STATE OF KARNATAKA vs K.K. MOHANDAS & ETC.

The Supreme Court upheld the decrees of the lower courts in favor of the plaintiffs, who were excise contractors that successfully bid for the right to vend arrack in Karnataka for the Excise Year 1990-91. The Court found that the State's failure to enforce the ban on toddy sales, as announced in the Minister of Finance's Budget Speech and subsequent Cabinet decision, constituted a breach of the contractual obligations owed to the plaintiffs. The Court emphasized that the State must uphold its policies and contracts, thereby affirming the plaintiffs' rights under the contracts executed on 29.6.1990.