Union of India v Anglo Afghan Agencies

Facts

• Government issued an export promotion scheme promising full import entitlements to exporters meeting specified targets
• Anglo Afghan Agencies met the targets and earned entitlement
• The government then reduced the entitlement citing changed policy

Issue

1. Whether promissory estoppel operates against the government, binding it to clear representations on which parties have relied to their detriment?

Held

• Promissory estoppel applies against the government. Equity operates against all parties who retract representations others acted on to their detriment. Executive privilege does not override the equitable obligation created by the representation.

Ratio Decidendi

The government is bound by clear representations when: (1) representation made; (2) party relied; (3) detriment resulted from reliance. The government cannot shelter behind policy prerogative to escape equitable obligations created by its own published promises.