Promissory and equitable estoppel barred refusal to close a savings account and release the balance with interest.

A public authority cannot refuse closure of a National Savings Scheme account and release of the balance with interest after the depositor has acted on the scheme's assurance and altered position to her detriment. The Gujarat High Court applied promissory and equitable estoppel, holding that a hypertechnical refusal to honour the promised benefit was arbitrary and unreasonable and offended Article 14. The impugned communications were quashed, and the petitioner was entitled to closure of the account and payment of the amount with interest.

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Issues: Whether the petitioner was entitled to closure of the National Savings Scheme account and release of the balance amount with interest, and whether the respondent could refuse such relief after the petitioner had deposited the amount and acted on the assurance implicit in the scheme.

Analysis: The petitioner had opened the account under the National Savings Scheme and sought closure and return of the balance with interest. The Court applied the principles of promissory and equitable estoppel, relying on the earlier decision of the Court and the settled position that a public authority cannot, to the detriment of a person who has altered position on the basis of the assurance, take a hypertechnical stand and deny the benefit promised. The Court also treated the refusal to pay the accrued interest and to close the account as arbitrary and unreasonable, attracting the protection of Article 14 of the Constitution of India.

Conclusion: The respondent's refusal to close the account and to pay the amount with due interest was held unsustainable, and the petitioner was held entitled to the relief sought.

Final Conclusion: The writ petition succeeded and the impugned communications were quashed, with a direction to close the account and release the amount with interest.

Ratio Decidendi: A public authority is bound by promissory and equitable estoppel where a person has acted to her detriment on the basis of the authority's representation, and an arbitrary refusal to honour that position is liable to be struck down under Article 14.

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