Government's Withdrawal of Cash Support Overturned: Promissory Estoppel Upheld

The court dismissed the appeal, ruling that the government could not withdraw cash compensatory support after accepting similar judgments and making payments. Upholding the principle of promissory estoppel, the court found that exporters were entitled to rely on the initial communication offering cash assistance for exports when entering firm contracts. The government's unilateral withdrawal of support caused losses to exporters, and the court emphasized that the government must have valid reasons for changing policies affecting firm contracts.

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Issues:
1. Challenge to the circular withdrawing cash compensatory support.
2. Application of principles of promissory estoppel.
3. Government's right to change policy.

Analysis:
1. The judgment concerns an appeal against a circular withdrawing cash compensatory support, affecting confirmed contracts entered into prior to the withdrawal date. The respondents argued that the government cannot challenge the circular after accepting similar judgments from other High Courts and making payments. The court agreed, stating that the government cannot discriminate against the petitioners after accepting judgments in similar cases.

2. The court detailed the facts where exporters relied on a communication offering cash assistance for exports, pricing their goods accordingly. The withdrawal of cash support led to losses for exporters who had firm contracts with buyers based on the initial scheme. The court upheld the principle of promissory estoppel, stating that the government is bound to honor the policy for all firm contracts entered into based on the initial communication.

3. The appellant challenged the judgment on three points: (i) the petitioners did not base their prices on the cash compensatory scheme, (ii) the elements of promissory estoppel were not met, and (iii) the government has the right to change its policy. The court rejected these arguments, emphasizing that the scheme aimed to offset losses in the international market and that the government's promise led to altered positions by the petitioners. The court also noted that the government's right to change policy should be exercised for valid reasons, not arbitrarily.

In conclusion, the court dismissed the appeal, stating that the government failed to justify the withdrawal of cash compensatory support and upheld the principles of promissory estoppel in honoring firm contracts based on the initial scheme.

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