'Legitimate expectation' and public interest

EXPERT EYE

A person may have a 'legitimate expectation' of being treated in a certain way by an authority even though he has no right in private law to receive such treatment.

The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice.

The doctrine of legitimate expectation has an important place in the developing law of judicial review. It has taken a concrete shape in the law of equitable or promissory estoppel, which is not based on any statute but on successive judgements given by the higher judiciary.

In the hey days of this principle, it was held in a series of judgements that promissory estoppel applies in the case of the exercise of executive power by the government.

The concept fell on bad days when the Supreme Court held that a time-bound notification, though it can be taken as a promise, could be withdrawn before the time period expired, in public interest.

One of the latest judgments (21 September, 2006) of the Supreme Court in the case of MRF Ltd Kottayam vs Asst Commissioner, Sales Tax, Appeal (Civil), has generated a lot of interest.

The judgement has upheld the plea of promissory estoppel on the ground that MRF had effected huge investments on the basis of the Kerala government's promise for exemption, which was later withdrawn.

The Supreme Court observed that the government had "clearly held out a promise to these new industries which had admittedly got established in the region, acting on such promise, the same in equity would bind the government."

This has been interpreted by analysts that the doctrine of legitimate expectation has been upheld by the Supreme Court once again in contrast to some of the earlier restrictive judgements.

But that is not the correct position. In the MRF case, the state of Kerala did not even take the plea of public interest.

The court, in fact, has observed that since there is no issue of public interest involved, the change in policy in exercise of executive power cannot go against the legitimate expectation contained in the promise in pursuance of which huge investments were made.

It is quite clear that the Supreme Court upheld the principle that the existence of public interest would have entitled the government to withdraw the exemption, that is to say, act against the so-called legitimate expectation. So this judgement is not contrary to the tenor of the series of previous judgements discussed above.

The conclusion is that the protection of 'legitimate expectation' does not require the fulfilment of such expectation where an overriding public interest requires otherwise. That is to say, the public interest is overriding.

If public interest is not involved, the doctrine of legitimate expectation has its full sway. However, it must be proved that a legitimate authority made a promise, which was acted upon and substantial investment or expenditure was made. Another substantial point is that public interest is not justiceable.

smukher2000@yahoo.com