Promissory estoppel in incentive schemes supports judicial review of arbitrary refusal to issue an eligibility certificate.

An industrial unit that completed the required effective steps under a 1979 incentive scheme acquired an enforceable right to an eligibility certificate where it had acted on Government representations and altered its position by investing in the project. The Court applied promissory estoppel against executive action, holding that the scheme and notifications were public promises capable of enforcement even though the scheme was not statutory. Clause 4.6 was read as requiring an eligibility certificate before incentives could be claimed, not as conferring unfettered discretion to refuse certification once the scheme conditions were satisfied. Arbitrary denial of the certificate was held amenable to judicial review under Article 226, and the petitioners were entitled to a writ directing issuance of the certificate.

---

---

Issues: Whether the industrial unit, having completed the required effective steps under the 1979 incentive scheme and acted upon the Government's representations, had an enforceable right to obtain an eligibility certificate and consequential relief under Article 226, notwithstanding the executive character of the scheme and the earlier view that no right accrued under the scheme.

Analysis: The scheme invited industrial units to establish themselves in specified regions on promised incentives, and the application for eligibility was to be made after initial effective steps, with completion of all effective steps by the stipulated date. The Court held that the Government's scheme and notifications constituted representations intended to induce action, and that the petitioners had altered their position by investing in and setting up the unit. The doctrine of promissory estoppel was held applicable against executive action as well, and the absence of a statutory origin did not defeat enforceability where the State had acted through a public incentive scheme. Clause 4.6 was construed as preventing a claim to incentives without an eligibility certificate, not as conferring unlimited discretion on the implementing authority to refuse the certificate after the scheme conditions were satisfied. The Court also rejected the view that Article 14 afforded no enforceable right, holding that arbitrary denial of the certificate would be open to judicial review under Article 226.

Conclusion: The petitioners were entitled to enforcement of the Government's promise and to a writ directing issuance of the eligibility certificate; the contrary view previously taken was overruled.

---