Principle: When a person who has made a promise to another person to do something does not fulfill his promise, another person becomes entitled to receive, from the person who did not fulfill his promise, compensation in the form of money.
Facts: X made a promise to Y to repair his car engine. Y made the payment for repair. After the repair, Y went for a drive in the same car. While driving the car, Y met with an accident due to bursting of the tyre.

Question

The doctrine of promissory estoppel is by now well recognized and well defined by a catena of decisions of this Court. Where the Government makes a promise knowing or intending that it would be acted on by the promise and, in fact, the promise, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promise notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 229 of the Constitution. The rule of promissory estoppel being an equitable doctrine has to be moulded to suit the particular situation. It is not a hard-and-fast rule but an elastic one, the objective of which is to do justice between the parties and to extend an equitable treatment to them. This doctrine is a principle evolved by equity, to avoid injustice and though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. For application of the doctrine of promissory estoppel the promise must establish that he suffered in detriment or altered his position by reliance on the promise.
Normally, the doctrine of promissory estoppel is being applied against the Government and defence based on executive necessity would not be accepted by the court. However, if it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the court would not raise an equity in favour of the promise and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. The Government can change the policy in public interest. However, it is well settled that taking cue from this doctrine, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary to law.
[Extract from the judgment of the Supreme Court in Shree Sidhbali Steels Limited v. State of Uttar Pradesh, (2011) 3 SCC 193, decided on January 20, 2011, hereafter ‘Shree Sidhbali Steels’].

Answer 1

Trace the sequence: X promised a repair, Y paid for it, and almost immediately after, the car failed in a way connected to its roadworthiness.

X entitled to compensation from Y: Wrong, Y made no promise capable of being breached; Y only paid for the service X promised.
Y entitled to compensation from X: The repair X promised was meant to make the car safe, and its near-immediate failure suggests the promise was not properly fulfilled, so Y is entitled to compensation for the resulting harm.
X not entitled to compensation: True as a standalone fact but incomplete, since it does not answer who is entitled, which is what the question asks.
Y not entitled to compensation: Incorrect, this denies Y the remedy that follows once X's promise was not properly fulfilled.

The correct answer is Y will be entitled to receive compensation from X in the form of money.

Answer 2

Assuming each option true and checking against the sequence of events.

X entitled to compensation from Y: Assume true, then Y must have made some promise to X that went unfulfilled. Y only paid money for a service, he made no separate promise capable of being broken, so the assumption finds nothing to attach to.
Y entitled to compensation from X: Assume true, then X's repair promise must not have been properly kept, and Y must have suffered as a result. The tyre bursting almost immediately after the repair, while Y was driving the very car just serviced, is consistent with the repair falling short, and Y's accident is the resulting harm, so the assumption holds together.
X not entitled to compensation: Assume true, then the question of who else might be entitled remains open, since this option only rules out X without resolving the actual question. Testing it in isolation doesn't contradict the facts, but it also doesn't answer what the question asks, which weakens it as a full answer compared to the option that does.
Y not entitled to compensation from X: Assume true, then the repair's near-immediate failure would have to be unconnected to X's promise. Nothing in the facts suggests some unrelated, intervening cause for the tyre bursting, so the assumption strains against the plain sequence of repair, then failure, then accident.

The assumption that survives cleanly is that Y is entitled to compensation, since the repair's failure so soon after service ties directly back to X's unfulfilled promise.

Therefore, the correct answer is Y will be entitled to receive compensation from X in the form of money.

Answer 3

Assuming each option true and checking against the sequence of events.

X entitled to compensation from Y: Assume true, then Y must have made some promise to X that went unfulfilled. Y only paid money for a service, he made no separate promise capable of being broken, so the assumption finds nothing to attach to.
Y entitled to compensation from X: Assume true, then X's repair promise must not have been properly kept, and Y must have suffered as a result. The tyre bursting almost immediately after the repair, while Y was driving the very car just serviced, is consistent with the repair falling short, and Y's accident is the resulting harm, so the assumption holds together.
X not entitled to compensation: Assume true, then the question of who else might be entitled remains open, since this option only rules out X without resolving the actual question. Testing it in isolation doesn't contradict the facts, but it also doesn't answer what the question asks, which weakens it as a full answer compared to the option that does.
Y not entitled to compensation from X: Assume true, then the repair's near-immediate failure would have to be unconnected to X's promise. Nothing in the facts suggests some unrelated, intervening cause for the tyre bursting, so the assumption strains against the plain sequence of repair, then failure, then accident.

The assumption that survives cleanly is that Y is entitled to compensation, since the repair's failure so soon after service ties directly back to X's unfulfilled promise.

Therefore, the correct answer is Y will be entitled to receive compensation from X in the form of money.

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The Correct Option is B

Approach Solution - 1

Approach Solution -2

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