K.T. VENATAGIRI AND ORS. versus STATE OF KARNATAKA AND ORS.

Citation: [2003] 1 S.C.R. 1081 · Decided: 13-02-2003 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Disposed off
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Judgment (excerpt)

K.T. VENATAGIRI AND ORS. 
A 
v. 
STATE OF KARNATAKA AND ORS. 
FEBRUARY 13, 2003 
[V.N. KHARE, S.B. SINHA AND DR. AR. LAKSHMANAN, JJ.] 
B 
Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. 
rr.4A and 1 I (b}-Distribution of Liquor in the Stat"-MSIL appointed 
as sole distributor by Notifications dated 13.9.1989-Amount to be charged in C 
respect of operation by MSIL as distributors-Writ petitions by manufacturers, 
who he/ore the Notification were selling their product either to Distributor or 
direct to wholesale dealer, filed before High Court challenging the common 
Notifications dismissed-Appeals before Supreme Court-Interim stay granted 
on 20.11. I 989 with a direction that in the event of dismissal of the appeals, D 
compensation to be paid to MSl~Except appellant 'K', other appellants 
withdrew their appeals, but took the advantage of the stay orders that remained 
operative in 'K's appeal-K's appeal• dismissed with the directions that the 
appellants would pay to MSIL the requisite commission amount-Appellants 
other than 'K' contending that the Notification dated 13.9.1989 having come 
into force w.e.f 1.7.1990 and the appe/lants.having withdrawn their appeals E 
on 9. 4. I 990, they did not commit any violation of interim order dated 
20. I I. I 989 nor were they liable to pay to MSl~Held, ordinarily in a disposed 
o_f qppea/ the Court would not have entertained contentious questions-But in 
these appeals questions to be determined relate to adjustment of equities-
Appe/lants not only took advantage of the interim order passed in 'K's appeal, F 
but also denied and disputed claim of MSlL relying on the Court's order 
permitting them to withdraw their appeals- Though the Court permitted the 
appellants to withdraw their appeals, they took advantage of the interim order 
passed in K's appeal-State also issued permits to wholesale dealers having 
regard lo stay order passed in K's appeal-Appellants either expressly charged 
commission payable to MSIL or otherwise recovered the said amount from G 
other distributors-In some cases appellants realised the amount of commission 
payable to MSIL, without actually showing it in the bills-They cannot having 
regard to doctrine of 'unjust enrichment' retain the undue advantage derived 
by them-They are liable to pay back the amount received either directly or 
indirectly on account of MSll-Doctrine of restitution must be applied in H 
1081 
1082 
SUPREME COURT REPORTS 
(2003] I S.C.R. 
A these appeals-With a view to do complete justice between the parties directions 
given to determine the amount payable to MSIL-Equity-Constitution of 
India-Article 142-Doctrine of 'unjust enrichment '-Doctrine of r~titution. 
B 
*Khoday Distilleries ltd. and Ors. v. State of Karnataka and Ors., ( 19961 
IO SCC 304, referred to. 
Bimal Chandra Banerjee etc. v. State of Madhya Pradesh etc., ( 19701 2 
SCC 467 and State of Kera/av. Madras Rubber Factory Ltd., (199811 SCC 
616, cited. 
C 
Constitution of India 
Articles 132 and 142-Appeals challenging common Notifications-
Interim stay granted with a direction to compensate the respondent in the 
event of dismissal of appeals-Except appellant 'K' all other appellants 
withdrawing their appeals, but t'aking advantage of stay order in K's appeal-
D K's appeal ultimately dismissed-All the appellants directed to compensate 
the respondent as a consequence of the stay orders-Appellants who had 
withdrawn their appeals contending that since they had withdrawn their 
appeals, they were not liable under the stay order granted in K's appeal-
Held, the appellants having taken advantage of the interim order are liable to 
E pay back the amount realised by them and payable to respondent-Interim 
order-Effect of 
F 
Doctrines: 
(i) Doctrine of 'unjust enrichment'-Applicability of· 
(ii) Doctrine of restitution-Applicability of 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4728-4732 
of 1989. 
G 
From the Judgment and Order dated 13 .11.1989 of the Kamataka High 
Court in W.P. Nos. 16876, 17418, 17530, 17531 and 17632 of 1989. 
WITH 
C.P. (C) Nos. 443-448/98 in C.A. Nos. 4702-4707/89 and C.P. (C) 
H Nos. 449-453/98 in C.A. Nos. 4728-4732 of 1989. 
) 
'"! 
K.T. VENATAGIR!v. STATE 
1083 
A.K. Ganguli, Rakesh Dwivedi, K.K. Venugopal, P.P. Rao, Jaideep A 
Gupta, Padmanabha Mahale, Nagendra Naidu, S.S. Sukumaran, D.N.N. Reddy, 
Shivaji Srinivas. K. Rajeev, Udaye Hola, Mohammed Risha, A.S. Bhasme, 
S.R. Bhat, Naveen R. Nath, Ms. Lalit Mo
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