LexSTATE OF KARNATAKA AND ANR. versus K.K. MOHANDAS AND ETC.
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- ' • ...-<( ST A TE OF KARNA TAKA AND ANR. A v. K.K. MOHANDAS AND ETC. AUGUST l, 2007 [P.K. BALASUBRAMANY AN AND A.K. MATHUR, JJ.] B Specific Relief Act, 1963: s.26-Party cannot ask for rectification of an agreem,;,nt entered into with open eyes and without any mutual mistake-At best it can ask for C damages if it suffers any loss due to some default of opportunity-When no . loss was shown, plaintiff could not even ask for damages nor make their claim on the basis that Government failed to prevent illegal sale oftoddy- Plaintiffs who are experienced contractors must have knownfactum of illegal sale and cannot claim ignorance-Estoppel against Government cannot be D pleaded due to policy statement of Government in Assembly as plaintiffs were never mislead by same. The State of Karnataka had been auctioning the right to vend liquor in various taluks of the State including trade in arrack. The plaintiffs in the suits, the Excise Contractors on their own showing, had bid the right to vend E liquor from the concerned taluks earlier and even for the Excise Year 1989- . 90. On 16.3.1990, the Minister of Finance, Government of Karnataka, during his Budget Speech in the Assembly, made the statement, for adopting the policy of banning the sale of toddy in the entire State with effect from 1.7.1990. On 28.5.1990, auction for right to vend arrack in the concerned taluks F was held for the Excise Year 1990-91. The plaintiffs were the highest bidders in the respective auctions and the contract were held in their favour. Meanwhile, the toddy tappers resisted to the attempted ban. This resistance had starttd even before the plaintiffs entered their highest bids. In view of the agitation, the Government considered the relevant aspects G and issued an order to arrange for sale of todrly 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 697 H 698 SUPREME COURT REPORTS [2007) 8 S.C.R. A till finalising the purchase by a centralised society as envisaged. SO me of the plaintiffs approached the High Court with a prayer to issue a writ of mandamus directing the State Government to take effective and appropriate steps for prohibiting the tapping or sale of toddy in certain taluks of Dakshina Kannada District during the Excise Year 1990-91. An interim B order was sought and obtained restraining the State from terminating the contracts of the writ petitioners. The writ petitioners relied upon the policy statement and contended that they had bid the right to vend arrack for the Excise Year 1990-91 on the basis of that assurance. They also sought a direction to the State not to collect the Kist amount at the rate of rentals bid C for the year 1990-91, but to collect it only at the rates of the bid amount for the Excise Year 1989-90. The High Court dismissed the writ petitions holding that promissory estoppel cannot arise where it is a matter of policy, and that the Government by filing statement of objections has stated that it h_as been doing whatever is D possible within its means to ~top the illegal trade. E However, the attempted termination of the contract by the State was restrained until 30.9.1990. The matter was brought up to this Court by way of SLPs. This Court dismissed the same giving right to the plaintiffs to approach the appropriate Civil Court. Thereafter plaintiffs filed these suits. The trial Court held that since the State had failed to implement successfully the policy of banning tapping and selling of toddy to the public, the State was estopped from claiming the Kist amount in terms of the contract entered into between the State and the contractor. The lower appellate court also proceeded on the same lines and dismissed the appeals. High Court merely F ended up by dismissing the second appeals upholding the plea of promissory estoppel. Hence these appeals. Allowing the appeals, the Court HELD: 1. Under s.26 of the Specific Relief Act, an instrument or contract G may be rectified when through fraud or a mutual mis~ake of the parties, a contract or other instrument in writing does not express their real intention. However, ifthe parties had deliberately left out something from the written instrument, that cannot be put in by resort to the remedy of rect
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