State of Himachal Pradesh v. Ganesh Wood Products (1996)

The case deals with approvals for katha factories using khair wood in Himachal Pradesh. Provisional approvals were given by IPARA, but the State later pulled back many of them due to forest concerns. The Supreme Court said the government can refuse or revoke approvals to protect the environment. Promissory estoppel cannot force the State to act against public interest.

• Approval Power: The power to approve carries the power to refuse or revoke when circumstances demand.
• IPARA Nature: IPARA’s approvals were provisional; they did not create a vested right. Final discretion lay with the Government.
• Promissory Estoppel: An equitable, flexible doctrine. It cannot bind the State where enforcement harms public interest.
• Sustainable Development: Raw material availability and forest impact must be assessed before granting industrial approvals.
• Judicial Review: Courts do not replace policy choices; they check arbitrariness or illegality only.

The Supreme Court set aside the High Court’s judgment. It held that the State could regulate, refuse, or revoke approvals in the interest of environmental protection. IPARA’s approvals did not create vested rights. Promissory estoppel cannot compel the State to act against public interest. The Court remanded the matter for a fresh assessment of khair wood availability and directed that no new katha units be approved until the final determination. No costs were awarded.

1. Approval ≠ Vested Right: Provisional approvals by IPARA did not lock in entitlement.
2. Public Interest Limits Estoppel: Promissory estoppel yields to environmental protection.
3. Policy Deference: Courts avoid second-guessing executive assessments absent arbitrariness or illegality.
4. Sustainability Test: Raw material availability must guide industrial licensing.

The judgment gives governments clear space to protect forests even after provisional approvals are issued. It teaches that equity (estoppel) cannot defeat ecology. Investors must factor in sustainability checks in resource-based industries.

• State can revoke approvals to prevent environmental harm.
• IPARA approvals were conditional and non-statutory.
• Promissory estoppel is flexible; public interest prevails.
• Court review is limited to arbitrariness or legal error.

Mnemonic (WOOD): Withdrawal is allowed • Only provisional rights • Overriding public interest • Deference to policy.

1. Spot the approval type (provisional vs final).
2. Plug in estoppel limits (public interest first).
3. Rule on sustainability and limited judicial interference.

Promissory Estoppel

An equity rule that can stop a party from going back on a promise relied upon—unless public interest would be harmed.

Vested Right

A fixed legal right. Provisional approvals normally do not create such rights.

Sustainable Development

Development that meets current needs without damaging future resource availability.