State of Himachal Pradesh & Ors. v. M/s Kundlas Loh Udyog, 2026

respondent-company was an existing industrial unit engaged in industrial metal processing and stamping since 2005-06.

In 2020, the respondent undertook substantial expansion by increasing its plant and machinery by approximately 88.69% and generating additional employment.

The respondent claimed concessional electricity tariff benefits under Clause 16(a) of the Industrial Policy, 2019.

The respondent argued that the use of the expression “eligible enterprises” in the policy extended benefits even to existing industries undergoing substantial expansion.

The State contended that the concessional tariff scheme was intended only for new industrial enterprises and not for existing units.

According to the State, the use of the word “eligible” in Clause 16(a) was merely a drafting error.

The respondent had already availed benefits under Clause 16(b) by receiving a rebate incentive of 15% on additional power consumption.

The Himachal Pradesh High Court directed the State to extend concessional tariff benefits to the respondent.

Aggrieved by the judgment, the State approached the Supreme Court.

The Supreme Court allowed the appeal filed by the State of Himachal Pradesh.

The Court held that the Industrial Policy, 2019 was intended to grant concessional tariff benefits only to new industrial enterprises.

The Bench observed that existing industrial units undergoing expansion were never intended beneficiaries under Clause 16(a).

The Court ruled that the doctrine of promissory estoppel cannot be invoked to create an entitlement contrary to the actual intent and scope of the policy.

It was observed that once the policy was properly construed, the very foundation of the respondent’s plea collapsed.

The Court emphasized that substantial expansion undertaken by the respondent could not independently create a legal right to concessional tariff benefits.

The Bench held that the respondent had already availed the incentive legitimately available to its category under Clause 16(b).

The Court noted that granting additional concessional tariff benefits would result in an impermissible double benefit contrary to public interest and fiscal discipline.

The judgment clarified that equitable doctrines such as promissory estoppel remain subject to:

• public interest,

• fairness,

• statutory intent, and

• proper interpretation of policy provisions.

The Court also extensively laid down principles governing the doctrine of promissory estoppel.

Reliance was placed on IFGL Refractories Ltd. v. Orissa State Financial Corporation.

udgment significantly clarifies the limits of the doctrine of promissory estoppel in public law.

The Supreme Court reaffirmed that equitable doctrines cannot override the plain language, intent, and scheme of government policy.

The ruling protects fiscal discipline by preventing unintended extension of industrial incentives.

The Court carefully balanced fairness toward industries with the State’s power to design and classify beneficiaries under policy frameworks.

By emphasizing proper interpretation of policy intent, the Court discouraged expansive readings based solely on isolated expressions or drafting ambiguities.

The judgment also highlights that mere investment or expansion by an industry does not automatically generate enforceable rights unless the policy expressly grants such entitlement.

The detailed principles laid down by the Court provide comprehensive guidance for future disputes involving:

• industrial incentives,

• government representations,

• legitimate expectation, and

• promissory estoppel.

The ruling strengthens jurisprudence relating to equitable doctrines against the State while reaffirming that such doctrines operate within constitutional and policy limitatio