By Sarica AR
INTRODUCTION TO THE DOCTRINE OF LEGITIMATE EXPECTATION
It cannot be overemphasized that the concept of legitimate expectation has now emerged as an important doctrine. It is stated that it is the latest recruit to a long list of concepts fashioned by the court to review administrative action. It operates in public domain and in appropriate cases constitutes a substantive and enforceable right.
As a doctrine, it takes its place beside such principles as rules of natural justice, rule of law, non-arbitrariness, reasonableness, fairness, promissory estoppel, fiduciary duty and perhaps, proportionality to check the abuse of the exercise of administrative power. The principle at the root of the doctrine is Rule of Law which requires regularity, predictability and certainly the governments dealing with the public.
An expectation could be based on an express promise, or representation or by established past action or settled conduct. It could be a representation of the individual or generally to a class of persons. Whether an expectation exists is a question of law, but clear statutory words override any expectation, however, founded. However, as an equity doctrine, it is not rigid and operates in areas of manifest injustice. It enforces a certain standard of public morality in all public dealings. However, considerations of public interest would outweigh its application. It would immensely benefit those who are likely to be denied relief on the ground that they have no statutory right to claim relief.
The exercise of discretion is an inseparable part of sound administration and, therefore, the State which is itself a creature of the Constitution, cannot shed its limitation at any time in any sphere of State activity. Discretionary power is one which is exercisable by the holder of the power in his discretion or subjective satisfaction. The exercise of discretion must not be arbitrary, fanciful and influenced by extraneous considerations. In matters of discretion, the choice must be dictated by public interest and must not be unprincipled or unreasoned.
A reasonable and non-arbitrary exercise of discretion is an inbuilt requirement of the law and any unreasonable or arbitrary exercise of it violates Article 14 of the Constitution of India, 1950. The discretion must be exercised reasonably in furtherance of public policy, public good and for the public cause. This doctrine of legitimate expectation acts as a deterrent for those in charge of public power from exercising it arbitrarily. It should not be capped, cabined or confined in narrow, pedantic and lexographic approach; rather it should be given broadest of interpretations so as to cover within its purview the dialectics and dynamics of fairness and efficiency.
The basic purpose for the same being the expectation in a rule of law society is that holders of public power and authority must be able to publicly justify their action as legally valid and socially wise and just. Under such circumstances, it becomes an inherent right of the public in a democracy to prevent themselves from the abuse of discretion and do not get susceptible to the deadly tentacles of arbitrariness and unreasonableness.
As the legitimate expectation doctrine gained acceptance, it was invoked in a wider range of cases, which can be conveniently summarised into four categories:
1. The first was cases in which a person had relied upon a policy or norm of general application but was then subjected to a different policy or norm.
2. The second category, which was a slight variation on the first, included cases in which a policy or norm of general application existed and continued but was not applied to the case at hand.
3. A third category arose when an individual received a promise or representation which was not honored due to a subsequent change to a policy or norm of general application.
4. A fourth category, which was a variation on the third, arose when an individual received a promise or representation which was subsequently dishonored, not because there had been a general change in policy, but rather because the decision maker had changed its mind in that instance.
The doctrine of legitimate expectation originated under the French Legal system, known as droit administratif. Counseil d’Etat applied the doctrine of legitimate expectation (protectio de la confiance legitime) in the FORTUNE CASE.
A wanted to appear at a competitive examination. He was not permitted to appear on the ground that his confidential file contained certain adverse remarks. In an action by A, Conseil d’Etat went through the records and called upon the Secretary to justify the order. The Secretary pleaded that it was an ‘Act de Government’ (Act of State) and that the Court had no jurisdiction to deal with the matter.
He did not produce any document. The Court passed an order to produce the entire file relating to the matter, went through it and quashed the order. In England, governed by the Rule of Law one cannot conceive of such a situation, for the ordinary courts of law have no right to interfere with any ‘Act of State’ or with ministerial discretion nor can they have access to secret documents.
It held that administration must be careful not to create a situation adversely affecting innocent persons by an unexpected change in the rules applied, or in its behavior unless such sudden change is necessitated by the public interest. The administration is entitled to change its decisions, but it must take appropriate steps to ensure that those likely to be affected are informed before-hand.
This doctrine has found acceptance not only in the U.K. but also in Australia, South Africa, Hong Kong, Singapore, New Zealand, Canada, and India.
JUDICIAL DEVELOPMENT OF LEGITIMATE EXPECTATIONS IN THE UNITED KINGDOM
The Courts in England have been faced with various situations in which they have had to deal with the aspect of legitimate expectations. The developments that the Courts have brought about have lent structural stability to the concept.
Types of Legitimate Expectations:
1. Procedural Legitimate Expectation-
Denotes the existence of some process right the applicant claims to possess as a result of behavior by the public body that generates the expectation.
2. Substantive Legitimate Expectation-
Refers to the situation in which the applicant seeks a particular benefit or commodity, such as a welfare benefit or license. The claim to such a benefit will be founded upon governmental action which is said to justify the existence of the relevant expectation. Some of the arguments in favor of substantive legitimate expectations are: it creates fairness in public administration, reliance, and trust in government, the principle of equality, upholds rule of law.
Reasons for protecting legitimate expectations:
It is required by fairness; abuse of power has been considered the root concept justifying the protection of legitimate expectations; in European context, legal certainty i.e. the individual ought to be able to plan his or her action on the basis that the expectation will be fulfilled is also relied upon; the trust that has been reposed by the citizen in what he has been told or led to believe by the official.
When is an expectation legitimate?
First, it must be founded upon a promise or practice by the public authority that is said to be bound to fulfill the expectation.
Second, clear statutory words override any expectation howsoever founded.
Third, the notification of a relevant change of policy destroys any expectation founded upon the earlier policy.
Fourth, the individual seeking protection of the expectation must themselves deal fairly with the public authority.
How can a legitimate expectation arise?
In CCSU v. Minister for Civil Service, Lord Fraser identifies two ways by which a legitimate expectation can arise: “legitimate expectation may arise from either an express promise given on behalf of the public authority or from the existence of a regular practice which the claimant can reasonably expect to continue.”
1. Express Promise:
The most common way a legitimate expectation might arise is by an express promise or specific representation to an individual or group. In R. v. Liverpool Taxi Fleet Association van express promise from the Liverpool Corporation that it would not increase the number of taxi licenses in the area without consultation with the Association was held to create a legitimate expectation of consultation.
2. The existence of Regular Practice:
In CCSU case, where the continuous practice of consultation before changes to conditions of service led to the legitimate expectation, they would be consulted before the Minister abolished the membership of the trade union.
3. Certain Criteria must be satisfied with the promise or practice to gain legal enforceability in public law:
The promise must be clear, unambiguous and precise. The promise of a hearing before a decision is taken may give rise to a legitimate expectation that the hearing will be given.
The legitimate expectation must be legal. It should be within the powers of the body to make the representation and fulfill it.
Knowledge of policy but not reliance to one’s own detriment.
If the individual has suffered no hardship, there would be no reason to hold the decision-maker to its promise.
Standard of Review for breach of legitimate expectation:
In R. (Bibi) v. Newham London Borough Council, the Court of Appeal gave guidance on how the court should approach legitimate expectation cases with three practical questions:
First, what has the public authority, whether by promise or practice, committed itself to; second, whether the authority has acted or proposed to act unlawfully in relation to its commitment; third, what the court should do in this regard.
L. J. Laws in Abdi and Nadarajah v. Secretary of State for Home Department advocated a test of proportionality for judicial review of administrative action on the basis of legitimate expectation. This precedent sheds some light on whether proportionality could be used and adjusted to give due weight to the fact that the decision-maker nay have greater expertise and/or democratic legitimacy than the court, and the court could apply the test with varying degrees of intensity by scrutinizing more or less closely a decision-maker’s claims that it was necessary to frustrate the applicant’s expectation.
JUDICIAL DEVELOPMENT OF LEGITIMATE EXPECTATIONS IN INDIA
Some Supreme Court cases that have recently dealt with the doctrine of legitimate expectation are:
In J.P.Bansal v State of Rajasthan, the Supreme Court while examining the doctrine of legitimate expectation held that:
The principle of legitimate expectation is at the root of the rule of law and requires regularity, predictability, and certainty in government’s dealings with the public. For a legitimate expectation to arise, the decisions of the administrative authority must affect the person by depriving him of some benefit or advantage which either:
(i) he had in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rationale grounds for withdrawing it or where he has been given an opportunity to comment; or
(ii) he has received assurance from the decision maker that they will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.
The procedural part of it relates to a representation that a hearing or other appropriate procedure will be afforded before the decision is made. The substantive part of the principle is that if a representation is made than a benefit of substantive nature will be granted or if the person is already in receipt of the benefit than it will be continued and not be substantially varied, then the same could be enforced.
An exception could be based on an express promise or representation or by established past action or settled conduct. The representation must be clear and unambiguous.
It could be a representation to an individual or to a class of persons.”
In another case, Punjab Communications Ltd v. Union of India (1999), the Supreme Court cited British precedents (especially Hargreaves) to suggest that whether a legitimate expectation can be legally frustrated on public interest grounds can only be judged by the very deferential standards of Wednesbury unreasonableness, and nor the more demanding test of proportionality.
It also went on to note that the doctrine of legitimate expectation in the substantive sense has been accepted as part of [Indian] law and that the decision maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way.
In MRF Ltd Kottayam vs Asst Commissioner, Sales Tax, it was observed that the protection of legitimate expectation does not require the fulfillment of such expectation where an overriding public interest requires otherwise. That is to say, the public interest is overriding.
Therefore, what becomes clear is that legitimate expectations as a ground for challenging administrative action can be done away with when there is an overriding public interest and the immediacy of the situation required a change in policy, moving away from past promises and practice.
Recently, a Constitution Bench of the SC in Secretary, State of Karnataka v. Umadevi, referred to the circumstances in which the doctrine of legitimate expectation can be invoked: “The doctrine can be invoked if the decisions of the administrative authority affect the person by depriving him of some benefit or advantage which either:
(i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there have been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or
(ii) he has received assurance from the decision-maker that they will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.”
Another Constitution Bench, referring to the doctrine, observed thus in Confederation of Ex-servicemen Associations vs. Union of India: “No doubt, the doctrine has an important place in the development of Administrative Law and particularly law relating to ‘judicial review’.
“Under the said doctrine, a person may have a reasonable or legitimate expectation of being treated in a certain way by an administrative authority even though he has no right in law to receive the benefit. In such situation, if a decision is taken by an administrative authority adversely affecting his interests, he may have a justifiable grievance in the light of the fact of continuous receipt of the benefit, legitimate expectation to receive the benefit or privilege which he has enjoyed all throughout. Such expectation may arise either from the express promise or from consistent practice which the applicant may reasonably expect to continue.
“In such cases, therefore, the Court may not insist on an administrative authority to act judicially but may still insist it act fairly. The doctrine is based on the principle that good administration demands observance of reasonableness and where it has adopted a particular practice for a long time even in absence of a provision of law, it should adhere to such practice without depriving its citizens of the benefit enjoyed or privilege exercised.”
As to who can invoke the protection of legitimate expectation, the SC has observed, after examining a list of authorities on the subject, that: “The doctrine of legitimate expectation based on established practice (as contrasted from legitimate expectation based on a promise), can be invoked only by someone who has dealings or transactions or negotiations with an authority, on which such established practice has a bearing, or by someone who has a recognized legal relationship with the authority.
A total stranger unconnected with the authority or a person who had no previous dealings with the authority and who has not entered into any transaction or negotiations with the authority, cannot invoke the doctrine of legitimate expectation, merely on the ground that the authority has a general obligation to act fairly.”
In Food Corporation of India v. Kamdhenu Cattle Feed Industries Ltd, the Supreme Court has observed that the doctrine of legitimate expectation falls within the purview of the principle of non-arbitrariness as incorporated under Article 14 of the Constitution. It becomes an enforceable right when the Government instrumentality fails to give due weight to it.
However, as per the observations of the Supreme Court in Assistant Excise Commissioner v. Issac Peter, the doctrine of legitimate expectation cannot be invoked to alter the terms of a contract of a statutory nature. Similarly, in Howrah Municipal Corporation v. Ganges Road Company Ltd it has been held that no right can be claimed on the basis of legitimate expectation when it is contrary to statutory provisions which have been enforced in public interest.
In Madras City Wine Merchants Association v. State of Tamil Nadu, the doctrine of legitimate expectation was held to become inoperative when there was a change in public policy or in public interest as has been reaffirmed in some of the aforementioned decisions.
In Union of India v. Hindustan Development Corporation, the Supreme Court has elaborately considered the reverence of this theory. In the estimation of the Apex Court, the doctrine does not contain any crystallized right. It gives to the applicant a sufficient ground to seek judicial review and the principle is mostly confined to the right to a fair hearing before any decision is given.
It was held in Navjyoti Co-op Group Housing Society v. Union of India that the doctrine of legitimate expectation imposes in essence a duty on the public authorities to act fairly by taking into consideration all the relevant factors bearing a nexus to such legitimate expectation. The concerned authority cannot act arbitrarily so as to defeat the expectation unless demanded by over-riding reasons for the public policy.
Further, in another landmark judgment, M.P. Oil Extraction Co v. State of Madhya Pradesh, the Supreme Court was dealing with the license renewal claims of certain industries. It was held in this case that extending an invitation, on behalf of the State, was not arbitrary and the selected industry had a legitimate expectation of renewal of the license under the renewal claims.
Lastly, in National Building Constructions Corporation v. S Raghunathan, it was held that legitimate expectation is a source of both, procedural and substantive rights. The person seeking to invoke the doctrine must be aggrieved and must have altered his position. The doctrine of legitimate expectation assures fair play in administrative action and can always be enforced as a substantive right. Whether or not an expectation is legitimate is a question of fact.
The development of the doctrine of legitimate expectation in India has been in line with the principles evolved in common law English courts. In fact, it was from these English cases itself that the doctrine first came to be recognized by the courts in India. It, therefore, creates a new category of remedy against an administrative action and furthers the rule of law in India.
The doctrine of legitimate expectations is a welcome addition to the armory of the courts ensuring that discretions are exercised fairly. The phrase legitimate expectation, which is much in vogue, must not be allowed to collapse into an inchoate justification for judicial intervention.
Academics have expressed skepticism as to whether the doctrine of legitimate expectation should apply to substantive rights. Some argue that legitimate expectations should relate only to procedural rather than substantive rights. Procedural protection only has a minimal impact on the administrative autonomy of the relevant public authority, since the court is only concerned with the manner in which the decision was made and not whether the decision was fair. Thus, the ultimate autonomy of public authorities is never placed in jeopardy.
Conversely, some posit, giving effect to a substantive legitimate expectation impinges on the separation of powers. The authority has been entrusted by Parliament to make decisions about the allocation of resources in public interest. Applying legitimate expectation substantively allows the courts to inquire into the merits of the decision. Such interference with the public authority’s discretion would be overstepping their role and exceeding their proper constitutional function.
The Courts have been taking a more active role in controlling the exercise of discretionary power and upholding the rule of law while recognizing that in certain situations deference to the Executive is necessary. The courts have to therefore maintain a balance between legitimate judicial intervention and judicial interference violating the principle of separation of powers, and as the concept of legitimate expectations continues to develop, maintaining this balance will be at the forefront.
Formatted on February 16th, 2019.
1. Paul Craig, Administrative Law (6th ed, 2008)
2. B. C. Sarma, The Law of Ultra Vires (Eastern Law House, 2004)
3. Bradley & Ewing, Constitutional and Administrative Law (13th edn., 2003).