Orissa High Court
Swosti Premium Ltd vs State Of Odisha on 21 May, 2026
Author: B.P. Routray
Bench: B.P. Routray
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Location: Orissa High Court, Cuttack
Date: 21-May-2026 17:37:31
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021
(In the matter of an application under Article 226 & 227 of the
Constitution of India)
In W.P.(C) No.21670 of 2025
Swosti Premium Ltd., Jaydev Vihar,
Bhubaneswar, represented through
its General Manager and another ... Petitioner
-versus-
State of Odisha, represented through
its Chief Secretary and others ... Opposite Parties
Advocate(s) appeared in this case:-
For Petitioner : Mr.G.Mukherji, Sr.Advocate
Mr.A.Behera, Advocate
For Opposite Parties : T.K.Dash, AGA
In W.P.(C) No.37811 of 2021
Hotel and Restaurant Association of
Odisha, Bhubaneswar, represented
through its Executive Secretary and
another ... Petitioner
-versus-
State of Odisha, represented through
its Chief Secretary and others ... Opposite Parties
Advocate(s) appeared in this case:-
For Petitioner : Mr.G.Mukherji, Sr.Advocate
Mr.A.Behera, Advocate
For Opposite Parties : T.K.Dash, AGA
W.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 1 of 23
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Location: Orissa High Court, Cuttack
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CORAM: JUSTICE B.P. ROUTRAY
JUDGMENT
———————————————————————————
Date of Hearing : 24th March, 2026
Date of Judgment : 21st May, 2026
———————————————————————————
B.P. Routray, J.
1. Both the writ petitions, one filed by Swosti Premium Ltd., and
other by Hotel and Restaurant Association of Odisha, are directed
with common prayer to quash the order of Chief Secretary, Odisha
dated 26th October 2021 along with different clauses of the Odisha
Tourism Policy, 2016 read with operational guidelines issued thereof
on 5th June 2017 and as such are involving common issues for
decision. In addition to this, Swosti Premium Ltd. has further prayed
to quash the order of the Director of Tourism rejecting his prayer to
grant such incentives. The common issues involved in both the writ
petitions are to the effect that, whether the migrated industrial units
could be included to receive such benefits/incentives under the Odisha
Tourism Policy, 2016 and the operational guidelines issued thereof.
The crux of the issue is relating to insertion of a migration clause in
the Odisha Tourism Policy, 2016 based on certain clauses mentioned
in the Odisha Industrial Policy Resolution, 2015.
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2. The Industrial Policy Resolution, 2015 (IPR 2015) was issued
by the Government of Odisha covering different industrial sectors
including concern of present Petitioners, i.e. Tourism and Hospitality
Sector. The objective of IPR 2015 was to promote industrial
development for setting up a business climate conducive to accelerate
investment in industries and infrastructure projects and its prime
objectives include, specifically, promotion of sectors in priority
category such as Information Technology (IT) / Information
Technology Enabled Services (ITES) / Electronic System Designing
and Manufacturing (ESDM), Biotechnology, Agro, Marine and Food
Processing, Tourism, Textiles and Apparel and automotive industries
which offer strong images to employment generation and exports.
3. The main purpose was to maximize employment generation and
enhance employability through industry oriented skill development
and to encourage establishment of environment friendly and less
polluting industries. For ready reference, the objectives of IPR 2015
as mentioned at Clause-2 of said resolution are reproduced below:
“2.3 To specifically promote sectors in the priority category
such as Information Technology (IT)/Information Technology
Enabled Services (ITES)/Electronic System Designing and
Manufacturing (ESDM), Biotechnology, Agro, Marine and FoodW.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 3 of 23
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industries, which offer strong images to employment generation
and exports.”
4. It is required to be mentioned here that priority sectors as per
the definition and interpretation clause given in IPR 2015, means
industrial units which fall within such categories that include tourism
and hospitality. It is further defined in IPR 2015, the new industrial
units, expansion of existing industrial units and migrated industrial
units. Such definition contained at Clause 15 of the IPR 2015 reads as
under:
“8. “Expansion/Modernization/Diversification” of an
existing industrial unit means additional investment of at least
50% of the un-depreciated book value of plant and machinery
of the said unit made in acquisition of additional plant and
machinery and technology for such E/W/D duly appraised and
approved by DIC/RIC/SISI/NSIC/NCDC/OCAC/STPI/
IPICOL/ Public Financial Institutions. In case of “Expansion”
the additional investment as above must result in at least 50%
addition in production capacity. In case of “Diversification”
the additional investment as above must result in production of
at least one additional product.
xx.. xx.. xx..
15) "New Industrial Unit" means an industrial unit where
fixed capital investment has commenced on or after the
effective date and which goes in to production within three
years for MSMEs and five years for Large units from the date
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of starting of first fixed capital investment. New investment
after the effective date on existing land towards building and
plant and machinery and which goes in to production within
three and five years for MSME and Large units respectively
from the date of starting of first fixed capital investment will
be considered as a new industrial unit.
16. “Migrated Industrial Unit” means an industrial unit which
has commenced fixed capital investment but not gone into
production before the effective date and will have the option to
be treated as New Industrial Unit under this IPR provided that
it goes into production within three years for MSMEs and five
years for Large Industries from the effective date and it will
surrender and or refund the incentives availed, if any under
earlier IPRs, Provided also that such option shall be exercised
in the prescribed form provided in the Operational Guidelines
and submitted within 180 days from the “Effective Date”.
Once the option is exercised, it shall be final and irrevocable.”
5. The Miscellaneous Clause in IPR 2015 is also required to be
noted here and the same is reproduced below:
“14. MISCELLANEOUS
a) The policy lays down the base fiscal and non-fiscal
incentives available to any industry set up across the State.
b) Government of Odisha has notified a separate policy-
Orissa MSME Development Policy 2009- which provides
fiscal and non-fiscal incentives to MSME units.
c) Various sector specific policies have been and will be
notified by Government of Odisha from time to time. In
such cases, while the allocation of land will be governed
by this IPR, the industrial unit can choose to avail a
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particular incentive under either this policy or the sectoral
policy.
d) Any Act or policy of Government of Odisha along with its
rules and procedures thereunder dealing with promotion of
investments in the State that is conflicting with this policy,
its rules and procedures shall be suitably amended to the
extent required to bring conformity with this policy within
one year of notification of this policy.
e) The incentives on taxes such as VAT, Entry Tax, Central
Sales Tax (CST) and Entertainment Tax will be applicable
till the notification of GST by Governed of India, Post
notification of GST, Industries Department will suitably
modify this policy.
f) The State Government may at any time amend any
provision of this policy
g) A special package of incentives over the above what has
been enumerated in this Policy document may be
considered for new industrial projects in certain sectors or
certain locations on a case to case basis by a high level
committee to be constituted under the Chairmanship of
Chief Secretary taking into account the benefits to the
State. The Cabinet would consider such proposals duly
recommended by the high level committee.
h) All the industrial units are expected to adhere to the
provisions of the Apprentice Policy 1973 as a measure of
their contribution to skill development.
i) Doubts relating to interpretation of any term and/or dispute
relating to the operation of any provision under this IPR
shall be referred to the Industries Department for
clarification/resolution. The decision of Government in
this regard shall be final and binding on all concerned.”
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6. Subsequently, the State Government of Odisha announced
Odisha Tourism Policy, 2016 at Annexure-15. The objective of such
policy is to promote sustainable and green tourism along with
preservation, enrichment and promotion of unique cultural heritage of
Odisha and its natural environment with a view to achieve inclusive
development for addressing developmental functions in Private Public
Partnership (PPP) mode and for creation of employment opportunities
bringing socio-economic benefits to the community. The details of
such objectives are narrated below:-
4. The Objectives:
a. To promote Sustainable and Green Tourism with a view to
create employment opportunities and to bring about socio-
economic benefits to the community.
b. To preserve, enrich and promote Odisha‟s unique cultural
heritage, natural resources and environment with a view to
achieve inclusive development; addressing the regulatory and
tourism promotion/ development functions in Private Public
Partnership (PPP) mode at all levels in an effective and well
coordinated manner.
c. To promote Odisha as one step destination to experience its
great history, culture, society and natural beauty so as to boost
foreign and domestic tourist arrival in the State.
d. To promote circuit tourism in association with the States of
the Eastern Zone of the country to facilitate easy arrival and
movement of the tourist.
W.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 7 of 23
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Date: 21-May-2026 17:37:31e. To upgrade skill and professionalism and promote
employment opportunities in tourism sector.
f. To promote digital tourism.
g. To promote responsible tourism and develop tourism
products in an environment friendly manner.
h. To promote barrier free tourism.
i. To promote (1) Beach Tourism, (2) Eco Tourism, (3)
Buddhist Tourism, (4) Heritage Tourism, (5) Religious
Tourism, (6) Knowledge Tourism, (7) Medical Tourism, (8)
Travel Tourism, (9) Caravan Tourism, (10) Wellness Tourism,
(11) Cruise Tourism, (12) Sand Art Tourism, (13) Adventure
Tourism, in a mission mode.
7. Odisha Tourism Policy, 2016 applies to a new tourism unit,
which means a tourism unit set up and commences commercial
operation during the partition period of the policy. It also includes an
existing tourism unit undergoing expansion more than 50% of its
existing capabilities after the effective date. In this regard Clause-6.3,
6.4 and 6.6 of the Odisha Tourism Policy, 2016 enumerate as above.
8. The grievance of the Petitioners is that absence of inclusion of
migration clause in the Odisha Tourism Policy, 2016 leads to violation
the purported representation of the State Government under Clause
14(c) and 14(d) of IPR 2015, and thereby attracts the doctrine of
legitimate expectation in favour of the Petitioners to get such
incentives/benefits as extended to the new „Industrial Units‟ and
W.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 8 of 23
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expansion of „Existing Industrial Units‟ under said policy. According
to the description narrated by the Petitioners, IPR 2015 is to be
considered as the mother policy and Odisha Tourism Policy, 2016
being a sector specific policy cannot be in conflicting terms with IPR
2015 and must be in conformity with the same. Such inaction on the
part of the State Government to exclude migrated „Industrial Units‟
from the applicability of Odisha Tourism Policy, 2016 is in violation
of the object and prescription of IPR 2015.
9. It is true and admitted on the part of the Petitioner in W.P.(C)
No.21670 of 2025, i.e. Swosti Premium Ltd., does not come within
the description and definition of „New Industrial Unit‟ and expansion
of existing „Industrial Unit‟ as per Odisha Tourism Policy, 2016. Thus
its‟ general grievance along with HRAO (the other petitioner) is for
inclusion of the migrated „Industrial Units‟ in the Odisha Tourism
Policy, 2016 and the operational guidelines prescribed thereof on 5 th
June 2017.
10. As per Clause-14(c) of IPR, 2015 various sectors specific
policies have been and will be notified by the Government of Odisha
from time to time and the „Industrial Unit‟ may chose to avail a
particular incentive either under IPR 2015 or under such sectoral
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policy. Further, as per Clause-14(d), any act or policy of Government
of Odisha along with its rules and procedures there-under dealing with
promotion of investments in the State that is conflicting with IPR
2015, its rules and procedures shall be suitably amended to the extent
required to bring conformity with IPR 2015. These are two clauses of
IPR 2015 taken to the advantage of the Petitioners to submit that
exclusion of clause „Migrated Industrial Unit‟ is in conflict with IPR
2015 and violation of the principles thereof.
11. Said submission as advanced on behalf of the Petitioners is not
found quite convincing. It is for the reason that, exclusion of
„Migrated Industrial Unit‟ from the purview of Odisha Tourism
Policy, 2016 may not be construed as conflicting to the principles or
terms of policy in IPR 2015 though it may be opined to some extent
that it is not conformity with the adopted terms of IPR 2015. IPR 2015
includes three categories of „Industrial Units‟ Viz. New Industrial
Unit, Migrated Industrial Unit and expansion/modernization/
diversification of an existing „Industrial Unit‟. The word „conflicting‟
as used in Clause-14(d) of IPR 2015 has a restricted application which
denotes that the rules and procedures under a sector specific policy
dealing with promotion and investment should not run contrary to the
W.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 10 of 23
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principles regarding rules and procedures for promotion of
investments in the State. Non-inclusion or exclusion of particular
category of „Industrial Unit‟ in the sectoral policy from those included
in IPR 2015 thus cannot be said as conflicting with the rules and
procedures of IPR 2015. For example, had it been a case of expansion
of the „Industrial Unit‟ less than 50% as specified in IPR 2015 as a
condition of eligibility, it would have been an effect of conflict with
IPR 2015. In the given case at hand, it is a matter of exclusion of a
particular category of industrial unit from the Odisha Tourism Policy,
2016 which was drafted as per the advice of the Tourism Advisory
Committee. It is pertinent to mention here that, objective of both the
policies does not run in conflict with each other nor any such rule or
procedure of Odisha Tourism Policy 2016 would be said as repugnant
to the objective of IPR 2015.
12. The second contention of the Petitioners to treat IPR 2015 as
the mother policy of Odisha Tourism Policy, 2016 has no legislative
sanctity. Both IPR 2015 and Odisha Tourism Policy, 2016 are the
resolutions formulated by the Government of Odisha having the
approval of Cabinet. Both the policies are the Cabinet approved
resolutions and therefore nothing is there not to distinguish them to be
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treated differently, according to the arguments advanced on behalf of
the Petitioners.
13. So far as the expectation of the Petitioners to get such
incentives/ benefits under Odisha Tourism Policy, 2016 is concerned,
the same is not supported by any such express promise or practice
under the existing policy for any relevant time. It is admitted that
Odisha Tourism Policy, 2013 does not contain any such provision or
clause to incentivize „Migrated Industrial Units‟ during validity of
said policy. This aspect is never disputed and the Petitioner does not
claim about existence of any such policy term in Odisha Tourism
Policy, 2013 to favour „Migrated Industrial Units‟. As a settled
principle the doctrine of legitimate expectation applies where there is
an express promise given by a public authority, or because of the
existence of a regular practice which a claimant can reasonably expect
to continue, and such expectation must be within the limits of
reasonableness. Any situation of change in policy or where the
position is altered in public interest the question of legitimate
expectation does not survive. In State of Bihar and Ors. Vs.
Suprabhat Steel Limited and Ors., (1999) 1 SCC 31, the Hon‟ble
Supreme Court has observed that, ” .. .. the industrial incentive policy
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is issued by the State Government after such policy is approved by the
Cabinet itself. The issuance of the notification under Section 7 of the
Bihar Finance Act is by the State Government in the Finance
Department which notification is issued to carry out the objectives
and the policy decisions taken in the Industrial Policy itself. In this
view of the matter, any notification issued by the Government order in
exercise of power under Section 7 of the Bihar Finance Act, if is found
to be repugnant to the Industrial Policy declared in a Government
Resolution, then the said notification must be held to be bad to that
extent”.
14. In Food Corporation of India v. Kamdhenu Cattle Feed
Industries, (1993) 1 SCC 71, Hon‟ble Apex Court have held at
paragraph 8 as follows:-
“8. The mere reasonable or legitimate expectation of a
citizen, in such a situation, may not by itself be a distinct
enforceable right, but failure to consider and give due weight
to it may render the decision arbitrary, and this is how the
requirement of due consideration of a legitimate expectation
forms part of the principle of non-arbitrariness, a necessary
concomitant of the rule of law. Every legitimate expectation
is a relevant factor requiring due consideration in a fair
decision making process. Whether the expectation of the
claimant is reasonable or legitimate in the context is a
question of fact in each case. Whenever the question arises,W.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 13 of 23
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Date: 21-May-2026 17:37:31it is to be determined not according to the claimant’s
perception but in larger public interest wherein other more
important considerations may outweigh what would
otherwise have been the legitimate expectation of the
claimant. A bona fide decision of the public authority
reached in this manner would satisfy the requirement of non-
arbitrariness and withstand judicial scrutiny. The doctrine of
legitimate expectation gets assimilated in the rule of law and
operates in our legal system in this manner and to this
extent.”
15. In Tej Prakash Pathak & others vs- Rajasthan High Court &
Others, (2025) 2 SCC 1, it has been explained as follows:-
26. However, the doctrine of legitimate expectation does not
impede or hinder the power of the public authorities to lay down
a policy or withdraw it. The public authority has the discretion
to exercise the full range of choices available within its
executive power. The public authority often has to take into
consideration diverse factors, concerns, and interests before
arriving at a particular policy decision. The courts are generally
cautious in interfering with a bona fide decision of public
authorities which denies legitimate expectation provided such a
decision is taken in the larger public interest. Thus, public
interest serves as a limitation on the application of the doctrine
of legitimate expectation.
27. Courts have to determine whether the public interest is
compelling and sufficient to outweigh the legitimate expectation
of the claimant. While performing a balancing exercise, courts
have to often grapple with the issues of burden and standard ofW.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 14 of 23
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[Sivanandan C.T. case, (2024) 3 SCC 799, para 37]
16. In Madras City Wine Merchants’ Association and Anr. Vs.
State of T.N. and Anr., (1994) 5 SCC 509, the Hon‟ble Supreme
Court has observed as follows:-
19. Legitimate expectation is a weak and sober right as ordained
by a statute. When the Government decides to introduce fair
play by way of auction facilitating all eligible persons to contest
on equal terms, certainly one cannot contend that he is entitled
for a lease merely on the basis of a pending application. The
right being not legal, apart from being non-existent, it can
certainly not be enforceable. The principle of law on these
aspects, as settled decades ago in State of T.N. v. Hind Stone
[State of T.N. v. Hind Stone, (1981) 2 SCC 205] , is being
reiterated from time to time. (Monnet Ispat & Energy [Monnet
Ispat & Energy Ltd. v. Union of India, (2012) 11 SCC 1] , SCC
pp. 106 & 110, paras 183 & 188)Principles of legitimate expectation
183. As there are parallels between the doctrines of
promissory estoppel and legitimate expectation because
both these doctrines are founded on the concept of fairness
and arise out of natural justice, it is appropriate that the
principles of legitimate expectation are also noticed here
only to appreciate the case of the appellants founded on the
basis of the doctrines of promissory estoppel and legitimate
expectation.
188. It is not necessary to multiply the decisions of
this Court. Suffice it to observe that the following
principles in relation to the doctrine of legitimate
expectation are now well established:
188.3. Where the decision of an authority is founded
in public interest as per executive policy or law, the courtW.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 15 of 23
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invoking the doctrine of legitimate expectation. The
legitimate expectation doctrine cannot be invoked to fetter
changes in administrative policy if it is in the public
interest to do so.
188.4. The legitimate expectation is different from
anticipation and an anticipation cannot amount to an
assertable expectation. Such expectation should be
justifiable, legitimate and protectable.
188.5. The protection of legitimate expectation does
not require the fulfilment of the expectation where an
overriding public interest requires otherwise. In other
words, personal benefit must give way to public interest
and the doctrine of legitimate expectation would not be
invoked which could block public interest for private
benefit.”
20.Kerala State Beverages (M&M) Corpn. Ltd. v. P.P. Suresh
[Kerala State Beverages (M&M) Corpn. Ltd. v. P.P. Suresh,
(2019) 9 SCC 710 : (2019) 2 SCC (L&S) 821] : (SCC pp. 719-
20, paras 14-20)
“B. Legitimate expectation
14. The main argument on behalf of the respondents
was that the Government was bound by its promise and
could not have resiled from it. They had an indefeasible
legitimate expectation of continued employment, stemming
from the Government Order dated 20-2-2002 which could
not have been withdrawn. It was further submitted on
behalf of the respondents that they were not given an
opportunity before the benefit that was promised, was
taken away. To appreciate this contention of the
respondents, it is necessary to understand the concept of
legitimate expectation.
15. The principle of legitimate expectation has been
recognised by this Court in Union of India v. Hindustan
Development Corpn.[Union of India v. Hindustan
Development Corpn., (1993) 3 SCC 499] If the promise
made by an authority is clear, unequivocal and
unambiguous, a person can claim that the authority in all
fairness should not act contrary to the promise.
16. M. Jagannadha Rao, J. elaborately elucidated on
legitimate expectation inPunjab Communications Ltd. v.
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Union of India [Punjab Communications Ltd. v. Union of
India, (1999) 4 SCC 727] . He referred (at SCC pp. 741-
42, para 27) to the judgment inCouncil of Civil Service
Unions v. Minister for the Civil Service [Council of Civil
Service Unions v. Minister for the Civil Service, 1985 AC
374 : (1984) 3 WLR 1174 (HL)] in which Lord Diplock
had observed that for a legitimate expectation to arise, the
decisions of the administrative authority must affect the
person by depriving him of some benefit or advantage
which : (Punjab Communications case [Punjab
Communications Ltd. v. Union of India, (1999) 4 SCC 727]
, SCC p. 742, para 27)
27. … (i) he had in the past been permitted by the
decision-maker to enjoy and which he can legitimately
expect to be permitted to continue to do until there have
been communicated to him some rational grounds for
withdrawing it on which he has been given an opportunity
to comment; or
(ii) he has received assurance from the decision-
maker that they will not be withdrawn without giving him
first an opportunity of advancing reasons for contending
that they should not be withdrawn. ‘(AC p. 408)
17. Rao, J. observed in this case, that the procedural
part of legitimate expectation relates to a representation
that a hearing or other appropriate procedure will be
afforded before the decision is made. The substantive part
of the principle is that if a representation is made that a
benefit of a substantive nature will be granted or if the
person is already in receipt of the benefit, that it will be
continued and not be substantially varied, then the same
could be enforced.
18. It has been held by R.V. Raveendran, J. inRam
Pravesh Singh v. State of Bihar [Ram Pravesh Singh v.
State of Bihar, (2006) 8 SCC 381 : 2006 SCC (L&S) 1986]
that legitimate expectation is not a legal right. Not being a
right, it is not enforceable as such. It may entitle an
expectant : (SCC p. 391, para 15)
’15. … (a) to an opportunity to show cause before the
expectation is dashed; or
(b) to an explanation as to the cause for denial. In
appropriate cases, the courts may grant a direction
requiring the authority to follow the promised procedure or
established practice.’
Substantive Legitimate Expectation
19. An expectation entertained by a person may not be
found to be legitimate due to the existence of some
countervailing consideration of policy or law. [ H.W.R.
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Wade & C.F. Forsyth : Administrative Law (Eleventh Edn.,
Oxford University Press, 2014).] Administrative policies
may change with changing circumstances, including
changes in the political complexion of Governments. The
liberty to make such changes is something that is inherent
in our constitutional form of Government. [Hughes v.
Deptt. of Health & Social Security, 1985 AC 776, 788 :
(1985) 2 WLR 866 (HL).]
20. The decision-makers ‘freedom to change the policy
in public interest cannot be fettered by applying the
principle of substantive legitimate expectation. [Findlay,
In re, 1985 AC 318 : (1984) 3 WLR 1159 (HL).] So long
as the Government does not act in an arbitrary or in an
unreasonable manner, the change in policy does not call
for interference by judicial review on the ground of a
legitimate expectation of an individual or a group of
individuals being defeated.”
17. In State of Rajasthan & Ors. Vs. Sharwan Kumar Kumawat &
Ors., (2023) 20 SCC 747, the Hon‟ble Supreme Court has stated that
legitimate expectation is a weak and sober right as ordained by a
statute. There it has been held as follows:-
[(1993) 3 SCC 499 : JT (1993) 3 SC 15, 50-51] this Court
observed thus: (SCC pp. 540-41, para 29)
“It has to be noticed that the concept of legitimate
expectation in administrative law has now, undoubtedly,
gained sufficient importance. It is stated that ‘legitimate
expectation ‘is the latest recruit to a long list of concepts
fashioned by the courts for the review of administrative
action and this creation takes its place beside such
principles as the rules of natural justice, unreasonableness,
the fiduciary duty of local authorities and ‘in future,
perhaps, the principle of proportionality’. A passage in
Administrative Law, 6th Edn., by H.W.R. Wade page 424
reads thus:
These are revealing decisions. They show that the courts
now expect government departments to honour their
published statements or else to treat the citizen with theW.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 18 of 23
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Date: 21-May-2026 17:37:31fullest personal consideration. Unfairness in the form of
unreasonableness here comes close to unfairness in the
form of violation of natural justice, and the doctrine of
legitimate expectation can operate in both contexts. It is
obvious, furthermore, that this principle of substantive, as
opposed to procedural, fairness may undermine some of
the established rules about estoppel and misleading advice,
which tend to operate unfairly. Lord Scarman has stated
emphatically that unfairness in the purported exercise of a
power can amount to an abuse or excess of power, and this
seems likely to develop into an important general
doctrine.’
Another passage at page 522 in the above book reads thus:
“It was in fact for the purpose of restricting the right
to be heard that ‘legitimate expectation ‘was introduced
into the law. It made its first appearance in a case where
alien students of ‘scientology ‘were refused extension of
their entry permits as an act of policy by the Home
Secretary, who had announced that no discretionary
benefits would be granted to this sect. The Court of Appeal
held that they had no legitimate expectation of extension
beyond the permitted time, and so no right to a hearing,
though revocation of their permits within that time would
have been contrary to legitimate expectation. Official
statements of policy, therefore, may cancel legitimate
expectation, just as they may create it, as seen above. In a
different context where car-hire drivers had habitually
offended against airport bye-laws, with many convictions
and unpaid fines, it was held that they had no legitimate
expectation of being heard before being banned by the
airport authority.
There is some ambiguity in the dicta about legitimate
expectation, which may mean either expectation of a fair
hearing or expectation of the licence or other benefit
which is being sought. But the result is the same in either
case; absence of legitimate expectation will absolve the
public authority from affording a hearing.
Again, at pages 56-57 it is observed thus: (SCC p. 547, para 33)
“A case of legitimate expectation would arise when a
body by representation or by past practice aroused
expectation which it would be within its powers to fulfil.
The protection is limited to that extent and a judicial
review can be within those limits. But as discussed above a
person who bases his claim on the doctrine of legitimate
expectation, in the first instance, must satisfy that there is a
foundation and thus has locus standi to make such a claim.
In considering the same several factors which give rise toW.P.(C) No.21670 of 2025 & W.P.(C) No.37811 of 2021 Page 19 of 23
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Date: 21-May-2026 17:37:31such legitimate expectation must be present. The decision
taken by the authority must be found to be arbitrary,
unreasonable and not taken in public interest. If it is a
question of policy, even by way of change of old policy, the
courts cannot interfere with a decision. In a given case
whether there are such facts and circumstances giving rise
to a legitimate expectation, it would primarily be a
question of fact. If these tests are satisfied and if the court
is satisfied that a case of legitimate expectation is made
out then the next question would be whether failure to give
an opportunity of hearing before the decision affecting
such legitimate expectation is taken, has resulted in failure
of justice and whether on that ground the decision should
be quashed. If that be so then what should be the relief is
again a matter which depends on several factors.”
Again at pages 57-58 it is observed thus: (SCC pp. 548-49, para
35)
“Legitimate expectations may come in various forms
and owe their existence to different kind of circumstances
and it is not possible to give an exhaustive list in the
context of vast and fast expansion of the governmental
activities. They shift and change so fast that the start of our
list would be obsolete before we reached the middle. By
and large they arise in cases of promotions which are in
normal course expected, though not guaranteed by way of
a statutory right, in cases of contracts, distribution of
largess by the Government and in somewhat similar
situations. For instance discretionary grant of licences,
permits or the like, carry with it a reasonable expectation,
though not a legal right to renewal or non-revocation, but
to summarily disappoint that expectation may be seen as
unfair without the expectant person being heard. But there
again the court has to see whether it was done as a policy
or in the public interest either by way of GO, rule or by
way of a legislation. If that be so, a decision denying a
legitimate expectation based on such grounds does not
qualify for interference unless in a given case, the decision
or action taken amounts to an abuse of power. Therefore
the limitation is extremely confined and if the according of
natural justice does not condition the exercise of the
power, the concept of legitimate expectation can have no
role to play and the court must not usurp the discretion of
the public authority which is empowered to take the
decisions under law and the court is expected to apply an
objective standard which leaves to the deciding authority
the full range of choice which the legislature is presumed
to have intended. Even in a case where the decision is left
entirely to the discretion of the deciding authority without
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any such legal bounds and if the decision is taken fairly
and objectively, the court will not interfere on the ground
of procedural fairness to a person whose interest based on
legitimate expectation might be affected. For instance if an
authority who has full discretion to grant a licence prefers
an existing licence-holder to a new applicant, the decision
cannot be interfered with on the ground of legitimate
expectation entertained by the new applicant applying the
principles of natural justice. It can therefore be seen that
legitimate expectation can at the most be one of the
grounds which may give rise to judicial review but the
granting of relief is very much limited. It would thus
appear that there are stronger reasons as to why the
legitimate expectation should not be substantively
protected than the reasons as to why it should be protected.
In other words such a legal obligation exists whenever the
case supporting the same in terms of legal principles of
different sorts, is stronger than the case against it.
As observed in Attorney General for New South Wales
case [Attorney General for New South Wales v. Quin,
(1990) 64 Aust LJR 327] :
“To strike down the exercise of administrative power
solely on the ground of avoiding the disappointment of the
legitimate expectations of an individual would be to set the
courts adrift on a featureless sea of pragmatism. Moreover,
the notion of a legitimate expectation (falling short of a
legal right) is too nebulous to form a basis for invalidating
the exercise of a power when its exercise otherwise
accords with law.
If a denial of legitimate expectation in a given case amounts to
denial of right guaranteed or is arbitrary, discriminatory,
unfair or biased, gross abuse of power or violation of
principles of natural justice, the same can be questioned on
the well-known grounds attracting Article 14 but a claim
based on mere legitimate expectation without anything
more cannot ipso facto give a right to invoke these
principles.”
From the above it is clear that legitimate expectation may arise-
(a) if there is an express promise given by a public authority; or
(b) because of the existence of a regular practice which the
claimant can reasonably expect to continue;
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(c) Such an expectation must be reasonable.
However, if there is a change in policy or in public interest the
position is altered by a rule or legislation, no question of legitimate
expectation would arise.
18. The facts as narrated in the instant case not do not reveal any
such promise or existence of regular practice to give rise a legitimate
expectation on the part of the Petitioners to get the benefits/ incentives
in their favour. This was not availed or extended in the previous
tourism policy of the year 2013 nor is it in present policy. What is
stated in IPR 2015 to include tourism sector in Clause 2.3 is in a
general form and that apart, Petitioners case is not to be considered in
terms of IPR 2015 excluding the tourism policy, 2016. It is further
seen that the Petitioner had the choice to opt between IPR 2015 and
Odisha Tourism Policy, 2016 as per the condition stipulated in both
the policies. Keeping in view the objective and applicability of Odisha
Tourism Policy, 2016, the expectation of the Petitioners to get such
benefits as „Migrated Industrial Units‟ under IPR 2015 cannot be
considered as legitimate on their part either by way of practice or
promise. The expectation of the Petitioners to pluck the benefits for
Migrated Industrial Units implanting the same within the purview of
Odisha Tourism Policy, 2016 would thus not considered as
reasonable.
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19. In the given case at hand, the claim of both the Petitioners have
been rejected vide the direction of Director of Tourism and the Chief
Secretary to Government of Odisha respectively. The order of the
Chief Secretary dated 26th October 2021, commonly impugned in both
the writ petitions, is seen to be a reasoned one declining to extend the
benefits to Migrated Industrial Units as per the Odisha Tourism
Policy, 2016. On the anvil of discussions made above, the reasons
stated in the impugned order of the Chief Secretary do not found to be
unreasonable warranting interference of this Court to grant the relief
in favour of the Petitioners. Nonetheless, it is found from said
impugned order of the Chief Secretary that the Finance Department of
State Government has opined to insert perspective migration in the
policy and therefore, this Court is of the opinion that in the event, such
migration clause is included perspectively in the policy to include
“Migrated Industrial Units” to avail such incentives/ benefits, it is
open for the State Authority to do so for extending benefits to such
„Migrated Industrial Units‟.
20. Accordingly, both the writ petitions are disposed of.
( B.P. Routray)
Judge
C.R.Biswal, A.R.-cum-Sr.Seretary
S.Das
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