M/S MANUELSONS HOTELS PRIVATE LIMITED versus STATE OF KERALA & OTHERS

Citation: [2016] 3 S.C.R. 718 · Decided: 11-05-2016 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Case Partly allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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(2016] 3 S.C.R. 718 
M/S MANUELSONS HOTELS 
PRIVATE LIMITED 
v. 
STATE OF KERALA & OTHERS 
(Civil Appeal No. 2480 of2008) 
MAY 11, 2016 
[A.K. SIKRI AND R.F. NARIMAN, JJ.J 
Administrative law: Promissory estoppel -
By way of 
government order datecf 11.7.1986, exemption from building tax 
granted if hotels set up in the State of Kera/a -
Pursuant to 
government order, s.3A added to the Kera/a Building Tax Act, 1975 
granting exemption from payment of building tax - Pursuant thereto, 
appellant constructed hotel building -. However, on 6.2.1997, 
concession promised by way of government order denied ·to the 
D ·appellant stating that as s.3A had been omitted w.ej 1.3.1993, the 
power ro grant exemption had· itself gone; that no exemption 
notification was issued u/s. 3A when it was in· existence in the statute 
book; and that mere promise to amend the law does not hold out a 
promise of exemption - Held:. s.3A was enacted by the Kera/a 
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legislature by suitably amending the Kera/a Buildings Tax Act, 1975 
on 6.11.1990 - The said provision continued on the statute book 
and was de'/eted only w.e.f 1.3.1993 - This shows that from 
6.11.1990 to 1.-3.1993. the power to grant exemption from building 
tax was statutorily conferred by s.3A on the Government - s.3A was 
introduced in order to fulfill one of the promises contained in the 
GO. dated 11. 7.1986 - Appellants, having relied on the said G 0., 
had,, in fact, constructed a hotel building by 1991 - Therefore, non-
issuance of a notifh:ation u/s. 3A was an arbitrary act of the 
Government which must be remedied by application of the doctrine 
of promissory estoppel - The ministerial act of non-issue of the 
notification cannot possibly stand in the way of the appellants getting 
relief under the said doctrine for it would be unconscionable on 
the part of the Government to get away without fi1lfilling its promise 
-Admittedly, no other consideration of overwhelming public interest 
existed in order that the Government be justified in resiting from its 
promise - The relief that inust therefore be moulded on the facts of 
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718 
M/S MANUELSONS HOTELS PRIVATE LIMITED v. STATE OF · 719 
KERALA 
the present case is that for the period that s.3A was in force, no 
building tax was payable by the app~llants - However, for the period 
post 1. 3.1993, no statutory provision for the grant of exemption 
being available, no relief can be given to the appellants as the 
doctrine of promissory estoppel must yield when it is found that it 
' would be contrary to statute to grant such relief - Kera!a.Buildirig 
Tax Act, 1975 - s.3A. 
Partly ~llowing the appeal, the Court 
HELD: In the present Cl)se, no Writ of Mandamus is being. 
issued to the executive to frame a body of rules or regula!ions 
which would be subordinate legislation in the nature. of primary 
legislation (being general rules of conduct which would apply to 
those bound by them). On the facts of the present case, a 
discretionary power has to be exercised on facts under S~ction 
3A of the Kerala Buildings Tax Act, 1975. The non-exercise of 
such discretionary power is clearly vitiated on account of the 
application of the doctrine of promissory· estoppel in terms of 
this Court's judgments in 'Motjlal Padampat'and Nestle. Thjs is 
for the reason that non-exercise of such power is itself an arbitrary 
act which is vit.iated by non-application of mind to relevant .facts, 
namely, tb.e fact that a GO. dated 11.7.1986 specific-ally provided 
for exemption from build fog tax if hotels were t.O be set- up in the 
State of Kera la pursuant to the representation· mad(in the said 
GO. True, no mandamus. could.issue to the legislature to alJ!end 
the Kerala Buildings Tax Ac~, 1975, for that would necessarily 
involve the judiciary in transgressing into a forbidden field under 
the constitutional scheme of separation of powers. However, o'n 
facts, Section 3A was, in fact, enacted by the Kerala legislature 
by suitably amending the Ke,rala .Buildings Tax Act, 1975 oit 
6.11.1990 in oi:_der to give effect to the representation made by 
the G.O. dated 11.7.1986. The said prowsion continued_ on the 
statute book and was deleted only ~ith effect from 1.3.19.93. This 
would make it clear that from 6.11.1990 to 1.3.1993, the power 
to grant exemption from building tax was statutorily conferred 
by Section 3A on the Government. And the statement of objects 
and reasons for introducing Section 3A expressly states tha

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