Court Upholds Promissory Estoppel, Orders Release of Funds

The court dismissed objections on territorial jurisdiction and maintainability of the writ application. It applied the doctrine of promissory estoppel, directing the Southern Railway to release funds for the petitioner company's claim, disposing of the application.

---

---

Issues Involved:
1. Territorial Jurisdiction
2. Maintainability of the Writ Application
3. Doctrine of Promissory Estoppel
4. Release of Payment for Work Executed

Issue-wise Detailed Analysis:

1. Territorial Jurisdiction:
The respondent nos. 2 to 4 raised a preliminary objection regarding the territorial jurisdiction of the High Court, arguing that the execution of the contract and the respondent authority's office were outside the territorial jurisdiction. However, the court found that the sub-contract between the petitioner company and the respondent no.1 was executed within the territorial jurisdiction of this High Court. The court also noted that instructions for ascertaining the status of the work contract took place within the territorial jurisdiction of this High Court. Referencing the decision of Rajendran Chingaravelu Vs. R. K. Mishra, the court held that even if a small fraction of the cause of action arises within the jurisdiction, the High Court has jurisdiction. Therefore, the objection regarding territorial jurisdiction was dismissed.

2. Maintainability of the Writ Application:
The respondents argued that the petitioner company was a stranger to the respondent nos. 2 and 4, and thus the writ application was not maintainable. The court, however, noted that the respondent no.1 was an instrumentality of the state and had entered into a contract with the petitioner company. The court held that since all parties were present before it, the writ application was maintainable. The court referenced the decision in Monghibai Vs. Cooverji Umersey, which states that once all parties are before the court, it can make the appropriate order. Hence, the objection regarding the maintainability of the writ application was dismissed.

3. Doctrine of Promissory Estoppel:
The court observed that the petitioner company had acted upon the assurance given by the respondent no.1 and invested its funds for manufacturing longitudinal middle berths. The work was cancelled based on a policy decision by the Railway Board, without any fault on the part of the petitioner company or the respondent no.1. The Railway Board had communicated that payments should be made for the work already done till the change in policy. The court held that the doctrine of promissory estoppel applied, as the petitioner company had changed its position based on the promise held by the respondent no.1. The court referenced the decision in Pawan Alloys & Casting Pvt. Ltd. Meerut Vs. U.P. State Electricity Board, which supports the application of promissory estoppel to state authorities.

4. Release of Payment for Work Executed:
The court noted that the Railway Board had allocated funds for the payment of longitudinal middle berths and directed the Southern Railway to release the funds for the payment of the petitioner company's claim. The court directed the competent authority of the Southern Railway to release the funds within two months and instructed the respondent no.1 to release the amount to the petitioner company within a month of receiving the funds from the Southern Railway. The court thus disposed of the writ application, directing the release of the payment for the work executed by the petitioner company.

Conclusion:
The court dismissed the preliminary objections regarding territorial jurisdiction and maintainability of the writ application. It applied the doctrine of promissory estoppel and directed the Southern Railway to release the funds for the payment of the petitioner company's claim, thereby disposing of the writ application.

---