Promissory estoppel against government policy changes is limited where public interest justifies withdrawal and no actual loss is proved.

Promissory and equitable estoppel may, in principle, enforce governmental assurances where a party has altered its position to its detriment, but the doctrine applies more narrowly when the State acts in a governmental, public, or sovereign capacity. It will not prevent a policy change where public interest requires it, and operates only to prevent fraud or manifest injustice. On the stated facts, the cash assistance scheme for walnut exporters was linked to expected market losses, that basis disappeared with rising international prices, actual loss was not proved, and the withdrawal was not arbitrary. The challenge to the withdrawal therefore failed.

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Issues: Whether the Government was bound by promissory or equitable estoppel to continue the cash assistance scheme for walnut exporters after withdrawing it, and whether the withdrawal could be invalidated on the facts of the case.

Analysis: The doctrine of promissory estoppel was recognised as a principle that may enforce governmental assurances where a party has altered its position to its detriment. However, its application against the State was held to be narrower when the State acts in its governmental, public or sovereign capacity. The Court held that the Government cannot be made a prisoner of its policy where public interest requires a change, and the doctrine will apply only to prevent fraud or manifest injustice. On the facts, the scheme was intended to offset likely losses in an unfavourable market, but the rise in international walnut prices removed that basis. The petitioners failed to establish actual loss, and the asserted prejudice was no more than loss of additional profit. The withdrawal was not arbitrary and was made after notice.

Conclusion: The doctrine of promissory or equitable estoppel did not bar the Government from withdrawing the scheme in the circumstances, and the challenge to the withdrawal failed.

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