Promissory estoppel limits retroactive curtailment of an extended industrial permission despite a valid policy restriction.

A Foreign Trade Policy restriction barring reprocessing of garments and other recyclable textile materials under the EOU scheme was treated as a valid condition for renewal and extension of a Letter of Permission, but it could not be used to cut short an already extended permission. Because the units had obtained extensions and arranged their affairs in reliance on that continuation, sudden curtailment without fresh policy change or overriding public interest was held barred by promissory estoppel and arbitrary under Articles 14 and 19(1)(g). The curtailed order was quashed to the extent it shortened the permission, and the earlier extension was restored for its remaining period.

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Issues: (i) Whether the restriction in para 7 of Appendix 14IC of the Foreign Trade Policy, 2009-2014 barring reprocessing of garments and other recyclable textile materials under the EOU scheme could be applied to existing units seeking extension of a Letter of Permission. (ii) Whether curtailment of an already extended Letter of Permission could be sustained in view of the earlier extension and the doctrine of promissory estoppel, and whether the impugned action was unconstitutional under Articles 14 and 19(1)(g) of the Constitution of India.

Issue (i): Whether the restriction in para 7 of Appendix 14IC of the Foreign Trade Policy, 2009-2014 barring reprocessing of garments and other recyclable textile materials under the EOU scheme could be applied to existing units seeking extension of a Letter of Permission.

Analysis: The Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to regulate imports and exports and to frame the Foreign Trade Policy, while para 2.4 of the Policy authorises DGFT to prescribe procedures for implementation. On that basis, the Handbook of Procedures and Appendix 14IC were issued, and para 7 specifically prohibited the relevant textile reprocessing activities under the EOU scheme. The restriction was treated as a valid policy condition governing renewal and extension, and not as something limited only to fresh applicants.

Conclusion: The restriction was valid in principle and was capable of governing renewals and extensions, but it could not justify truncating the petitioners' already extended permission on the facts of this case.

Issue (ii): Whether curtailment of an already extended Letter of Permission could be sustained in view of the earlier extension and the doctrine of promissory estoppel, and whether the impugned action was unconstitutional under Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The petitioners had twice received extensions after the policy change, and the last extension carried the LoP up to 23 October 2015. The Court held that the petitioners were entitled to arrange their affairs on the basis of that extended permission, and that a sudden curtailment, without a fresh change in policy or overriding public interest, was barred by promissory estoppel. The Court also held that the impugned curtailment was arbitrary and could not be justified merely because the Government had earlier changed its policy, particularly when similarly placed units had been allowed to continue for a period.

Conclusion: The curtailment of the LoP was unsustainable, and the petitioners were entitled to continue operating under the extended permission till 23 October 2015.

Final Conclusion: The impugned order was quashed to the extent it shortened the petitioners' permission, and the earlier extension was restored for its full remaining duration.

Ratio Decidendi: A policy restriction may govern future renewals of a permission, but an authority cannot curtail an already extended permission retroactively in the absence of fresh public interest justification, especially where the beneficiary has altered its position in reliance on the extension.

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