Supreme Court upholds withdrawal of illegally issued NOC for private Ayurvedic college and hospital

A bench of Justices Sudhanshu Dhulia and K. Vinod Chandran heard an appeal challenging the State of Himachal Pradesh's withdrawal of a No Objection Certificate (NOC) that had enabled a private trust to commence an Ayurvedic medical college and a 60‑bed hospital. The issue before the Court was whether the grant of the NOC created an indefeasible right entitling the appellant to relief against the withdrawal and whether doctrines like promissory estoppel or violation of natural justice could save the impugned action.

The Court dismissed the appeal and affirmed the High Court's conclusion that the NOC was issued in breach of the Rules of Business and therefore was legally invalid and liable to be withdrawn. The bench held that where governmental action was ultra vires or taken without requisite Ministerial or Cabinet concurrence, the State could not be estopped from rescinding such action. The Court noted that the Department had issued the NOC on the Minister's direction while the matter remained under consideration by the Council of Ministers, and that "there could not have been a NOC issued as per the Rules of Business of the Government without the concurrence of the Council of Ministers; before which the matter was already placed by the Chief Minister, when the NOC was issued on the orders of the Minister for Ayurveda." The Court, in its reasoning, observed: "There can be no indefeasible right claimed on the basis of the grant issued, which is clearly illegal. There is no promise offered by the State or the Government by reason of the invalid order issued by the Department. ... when officers of the government acts outside the scope of authority, the plea of promissory estoppel would not be available, especially since the doctrine of ultra vires comes into operation and the government cannot be held bound by the unauthorised actions of its officers." The bench further held that a departmental hearing would have been "an useless formality" in the face of the Council of Ministers' decision.

Background The appellant, Jagdish Chand Memorial Trust, proposed in 2014 to establish an Ayurvedic college and hospital and submitted a project report in accordance with Central Council of Indian Medicine requirements. A departmental site inspection occurred in 2015. The Principal Secretary (Ayurveda) issued an NOC dated 20.02.2017 (Annexure P‑1). The Trust obtained university affiliation on 02.03.2017 and secured a loan sanction on 03.03.2017. The State withdrew the NOC by order dated 14.03.2017 (Annexure P‑4), asserting that the earlier grant had been made without complying with the State's Rules of Business which required placement before the Council of Ministers for matters of policy and statewide application (Schedule item No. 17).

The High Court examined Rules 14 and 16 of the Rules of Business and concluded that the issuance of the NOC circumvented the mandatory procedure of Ministerial or Cabinet concurrence. The High Court rejected the Trust's contentions that the grant conferred an indefeasible right, that promissory estoppel applied, and that principles of natural justice were breached. The Supreme Court agreed, relying on established precedent including M/s Jit Ram Shiv Kumar v. State of Haryana to hold that promissory estoppel could not be invoked against the government where officers acted beyond their authority. On the facts, the Court found that the Trust had not arranged its affairs to such an extent that it would suffer irreversible prejudice upon withdrawal; the hospital's construction within the limited interval was not accepted as established. The appeal was dismissed and any pending applications were disposed of.

Case Details: Case No.: Civil Appeal No. 2585 of 2025 (@SLP (C) No. 20474 of 2018); Citation: 2025 INSC 232 Case Title: Jagdish Chand Memorial Trust v. State of Himachal Pradesh Appearances: For the Petitioner(s): Mr. Shiv Prakash Pandey, Advocate For the Respondent(s): Ms. Radhika Gautam, Advocate (for the State)