 of the
Constitution. On the merits also, we see no justification to demand
that Neptha should take the same freight rate as that of crude oil.
We may now revert to the first question. It relates to the correct-
E ness of the view taken by the Tribunal on the doctrine of promissory
estoppel resulting by the letter Ex. C5 of the Railway Board. The
Tribunal has rejected this claim of the company by summarising its
conclusion in the following terms: ..
"We must, therefore, hold that the assurance contained in
F Ext. C5 was not mainly responsible for the setting up of the
Fertilizer Factory at Kota. 15.3. Even if it was held that Ex.
C5 was a definite encouragement to the complainant to set
up the Ko ta factory, there is no evidence on record to show
that the withdrawal of the concession by Ex. C 12 has
·adversely affected the complainant. We will show in the
G succeeding paragraphs that the complainant has suffered
no material injury by virtue of the withdrawal of the con-
cessional rate and the charging of the normal rate. It is well
settled that the principle of estoppel cannot be applied un-
less the person pleading estoppel can show that he has been
prejudiced b'y the conduct of the party on whose assurance
he has acted."
D.C.M. v. U.0.1. [SHETIY, J.] 393

Here the Railways Rates Tribunal apparently, appears to have
A
gone off the track. The doctrine of promissory estoppel has not been
correctly understood by the Tribunal. It is true, that i11 the formative
period, it was generally said that the doctrine of promissory estoppel
cannot be invoked by the promisee unless he has suffered 'detriment'
or 'prejudice'. It was often said simply, that the party asserting the
estoppel must have been induced to act to his detriment. But this has B
now been explained in so many decisions all over. All that is now
required is that the party asserting the estoppel must have acted upon
the assurance given to him. Must have relied upon the representation
made to him. !t means, the party has changed or altered the position
by relying on the assurance or the representation. The alteration of
position by the party is the only indispensable requirement of the C
doctrine. It is not necessary to prove further any damage, detriment or
prejudice to the party asserting the estoppel. The Court, however,
would compel the opposite party to adhere to the representation acted
upon or abstained from acting. The entire doctrine proceeds on the
promise that it is reliance based and nothing more.
D
This principle would be clear if we study the cases in which the
doctrine has been applied even since it was burst out into sudden blaze
in 1946. Lord Denning in Central London Properties Ltd. v. High
Trees House Ltd., [ 1947] K.B. 130 sitting as a trial judge, asserted:

"A promise intended to be binding, intended to be acted E
upon, and in fact acted upon is binding ....... "

The history of the High Trees principle is too well known to bear
repetition. It will be enough to make the following points. The prom-
isor is bound because he led the promisee to commit himself to change
the position. If the promisee has acted upon the promise, the promisor F
is precluded from receding his promise. No further detriment to the
promisee upon his temporal interests need be established. This position
has been made clear by Lord Denning himself in his article "Recent
Developments in the Doctrine of Consideration" Modern Law Review,
Vol. 15 at p. 5.
G
"A man should keep his word. All the more so when the
promise is not a bare promise but is made with the inten-
tion that the other party should act upon it. Just a contract is
different from tort and from estoppel, so also in the sphere
now under discussion promises may give rise to a different
equity from other conduct. H
394 SUPREME COURT REPORTS [ 1988] I S.C.R.

The difference may lie in the necessity of showing "detri-
A ment" where one party deliberately promises to waive,
modify or discharge his strict legal rights, intending the
other party to act on the faith of promise, and the other
party actually does act on it, then it is contrary, not only to
equity but also to good faith, to allow the promisor to go
back on his promise. It should not be necessary for the
other party to show that he acted to his detriment in re-
liance on the promise. It should be sufficient that he acted
on it."

The principle governing this branch of the subject cannot be
better put then in the wocds of a great Australian jurist, DIXON, J. in
c Grundt v. The Great Boulder Pty. Gold Mines Ltd., [1938] 59 CLR
641. There he said:

"It is often said simply that the party asserting the estoppel
must have been induced to act to his detriment. Although
D substantially such a statement is correct and leads to no
misunderstanding, it does not bring out clearly the basal
purpose of the doctrine. That purpose is to avoid or pre-
vent a detriment to the party asserting the estoppel by com-
pelling the opposite party to adhere to the assumption
upon which the former acted or abstained from acting. This
means that the real detriment or harm from which the law
seeks to give protection is that which would flow from the
change of position if the assumption were deserted that led

F
to it. So long as the assumption is adhered to, the party who
altered his situation upon the faith of it cannot complain.
His complaint is that when afterwards the other party
makes a different state of affairs the basis of an assertion of
-
right against him then, if it is allowed, his own original
change of position will operate as a detriment. His action
or inaction must be such that if the assumption upon which
}-
he proceeded were shown to be wrong, and an inconsistent
state of affairs were accepted as the foundation of the rights
G and duties of himself and the opposite party, the consequ-
ence would be to make his original act or failure to act a
source of prejudice."

This passage was referred to, with approval, by Lord Denning in
Central Newbury Car Auctions Ltd. v. Unity Finance Ltd., [1956] 3 All
H E.R. 905 at 909. The said passage has also been quoted, with approval,
D.C.M. v. U.0.1. [SHETIT, J.) 395

by Bhagwati, J. (as he then was) in Motilal Padampat Sugar Mills Co. A
Ltd. v. State of U.P. & Ors., [1979] 2 SCR 641 at p. 695= 1979 (2) SCC
409. The learned Judge then said:

"We do not think that in order to invoke the doctrine of
promissory estoppel it is necessary for the promisee to
show that he suffered detriment as a result of acting in B
reliance on the promise. But we may make it clear that if by
detriment we mean injustice to the promisee which could
result if the promisor were to recede from his promise then
detriment would certainly come_ in as a necessary ingre-
dient. The detriment in such a case is not some prejudice
suffered by the promisee by acting on the promise, but the
prejudice which would be caused to the promisee, if the c
promisor were allowed to go back on the promise."

The view taken in Motilal Padmapat Sugar Mills case (supra) has
been reiterated in Union of India & Ors. v. Godfrey Philips India Ltd.,
[1985] 4 sec 369= [ 1985] Supp 3 SCR 123. D

The concept of detriment as we now understand is whether it
appears unjust, unreasonable or inequitable that the promisor should
be allowed to resile from his assurance or representation, having re-
gard to what the promisee has done or refrained from doing in reliance
on the assurance or representation. E

It is, however, quite fundamental that the doctrine of promissory

- estoppel, cannot be used to compel the public bodies or the Govern-
ment to carry out the representation or promise which is contrary to
law or which is outside their authority or power. Secondly, the estop-
pel stems from equitable doctrine. It, therefore, requires that he who F
seeks equity must do equity. The doctrine, therefore, cannot, also be
invoked if it is found to be inequitable or unjust in its enforcement.

We may also state that for the purpose of invoking the doctrine,
it is not necessary for the company to show that the assurance con-
tained in Ex. CS was mainly responsible for establishing the factory at G
Ko ta. There may be several representations to one party from diffe-
rent authorities in regard to different matters. Or, there may be
several representations from the same party in regard to different
matters. As in the instant case, there was one representation by the
Rajasthan \]overnment to supply power to the company at conces-
sional rate. There was another representation from the same Govern- H
396 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

A ment to exempt the company from payment of tax for certain period.
There may be other representations from the same or some other
authorities. If those representations have been relied upon by the
company, the Court would compel those parties to adhere to their
respective representations. It is immaterial whether each of the rep-
resentations was wholly responsible or partly responsible for locating
B the factory at Kota. It is sufficient if the company was induced to act
on that representation.

The last and final aspect of the matter to which attention should
be drawn is that for the purpose of finding wheth~r an estoppel arises
in favour of the person acting on the representation, it is necessary to
C look into the whole of the representation made. It is also necessary to
state that the representation must be clear and unambiguous and not
tentative or uncertain. In this context we may usefully refer to the
following passage from Halsbury's Laws of England, Halsbury's Laws
ofEngland4thEdn. Vol. 16p.1071para 1595.
D
"1595. Representation must be unambiguous To found an
estoppel a representation must be clear and unambiguous,
not necessarily susceptible of only one interpretation, but
such as will reasonably be understood by the person to
whom it is made in the sense contended for, and for this
E purose the whole of the representation must be looked at.
This is merely an application of the old maxim applicable to
all estoppels, that they "must be certain to every intent
"

The question now is whether the assurance given by the Railway
F Board in the letter Ex.CS was clear and unqualified. But unfortu-
nately, it is not so. It was subject to review to be undertaken when the ( ·~
company starts moving the raw material. Ex. CS reads:- r-
"

G New Delhi I,
Dated 5 Nov., 1966
•
Dear Sir,

Sub: Integrated Fertilizer-PVC project at Kota,
H Rajasthan Rail movement of Naptha.
D.C.M. v. U.O.J. {SHETTY, J.] 397

Ref: Your letter No. SFC/Gen-72 A
dated 5.9.1966.

I am directed to state that the Railway Board agree to
quote a special rate equal to class 85-B (Special) CC: K for
transport of Naptha in train loads from Bombay or Koyali
8
to Kola, for manufacture of fertilizers. The proposed spe-
cial rate will apply at owner's risk.

Since the special rate is being quoted ahead of the
actual setting up of the factory the rate may need to be
<
reviewed when the traffic actually begins to move. The
Railway may accordingly be approached before the traffic C
actually starts moving.

Yours faithfully,

Sd/- R.L. Sharma
D
for Secretary
Railway Board"

What does this letter mean? The first part of the letter offering
the concessional rate equal to class 85-B (Special) has been completely
watered down in the second part of the letter. It has been expressly
~ stated that the rate may need be reviewed when the traffic actually
E
begins to move. The company was put to notice that it has to again
approach the Railway Administration. The Railway authorities now

- states that they have reviewed the whole matter and found no justifica-
tion to offer a concessional freight rate for Naptha, since fertilizers are
deliberately given a low classification in the tariff. From the tenor of
Ex. C 5 the Railways are entitled to state so, and it does not amount to F
j resiling from the earlier assurance. No question of estoppel arises in
-""\favour of appellant out of the representation made in Ex. C5.

We, therefore, agree with the conclusion of the Tribunal but not
for all the reasons stated.
G
In the result the appeal fails and is dismissed. In the circum-
stances, however, we make no order as to costs.
~ j.
S.L. Appeal dismissed.

/