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Doctrine of Legitimate ExpectationA comparative and analytical study

INTRODUCTION

It cannot be overemphasized that the concept of legitimate expectation has now emerged as animportant doctrine. It is stated that it is the latest recruit to a long list of concepts fashioned by the court to

review an administrative action.1 It operates in public domain and in appropriate cases constitutes a

substantive and enforceable right.2 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. "he principle

at the root of the doctrine is #ule of $aw which re%uires 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 to the individual or generally to a class of persons. 'hether

an expectation exists is a %uestion of law but clear statutory words override any expectation however

founded. (owever as an e%uity doctrine it is not rigid and operates in areas of manifest injustice. It

enforces a certain standard of public morality in all public dealings. (owever 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.

)xercise of discretion is an inseparable part of sound administration and therefore the *tate which is

itself a creature of the +onstitution cannot shed its limitation at any time in any sphere of *tate activity.

A discretionary power is one which is exercisable by the holder of the power in his discretion or

subjective satisfaction. "he 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. #easonable and non!arbitrary exercise of discretion is an inbuilt

re%uirement of the law and any unreasonable or arbitrary exercise of it violates Article 1, of the+onstitution of India 1-/. "he discretion must be exercised reasonably in furtherance of public

1 Union of India v. Hindustan Development Corpn., (1993) 3 SCC 99!

" M.P. Oil Extraction Co. v. State of M.P!, (199#) # SCC $9"!

3 Chanchal Goal !Dr." v. State of #a$asthan, ("%%3) 3 SCC &$

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policy public good and for public cause. "his 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 approach0 rather it should be given broadest of interpretations so as to

cover within its purview the dialectics and dynamics of fairness and efficiency. "he 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. nder 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. "he 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. "he 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.

&. A third category arose when an individual received a promise or representation which was not

honoured due to a subse%uent change to a policy or norm of general application.

,. A fourth category which was a variation on the third arose when an individual received a

promise or representation which was subse%uently dishonoured not because there had been a

general change in policy but rather because the decision! maker had changed its mind in that

instance.,

"his doctrine has found acceptance not only in the .3. 4as this paper will elaborate in the next chapter5

where it originated but also in Australia

*outh Africa

(ong 3ong *ingapore 6ew 7ealand

+anada and as this paper will examine in India.

CRI*, D+INISTRTIE L-, .1 ($t/ e0, "%%3)!

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JUDICIAL DEVELOPMENT O LE!ITIMATE E"PECTATION# IN

T$E UNITED %IN!DOM

"he +ourts in )ngland have been faced with various situations in which they have had to deal with the

aspect of legitimate expectations. "he developments that the +ourts have brought abut have lent a

structural stability to the concept.

TES O2 LE*ITI+TE EECTTIONS4

1! roce05ra6 Legitimate Expectation7

8enotes the existence of some process right the applicant claims to possess as a result of behavior by

the public body that generates the expectation.

"! S58tanti:e Legitimate Expectation 7

#efers to the situation in which the applicant seeks a particular benefit or commodity such as a welfare

benefit or license. "he claim to such a benefit will be founded upon governmental action which is said

to justify the existence of the relevant expectation.

*ome of the arguments in favor of substantive

legitimate expectations are it creates fairness in public administration

reliance and trust in

government principle of e%uality upholds rule of law.9

RESONS 2OR ROTECTIN* LE*ITI+TE EECTTIONS

$ See, R! :! Li:erpoo6 Taxi 26eet ociation, ;19#"< " => "99!

. Ex! ! ?am86e (O@/ore) 2i/erie Lt0 ;199$< " 66! E!R! #1, #"A ?argrea:e, ;199#< 1 -LR 9%.

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It is re%uired by fairness0 abuse of power has been considered the root concept justifying the protection of

legitimate expectations0

in )uropean 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 upon0 the trust that has

been reposed by the citizen in what he has been told or led to believe by the official.

-?EN IS N EECTTION LE*ITI+TEB

First it must be founded upon a promise or practice by the public authority that is said to be bound to

fulfil 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.

?O- CN LE*ITI+TE EECTTION RISEB

In CCSU v. Minister for Civil Service $ord :raser 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. )x p re ss > romise "he 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

= ?1-@ A+ &=, ,/1. See +$IB) $)'I* C8I+IA$ # )D)8I)* I6 >E$I+ $A' 2=2 4&rd edn 2//,5.

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Association@ an express promise from the $iverpool +orporation 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. ) x is t e n c e of # e g ular > r a c ti ce In CCSU case

where continuous practice of consultation before

changes to conditions of service led to the legitimate expectation there would be consultation

before the Dinister abolished the membership of the trade union.

&. + e rt a in +rite r ia must be s a ti sfi e d for the p romise or p rac ti c e to g a in leg a l

e n f o r c ea bi lit y in pub l ic l a w

• "he promise must be clear unambiguous and precise. "he promise of a hearing before a decision is

taken may give rise to a legitimate expectation that the hearing will be given.

• "he legitimate expectation must be legal. It should be within the powers of the body to make the

representation and fulfill it.

• 3nowledge of policy but not reliance on it to oneFs own detriment.

• If the individual has suffered no hardship there would be no reason to hold the decision!maker to

its promise.

STNDRD O2 REIE- 2OR >REC? O2 LE*ITI+TE EECTTION

In R. (Bibi) v. e!ha" London Borou#h Council - the +ourt of Appeal gave guidance on how

the court should approach legitimate expectation cases with three practical %uestions :irst what

has the public authority whether by promise or practice committed itself to0 second whether the

authority has acted or proposed to act unlawfully in relation to its commitment0 third what the

court should do in this regard.

$. C. $aws in Abdi and adara$ah v. Secretar% of State for &o"e 'epart"ent 1/ advocated a test of

proportionality for judicial review of administrative action on the basis of legitimate expectation.

"his 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 andGor democratic

& i8i0

9 ;"%%1< E-C Ci: .%#

1% ;"%%$< E-C Ci:! 13.3

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legitimacy than the court and the court could apply the test with varying degrees of intensity by

scrutinizing more or less closely a decision!makerFs claims that it was necessary to frustrate the

applicantFs expectation.

JUDICIAL DEVELOPMENT O LE!ITIMATE E"PECTATION# IN

INDIA

*ome *upreme +ourt cases that have recently dealt with the doctrine of legitimate expectation

are

• In ..Bansal v State of Ra$asthan11 the *upreme +ourt while examining the doctrine of legitimate

expectation held that

*The principle of le#iti"ate expectation is at the root of the rule of la! and re+uires re#ularit%,

predictabilit% and certaint% in #overn"ent-s dealin#s !ith the public. For a le#iti"ate expectation

to arise, the decisions of the ad"inistrative authorit% "ust affect the person b% deprivin# hi" of

so"e benefit or advanta#e !hich either

(i) he had in the past been per"itted b% the decision "a/er to en$o% and !hich he can le#iti"atel%

expect to be per"itted to continue to do until there has been co""unicated to hi" so"e

rationale #rounds for !ithdra!in# it or !here he has been #iven an opportunit% to co""ent0 or

(ii) he has received assurance fro" the decision "a/er that the% !ill not be !ithdra!n

!ithout #ivin# hi" first an opportunit% of advancin# reasons for contendin# that the% should

not be !ithdra!n.

The procedural part of it relates to a representation that a hearin# or other appropriate procedure

!ill be afforded before the decision is "ade. The substantive part of the principle is that if a

representation is "ade than a benefit of substantive nature !ill be #ranted or if the person is

alread% in receipt of the benefit than it !ill be continued and not be substantiall% varied, then the

sa"e could be enforced. An exception could be based on an express pro"ise or representation or

11 "%%3(3) SCC 1$

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b% established past action or settled conduct. The representation "ust be clear and una"bi#uous.

1t could be a representation to an individual or to a class of persons.2

• In another case un$ab Co""unications Ltd v. Union of 1ndia 41---512 the *upreme +ourt cited

Eritish precedents 4especially &ar#reaves5 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 'ednesbury 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 3RF Ltd 4otta%a" vs Asst Co""issioner, Sales Tax56 it was observed that the protection of

;legitimate expectation< does not re%uire the fulfillment of such expectation where an

overriding public interest re%uires otherwise. "hat is to say the public interest is overriding.

"herefore 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 re%uired a change in policy moving away from past promises and practice.

• #ecently a +onstitution Eench of the *+ in Secretar%, State of 4arnata/a v. U"adevi1,

referred to the circumstances in which the doctrine of legitimate expectation can be invoked thus

;"he doctrine can be invoked if the decisions of the administrative authority affect the person by

depriving him of some benefit or advantage which either 4i5 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 comment0 or 4ii5 he has received assurance from the decision!maker that

1" 1999 () SCC #"#

13 S5preme Co5rt of In0ia 50gment 0ate0 "1 Septem8er "%%.

1 "%%. () SCC 1

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they will not be withdrawn without giving him first an opportunity of advancing reasons for

contending that they should not be withdrawn.<

• Another +onstitution Eench referring to the doctrine observed thus in Confederation of 7x8

service"en Associations vs. Union of 1ndia1 ;6o doubt the doctrine has an important place in the

development of Administrative $aw and particularly law relating to Hjudicial reviewH. nder the

said doctrine a person may have 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 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. *uch 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 +ourt may not insist an administrative

authority to act judicially but may still insist it to act fairly. "he 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 *+ has observed after examining a

list of authorities on the subject that ;"he doctrine of legitimate expectation based on established

practice 4as contrasted from legitimate expectation based on a promise5 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.19

1$ T "%%. (&) SC $#

1. #am Pravesh Sin%h & Ors. v.State of 'ihar & Ors!, "%%. (&) SC #"1

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•

In Food Corporation of 1ndia v. 4a"dhenu Cattle Feed 1ndustries Ltd 1=

the *upreme +ourt has

observed that the doctrine of legitimate expectation falls within the purview of the principle of

non!arbitrariness as incorporated under Article 1, of the +onstitution. It becomes an enforceable

right when the overnment instrumentality fails to give due weight to it.

•

(owever as per the observations of the *upreme +ourt in Assistant 7xcise

Co""issioner v. 1ssac eter 1@ the doctrine of legitimate expectation cannot be invoked to

alter the terms of a contract of a statutory nature. *imilarly in &o!rah 3unicipal Corporation v.

9an#es Road Co"pan% 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 3adras Cit% :ine 3erchants Association v. State of Ta"il adu5;

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 1ndia v. &industan 'evelop"ent Corporation2/

the *upreme +ourt has elaborately

considered the reverence of this theory. In the estimation of the Apex +ourt 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 av$%oti Co8op 9roup &ousin# Societ% v. Union of 1ndia<5 that the doctrine of

legitimate expectation imposes in essence a duty on the public authorities to act fairly by taking

1# IR 1993 SC 1.%1

1& (199) SCC 1%!

19 ("%%) 1 SCC ..3

"% (199) $ SCC $%9

"1 IR 1993 SC 1$$

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into consideration all the relevant factors bearing a nexus to such legitimate expectation. "he

concerned authority cannot act arbitrarily so as to defeat the expectation unless demanded by

over!riding reasons of public policy.

:urther in another landmark judgment 3.. =il 7xtraction Co v. State of 3adh%a radesh

the *upreme +ourt was dealing with the license renewal claims of certain industries. It was held

in this case that extending an invitation on behalf of the *tate was not arbitrary and the selected

industry had a legitimate expectation of renewal of license under the renewal claims.

• In ational Buildin# Constructions Corporation v. S Ra#hunathan<< it was held that legitimate

expectation is a source of both procedural and substantive rights. "he person seeking to invoke

the doctrine must be aggrieved and must have altered his position. "he doctrine of legitimate

expectation assures fair play in administrative action and can always be enforced as a

substantive right. 'hether or not an expectation is legitimate is a %uestion of fact.

• "he *upreme +ourt in un$ab Co""unications Ltd. >s. Union of 1ndia ? =rs., referring to a large

number of authorities on the %uestion observed that a change in policy can defeat a substantive

legitimate expectation if it can be justified on J'ednesburyJ reasonableness. "he decision maker

has the choice in the balancing of the pros and cons relevant to the change in policy. "herefore the

choice of the policy is for the decision maker and not for the +ourt. "he legitimate substantive

expectation merely permits the +ourt to find out if the change in policy which is the cause for

defeating the legitimate expectation is irrational or perverse or one which no reasonable person

could have made!

• In Union of 1ndia v. 1nternational Tradin# Co<6. It was held that. "he reasonableness of

the legitimate expectation has to be determined with respect to the circumstances relating to the

trade or business in %uestion. +analisation of a particular business in favour of even a specified

individual is reasonable where the interests of the country are concerned or where the business

affects the economy of the country.

"" IR 199& SC "##.

"3 ("%%3) $ SCC 3#)

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• In itendra 4u"ar ? =rs. >s. State of &ar%ana ? Anr . It has been reiterated that a legitimate

expectation is not the same thing as anticipation. It is distinct and different from a desire and hope.

It is based on a right. It is grounded in the rule of law as re%uiring regularity predictability and

certainty in the overnmentHs dealings with the public and the doctrine of legitimate expectation

operates both in procedural and substantive matters.

• Dost recently in Sethi Auto Service Station v. ''A<@ the +ourt clarified its position on the doctrine

of legitimate expectation ;It is well settled that the concept of legitimate expectation has no role

to play where the *tate action is as a public policy or in the public interest unless the action taken

amounts to an abuse of power. "he court must not usurp the discretion of the public authority

which is empowered to take the decisions under law and the court is expected to apply an objective

standard which leaves to the deciding authority the full range of choice which the legislature is

presumed to have intended. )ven in a case where the decision is left entirely to the discretion of the

deciding authority without any such legal bounds and if the decision is taken fairly and objectively

the court will not interfere on the ground of procedural fairness to a person whose interest based

on legitimate expectation might be affected. "herefore a legitimate expectation can at the most be

one of the grounds which may give rise to judicial review but the granting of relief is very much

limited.

"he development of the doctrine of legitimate expectation in India has been in line with the principles

evolved in common law )nglish courts. In fact it was from these )nglish 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.

" ("%%9) 1 SCC 1&%

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CONCLUSION

As 'ade K :orsyth believe the doctrine of legitimate expectations is a welcome addition to the armoury

of the courts ensuring that discretions are exercised fairly. "he phrase ;legitimate expectation< which is

much in vogue

must not be allowed to collapse into an inchoate justification for judicial

intervention.2

Academics have expressed skepticism as to whether the doctrine of legitimate expectation should apply

to substantive rights. "hio $i!ann argues that legitimate expectations should relate only to procedural

rather than substantive rights.29 >rocedural 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. "hus the ultimate autonomy of public

authorities is never placed in jeopardy. +onversely as Dark )lliot posits giving effect to a substantive

legitimate expectation impinges on the separation of powers.2= "he authority has been entrusted by

>arliament to make decisions about the allocation of resources in public interest. Applying legitimate

expectation substantively allows the courts to in%uire into the merits of the decision. *uch

interference with the public authorityHs discretion would be overstepping their role and exceeding their

proper constitutional function.

"he 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 )xecutive is

necessary. "he courts have to therefore maintain a balance between legitimate judicial intervention and

"$ R! (E> oo:o) :! ?ome SecretarF, ;"%%&< U?L 1! (Lor0 Scott)

". "hio $i!ann La! and the Ad"inistrative State in 3)BI6 L)' $)) "A6 4ed.5 "() *I6A>M#) $)A$ *L*")D 1-/ 41--95

"# +arG E66iot, Cou%hlan( Su)stantive Protection of *e%itimate Expectations #evisited, $ (1)

50icia6 Re:ieH "# ("%%%)

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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.9

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