Jagdish Chand Memorial Trust v. State of Himachal Pradesh
Background
A charitable trust proposed setting up an Ayurvedic Medical College and Hospital in Himachal Pradesh and, after a site inspection, was issued an NOC by the State's Ayurveda Department in February 2017. Relying on the NOC, the trust obtained university affiliation and built a 60-bed hospital, but within weeks the State withdrew the NOC. The trust challenged the withdrawal before the High Court, which upheld it, leading to this appeal before the Supreme Court.
Decision Breakdown
The Supreme Court held that the NOC itself had been issued unlawfully, without following the State's own Rules of Business, which required such a policy decision to be placed before and approved by the Council of Ministers rather than being ordered unilaterally by a single Minister. Because the underlying grant was illegal from the outset, the Court held no indefeasible right or promissory estoppel could arise from it, and cited precedent that government officers acting outside their authority cannot bind the State. The Court also rejected the natural-justice argument, reasoning that a hearing would have been a "useless formality" given the Council of Ministers had already effectively decided the matter. The appeal was dismissed and the High Court's judgment was upheld.
Lesson Learnt
A government approval or permit obtained in violation of the government's own internal procedural rules confers no permanent or enforceable right: citizens and institutions who invest in reliance on such approvals bear the risk if the approval is later found to have been improperly granted.