The Bihar State Housing Board v. Radha Ballabh Health Care and Research Institute (P) Ltd.
Background
The Bihar State Housing Board advertised a plot in Patna for a health centre, but when the respondent company was the sole applicant, no plot was allotted. After years of litigation, the Board instead offered the respondent two alternative plots at a different location, and the dispute shifted to what price the respondent should be charged: the Board's updated market-linked price, or a lower price proportionate to the original advertised plot. The respondent accepted the Board's price three separate times, made payments, and executed a formal allotment agreement, but later went back to court disputing the price it had itself already accepted and paid.
Decision Breakdown
The Supreme Court held that the High Court's entire approach was flawed because the alternative plots were never advertised at all, so questions about "price proportionate to the advertisement" didn't even arise. The Court found that since the respondent had accepted the Board's price on three distinct occasions, making payments and signing a formal agreement, it was legally estopped from later disputing that same price. The Board, as a public authority, had the right to fix the commercial price of its land, and the High Court had no legal basis to direct a different, lower price. The Court set aside the High Court's order and allowed the Board's appeal, though it used its special constitutional power (Article 142) to waive interest for the litigation period provided the respondent paid the balance price within six months, given that a functioning hospital had already been built on the land.
Lesson Learnt
Once a person or entity accepts a price or term and acts on it, by paying money and signing an agreement, they generally cannot later turn around and dispute that very term in court; courts will hold them to what they already accepted.