JUDGMENT By the Court.—This intra Court appeal has been filed by the appellants challenging the judgment of learned Single Judge dated 24.3.1999. 2. The respondents Manoj Singh and others filed writ petition No. 99 (Tax) of 1998 for quashing of the order dated 8.10.1997 passed by the Excise Commissioner, U.P., Allahabad by which the representation of the respondents dated 12.2.1994 for grant of remission from payment of licence fee for the excise year 1993-94 was rejected. The petitioners/respondents further prayed that the recovery certificate issued by the Collector, Fatehpur dated 15.5.1994 be quashed and the appellants be directed to grant remission to the respondents for non supply of the minimum guaranteed quantity assured by them at the time of auction and not to recover licence fee to the extent of non supply of minimum guaranteed quantity of country liquor. 3. The learned Single Judge after considering the material available on the record held that the minimum guaranteed quantity of country liquor was 20 lac bulk litres and it constituted the terms and conditions of contract. The contract was binding on the excise authorities as also on the liecensee. The excise authorities once having agreed to fix the minimum guaranteed quantity to be 20 lac bulk litres of country liquor at the time of auction for the year 1993-94, then they could not depart from their promise and were bound by the assurance given by them. It was not open to the authorities of the State Government to modify or alter or curtail the aforesaid terms and conditions of the agreement arrived at between the parties at the time of auction. The writ petition was allowed on 24.3.1999 and the order dated 8.10.1997 and the recovery certificates were quashed and the respondents were directed to grant remission of licence fee in respect of non supply of 5.35 lac bulk litres quantity of country liquor on which the State Government was liable to grant remission keeping the minimum guaranteed quantity 20 lacs bulk litres of country liquor as assured. 4. We have heard learned Standing counsel for the appellants and the learned counsel for the respondents. Shri S.P. Kesharwani the learned Standing counsel has urged that the doctrine of promissory estoppel would not be applicable to the facts of the instant case. The learned counsel for the respondents has supported the impugned order. 5. 4. We have heard learned Standing counsel for the appellants and the learned counsel for the respondents. Shri S.P. Kesharwani the learned Standing counsel has urged that the doctrine of promissory estoppel would not be applicable to the facts of the instant case. The learned counsel for the respondents has supported the impugned order. 5. For the excise year 1993-94 the Excise Commissioner, U.P., Allahabad submitted his report on 17.12.1992 to the State Government that minimum guaranteed quantity for the year 1992-93 for district Fatehpur was 13,90,000 bulk litres and no enhancement in minimum guaranteed quantity was proposed for the year 1993-94. The report was accepted by the State Government on 17.2.1993 and the Excise Commissioner announced the minimum guaranteed quantity for various districts of State on 25.2.1993. For Fatehpur district the minimum guaranteed quantity of country liquor was fixed at 13,90,000 bulk litres. General notification dated 26.2.1993 was issued by the Excise Commissioner providing terms and conditions for the auction. 6. On the basis of minimum guaranteed quantity of country liquor 13,90,000 bulk litres fixed for entire district Fatehpur the Licensing Authority was not getting sufficient or adequate bids for the year 1993-94 and so the authorities had to postpone the auction for country liquor on a number of occasions. In the auction fixed for 16.3.1993 no bid was offered. On the next date 17.3.1993 the auction was again held and the bid offered was only Rs. 3,82,85,000/-. The bid was not accepted and again auction was held on 23.3.1993 in which the bid was offered for Rs. 3,97,25,000/-. The bid was not accepted and the auction was fixed for 30.3.1993 in which the bid was offered for Rs. 4,35,00,000/-. The Collector, Fatehpur who was the licensing authority was not satisfied with the bid made on 30.3.1993 as he was not getting adequate bid, therefore, on the same date he obtained the approval over telephone from the Excise Commissioner, U.P., Allahabad for increasing the minimum guaranteed quantity of country liquor to 20 lac bulk litres for the excise year 1993-94 and thereafter he promised and assured the bidders that the minimum guaranteed quantity of country liquor had been increased to 20 lac bulk litres and he invited fresh bid on the same day. On being assured by the Collector, Fatehpur that the minimum guaranteed quantity of country liquor had been increased to 20 lac bulk litres and acting on the assurance given by the Collector Fatehpur, the respondents offered a bid of Rs. 5,67,00,000/- which was an enhancement by 2.5% from the last year bid and the respondents obtained exclusive right to sell country liquor in the district of Fatehpur. 7. The appellants gave an assurance to the respondents that the minimum guaranteed quantity of country liquor had been increased to 20 lac bulk litres on the basis of which the respondents acted and made a bid of higher amount acting on the representation made by the appellants. The learned Single Judge has extracted the relevant portion of letter dated 30.3.1993 written by Collector/District Magistrate, Fatehpur to the Excise Commissioner which was to the effect that minimum guaranteed quantity of country liquor fixed for district Fatehpur is low, therefore, he is facing difficulty in the annual auction regarding which he has talked to him on telephone for increasing the minimum guaranteed quantity of country liquor by 6,10,000 bulk litres making the total annual minimum guaranteed quantity to be 20,00,000 bulk litres. Similar letters were written by Collector/District Magistrate, Fatehpur to the Excise Commissioner on 22.4.1993, 2.9.1993 and 16.9.1993, 27.9.1993 that assurance was given to the respondents as the Collector was facing difficulty in auction at the time of auction as the minimum guaranteed quantity was low, he requested the Excise Commissioner that minimum guaranteed quantity be enhanced by about 6 lacs bulk litres, at the earliest. 8. The letter of the Excise Commissioner dated 19.8.1993 to the Secretary, Government of U.P. has also been extracted by the learned Single Judge wherein it had been admitted that assurance was given to the bidders at the time of auction that minimum guaranteed quantity of country liquor would be enhanced. Similar letter was written by the Excise Commissioner to the Secretary on 13.10.1993. Similar letter was written by the Excise Commissioner to the Secretary on 13.10.1993. From the letters written by the Collector/District Magistrate, Fatehpur to the Excise Commissioner and letters written by the Excise Commissioner to the Secretary, State Government it is clear that at the time of auction and making of bids on 30.3.1993, assurance was given by the appellants to the respondents that minimum guaranteed quantity of country liquor would be enhanced to 20 lac bulk litres and the respondents may bid treating the minimum guaranteed quantity of country liquor to be 20 lac bulk litres. Acting on the representation made by the appellants, the respondents made a bid for entire district Fatehpur, namely, Fatehpur, Khaga and Bindki to the tune of Rs. 5.67 crores. 9. The State Government also admitted that assurance was given by the respondents at the time of bid that minimum guaranteed quantity of country liquor would be enhanced to 20 lac bulk litres and on 7.2.1994 the Special Secretary, Government of U.P. issued a letter to the Excise Commissioner, U.P. Allahabad that minimum guaranteed quantity for district Fatehpur be enhanced by 5 lac bulk litres. The State Government by the letter dated 7.2.1994 also cancelled its earlier two letters dated 2.12.1993 and 3.12.1993 by which enhancement in minimum guaranteed quantity was refused. 10. The State Government by the letter dated 7.2.1994 also cancelled its earlier two letters dated 2.12.1993 and 3.12.1993 by which enhancement in minimum guaranteed quantity was refused. 10. The letter dated 7.2.1994 of the State Government which was filed as Annexure-1 to the writ petition is extracted below : ^^vko;d Lak[;k &497bZ&2@rsjg&94 Vh0lh0 Ás"kd] ds0,y0 ehuk] foks"k lfpo] mRrj iznsk kkluA lsok esa] vkcdkjh vk;qDr] mRrj iznsk] bykgkcknA vkcdkjh vuqHkkx& 2 y[kuÅ% fnukad% 7 Qjojh] 1994 fo"k; % tuin Qrsgiqj@xkft;kckn@vkxjk@tkSuiqj esa o"kZ 1993&94 gsrq ns’kh ‘kjkc dh U;wure izR;kHkwr ek=k esa o`f) ds lEcU/k esaA egksn;] d`i;k kklu ds dk;kZy; Kki la[;k 4905bZ&2@92 fnukad 02-12-93 ,oa kkluknsk la[;k&8503 bZ&2@rsjg&93&20&92] fnukad 03-12-93 ds lUnHkZ esa izsf"kr vius ikokZfdar i=ksa dk lUnHkZ xzg.k djsaA vkius vius mDr i=ksa fnukad 15-12-93 ,oa 17-12-93 ,oa 17-12-93 }kjk lUnHkZxr tuinksa esa nskh 1- i= la0&8503@nl&97ch@,e0th0D;w0@93&94] fnukad 15-12-94 2- i= la[;k 134 ,lVh&97ch@93&94@,e0th0D;w0] fnukad 17-12-93 kjkc ds U;wure izR;kHkwr ek=k esa o"kZ 1993&94 gsrq iqu% o`f) fd;s tkus ds lECkU/k esa fopkj fd;s tkus dk izLrko ,oa laLrqfr izsf"kr dh xbZ gSA 2- bl lEcU/k esa eq>s ;g dgus dk funZsk gqvk gS fd o"kZ 1993&94 gsrq fuEukafdr tuinksa es nskh kjkc dh QqVdj fcdzh dh vuqKkfir nqdkuksa dh okf"kZd uhykeh ds le; ;k uhykeh ds nkSjku ;k uhykeh ds mijkUr tuin ds fy, fu/kkZfjr nskh kjkc dh U;wure izR;kHkwr ek=k esa o`f) ds lEcU/k esa uhyke izkf/kdkjh@ftykf/kdkjh }kjk fn;s x;s vkokluksa vFkok dh xbZ laLrqfr ,oa bl lEcU/k esa vkids mijksDRk i=ksa ls izsf"kr laLrqfr;ksa dks n`f"Vxr j[krs gq, kklu us lE;d fopkjksijkUr fuEufyf[kr tuinksa esa nskh kjkc dh QqVdj fcdzh ds nqdkuksa ds lewg ds fy, o"kZ 1993&94 gsrq iwoZ esa fu/kkZfjr nskh kjkc dh U;wure izR;kHkwr ek=k esa fuEufyf[kr rkfydk esa vafdr fooj.k rn~uqlkj o`f) fd;s tkus dk fu.kZ; bl izfrcU/k ds lkFk fd;k x;k gS fd ;g o`f) nskh kjkc dh mlh nqdku vFkok nqdkuksa ds lewg ds fy, vuqeU; gksxh ftlds fy, uhyke izkf/kdkjh@ftykf/kdkjh vFkok vkcdkjh vk;qDr }kjk bldh laLrqfr dh xbZ gS%& dzekad Ukke tuin@xzqi o"kZ 1993&94 U;wure izR;kHkwr ek=k esa gsrq fu/kkZfjr o"kZ 1993&94 gsrq U;wure izR;kHkwr ,rn~}kjk LohÑr o`f) ek=k ¼c0uh0½ 1 2 3 4 1- Qrsgiqj 13]90]000 5]00]000 2- xkft;kckn 60]00]000 10]13]000 3- vkxjk 40]27]000 5]00]000 4- vktex<+ 22]50]000 1]50]000 ¼ykyxat xzqi½ 5- tkSuiqj 27]00]000 3]50]000 3- eq>s ;g dgus dk Hkh funsZk gqvk gS fd bl lEcU/k esa kklu }kjk o"kZ 1994&95 dh vkcdkjh uhfr ds lEcU/k esa vxzsRrj fu.kZ; fy;k x;k gS fd 31 ekpZ] 1992 dks lekIr gq, foRrh; Ok"kZ ds ipkr foRrh; o"kZ 1992&93 ,oa 1993&94 esa vFkkZr 1 vizSy] 1992 ls vkt dh frfFk rd iznsk ds fy;s fu/kkZfjr nskh kjkc dh U;wure izR;kHkwr ek=k esa dh xbZ leLr vfrfjDr o`f) ij foRrh; o"kZ 1994&95 esa ¼1 vizSy] 1994 ls½ :0 13@& izfr CkYd yhVj dh nj ls vkxf.kr /kujkfk dks nskh kjkc dh QqVdj fcdzh ds nqdku vFkok nqdkuksa ds lewg ds fy, fu/kkZfjr dh tkuh okyh ykbZlsUl Qhl esa lekfgr dj fy;k tk;sxk vkSj mlh ds Åij okf"kZd uhykeh esa cksyh nkrkvksa }kjk cksyh cksyh tk;sxhA 4- vr% vkils vuqjks/k gS fd d`i;k mDrkuqlkj lEcfU/kr tuinksa gsrq o"kZ 1993&94 esa nskh kjkc dh U;wure izR;kHkwr ek=k dk iqufu/kkZj.k djrs gq, fue;kuqlkj nskh kjkc ,oa nskh kjkc dh vkiwfrZ lqfufpr djuk rRdky vko;d gS mijksDRk dk;kZy; Kki fnukad 2-12-1993 ,oa kkluknsk fnukad 03-12-1993 esa nskh kjkc dh U;wure izR;kHkwr ek=k esa o`f) dks vLohdkj fd;s tkus lEcU/kh kklu ds vknskksa dks ,rn~}kjk fujLr fd;k tkrk gSA Hkonh; ¼ds0,y0 ehuk½ fo’ks"k lfpo la[;k & 497 ¼1½ bZ&2@rsjg&94&Vhlh rn~fnukad Ikzfrfyfi ftykf/kdkjh] Qrsgiqj] xkft;kckn] vkxjk] vktex<+] tkSuiqj dks lwpukFkZ ,oa vko;d dk;Zokgh gsrq izsf"krA vkKk ls] ¼ds0,y0 ehuk½ foks"k lfpoA** 11. The decision of the State Government dated 7.2.1994 was communicated on 12.2.1994 by the Licensing Authority/ Collector, Fatehpur to the respondents. Since the licence and contract of the respondents was to expire on 31.3.1994 and it was not possible for the respondents to lift and sell the enhanced 5 lac bulk litres of country liquor in short time, the respondents lifted only 75,000 bulk litres of country liquor and paid licence fee on it. 12. The question is whether the doctrine of promissory estoppel would apply to the facts of the case in hand. The apex Court in Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 held in paragraph 24 as under : “... Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made it, nor claim to be the judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. It is elementary that in a republic governed by rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of ‘’honesty and good faith’? Why should the Government not be held to a high ‘’standard of rectangular rectitude while dealing with its citizens’? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations; but, let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Anglo Afghan Agencies case ( AIR 1968 SC 718 ) and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But if the Government makes such a promise and the promisee acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual. The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavour of the Courts and the legislature must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction. But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires.” 13. The doctrine of promissory estoppel is a significant judicial contribution in that direction. But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires.” 13. The doctrine of promissory estoppel is applicable to the facts of the instant case. The Collector Fatehpur on 30.3.1993 was of the opinion that bid of Rs. 4,35,00,000/- in the auction was insufficient and inadequate. On telephone he talked to the Excise Commissioner that the bid received by him was low and unless the minimum guaranteed quantity of country liquor for entire district of Fatehpur was not increased to 20 lac bulk litres, he would not get a higher bid which was accepted by the Excise Commissioner, U.P., Allahabad. The Collector, Fatehpur thereafter on 30.3.1993 itself had made a promise and gave an assurance to the bidders including the respondents that the minimum guaranteed quantity of country liquor would be increased to 20 lac bulk litres and fresh bids be made. Acting on the promise and assurance given by the Collector, Fatehpur the respondents made a bid of Rs. 5,67,00,000/-. The Collector sent reminders to the Excise Commissioner, U.P. for enhancing the minimum guaranteed quantity of country liquor to 20 lac bulk litres and the Excise Commissioner wrote to the State Government for enhancement as per promise and assurance given by the Collector, Fatehpur to the respondents. The State Government rejected the request on 2.12.1993 and 3.12.1993 but ultimately by order dated 7.2.1994 the State Government cancelled the earlier orders dated 2.12.1993 and 3.12.1993 and enhanced the minimum guaranteed quantity of country liquor for district Fatehpur by 5 lac bulk litres though as per the assurance and promise, the enhancement was required to be made by 6.10 lac bulk litres. The respondents could only lift 75,000 bulk litres of country liquor as the letter dated 7.2.1994 was communicated to the respondents on 12.2.1994 and validity of the licence of the respondents was due to expire on 31.3.1994. Therefore, it is clear that the State Government accepted that its officers had made a promise and have given assurance to the respondents that the minimum guaranteed quantity of country liquor would be increased to 20 lac bulk litres and the respondents should treat the minimum guaranteed quantity to be 20 lac bulk litres and accordingly make their bids. Therefore, it is clear that the State Government accepted that its officers had made a promise and have given assurance to the respondents that the minimum guaranteed quantity of country liquor would be increased to 20 lac bulk litres and the respondents should treat the minimum guaranteed quantity to be 20 lac bulk litres and accordingly make their bids. On the promise, assurance and representation made by the Collector, Fatehpur the respondents made the bid for Rs. 5,67,00,000/- and altered their position. The State Government and its officers were bound by the promise and assurance given at the time auction on 30.3.1993 and the learned Single Judge has rightly held that the respondents are entitled for remission of licence fee in respect of non supply of 5.35 lac bulk litres quantity of country liquor treating the minimum guaranteed quantity of country liquor for the year 1993-94 for district Fatehpur to be 20 lac bulk litres. The appellants are not entitled to recover any amount of licence fee from the respondents. 14. The apex Court in U.P. Power Corporation Ltd. and another v. Sant Steels & Alloys (P) Ltd. and others, (2008) 2 SCC 777 held in paragraphs No. 27, 33 and 35 as under : “27... But the general principle that emerges is that once a representation has been made by one party and the other party acts on that representation and makes investment and thereafter the other party resiles, such act cannot be stated to be fair and reasonable. 33. ... the judicial consensus that emerges is that wherever the State has made a representation to the public and the public has acted on that representation and suffered economically or otherwise, then in that case the State should e estopped from withdrawing such benefit to the detriment of such people except in public interest or against the statute. 35. In this 21st century, when there is global economy, the question of faith is very important. The Government offers certain benefits to attract the entrepreneurs and the entrepreneurs act on those beneficial offers. Thereafter, the Government withdraws those benefits. This will seriously affect the credibility of the Government and would show the short-sightedness of governance. Therefore, in order to keep the faith of the people, the Government or its instrumentality should abide by their commitments.” 15. The Government offers certain benefits to attract the entrepreneurs and the entrepreneurs act on those beneficial offers. Thereafter, the Government withdraws those benefits. This will seriously affect the credibility of the Government and would show the short-sightedness of governance. Therefore, in order to keep the faith of the people, the Government or its instrumentality should abide by their commitments.” 15. We are of the considered opinion that no interference is called for in the judgment of the learned Single Judge dated 24.3.1999 as due to the conduct, promise and assurance given by the appellants to the respondents in unequivocal and clear terms intending to create legal relations knowing or intending that it would be acted upon by the respondents to whom the promise and assurance had been made and the respondents acted upon the promise and assurance given by the appellant and as such the promise and assurance given by the appellant would be binding on the appellants and they cannot wriggle out from the promise and assurance given to the respondents at the time of auction on 30.3.1993 which has also been accepted by the State Government on 7.2.1994. 16. For the aforesaid reasons we do not find any merits in this appeal. 17. This special appeal fails and is accordingly dismissed. 18. Parties shall bear their own costs. ————