2011 (7) TMI 1049 - HC - VAT and Sales Tax

Whether a specific promise has been made and acting on the promise, the petitioner had acted and consequently put to hardship? Held that - In the case on hand, there is absolutely no material to support the contention of the writ petitioner that a specific promise has been made and acting on the promise, the petitioner had acted and consequently put to hardship. Law is well-settled that mere averments do not stand the test of proof. The contract period has expired on March 12, 2011. The writ petition has been filed on April 28, 2011, after the expiry of the period. When the terms and conditions of the contract specify a particular period during which, the parties can discharge their obligations, the petitioner has no legal or statutory right to claim the continuance or squat over the quarry site, without there being any extension of contract and any interim order permitting the petitioner to remove the quarry materials by deploying the machineries in the site would virtually amounting to extending the period of lease, without any legal or statutory basis on the determination of the contract period agreed upon by the parties. Courts cannot enlarge the period by granting interim orders. The interim order granted on June 8, 2011 is vacated. Consequently, for the reasons stated supra, the writ petition filed after the expiry of the period is liable to be dismissed and hence dismissed.

Issues Involved:
1. Validity of the status quo order obtained post-expiry of the contract period.
2. Application of the principle of promissory estoppel.
3. Legal right to claim extension of the contract period and interim relief.

Detailed Analysis:

1. Validity of the status quo order obtained post-expiry of the contract period:
The petitioner obtained an order of status quo on April 29, 2011, despite the contract period expiring on March 12, 2011. The court noted that the petitioner was not ready to make submissions on the writ petition. However, considering the merits and the nature of the order, the court decided to examine the case. The impugned order clearly stated that the raising agent agreement for Keelavalavu (297/5) D portion ended on March 12, 2011.

2. Application of the principle of promissory estoppel:
The petitioner argued that the first respondent had assured the continuation of the contract post-expiry, leading to significant investments. The petitioner claimed this assurance was violated, invoking the principle of promissory estoppel. The court referenced several Supreme Court judgments to elucidate the principle:
- Pine Chemicals Ltd. v. Assessing Authority: A finance minister's budget proposal does not constitute a binding decision for promissory estoppel.
- Kasinka Trading v. Union of India: Promissory estoppel requires a clear, unequivocal promise intended to create legal relations, acted upon by the other party.
- National Buildings Construction Corporation v. S. Raghunathan: Legitimate expectation must be based on a clear, rational promise.
- Dr. Ashok Kumar Maheshwari v. State of U.P.: Bald pleadings without supporting material cannot invoke promissory estoppel.
- Union of India v. Ganesh Rice Mills: Statements by ministers are not binding promises.
- State of Karnataka v. K.K. Mohandas: Promissory estoppel cannot be based on mere speeches or assurances without formal orders.
- Executive Engineer, Uttaranchal Power Corporation v. Kashi Vishwanath Steels Limited: A specific averment and material evidence are necessary to claim promissory estoppel.
- State of Bihar v. Kalyanpur Cements Ltd.: Clear representation and alteration of position based on the promise are required.

The court concluded that there was no material to support the petitioner's claim of a specific promise by TAMIN. Mere averments without proof do not suffice for promissory estoppel.

3. Legal right to claim extension of the contract period and interim relief:
The contract, as per the agreement dated March 13, 2008, was valid until March 12, 2011, with renewal at TAMIN's discretion. The petitioner's application for extension on February 28, 2011, did not result in any official order. The court emphasized that without an extension, the petitioner had no legal right to continue operations or claim interim relief. The possession of the site had already been taken over by the respondents. The interim order granted on June 8, 2011, was vacated, and the writ petition filed after the contract expiry was dismissed. The court highlighted that courts cannot extend contract periods through interim orders.

Conclusion:
The writ petition was dismissed, and the interim order was vacated. The principle of promissory estoppel was deemed inapplicable due to the lack of a specific, actionable promise. The petitioner had no legal right to claim contract extension or interim relief post-expiry of the contract period.

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