P. K. Balasubramanyan, J. - (1.) In all these appeals, the defendants, the State of Karnataka and the Deputy Commissioner (Excise) are the appellants. The four appeals arise from four suits being O.S. Nos. 1261, 1262, 1263 and 1264 of 1990 on the file of the Court of the First Additional Munsif, Mangalore. The suits were decreed in favour of the plaintiffs who were Excise Contractors and bidders of the right to vend arrack in various taluks of Dakshina Kannada District of the State of Karnataka for the Excise Year 1990-91 covering the period 1.7.1990 to 30.6.1991. Aggrieved by the decrees, the appellants filed four appeals in the Court of the Additional Civil Judge, Senior Division, Mangalore. The appeals were dismissed affirming the decrees of the trial Court. Four Second Appeals filed by the appellants in the High Court of Karnataka met with the same fate. These Appeals by Special Leave thus challenge the decrees granted in the four suits.
(2.) The State of Karnataka every year auctions the right to vend liquor in various taluks of the State. Among them is included trade in arrack. The plaintiffs in the suits, Excise Contractors on their own showing, had bid the right to vend liquor from the concerned taluks earlier and even for the Excise Year 1989-90. On 16.3.1990, the Minister of Finance, Government of Karna-taka, during his Budget Speech in the Assembly, made the following statement. "The State has been following a policy of banning the sale of toddy in a phased manner. At present, the sale of toddy has been banned in seven districts. I propose to extend the ban to the entire State with effect from 1.7.1990. The expected loss in revenue is Rs. 60 crores. It is hoped that a portion of this loss would be made good by higher arrack rentals and better enforcement of rules and regulations." The Budget Speech was marked Exhibit P-1 in the suits which were jointly tried. According to the plaintiffs, a decision was also taken by the Government in a meeting of the Cabinet on 2.5.1990 to implement the policy thus announced. But, illegal tapping and sale of toddy was not put down. On 28.5.1990, the right to vend arrack in the taluks of Kundapur, Udupi, Bantawal, Sullia, Puttur and Belthangadi was held for the Excise Year 1990-91. The plaintiffs were the highest bidders in the respective auctions and the respective bids were knocked down in their favour. On 29.6.1990, formal contracts were entered into by the plaintiffs with the defendants. The formal contracts were marked in the suits as defence Exhibits D-6 etc.. Meanwhile, the toddy tappers took up cudgels and even defied the attempted ban. This resistance had started even before the plaintiffs entered their highest bids.
(3.) In view of the agitation, the Government considered the relevant aspects and issued an order dated 29.6.1990. While the ban on sale of toddy to the public was continued, it was decided to arrange for sale of toddy tapped by the toddy tappers of Dakshina Kannada District, through a centralised society to the fenny units and permitting the fenny units of Dakshina Kannada to buy the toddy from tappers of allotted trees at the price to be fixed by the Excise Commissioner till finalising the purchase by a centralised society as envisaged.;