No Estoppel Against a Statute: The Limit on Section 121 of the Bharatiya Sakshya Adhiniyam, 2023

Estoppel binds a party because of what he represented. A statute binds everybody because Parliament enacted it. Where the two collide the statute prevails, and the rule is stated absolutely: there can be no estoppel against a statute. The proposition is easy to state and is constantly invoked too widely — the question in every case is not whether a statute is somewhere in the picture but which statutory provision the estoppel would actually defeat.

1. The Rule

Nothing in Section 121 says that it yields to a statute. The limitation is judge-made, and it rests on two propositions of principle.

A statute represents the will of the legislature. Parties cannot, by what they say to one another, dispense with what Parliament has enacted for the general good. If they could, every statutory requirement would be optional between consenting persons, and the protection the legislature intended would be available only to those who had not been persuaded to give it up.

Estoppel is a rule of evidence. It prevents a party from proving something. A statutory requirement operates whether or not anybody proves anything — a void transaction is void because the statute says so, not because a court has been persuaded of it, and no rule about what may be proved can alter that.

2. The First Limb — Defeating a Statutory Provision

Where a statute prescribes how something must be done, or prohibits it, or makes a transaction void for non-compliance, no representation and no conduct can supply what the statute requires.

2.1 Void transactions

A party who has represented that a transaction is valid is not estopped from afterwards showing that it was void for want of a statutory formality or for illegality. A void transaction has no legal existence, and an estoppel cannot give it one.

The point is not confined to the party who made the representation. Where a statute makes a transaction void, the court itself cannot enforce it, and the question is not one that depends on what either party is permitted to say.

2.2 Statutory protections enacted in the public interest

The clearest body of authority concerns provisions enacted for the protection of a class rather than for the benefit of an individual, and the reasoning runs exactly parallel to the law about waiver.

The test the decision supplies works for estoppel as it does for waiver.

2.3 Statutory duties and powers

An authority cannot be estopped from performing a statutory duty, nor from correcting an act done without statutory power. A representation by an officer that a thing would be done, or had been done, does not enlarge the power the statute conferred on him.

The reasoning is that the power exists for a public purpose and is held on behalf of the public. An officer who purports to bind the authority beyond his statutory power is doing something the statute did not authorise, and an estoppel would allow him to enlarge by representation what the legislature confined.

3. The Second Limb — Jurisdiction

Consent, conduct, acquiescence and representation cannot confer jurisdiction on a court or tribunal that the statute does not confer, and cannot prevent a party from taking the objection.

The decision concerns res judicata, and the principle it states is wider. If an erroneous judicial decision cannot confer jurisdiction, the agreement or conduct of parties plainly cannot. A tribunal exercising a jurisdiction it does not have is acting without authority, and no amount of participation by the parties cures it.

Three practical consequences follow.

• An objection to jurisdiction may be taken at any stage, including in appeal and in execution, and a party who participated without objection is not estopped.
• Parties cannot agree to confer jurisdiction. An agreement that a particular court shall try a dispute is effective only to choose among courts which already have jurisdiction; it cannot create jurisdiction where none exists.
• A decree passed without jurisdiction is a nullity and may be challenged collaterally, which is the sharpest expression of the rule.

4. Other Applications

Three further situations recur and each is an application of the same principle.

4.1 No estoppel on a question of law

A representation as to the legal position — as distinct from a fact — ordinarily founds no estoppel. A party who wrongly told the other that a statute did not apply, or that a transaction was exempt, is not estopped from asserting the true legal position, because the law is what it is and neither party's belief alters it.

The rule has a qualification. Where the representation is as to a fact which happens to have legal consequences, the estoppel operates in the ordinary way — the illustration to Section 121 concerns a representation about the ownership of land, which is a mixed question, and the estoppel is given effect.

4.2 Limitation

Limitation is a good illustration of a statutory provision that conduct cannot displace. The Limitation Act, 1963 directs that a suit instituted after the prescribed period shall be dismissed, although limitation has not been set up as a defence. The court is therefore bound to dismiss it, and no conduct of the defendant — participation, delay in taking the point, even an assurance not to take it — relieves the court of that obligation.

The contrast with an ordinary defence is instructive. Most defences may be given up; this one is addressed to the court, and it is for that reason outside the reach of estoppel and waiver alike.

4.3 Taxation

The field in which the rule is most often invoked. A taxing statute imposes liability by its own force, and a representation by an officer that tax is not payable, or that a particular treatment is available, does not displace the charging provision. Equally, an assessee who accepted a treatment in one year is not estopped from contending for the correct position in another, because the liability arises under the statute and not under any agreement.

The qualification is that a representation about a fact — the existence of a document, the date of a transaction, the receipt of a sum — is in a different position, and may found an estoppel in the ordinary way.

5. Promissory Estoppel and the Statute

Promissory estoppel operates against the Government, and the relationship between that doctrine and the rule about statutes needs to be stated carefully because the two appear to pull in opposite directions.

The apparent tension is resolved by distinguishing what the promise is asked to do.

6. What the Rule Does Not Cover

The proposition is stated absolutely and is applied too widely. Four situations lie outside it.

Where the estoppel operates on a question of fact within a statutory framework. A statute governing a transaction does not immunise every fact about it. Whether a notice was served, whether a sum was received, whether a document was executed — these are facts, and estoppel may operate on them in the ordinary way.

Where the provision was enacted for the benefit of an individual. Waman Shriniwas Kini draws the line at public policy, and a provision conferring a benefit that the individual is free to forgo is not within the rule.

Where the statute itself contemplates the arrangement. Where a statute permits parties to contract out, or confers a discretion which has been lawfully exercised, giving effect to what was agreed is not defeating the statute but applying it.

Where the estoppel concerns the exercise of a power, not its existence. An authority with power to act may be held to the manner in which it represented it would act, provided the representation did not exceed the power. This is the field in which legitimate expectation and promissory estoppel operate, and it is not touched by the rule.

7. The Parallel Limits

The same principle limits every doctrine in this family, and the parallelism is worth seeing whole.

What unites them is a single idea: the arrangements of private parties operate within the framework the legislature has laid down, and cannot be used to escape it. Each doctrine reaches its limit at the same place, and the limit is the statute.

8. Practical Points

1. Identify the provision. A plea of no estoppel against a statute must name the provision the estoppel would defeat.
2. Establish its character. Was it enacted for the benefit of an individual, or in the public interest? Waman Shriniwas Kini supplies the test.
3. Separate the two limbs. Defeating a provision and conferring jurisdiction are different objections and are met differently.
4. Take a jurisdiction objection whenever it arises. It is not lost by participation, by delay, or by having been decided wrongly earlier.
5. Where the estoppel is on a fact, say so. A statutory framework does not immunise the facts arising within it.
6. Against the Government, establish the source of the power. Promissory estoppel holds the State to a promise it was empowered to make, and to nothing else.
7. Remember that limitation is addressed to the court, and cannot be given up by the parties or displaced by conduct.

9. The Position Stated Shortly

1. There is no estoppel against a statute, and the rule rests on the will of the legislature and on the evidentiary character of estoppel.
2. Two limbs — an estoppel cannot defeat a statutory provision, and cannot confer jurisdiction the statute withholds.
3. A provision founded on public policy cannot be displaced; one enacted for an individual's benefit may be — Waman Shriniwas Kini.
4. Jurisdiction cannot be created by consent, conduct or an erroneous decision — Mathura Prasad — and the objection may be taken at any stage.
5. A representation as to the law ordinarily founds no estoppel, though one as to a fact with legal consequences may.
6. Promissory estoppel binds the Government within its lawful power — Motilal Padampat — and not beyond it.
7. The rule does not immunise every fact arising within a statutory framework.
8. A plea must name the provision the estoppel would defeat; the presence of legislation in the background is not enough.

10. Related Topics and Provisions