The doctrine of estoppel is a cornerstone of civil jurisprudence. It prevents a party from taking contradictory positions or denying facts that have already been settled to the detriment of another party. While estoppel provides stability in private dealings, its applicability against the government has always been limited. Courts have consistently emphasised that the State, in exercising its legislative, sovereign, or executive powers, cannot be restricted by estoppel, since such functions are carried out in the public interest.
The recent decision of the Supreme Court in Divyagnakumari Harisinh Parmar & Ors. v. Union of India & Ors. (2025 INSC 1145) revisits this principle in the context of land grants in Dadra and Nagar Haveli. The Court was called upon to decide whether long governmental inaction or alleged waiver could estop the administration from rescinding land concessions originally made during Portuguese rule.
Ultimately, the Court reaffirmed the principle that there can be no estoppel against the government in matters involving sovereign functions, thereby protecting the State’s regulatory authority.
Background: Colonial Legacy and Portuguese Land Grants
Portuguese Legal Regime
The lands in question were originally granted under the Portuguese administration between 1923 and 1930. The legal framework included:
Portuguese Civil Code, 1867 – which governed property contracts, including the concept of emphyteusis (long-term conditional land grants).
Decree No. 3602 (1917 Law) – provided for State land grants under emphyteusis.
Organização Agrária (OA), 1919 – specifically applied to Nagar Haveli, regulating land concessions (Alvaras) for cultivation.
The Alvara system allowed individuals to hold land in perpetuity, subject to conditions such as cultivation requirements and payment of fixed assessments. These rights were transferable and inheritable.
Post-Independence Transition
After liberation in 1954 and integration into India in 1961, the Indian administration continued recognising Alvara rights. However, failure to cultivate the land as mandated under Article 12 of the OA could result in rescission without compensation. In 1971, the President promulgated the Dadra and Nagar Haveli Land Reforms Regulation, which abolished Alvaras and conferred occupancy rights on holders, while imposing ceilings on landholdings.
Just before this reform came into effect (1 May 1974), the Collector rescinded several Alvaras, alleging breach of cultivation conditions. This triggered decades of litigation, culminating in the 2025 Supreme Court ruling.
Facts of the Case
Initial Grants: Between 1923 and 1930, appellants’ predecessors received Alvaras from the Portuguese Government, requiring cultivation within fixed timelines.
Collector’s Action (1969–1974): Indian Collector rescinded the grants, citing non-cultivation under Article 12 OA. The action was consolidated in an order dated 30 April 1974.
Litigation Before Lower Courts:
Trial Court (1978): Favoured the appellants, holding that conditions were either fulfilled or waived by the Portuguese administration; rescission was declared illegal.
First Appellate Court (1983): Affirmed the Trial Court, citing waiver, condonation, and long inaction by the authorities.
High Court (2005): Reversed both, holding that there can be no estoppel against the State in the exercise of sovereign power.
Appeal Before Supreme Court (2006–2025): The appellants challenged the High Court’s ruling, asserting waiver, condonation, and arbitrariness.
Issues Before the Supreme Court
The Court crystallised the following issues
- What is the true nature of rights under Portuguese Alvaras?
- Whether the High Court could interfere with concurrent factual findings of lower courts?
- Whether rescission of land grants could be vitiated by waiver, acquiescence, delay, or estoppel?
- Whether the Collector’s 1974 order mala fide or arbitrary?
Arguments of the Parties
Appellants
Waiver and Condonation: The Portuguese administration had acquiesced to non-cultivation due to poor soil quality, amounting to waiver.
Delay: Nearly 50 years had elapsed since the grant; rescission was belated and arbitrary.
Estoppel: Having recognised partition and mutation of Alvara lands, the government was estopped from rescinding them later.
Arbitrariness: Rescission one day before the Land Reforms Regulation was enacted was mala fide, intended to deprive holders of occupancy rights.
Violation of Article 300A: Forfeiture without compensation was unconstitutional.
Respondents (Union of India)
Mandatory Conditions: Article 12 OA made cultivation a statutory obligation; failure automatically attracted rescission.
No Estoppel Against Government: Public policy and statutory duties cannot be waived by officials.
Sovereign Authority: State must regulate land use in the public interest; estoppel cannot restrict sovereign powers.
Saving Clause: Section 57 of the 1971 Land Reforms Regulation preserved prior proceedings, validating rescission orders.
The Supreme Court’s Analysis
1. Nature of Alvara Rights
The Court clarified that Alvaras conferred conditional occupancy rights, inheritable and transferable, but always subject to cultivation obligations. These were not absolute ownership rights. The OA was a special law, governing such grants specifically for Dadra and Nagar Haveli, and it prevailed over the general 1917 Law.
2. Scope of High Court in Second Appeal
While generally restricted under Section 100 CPC, the High Court was justified in interfering where lower courts had misapplied the law by treating waiver and acquiescence as valid. Findings based on misinterpretation of statutory provisions raise substantial questions of law.
3. Waiver, Acquiescence, and Estoppel
The Court categorically held:
Statutory Obligations Cannot Be Waived: Conditions under Article 12 OA were mandatory and rooted in public policy. Even if Portuguese officials orally condoned breaches, such a waiver was legally invalid.
No Estoppel Against Government: Relying on precedents (Waman Shriniwas Kini v. Ratilal Bhagwandas, 1959; Shri Lalchoo Mal v. Radhey Shyam, 1971), the Court reiterated that estoppel cannot operate against the government in the discharge of legislative, sovereign, or executive functions.
Delay Does Not Confer Rights: Mere inaction does not constitute waiver or acquiescence. Rights cannot be perfected by the State’s failure to act promptly.
4. Mala Fides Allegation
The Court rejected the claim of mala fide timing, holding that the Collector acted within legal authority and pursuant to prior judicial directions. The saving clause in the Land Reforms Regulation protected ongoing proceedings.
Judgment
The Supreme Court dismissed the appeals, affirming the High Court’s ruling. It held that:
- The government is not estopped from enforcing cultivation conditions, even after a delay.
- Alvaras were conditional grants, not absolute ownership; failure to cultivate justified rescission.
- Sovereign functions, including land regulation, cannot be restricted by estoppel or waiver.
Thus, the Court restored the Collector’s rescission orders and underscored that individual interests cannot override statutory obligations framed for public policy.
Legal Principles Affirmed
- No Estoppel Against Government: A long-standing principle reaffirmed. Sovereign powers, legislative functions, and statutory obligations cannot be negated by estoppel.
- Lex Specialis Derogat Legi Generali: Special laws (OA) override general laws (1917 Law) when governing the same subject matter.
- Public Interest Supremacy: Statutory conditions attached to grants must be strictly enforced to protect collective welfare.
- Limitations of Waiver and Acquiescence: Waiver of mandatory statutory obligations is impermissible; mere delay cannot create rights.
Broader Implications
- Property Rights and Article 300A: The case reaffirms that property rights, while constitutionally protected, are subject to statutory restrictions and public policy. Occupancy rights under Alvaras were always conditional; hence, rescission for non-compliance does not amount to arbitrary deprivation.
- Administrative Accountability: While protecting government powers, the Court also emphasised adherence to natural justice. The Collector provided notices, inspections, and hearings. Thus, procedural fairness remains a constitutional requirement.
- Precedential Value: This judgment strengthens the State’s hands in matters of land regulation, urban development, and resource allocation. It prevents individuals from using estoppel as a shield against the enforcement of statutory duties, particularly in contexts like environmental compliance, land acquisition, and tenancy regulation.
Conclusion
The Supreme Court’s decision in Divyagnakumari Harisinh Parmar marks a reaffirmation of a fundamental doctrine: the government cannot be estopped from exercising its sovereign, legislative, or executive powers, especially when such functions are grounded in public interest and statutory mandates. While private parties may legitimately invoke estoppel in contractual and civil disputes, its application against the State is limited, ensuring that public policy objectives are not undermined.
In a democracy governed by the rule of law, this balance is crucial. Citizens’ rights must be protected against arbitrary State action, but at the same time, the State must retain the ability to enforce conditions essential to social welfare, economic development, and equitable land distribution.
This judgment underscores that statutory duties—once imposed—cannot be diluted by waiver, delay, or estoppel, safeguarding the primacy of public interest over private convenience.