R. C. MANKAD, J. ( 1 ) THE question which arises for my consideration in this petition is whether the petitioners are entitled to clam subsidy at the rate of Rs. 50 0 per film limited to maximum six films per year for feature films produced by them during a period of five years from 7/03/1975 to 6/03/1980 under the resolution Annexure I dated 25/07/1975 of the Government of Gujarat Industries Mines and power Department. ( 2 ) PETITIONER No. 1 is a private limited Company and petitioner No. 2 is its Chairman. The Government of Gujarat passed a resolution Annexure A dated 18/12/1969 declaring a policy for granting financial assistance an 3 giving incentives for setting up film studios in the Gujarat State. That resolution amongst other things provided that the State Government would consider guaranteeing advances upto Rs. 25 lacs from commercial banks on merits when the parties are unable to get assistance from the Gujarat Industrial Investment Corporation for seating up film studios in the State. The resolution also proveded exemption to the films produced in the State from entertainment tax for a specified period. The State Government passed another resolution Annexure B dated 2/01/1970 declaring a policy for granting financial assistance and certain concessions for setting up film processing laboratory in the Gujarat State. That resolution parodied that the State Government would consider on ment guaranteeing of advances upto Rs. 2 50 0 from any commercial Bank when the party is unable to get assistance from Gujarat Industrial Investment Corporation. The Government also decided to grant price preference concession for undertaking Government work and the resolution provided that the Government would give price preference of 10 per cent to the films processing laboratory established in Gujarat over the others situated outside the State for getting Government work through them. It is the petitioners case that relying on the policy declared by the State Government in its resolution Annexure A. they purchase equipments worth about Rs. 7 50 0 The State Government arranged for advances only upto Rs. 7 50 0 In other words the Government failed to make arrangement for guaranteeing advances of Rs. 25 lacs and that it guaranteed advances only of Rs. 7 50 0 As a result of this failure on the part of the Government the machinery imported by the petitioners from foreign countries remained idle for want of other equipments. 7 50 0 In other words the Government failed to make arrangement for guaranteeing advances of Rs. 25 lacs and that it guaranteed advances only of Rs. 7 50 0 As a result of this failure on the part of the Government the machinery imported by the petitioners from foreign countries remained idle for want of other equipments. Petitioners also invested Rs. 30 94 538 upto 31/03/1977 relying on the aforesaid policy of the state Government. ( 3 ) PETITIONERS submit that the Government policy for giving financial assistance and incentives was changed and he resolution Annexure C dated 19/02/1974 resolution Annexure A dated 18/12/1969 was cancelled. It was however provided in the said resolution Annexure C as follows:"government however further directs that Laxmi Film Laboratory and Studies Private Limited Baroda (petitioner herein) which is so far the only Unit entitled to the benefit of the incentives provided under para 2 (i) of the said Government Resolution shall continue to benefit from this incentive upto the date when it completes five years from the date of starting its functioning". Petitioners by their application Annexure D dated March 5 197 informed the Government about the loss incurred by them and suggested to the Government that it should consider subsidizing the film industry. Thereafter the Deputy Secretary. Industries Mines and Power Department wrote letter Annexure E-1 dated 20/12/1974 enclosing therewith a draft Government Resolution Annexure E-2 which the Government proposed to pass regarding the policy for film industry. In his letter the Deputy Secretary wrote to the petitioners as follows"before we issue it (resolution as per draft) we need our acceptance as you are the only functioning studio in the State. You are requested to confirm immediately that you accept the terms of this G. R. in supersession on the earlier G. R. . . . . . . . . "petitioners by their letter Annexure E-3 dated 23/12/1974 conveyed their acceptance of the proposed Government Resolution. It may be mentioned here that under the proposed or draft Government Resolution (G. R. for short) Annexure E-2 Government proposed to give cash subsidy of Rs. 50 0 per film for the films produced in the petitioners studio. Government however did not pass the resolution as per draft Annexure E-2. It may be mentioned here that under the proposed or draft Government Resolution (G. R. for short) Annexure E-2 Government proposed to give cash subsidy of Rs. 50 0 per film for the films produced in the petitioners studio. Government however did not pass the resolution as per draft Annexure E-2. The Deputy Secretary to the Government however by his letter Annexure F-1 dated 20/02/1975 sent another draft G. R. to the petitioners and requested them to indicate their acceptance of the terms and contents of the draft G. R. in supersession of the earlier G. R. Annexure A dated 18/12/1969 and G. R. Annexure C dated 18/02/1974 Petitioners accepted the draft resolution but suggested some modifications by their letter Annexure F-3 dated 22/02/1975 The Deputy Secretary however wrote a letter Annexure G-1 dated 1/03/1975 enclosing therewith yet another draft G. R Annexure G-2. In this letter the Deputy Secretary wrote to the petitioners: A copy of the draft G. R is enclosed for your information. Please now communicate your clear cut acceptance of the terms of G. R. in supersession of the earlier G. R. No. FLM-1068/7827-G dated 18-12-74. The draft resolution Annexure G-2 amongst other things provided that the studio would be eligible to subsidy of Rs. 50 0 per film and that amount would be released after the commercial release of the film. Petitioners by their letter Annexure G-3 dated 5/03/1975 gave their consent to the new policy contained in the draft G. R. Annexure G-2. Thereafter the State Government passed resolution Annexure H dated 7/03/1975 ( 4 ) UNDER the G. R. Annexure H dated 7/03/1975 it was provided that the studio would be eligible to a subsidy of Rs. 50 0 per film. This amount would be released after the commercial release of the film. It was further provided that the concession would be available for a period of five years from the date of issue of the order or upto five years from the commencement of a studio whichever is later. So far as the petitioners were concerned their studio had already started working with effect from 1/12/1972 and therefore so far as they were concerned period of five years would begin to run from the date of the order that is 7/03/1975 In other words according to the petitioners under the said resolution. they were entitled to subsidy of Rs. So far as the petitioners were concerned their studio had already started working with effect from 1/12/1972 and therefore so far as they were concerned period of five years would begin to run from the date of the order that is 7/03/1975 In other words according to the petitioners under the said resolution. they were entitled to subsidy of Rs. 50 0 per film for a period of five years from 7/03/1975 to 6/03/1980 Resolution Annexure H did not provide that cash subsidy on Rs. 50 0 was limited to certain number of films. The policy contained in the G. R. Annexure H. was however kept in abeyance. Government there after passed resolution Annexure I dated 25/07/1975 where in it was provided that subsidy of Rs. 50 0 per film would be limited to maximum six films pet year per studio. There was no change in the resolution so far as the period for which subs by was available. In other words subsidy as stated above was to by available for a period of five years from 7/03/1985 or from the commencement of the studio which was later. Petitioners contend that under the resolution Annexure H they were entitled to subsidy of Rs. 50 0 per film without any limit regarding number of films on which subsidy was to be given. However by a subsequent resolution Annexure I which was not issued with their consent subsidy was limited to six films per year. Petitioners therefore protested against the change in the policy. The State Government therefore issued resolution Annexure L dated 8/12/1976 and by this resolution subsidy which was given at the rate of Rs. 50 0 per film was reduced to Rs. 20 0 only irrespective of the number of films produced in the studio. The said resolution also provided that concession would be available only upto 31/03/1978 It was clarified that the said order would take effect immediately and all pending cases would also be governed by that order. Petitioners thereupon wrote letter Annexure M dated 15/12/1976 and protested against the retrospective effect given to the resolution Annexure L. Peti-tioners submit that so far as they are concerned they should be given subsidy under the old G. R. for a period of five years. The State Government however sanctioned subsidy of Rs. 20 0 per film which the petitioners accepted under protest. The State Government however sanctioned subsidy of Rs. 20 0 per film which the petitioners accepted under protest. Petitioners made representation to the Chief Minister of the Gujarat State and objected to the frequent changes in the policy of the Government regarding the film industry. Government however rejected the objections raised by the petitioners and refused to give subsidy to the petitioners as per the resolution Annexure H dated 7/03/1975 Petitioners have therefore approached this Court by way of this petition ( 5 ) THE contention which is raised on behalf of the petitioners is that they set up the studio in Gujarat State relying on the Government policy of financial assistance and incentives for film studios established in the State Government had first agreed to guarantee advances upto Rs. 25 lacs taken from commercial bank and it was relying on this policy that the petitioners decided to set up studio in the State. This policy was however changed from time to time as state above. Petitioners agreed to the change in the policy and agreed to accept subsidy of Rs. 50 0 per film for a period of five years from 7/03/1975 as laid down in resolution Annexure H dated 7/03/1975 Since the petitioners had agreed to change in the policy laid down in resolution Annexure H they are not insisting upon as indeed they cannot implementation of the policy laid down in G. R. Annexure A dated 18/12/1969 which was subsequently canceled or superseded. However one thing which clearly emerges is that petitioners set up studio in the State relying on the policy of the State Government to give financial assistance and incentives for setting up of film studio in the State. Petitioners submit that they are also willing to accept the conditions laid down in the subsequent resolution Annexure I dated 25/07/1975 where in it was laid down that subsidy of Rs. 50 0 per film would be limited to maximum six film per year. It is however submitted that the State Government cannot go on changing the policy unilaterally which which adversely affect the interest of the Petitioners. It was submitted that petitioners would not have established studio in the State and charged their position their detriment had they known that the State Government would go on changing the policy adversely affecting their interest. It is however submitted that the State Government cannot go on changing the policy unilaterally which which adversely affect the interest of the Petitioners. It was submitted that petitioners would not have established studio in the State and charged their position their detriment had they known that the State Government would go on changing the policy adversely affecting their interest. According to the petitioners the State Government is bound to keep its promise to give cash subsidy of Rs. 50 0 per films limited to maximum 6 film per year for a period of live years from 7/03/1975 In other words petitioners contend that they are entitled to cash subsidy of Rs. 50 0 (per film limited to maximum six films per year. for the films produced in their studio in this State during the period from 7/03/1975 to Marc 6/03/1980 ( 6 ) THE stand taken up by the State Government is that it is open to the State Government to change its policy for giving financial assistance and incentives to film industry inasmuch as the G. R. are only executive action of the State Government and the State Government is at liberty to change its policy whenever it finds it necessary to do so. It was not necessary for the Government to consult the petitioners before changing its policy. It is further submitted that resolutions dated 7/03/1975 and 25/07/1975 on which petitioners rely were passed much after setting up of the studio by the petitioners in 1972. Petitioners therefore court not be said to have acted upon the policy or promise contained in the said resolution for setting up of their studio. Petitioners are therefore not entitled to claim benefit under the aforesaid resolutions. ( 7 ) PETITIONERS are claiming benefit of subsidy of Rs. 50 0 per film on the doctrine of promissory estoppl. At the time of admission of this matter petitioners gave up all other contentions which are raised in the petition and based their case only on the doctrine of promissory estoppl. According to the respondents since the petitioners had not acted on any promise held out by them for establishing the studio the doctrine of promissory estoppl has no application to the facts of this case. Doctrine (of promissory estoppl was considered by the Supreme Court in Ms. According to the respondents since the petitioners had not acted on any promise held out by them for establishing the studio the doctrine of promissory estoppl has no application to the facts of this case. Doctrine (of promissory estoppl was considered by the Supreme Court in Ms. Jit Ram Shiv Kumar v. The State of Haryana A. I. R. 1980 S. C. 1285. The Bench which disposed of this matter consisting of two learned Judges namely Fazal Ali and Kailasam JJ. and Kailasam J. speaking for the Supreme Court summed up the legal position as follows in paragraph 39 of the judgment at page (1302. The position has been culled out after examination of all the relevant decisions having bearing on the point and the principles laid down are as follows : " (1) The plea of promissory estoppl is not available against the exercise of the legislative functions of the State. (2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law. (3) When the officer of the Government acts outside the scope of his authority the plea of promissory estoppl is not available. The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorized acts of its officers. (4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representational and a person acting on that representation puts himself in a disadvantageous position the Court is entitled to require the officer to act according to the scheme and the agreement or representation. The officer cannot arbitrarily action his mere which and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representational and put himself in a disadvantageous position. (6) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interest oil the State. The position was again reiterated in more or less the same tells in paragraph 50 at page 1305:" On a consideration of the decisions of this Court iq is clear that there can be no promissory estoppl against the exercise of legislative power of the State. The position was again reiterated in more or less the same tells in paragraph 50 at page 1305:" On a consideration of the decisions of this Court iq is clear that there can be no promissory estoppl against the exercise of legislative power of the State. So also he doctrine cannot be invoked for preventing the Government from acting in discharge go its duly under the law. The Government would not be bound by the acts of its officers and agents who act beyond the scope of their authority and a person dealing with the agent of the Government must be held to have notice of the limitations of his authority. The Court can enforce compliance of a public authority of the obligation laid on him if se arbitrarily or on his mere which ignores the promises made by him on behalf of the Government. It would be open to the authority to plead and prove that there were special considerations which necessitated his not being able to comply with his obligations in public interest". ( 8 ) THE legal position being very clear in the light of the provision (4) and in the light of the last portion of Paragraph 50 in Ms. Jitrams case (supra) in the instant case since the petitioners have spent a large amount of about Rs 31 lacs relying on the Government policy of financial assistance and incentives. It is not now permissible to the State Government to back out of the policy and to say to the petitioners that they were not entitled to the benefit of the policy set out in resolutions Annexure H and L It is true that the petitioners had already set up studio in 1972 before the resolutions Annexure H and I were issued in 1975. Petitioners as pointed out above had set up studio relying on the Government policy of financial assistance and incentives as contained in its resolution Annexure A dated 18/12/1969. This policy was subsequently changed but since the petitioners were to be adversely affected it appears that before changing the policy the Government had sought the consent or approval of the petitioners. This is evident from the correspondence and draft resolutions sent to the petitioners as adverted to above. This policy was subsequently changed but since the petitioners were to be adversely affected it appears that before changing the policy the Government had sought the consent or approval of the petitioners. This is evident from the correspondence and draft resolutions sent to the petitioners as adverted to above. Where was the question of obtaining acceptance or concurrence of the petitioners if it was open to the Government to change its policy at any time it liked as contended on behalf of the respondents. It is obvious that the Government was aware of the fact of large investments made by the petitioners in setting up studio relying on its policy of financial assistance and incentives and it was therefore that before changing its policy it had sought the acceptance or consent of the petitioners. Resolution Annexure H dated 7/03/1975 was issued with the consent of the petitioners and under this resolution the Government amongst her things agreed to give subsidy of Rs. 50 0 per film for a period of five years from the date of the order that is 7/03/1975 Later on by resolution Annexure I dated 25/07/1975 subsidy of Rs. 50 0 per film was limited to maximum 6 films per year. The resolution though issued without the consent of the petitioners is acceptable to the petitioners. In other words although they have to consented petitioners are willing to accept the subsidy of Rs 50 0 per film limited to maximum 6 films per year. The question is could the Government have subsequently changed its policy further and confined the subsidy to Rs. 20 0 per film and curtailed the period of subsidy. The answer is emphatically no because as already pointed out above it was relying on the policy of the financial assistance and incentives that petitioners had changed their position by setting up studio by investing large amount. Petitioners would not have made such large investment had they known that the Government would go on changing its policy of giving financial assistance or incentives. In fact the Government was bound to carry out the promise given by it in its resolution Annexure A dated 18/12/1969 and the petitioners could have insisted upon the Government to keep its promise contained in the said resolution. In fact the Government was bound to carry out the promise given by it in its resolution Annexure A dated 18/12/1969 and the petitioners could have insisted upon the Government to keep its promise contained in the said resolution. However since the petitioners themselves agreed to change of policy as contained in resolution Annexure H they are not making grievance regarding Governments failure to keep promise contained in resolution Annexure A. However that does not mean that Government could go on changing its policy adversely affecting the interest of the petitioners. The mere fact that the studio was set up in 1972 before resolutions Annexure H and I were passed with the consent of the petitioners. In view of the consent given by the petitioners the State Government was in any case bound to carry out its promise and give subsidy as per the terms and conditions laid down in Annexure H. However since the petitioners are accepting the condition regarding limiting subsidy to maximum 6 films per year contained in resolution Annexure Government was bound to give subsidy of Rs. 50 0 per film limited maximum 6 films per year for the films produced in the petitioners studio in the State. Since the doctrine of promissory estoppel would very much apply in the instant case the Government is estopped for a period of five years from 7/03/1975 to 6/03/1980 from denying the benefits of subsidy to the petitioners under the resolutions Annexure H and I. ( 9 ) THE view which I am inclined to take derives support from the decision of this Court in Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. A. I. R. 1982 Gujarat 198 which was confirmed by the Supreme Court in Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. A. I. R. 1983 S. C. 48. As in that case the petitioners acting upon the promise made by the State Government incurred huge expenditure and if the State Government is not held to be bound by its promise the petitioners would be put in very disadvantageous position and therefore principle of promissory estoppel can be invoked in this case. Petitioners must therefore succeed. ( 10 ) IN the result this petition is allowed. Petitioners must therefore succeed. ( 10 ) IN the result this petition is allowed. It is declared that the petitioners are entitled to subsidy as per resolution Annexure H dated 7/03/1975 and resolution Annexure I dated 25/07/1975 for a period of five years from 7/03/1975 to 6/03/1980 Respondents are directed to pay to the petitioners subsidy in accordance with the said resolutions notwithstanding the subsequent resolutions amending the Government policy within three months from the date of receipt of the writ of this Court. ( 11 ) RULE accordingly made absolute with casts. Petition Allowed. .