Professional Documents
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06 - Doctrine of Legitimate Expectation
06 - Doctrine of Legitimate Expectation
62: 1
I Introduction
THERE ARE several principles of administrative law, which have been evolved by the
courts for the purpose of controlling the exercise of power so that it does not lead to
arbitrariness or abuse of power. These principles are intended to provide safeguard to
the citizens against abuse or misuse of power by the instrumentalities oragencies of
the state. One of the latest and important of these principles is the ‘doctrine of
legitimate expectation’, which is an outcome of synthesis between the principle of
administrative fairness (a component of the principles of natural justice)and the rule
of estoppel.
It is relevant to note that the doctrine of legitimate expectation is attaining the status
of a fundamental legal concept of administrative justice which is evident from its
incorporation into section 24 (b) of the Interim Constitution of the Republic of
South Africa Act 200 of 1993.1
The doctrine of ‘legitimate expectation’ imposes in essence a duty on public authority
to act fairly by taking into consideration all relevant factors relating to such legitimate
expectation. The doctrine is still at a stage of evolution but it has generated a significant
body of case law.
The doctrine of ‘legitimate expectation’ has been judicially recognized by the Indian
Supreme Court and this recognition has paved the way for the development of a
broader and more flexible doctrine of fairness. Consequently, the ultimate question
should always be whether something has gone wrong to the extent that the court’s
intervention is required and if so, what form that intervention should take. In
considering whether something has gone wrong, the court has to determine whether
what has happened has resulted in real injustice. If it has, the court must intervene in
the appropriate manner, in this context. The utility of the doctrine of legitimate
expectation is manifold.
in the event. The two phrases ‘reasonable expectation’ and ‘legitimate expectation’ are
treated as synonymous.
It is important that in his judgement in Schmidt v. Secretary of Home Affairs, Lord Denning
makes no mention of any authority, judicial or otherwise, upon which the concept of
legitimate expectation could be founded; indeed he has said that he feels “sure it came
out of my ownhead and not from any continental or other source”4 The later cases do
not suggest any other provenance. Presumably, therefore, the origin of the concept
lies within Lord Denning’s justly famed creative mind and not elsewhere.
However, it may be recalled that prior to the introduction of the doctrine into English
law, it was evolved in German administrative law5 which was subsequently borrowed
and developed by the European Court.6
The judicial evolution of the doctrine of ‘legitimate expectation’ can be traced to the
opinion of the Judicial Committee delivered by Lord Fraser in Attorney-General of Hong
Kong v. Ng Tuen Shiu.7 Ng was an illegal immigrant from Macau. The government
announced a policy of repatriating such persons and stated that each would be
interviewed and each case treated on its merits. Ng. was interviewed and his removal
ordered. His complaint was that at the interview he had not been allowed to explain
the humanitarian grounds on which he might be allowed to stay, but only to answer
the questions put to him; that he was given a hearing, but not the hearing in effect
promised, as the promise was to give one at which ‘mercy’ could be argued. The judicial
committee agreed that, on that narrow point, the government’s promise had not been
implemented, his case had not been considered on its merits, and the removal order
was quashed. Ng succeeded on the basis that he had a legitimate expectation that he
would be allowed to put his case, arising out of the government promise that everyone
affected would be allowed to do so.
In Council of Civil Service Unions v. Minister for the Civil Services,8 the Prime Minister issued
an instruction that civil servants engaged on certain work would no longer be permitted
to be members of trade unions. The House of Lords held that those civil servants had
a legitimate expectation that they would be consulted before such action was taken, as
it was a well-established practice for government to consult civil servants before making
significant changes to their terms and conditions of service. In this case, it may be
4 In a letter to C.F. Forsyth, quoted in 47 (2) Cambridge Law Journal 241 (July 1988).
5 The German concept of ‘Vertrauenschutz’ sought to protect the confidence that subjects had
placed in government.
6 See J. Usher, “The Influence of National Concepts on Decisions of the European Court” 1
European Law Review 359 at 364 (1976) and Re Civil Service Salaries: E. C. Commission v. E. C.
Council (1973) E.C.R. 575; (1973) C.M.L.R. 639.
7 (1983) 2 A.C. 629, (1983) 3 All E.R. 346.
8 (1985) A.C. 374, (1984) 3 All E.R. 935.
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noted, legitimate expectation arose not (as in Ng) out of a promise, but out of the
existence of a regular practice which could reasonably be expected to continue.
In R v. Brent London Borough Council, exp Gunning,9 the legality of adecision to close
schools was challenged by a group of parents, rate payers and parent governors, who
alleged, inter alia, inadequate consultation. Hodgson J. said:
The parents had no statutory right to be consulted, but that they had a
legitimate expectation that they would be consulted seems to me to be
beyond question. The interest of parents in the educational arrangements
in the area in which they live is self-evident... local education authorities
habitually do consult on these mailers. In 1980 and 1983 this local
authority itself had comprehensive consultations which had led to the
decision in 1983 to retain all school sites. Local education authorities are
exhorted by the Secretary of State to consult and results of the
consultations are something which takes into account (in deciding
whether to agree to closures). On any test of legitimate expectation, it
seems to me that these parents qualify.
In a subsequent case, the Court of Appeal used this as an opportunity to reconsider
the entire development in Britain in the area of legitimate expectation. In Regina v.
North and East Division Health Authority, Ex-parte Coughlan,10 the court enforced against
the health authority its promise made to a lady who was seriously injured in an accident
to maintain her in a nursing home for her life. Perhaps it is very significant feature of
the opinion in this case that the Court of Appeal not only recognized the doctrine of
legitimate expectation into two classes, viz., Firstly cases where the court may decide
that the public authority was only required to bear in mind its previous policy or other
representation, giving it weight it thought fit, before deciding to change course. In
such cases, the court would review the decision by applying the test of rationality.
Secondly cases where the court may decide that a lawful promise had induced a substantive
legitimate expectation. Here the court would decide whether the frustration of legitimate
expectation was so unfair that to take a new and different course of action would
amount to an abuse of power. Finally, the court generalized:11
When the legitimacy of the exception had been established, the court
wouldhave the task of weighting the requirements of fairness against
any overriding interestrelied upon for the change of policy.
It is for the court to decide in which of the two categorizes is a specific fact situation.
in private law or he has been deprived of some benefit or advantage which he was
having in the past and which he could legitimately expect to be permitted to continue
unless it is withdrawn on some rational ground or he has received assurance from the
decision making authority which is not fulfilled, i.e., the kind of promissory estoppel.
Change of policy should not violate the substantive legitimate expectation and if it
does so it must be as the change of policy which is necessary and such a change is not
irrational or perverse.
The next case in which the doctrine of “legitimate expectation” was considered is the case
of Food Corporation. of India v. Kamdhenu Cattle Feed Industries. 14 There the Food
Corporation of India invited tenders for sale of stocks of damaged food grains and
the respondent’s bid was the highest. All tenderers were invited for negotiation, but
the respondent did not raise his bid during negotiation while othersdid. The respondent
filed a writ petition claiming that it had a legitimate expectation of acceptance of its
bid, which was the highest. The high court allowed the writ petition. Reversing the
judgement, the Supreme Court referred to CCSU case15 and to Preston, in re16 and held
that though the respondent’s bid was highest, still it had noright to have it accepted.
No doubt, its tender could not be arbitrarily rejected, but if the corporation reasonably
felt that the amount offered by the respondent was inadequate as per the factors
operating in the commercial field, the non-acceptance of bid could not be faulted.
The procedure of negotiation itself involved giving due weight to the legitimate
expectation of the highest bidder and thus was sufficient.
In Union of India v. Hindustan Development Corporation,17 the Supreme Court has pointed
out that “the concept of legitimate expectation which is latest recruit to a long list of
concepts’ fashioned by the courts for the review of administrative action, must be
restricted to the general legal limitations applicable and binding (sic) the manner of
the future exercise of administrative power in a particular case”.18 According to the
Supreme Court an element of ‘speculation’ and ‘uncertainty’ is inherent in that very
concept. In this case tenders were called for supply of cast-steel bogies to the Railways.
The three big manufacturers quoted less than the smaller manufacturers. The Railway
then adopted a dual-pricing policy giving counter-offers at a lower rate to the big
manufacturers who allegedly formed a cartel and a higher offer to others so as to
enable a healthy competition. This was challenged by three big manufacturers
complaining that they were also entitled to ahigher rateand a large number of bogies.
The Supreme Court held that the changeinto adual-pricing policy was not vitiated and
was based on “rational andreasonable”grounds.
The court noted that:19
…legitimate expectation was not the same thing as a anticipation. It was
also different from a mere wish to desire or hope; nor was it a claim or
demand based on a right. A mere disappointment would not give rise to
legal consequences.
At another place, in the same judgement, the position was indicated as follows:20
The legitimacy of an expectation can be inferred only if it is founded on
the sanction of law or custom or an established procedure followed in
regular and natural sequence.... Such expectation should be justifiably
legitimate and protectable.
In M.P. Oil Extraction v. State of M.P.21 the Supreme Court ruled that the doctrine of
legitimate expectation has its application only in the realm of public law and that in an
“appropriate case, constitutes a substantive and enforceable right”. On the facts of
the instant case, itwas held that the industries, with whom the state government had
entered into agreements for supply of sal seeds, had a legitimate expectation that in
accordance with the renewal clause and in accordance with the past practice, the
agreements would be renewed inthe usual manner. The court also ruled that the selected
industries, with which the state had entered into agreements for supply of sal seeds at
concessional rates, needed the protection of continuing such agreements and hence,
the renewal clause were provided in those agreements. The court attached considerable
importance to the need for protection of such selected industries by upholding the
validity of the renewal clauses in those agreements, although it was apparent in the
mind of the court that to ensure fair play and transparency in the state’s action, it was
desirable that distribution of state largesse was effected by inviting open tenders or by
public auction. The court, however, felt that special agreements entered into with the
selected industrial units by the state government were permissible. The decision reflects
the mind of the court that it considered the doctrine of legitimate expectation as an
equitable principle and that inorder to give full effect to this principle, application of
another principle in the realm of public law may, if need be, have to berestricted.
The Supreme Court laid down a clear principle that claims on legitimate expectation
required reliance on representation and resultant detriment in the same way as claims
based on promissory estoppel. In National Buildings Construction Corporation v. S.
19 Id. at 540.
20 Ibid.
21 (1997) 7 SCC 592.
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the pros and cons relevant to the change in policy. The choice of policy is for the
decision-maker and not for the court. The legitimate substantive expectation merely
permits the court to find out if the change of policy which is the cause for defeating
the legitimate expectation is irrational or perverse or one which no reasonable person
could have made. A claim based on merely legitimate expectation without anything
more cannot ipso facto give a right. “Legitimacy of an expectation can be inferred only
if it is founded on the sanction of law.”
The court has observed:26
If a denial of legitimate expectation in a given case amounts to denial of
right guaranteed or is arbitrary, discriminatory, unfair or biased gross
abuse of power or violation of principles of natural justice, the same
can be questioned on the well known grounds attracting Article 14 but a
claim based on mere legitimate expectation without anything more cannot
ipso facto give a right to invoke these principles.
In Bannari Amman Sugar Ltd. v. C.T.O.,27 the apex court maintained that where a person’s
legitimate expectation is not fulfilled by taking a particular decision then authority
should justify the denial of such expectation by showing some overriding public interest.
In the present case, since the state had not indicated reasons justifying the withdrawal
of benefit, the court insisted that appellants be given an opportunity of hearing to
present their side of the picture.
In Chief Commissioner of Income Tax v. Smt. Susheela Prasad,28 the Supreme Court has
dealt with an important question relating to invocation of doctrine of legitimate
expectation by temporary/contractual/casual employees for seeking confirmation in
service. The court, while rejecting the contention, quoted with approval the principle
laid down in Uma Devi’s case on the point:29
When a person enters a temporary employment or gets engagement as a
contractual or casual worker and engagement is not based on a proper
selection as recognized by the relevant rules or Procedure, he is aware of
the consequences of the appointment being temporary, casual or
contractual in nature. Such a Person cannot invoke the theory of
legitimate expectation for being confirmed in the post when an
appointment to the post could be made only by following a proper
procedure for selection and in concerned cases, in consultation with the
Public Service Commission. Therefore, the theory of legitimate
been in the negative list. In January, 1996, notice was given of the intention of the
government to amend the rules. A draft for the information of persons likely to be
affected by it was also circulated. Amendment in terms of the draft rules were notified
on January 16, 1996, whereby ‘solvent extraction plant’ was put in the negative list of
industries not entitled to exemption. ‘note 2’ appended thereto provided that ‘the
industrial units in which investment has been made up to 25% of the anticipated cost
of the project and which have been included in the above list for the first time shall be
entitled to the sales tax benefits related to the extent of investment made up to January
3, 1996.’
However, in May, 1997, the said rules were amended inter alia by omitting ‘note 2’
deeming to have always been omitted. Mahabir Vegetable Oils Private Limited applied
for sales tax exemption which was rejected in terms of the omission of ‘note 2’. In
Mahabir Vegetable Oils (P) Ltd. v. State of Haryana32 the Supreme Court had held that
Mahabir Vegetable Oils had the legitimate expectation of being entitled to sales tax
exemption pursuant to ‘Note 2’ by which certain rights had accrued on the industrial
units.
The Supreme Court in Union of India v. Lt. Col. P.K. Choudhary,33 restated that denial of
legitimate expectation in a given case amounts to denial of a right that is guaranteed or
is arbitrary, discriminatory, unfair or biased, gross abuse of power or in violation of
principles of natural justice the same can be questioned on the well-known grounds
attracting article 14 of the Constitution but a claim based on mere legitimate expectation
without anything more cannot ipso facto give a right to invoke these principles.34 However,
the court while referring to Punjab Communications v. Union of India35 emphasized that
change in policy defeating substantive legitimate expectation must satisfy the test of
Wednesbury reasonableness, hence, courts can interfere on being satisfied that change
in its policy is irrational or perverse. In this case, the court rejected the contention that
the legitimate expectation did arise.
IV Conclusion
The plea of legitimate expectation still remains a very weak plea in Indian Administrative
Law. A claim for a benefit on the basis of legitimate expectation is more of ten negatived
by the courts. It is rarely that such a plea is accepted by courts in India. It is humbly
submitted, therefore, that in situation of confusion of ideas regarding the concept of
legitimate expectation what needs to be realized is that the concept envisages not
merely “expectation” but “legitimate expectation” which means that there is already
something super-added to just ‘expectation’ – some kind of assurance or representation
by the administration or the fact that the expectation has been recognized over a
period of time. What needs to be realized is that the concept is more of an equitable
nature rather than legalistic in nature.