The Doctrine of Legitimate Expectation

The two kinds of expectation

This division is the core of the topic.

Procedural legitimate expectation

The expectation is of a procedure: to be consulted, to be heard, or to be given notice before the decision. This is the settled and uncontroversial limb, and the remedy is straightforward: the authority must give the procedure, or explain why the public interest requires it to be withheld.

Substantive legitimate expectation

The expectation is of a benefit or a result: the renewal of the licence, the continuation of the concession, the grant of the exemption promised. This limb is more controversial, because enforcing it comes close to compelling the authority to exercise its discretion in a particular way, which offends the principle in [Grounds of Judicial Review: Failure to Exercise Discretion] that discretion may not be fettered.

The Indian position is a middle one, and it should be stated in three parts.

1. A substantive expectation does not create an enforceable right to the benefit.
2. The authority may depart from it, but only for a reason that is rational and in the public interest, and not arbitrarily.
3. If it departs arbitrarily, the decision is reviewable under Article 14, because arbitrariness in State action is the vice Article 14 strikes at.

That last step is what makes the doctrine work in India, and its source is Maneka Gandhi v. Union of India, AIR 1978 SC 597.

Facts. A passport issued in June 1976 was impounded in July 1977 under section 10(3)(c) of the Passports Act 1967, the order reciting only that it was "in public interest". No hearing was given, and reasons were refused on the ground that it was not in the interest of the general public to supply them.

Held. Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment; equality and arbitrariness are sworn enemies, one belonging to the rule of law in a republic and the other to the whim and caprice of an absolute monarch. The procedure contemplated by Article 21 must satisfy the test of reasonableness in order to conform to Article 14, being right and just and fair and not arbitrary, fanciful or oppressive. Even where a statute is silent the law may imply the requirement of natural justice, and there is no distinction between quasi-judicial and administrative functions for this purpose.

Why it matters here. Legitimate expectation in India is enforced principally through Article 14 rather than as a free standing common law doctrine. An authority which departs from its own published policy or settled practice in one case, without explanation, is treating like cases unalike, and that is arbitrary.

The limits

An answer that states the doctrine without its limits overstates it badly.

1. It does not fetter a change of policy. A public authority must remain free to change its policy in the public interest, and a legitimate expectation cannot freeze the law or the policy. What it requires is that the change be made in good faith, for a rational reason, and, where an individual is affected, with an opportunity to be heard.
2. It cannot override a statute. No expectation can compel an authority to act contrary to law.
3. It is not a right to the benefit. At most it is a right to be heard and to a reasoned decision.
4. It does not apply to legislative action. Nobody has a legitimate expectation that a rule will not be amended.
5. The public interest prevails. Where the two conflict, the expectation yields, though the authority must show the public interest genuinely required the departure.

Legitimate expectation compared with its neighbours

A worked example

The State Industries Department publishes a scheme announcing that any unit established in a backward district before 31 March will receive a five year exemption from electricity duty. Rohit Bhandari reads the scheme, buys land, builds a unit and starts production in February.

Case 1. The Department refuses the exemption without notice or reasons. Rohit has a legitimate expectation founded on an express published promise, and he is entitled at least to notice, a hearing and a reasoned decision. Refusal without any of those is arbitrary under Article 14.

Case 2. The Department withdraws the scheme in January for all future units, but honours it for units already established. Perfectly lawful. A policy may be changed prospectively.

Case 3. The Department withdraws the scheme in April with retrospective effect, because a review found the exemption was being misused by shell units. The change of policy is in the public interest and is rational, so the expectation yields; but Rohit, who has already acted on it, is entitled to be heard, and the authority must consider whether a transitional protection is appropriate for units already established.

Case 4. The Department withdraws the exemption only for Rohit's unit and continues it for the others. Not a change of policy at all, but unequal treatment. Squarely arbitrary under Article 14.

Case 5. It transpires that the electricity duty exemption was beyond the Department's statutory power to grant. The expectation fails entirely, because no expectation can be founded on an illegality, however clearly the scheme promised it.

Case 6. Rohit had not built anything and had merely read the scheme with interest. He has a much weaker case. Without reliance he can still say a published policy should be applied consistently, but the strength of the claim is far lower.

What it does NOT mean

It does not mean a promise by the government is binding like a contract. It gives a hearing and a reason, not specific performance.

It does not mean policy cannot change. It means it should not change capriciously, or be departed from in one case only.

It does not mean the doctrine can create a right the statute denies. An expectation contrary to law is not legitimate.

It does not mean every hope is protected. There must be a promise or a settled practice, and it must be reasonable to rely on it.

Quick revision

1. Legitimate expectation arises from an express promise or from a settled and consistent past practice.
2. Two kinds: procedural, an expectation of consultation or a hearing; and substantive, an expectation of a benefit.
3. It is not an enforceable right to the benefit. It entitles the person to be heard and to a rational, public interest reason for any departure.
4. In India it is enforced principally through Article 14, because an arbitrary departure from a policy or practice is unequal treatment: Maneka Gandhi v. Union of India, AIR 1978 SC 597, holds that equality and arbitrariness are sworn enemies and that Article 14 strikes at arbitrariness.
5. Not legitimate where contrary to statute, founded on an unauthorised practice or representation, or where the person knew the policy was under review.
6. Limits: policy may be changed in the public interest; the doctrine cannot override a statute; it does not apply to legislative action; the public interest prevails.
7. Distinguish from promissory estoppel, which needs a clear promise and reliance, and from a legal right, which is enforceable in itself.

Test yourself

1. Explain the doctrine of legitimate expectation. It holds that where a public authority has, by an express promise or by a settled and consistent past practice, led a person to expect a particular benefit or a particular procedure, the law protects that expectation to the extent of requiring the authority to hear him before disappointing it and to give a rational reason in the public interest for any departure. The expectation may be procedural, an expectation of consultation or a hearing before a decision, or substantive, an expectation of the benefit itself. It does not create an enforceable right to the benefit, and it does not prevent a change of policy made in good faith in the public interest; but an arbitrary departure is reviewable, in India principally through Article 14, since Maneka Gandhi v. Union of India, AIR 1978 SC 597, holds that Article 14 strikes at arbitrariness in State action and that equality and arbitrariness are sworn enemies.

2. Distinguish procedural from substantive legitimate expectation. A procedural legitimate expectation is an expectation of a particular procedure, such as consultation, notice or a hearing, before a decision is taken. It is uncontroversial and readily enforced: the authority must either follow the procedure or explain why the public interest requires it to be dispensed with. A substantive legitimate expectation is an expectation of the benefit or result itself, such as the renewal of a licence or the continuation of a concession. It is more difficult, because enforcing it approaches compelling the authority to exercise its discretion in a particular way and so fettering it. The Indian position is that a substantive expectation does not confer a right to the benefit, but requires that any departure be for a rational reason in the public interest and not arbitrary.

3. Can a legitimate expectation prevent a change of government policy? No. A public authority must remain free to change its policy in the public interest, and the doctrine cannot freeze a policy or a law. What it requires is that the change be made in good faith and for a rational reason, and that a person who has already acted on the earlier policy be given an opportunity to be heard and have his position considered, including whether transitional protection is appropriate. Where the change is not a change of policy at all but a departure in the individual case only, that is unequal treatment and is arbitrary under Article 14.

4. Distinguish legitimate expectation from promissory estoppel. Promissory estoppel requires a clear and unambiguous promise and requires the promisee to have altered his position in reliance on it, and its ordinary effect is to hold the promisor to the promise. Legitimate expectation may arise either from a promise or from a settled and consistent past practice, does not require proof of reliance, and ordinarily yields not the benefit itself but a right to be heard and to a reasoned decision. Neither can operate against a statute: the government cannot be estopped from performing a statutory duty, and an expectation contrary to law is not legitimate.

5. When is an expectation not legitimate? When it is contrary to a statute, since no expectation can be founded on an illegality; when the practice relied on was itself irregular or unauthorised; when the representation was made by an officer with no authority to make it; when the person knew that the policy was under reconsideration, so that reliance was not reasonable; and when it rests on a mere hope or wish rather than on any promise or settled practice of the authority.