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Doctrine of Legitimate Expectation

By Y.Srinivasa Rao, Prl. Senior Civil Judge, Tirupati

TABLE OF CONTENTS:

  1. Introduction
  2. Basic principles relating to ‘Legitimate Expectation’
  3. Doctrine of substantive legitimate expectation
  4. Some of the important decisions of Supreme Court to find out the extent to which the principle of substantive legitimate expectation is accepted in India
  5. Conclusion


Introduction: Adverting to the basis of legitimate expectation its procedural and substantive aspects, Lord Steyn in Pierson v. Secretary of State for the Home Department (1997 (3) All ER 577, at p.606)(HL) goes back to Dicey’s description of the rule of law in his “Introduction to the study of the Law of the Constitution” (10th Edn. 1968 p.203) as containing principles of enduring value in the work of a great jurist. Dicey said that the constitutional rights have roots in the common law. See. Dr. (Mrs.) Chanchal Goyal vs State Of Rajasthan, Appeal (Civil) No. 7744/1997, Dt.18-02-2003. The principle of ‘legitimate expectation’ is still at a stage of evolution as pointed out in De Smith Administrative Law (5th Edn. Para 8.038). See.Union Of India Ors vs Harish Bhikrishna Mahajan, (1997 [3] SCC 194).

“The ‘rule of law’, lastly, may be used as a formula for expressing the fact that with us, the law of constitution, the rules which in foreign countries naturally form part of a constitutional code, are not the source but the consequence of the rights of individuals, as defined and enforced by the courts; that, in short, the principles of private law have with us been by the action of the courts and Parliament so extended as to determine the position of the Crown and its servants; thus the constitution is the result of the ordinary law of the land”. — Dicey’s description of the rule of law in his “Introduction to the study of the Law of the Constitution”.

Basic principles relating to ‘Legitimate Expectation’:—-

The basic principles in this branch relating to ‘legitimate expectation’ were enunciated by Lord Diplock in Council of Civil Service Unions and Ors. v. Minister for the Civil Service (1985 AC 374 (408-409) (Commonly known as CCSU case). It was observed in that case that 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 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. 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 that a benefit of a substantive nature will be granted or if the person is already in receipt of the benefit that it will be continued and not be substantially varied, then the same could be enforced. In the above case, Lord Fraser accepted that the civil servants had a legitimate expectation that they would be consulted before their trade union membership was withdrawn because prior consultation in the past was the standard practice whenever conditions of service were significantly altered. Lord Diplock went a little further, when he said that they had a legitimate expectation that they would continue to enjoy the benefits of the trade union membership, the interest in regard to which was protectable. An expectation 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 the individual or generally to class of persons.

Doctrine of substantive legitimate expectation:—

The principle of a substantive legitimate expectation, that is, expectation of favourable decision of one kind or another, has been accepted as part of the English Law in several cases. (De Smith, Administrative Law, 5th Ed.) (Para 13.030), (See also Wade, Administrative Laws, 7th Ed.) (pp. 418-419). According to Wade, the doctrine of substantive legitimate expectation has been “rejected” by the High Court of Australia in Attorney General for N.S.W. vs. Quin (1990) 93 ALL E.R. 1 (But see Teon’s case referred to later) and that the principle was also rejected in Canada in Reference Re Canada Assistance Plan (1991) 83 DLR (4th 297, but favoured in Ireland: Canon vs. Minister for the Marine 1991(1) I.R. 82. The European Court goes further and permits the Court to apply proportionality and go into the balancing of legitimate expectation and the Public interest.

Lord Scarman says,

“But what was their legitimate expectation. Given the substance and purpose of the legislative provisions governing parole, the most that a convicted prisoner can legitimately expect is that his case be examined individually in the light of whatever policy the Secretary of State sees fit to adopt provided always that the adopted policy is a lawful exercise of the discretion conferred upon him by the statute. Any other view would entail the conclusion that the unfettered discretion conferred by statute upon the minister can in some cases by restricted so as to hamper or even to prevent changes of policy.”

Administrative policies may change with changing circumstances, including changes in the political complexion of governments. The liberty to make such changes is something that is inherent in our constitutional form of government.” —- Lord Diplock in Hughes vs. Department of Health and Social Security (HL) 1985 AC 776 (788).

Some of the important decisions of Supreme Court to find out the extent to which the principle of substantive legitimate expectation is accepted in India:—

According to the principle of ‘legitimate expectation’, if the authority proposed to defeat a person’s legitimate expectation, it should afford him an opportunity to make a representation in the matter. —- Navjyoti Coo-Group Housing Society vs Union Of India And Others(1992 (4) SCC 477).

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 others did. 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 judgment, the Apex Court referred to CCSU case and to R. v. IRC ex p Preston (1985 AC 835). It was held that though the respondent’s bid was the highest, still it had no right 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 the giving due weight to the legitimate expectation of the highest bidder and this was sufficient. —- Food Corporation Of India vs M/S. Kamdhenu Cattle Feed,  (1993 (1) SCC 71).

“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.” —- Union Of India And Ors vs Hindustan Development Corpn., 1993 SCR (3) 128.

The rules relating to renewal of liquor licences were statutorily altered by repealing existing rules. It was held that the repeal being the result of a change in the policy by legislation, the principle of non-arbitrariness was not invocable. — Madras City Wine Merchants’ … vs State Of Tamil Nadu , 1994 (5) SCC 509.

State’s policy to extend renewal of an agreement to selected industries which came to be located in Madhya Pradesh on invitation of State, as against other local industries was not arbitrary and the said selected industries had a legitimate expectation of renewal under renewal claims which should be given effect to according to past practice unless there was any special reasons not to adhere to the practice. —- M.P. Oil Extraction And Anr. Etc vs State Of Madhya Pradesh , (1997 (7) SCC 592.

The doctrine of ‘legitimate expectation’ had both substantive and procedural aspects. This 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. The principle was developed in the context of ‘reasonableness’ and in the context of ‘natural justice’.  — National Buildings Construction … vs S. Raghunathan & Ors,  (1998 (7) SCC 66).

The  doctrine of legitimate expectation has been succinctly discussed by the Supreme Court in M/S Sethi Auto Service Station & … vs Delhi Development Authority & Ors, (2009) 1 SCC 180. The protection of legitimate expectations, as pointed out in De Smith’s Judicial Review (Sixth Edition), (para 12-001), is at the root of the constitutional principle of the rule of law, which requires regularity, predictability, and certainty in government’s dealings with the public.

Conclusion:- The doctrine of legitimate expectation may not be restricted where the expectation was to be consulted or heard, but the doctrine imposes, in essence, a duty to act fairly. (Ref. Lalit Sehgal vs State Of Goa And Ors.,1996 (3) BomCR 105, (1995) 97). As is said by Taylor, J, the doctrine of legitimate expectation in essence imposes a duty to act fairly. As was observed in Attorney General of Hong Kong Vs. Ng Yuen Shiu, when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it should act fairly and should implement its promise, so long as the implementation does not interfere with its statutory duty.
The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary.

If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, (1993) 3 SCC 499  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. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the 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 the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is “not the key which unlocks the treasury of natural justice and it ought not unlock the gate which shuts the court out of review on the merits”, particularly when the element of speculation and uncertainty is inherent in that very concept.”

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