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Navigating the Legal Landscape: The Doctrine of Legitimate Expectation

Updated: Nov 10, 2023

Authored by Shivam Tah, a 2nd-year Law Student at Nirma University, Institute of Law

Overview

Recently, in the case of M/s KB Tea Product Pvt Ltd v Commercial Tax Officer, Siliguri, the Supreme Court passed a split judgment on whether the doctrine of public legitimate expectation is applicable to tax exemptions. Justice Krishna Murari gave his opinion on the issue and said that if barring the applicability of legitimate expectation defeats the very purpose of the doctrine, then such bar must be removed. However, the question arises: what exactly is legitimate expectation, and how does it work?

Suppose a party, say, A promises to pay party B when he works according to certain conditions, and subsequently, party B starts to work accordingly. But what will happen when party A suddenly changes the conditions midway? Will the work done by party B and the resources she spent on finishing the work all go unrewarded? No, because the ‘doctrine of promissory estoppels’ will stop party A from going back on his initial promise.


However, what happens when Party A is the government or public officials, Party B is the general public, and the conditions are a government scheme, policy, or any other established procedure? Will the general public expect some relief in such situations? The answer is yes. The ‘doctrine of legitimate expectation ‘discusses such situations and bars the government from misusing its power. The core idea of this doctrine is the principle of natural justice. The government cannot change an established policy and procedure suddenly, which disrupts the lives of many people who are getting benefits out of it without informing them, given that the policy or the procedure is consistent, regular, predictable, and has been in force for a reasonable amount of time. As Henry Wade has put it perfectly,

The Doctrine of Legitimate Expectation has been developed both in the context of reasonableness and natural justice”.


History and Origin of the Doctrine

The doctrine was first applied in the case of Associated Provincial Picture Houses Ltd. v. Wednesbury Corp, long before it became known as the 'Doctrine of Legitimate Expectation'. The Sunday Entertainments Act of 1932 allowed the opening of cinemas on Sundays, subject to certain conditions, which had been prohibited earlier through a majority vote in the principality. In 1947, associated provincial Houses granted a license to the Wednesbury Corp to run a cinema hall subject to the condition that no children below the age of 15 would be allowed. The provincial house appeal challenged this decision in the court on the grounds of unreasonableness. Here, the court ruled that the corporation had taken a decision on grounds which are not relevant and came to a conclusion that was so irrational that no sane authority could conclude in any condition.


As said earlier, reasonableness and fairness lie at the core of this doctrine and are used in many cases afterwards, but the term “legitimate expectation” was first used by Lord Denning in the case of Schmidt v. Secretary for Home Affairs. In this case, the permits of two United States (US) citizens residing in the United Kingdom (UK) for academic purposes were denied extension, and no opportunity was given to the citizens to be heard in court. When they challenged this decision in the court, Lord Denning had put it beautifully that when the tenure of their permits ended on time and not prematurely, there cannot exist any legitimate expectation on their part that they would be given the opportunity to be heard before the courts of law.


Lord Diplock has put three conditions from where legitimate expectations may arise in the case of Council of Civil Services Union v. Minister for the Civil Services:

  1. When the authority has promised that someone can enjoy the benefits of some schemes or policy or any other ordinances in the present and reasonably expects to continue to do so until and unless he has been given reason in advance upon which he can act accordingly.

  2. When the authority has expressly or regularly said that the benefit would not be withdrawn arbitrarily without giving him proper time and opportunity to make up his point.

  3. The benefit is expected to be in continuation in the near future as promised by the authorities.


Types of Legitimate Expectation

There are primarily two types of legitimate expectations used in the Indian laws and UK laws.


Procedural expectation

When there exists a pre-established procedure of doing something and the same has not been followed or changed arbitrarily without any prior notice, then the courts of law are supposed to listen to the people who sought relief. Here, the courts are not supposed to provide relief but ensure that proper procedure is followed. For example, an accused has some rights in a criminal case, including the right to be heard before the final judgment is passed, which can be considered his legitimate expectation. Article 22 of the Indian constitution is somewhat in line with this expectation.


Substantive expectation

When there is a change in policy or scheme without any prior notice, which affects the ends of the person getting benefited from it, then the courts can take the matter in hand and provide substantive benefit to the person seeking relief. In a celebrated case of Ex P Coughlan, The court ruled against the health authorities who wanted to close a nursing care where an elderly disabled lady was receiving her treatment for some difficulty, saying that arbitrarily closing the centre would have negative consequences and a breach of legitimate expectations of the public.


Relationship Between Article 14 and Doctrine of Legitimate Expectation

The doctrine of legitimate expectation is not a new concept in Indian laws and is considered an essential subset of Article 14 (Equality before law) of our constitution. Time and again, the Supreme Court of India has confirmed the same. In the case of The State of Jharkhand and Others v. Brahmaputra Metallics Ltd, the Supreme Court has passed the ratio that the denial of legitimate expectation is possible only when there is a breach of the fundamental right of Article 14. These two are essentially integrated and not two separate concepts. Supreme Court of India has applied this doctrine to various domains ranging from statutory laws to public policy and even government bodies. In 1957, the Government of India set up the 2nd Pay Commission Committee, whose recommendations were accepted by the government. The recommendations were supposed to apply to every government employee retrospectively from July 1, 1959, but the same was not done for some of the posts of Forest Research Institute and College. The SC has ruled that the decision of the government is a breach of Article 14, and the petitioners have legitimate expectations regarding the policy being implemented retrospectively and should be provided compensation for the same. In the case of Vellore Educational Trust v. State of Andhra Pradesh, the SC ruled that rejecting a trust’s plea to establish an engineering college for the minority Tamil community in Andhra Pradesh solely on the basis of a government policy when the application was filed before the policy came into effect and respondent himself do not follow it diligently is arbitrary and against the legitimate expectation of the trust and should be reconsidered.


Conclusion

All this being said, one thing that needs to be understood is that the doctrine of legitimate expectation is not a legal right and is nowhere mentioned in the constitution of India but is often used along with Article 14. This doctrine is not absolute and has exceptions. One of them is greater public welfare. If a change in the decisions is reasonable and for the greater good of the public, then such change will be deemed right. For example, in government contracts of leases and tenders, the highest bidder at the time can be rejected by the concerned authorities if they think that it will cause harm later on, even if there exist legitimate expectations from the side of the highest bidder. Another thing that is very important to consider is that legitimate expectations arise from regular schemes, ordinances, policies, pre-established procedures and unilateral promises of the government and not from contractual relationships. The Supreme Court has confirmed the same in the case of Indian Aluminum Co Ltd v. Karnataka Electricity Board.


In essence, this doctrine acts as an essential barrier against unreasonable state actions even though it is not codified as a legal right. Holding governments responsible for their commitments and protocols upholds the ideals of fairness, rationality, and natural justice. It is nonetheless flexible, though, as it is aware that the public good and changing conditions may call for exceptions in order to ensure that the greater good triumphs. This idea continues to be a cornerstone of fairness and transparency in the area of administration and public policy, even as our legal system changes.

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