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1983 (3) TMI 312

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..... clause of the contract. 3. It is the case of the petitioner that it has entered, into a franchise agreements with different bottlers in various parts of the country. Under those agreements it sells concentrate for manufacturing 77 to the bottlers who actually manufacture and bottle the said aerated water drink and distribute it in their' respective territories. According to it, it had entered into such a franchise agreement with the respondent, a private limited company, carrying on the business of manufacturing, bottling and distributing soft drinks at Hyderabad. The agreement executed between them on 17th March, 1982, was valid for a period of five years in the first instance. By another agreement of the same date between them the petitioner in addition was to supply the concentrate of another aerated water soft drink known as 'Tingler' The allegations are that the respondent on one pretext or the other not only failed to bottle and market the soft drink '77', but has now entered into an agreement with another company M/s. McDowell Company to bottle and market their aerated water soft drink known as 'Thril' in contravention of the said agreement o .....

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..... the parties. The petitioner will suffer loss of ₹ 60 lakhs in one season because of the conduct of the respondent before it can make arrangements with other bottlers for next season. 7. I may note here that during the course of arguments on these applications one of the objections raised by the respondent was that the damages having been quantified, the injunction sought for ought not be granted as the petitioner on its own showing has only a claim for damages. The petitioner thereafter filed an application on 8th March, 1983, bearing No. 1072 of 1983 seeking deletion of words paragraph 16 of in the prayer clause on the ground that these words have crept in by inadvertence. That application is pending consideration. 8. Mr. V.P. Singh, learned counsel for the petitioner, submitted that apart from the above dispute another dispute which has arisen is because of the fact that the respondent has entered into an agreement with M/s. McDowell Company to manufacture and market their product 'Thril' during the currency of the present agreement. It is urged that this dispute is apparent from the pleadings. 9. I may note here that a preliminary objection has been take .....

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..... he pendency of the petition and which fact has been highlighted by the respondent to show that the contract is determinable is that after notice of this suit was served on the respondent, the respondent without prejudice to its rights exercised its right to terminate the contract under clause 21-B and has given the requisite six months' notice in writing to the petitioner. A copy of that notice dated 28th February, 1983, was brought on the record. 13. The respondent has also produced on record some documents to show that the petitioner had earlier entered into a franchise agreement for manufacturing and bottling of the soft drink 77' and 'Tingler' in the territory of Andhra Pradesh including the territory of Hyderabad with M/s. Spencer and Company Ltd. under which agreement the soft drinks in question were being and continue to be sold in the city of Hyderabad by their authorised distributors. A bill dated 22nd February, 1983, from M/s. Kanuri Enterprises has been placed on the record in support of this contention that even after the petitioner had entered into the agreement with the respondent, their product '77' was being sold and is available in that c .....

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..... rd. 16. Further, it is the case of respondent that under clause 18 of the agreement between the parties in the event of the respondent not complying with some of the conditions, it would result into automatic termination not only of the contract but may entail the forfeiture of the security deposited by it. Even otherwise, the case of the respondent is that the agreement between the parties is determinable under clause 21 thereof. The petitioner has a right under sub-clause (a) of that clause to terminate the agreement with prior notice if the bottler fails to perform any or all of its obligations under this agreement and the respondent by giving a notice in writing within six months in advance. 17. As stated earlier, the respondent has already served this six months' notice on the petitioner on 28th February, 1983. 18. Now turning to the preliminary objection noticed earlier, in my view, it is open to the Court to grant injunction directing the respondent not to manufacture 'Thril', the prohibition under Section 41 of the Act is not applicable. The question which arises, however, is it a fit case where such an injunction be issued? 19. Mr. V.P. Singh urge .....

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..... ployee having agreed to the negative stipulation the negative stipulation must be held binding on him and if there is breach of the negative stipulation, the employer would have his remedy in damages, if any, but the Court would not grant the extraordinary remedy by way of an injunction because by doing so, beyond a mere enforcement of contractual obligation, no legitimate object or purpose would be advanced. 21. It appears from the above-cited authority that in case it is found that if a remedy by way of damages in a given case was more efficacious, it is not reasonable to grant injunction even where negative stipulation can be enforced. Prima facie I am of the view that such an injunction ought to be granted only in exceptional cases; for example, where the employer or the principal has imparted specialised knowledge or technical know how to his employee or agent to train them for a specific specialised field of work and during the currency of the contract or employment that specialised knowledge or know how ought not be allowed to be used to the detriment of the employer or the principal. The enforcement of a negative stipulation ought not be granted only to spite a party pro .....

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