1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.24 OF 2005
IN
NOTICE OF MOTION NO.553 OF 2004
IN
SUIT NO.233 OF 2004
Severn Trent Water Purification Inc .. Appellants
V/s
Chloro Controls (India) Pvt.Ltd. & Ors.
ig .. Respondents
WITH
APPEAL NO.528 OF 2005
IN
NOTICE OF MOTION NO.553 OF 2004
IN
SUIT NO.233 OF 2004
Hi Point Services Pvt.Ltd. .. Appellants
V/s
Chloro Controls (India) Pvt.Ltd. & Ors. .. Respondents
Mr.Rohit Kapadia, Senior Advocate with Mr.J.P.Sen, Mr.Yash
R.Kapadia, Mr.Simil Purohit, Mr.Pranav Desai, Mr.H.K.Sudhakara and
Ms.Arundhati Iyer i/by Khaitan & Co.for the Appellants in Appeal No.
24/2005 and for Respondent No.2 in Appeal No.528/2005.
Mr.Pradip Sancheti, Senior Advocate i/by M/s.Legal Associates for the
Appellants in Appeal No.528/2005 and for Respondent No.4 in Appeal
No.24/2005.
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Mr.S.H.Doctor, Senior Advocate with Mr.Naval Agarwal and Ms.Ankita
Singhania i/by Bachubbai Munim & Co.for Respondent No.1 in both
appeals.
CORAM: D.K.DESHMUKH &
R.G.KETKAR, JJ.
DATE: 28th July, 2011.
JUDGMENT: (Per R.G.Ketkar, J.)
1. Both these appeals are instituted against the common judgment
and order dated 23.12.2004 passed by the learned Single Judge in
the Notice of Motion No.553 of 2004 and the Notice of Motion
No.2382 of 2004 in Suit No.233 of 2004. By the impugned order,
the learned Single Judge made the Notice of Motion No.553 of
2004 absolute in terms of prayer clauses (a) to (c)(i), (ii) & (iii)
with clarification that the order will not affect the Defendant No.
3’s rights vis-a-vis Seaclor Mac regarding the manufacturing and
distributing. In view of granting of prayer clauses (c)(i), (ii) &
(iii) of the Notice of Motion No.553 of 2004, the learned Single
Judge disposed of the Notice of Motion No.2382 of 2004 as not
surviving.
2. The facts giving rise to the present appeals, briefly stated are as
under:-
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Appeal No.24 of 2005 is preferred by Severn Trent Water
Purification Inc, Defendant No.1. Respondent No.1 is the plaintiff
and Respondent Nos.2 to 11 are the Defendant Nos.2 to 11.
Appeal No.528 of 2005 is preferred by Hi Point Services Pvt.Ltd.,
Defendant No.4, wherein the Respondent No.1 is the plaintiff and
Respondent No.2 to 11 are the Defendant Nos.1 to 3 and 5 to 11
respectively. The parties shall hereinafter be referred as per their
status in the suit.
3. Plaintiff is a private limited company incorporated under the
Indian Companies Act, 1956 and is a holding company
incorporated to hold 50% share holdings in the Capital Controls
India Private Limited (Defendant No.5), which is the Joint
Venture Company. The plaintiff is registered and beneficial
holder of 375000 equity shares (being 50% of the equity share
capital) of and in the 5th Defendant Company. Defendant No.1 is a
Corporation organised and existing under the laws of the State of
Pennsylvania, Unites States of America (for short U.S.A.).
Defendant No.2, Capital Controls (Delaware) Company Inc is the
Corporation organised and existing under the laws of the state of
Delaware, U.S.A. Defendant Nos.1 & 2 carry on business of
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manufacture, supply, sale and distribution of Chlorination
equipments including gas and electro chlorination equipments.
Defendant Nos.1 & 2 are group companies and were earlier part
of Capital Controls group not being Defendant No.5 herein.
4. Defendant No.3 is the company incorporated under the Indian
Companies Act, 1956 and carries on business of manufacture and
marketing of electro Chlorination equipments. In or about in the
year 1989-90, Defendant No.3 was floated as Joint Venture in
technical and financial collaboration with De Nora group of Italy
who hold 51% of equity share capital of the Defendant No.3. Hi
Point Services Pvt.Ltd., Defendant No.4 is a private limited
company incorporated under the Indian Companies Act, 1956 and
interalia carries on business in electro chlorination equipments.
Defendant No.4 had a tie up with American Company called
Exceltec Inc who were engaged in the business of electrolytic
disinfection equipment.
5. Defendant No.5 viz.Capital Controls India Pvt.Ltd., is a private
limited company incorporated under the Indian Companies Act,
1956 in implementation of the Joint Venture Agreement dated
16.11.1995 executed between the plaintiff and Madhusudan
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B.Kocha (Defendant No.9) on one hand and Defendant Nos.1 &
2 on the other. 50% share capital of Defendant No.5 is held by
the plaintiff and the balance 50% share capital is held in the name
of Defendant No.2. Plaintiff and Defendant No.2 are the Joint
Venture partners constituting Defendant No.5. Defendant No.6
(W.A.Stimeling), Defendant No.7 (Marwan Nesicolasi) and
Defendant No.8 (R.Fernandez) are the directors of Defendant No.
5 Company appointed by Defendant No.2 Company for and on
behalf of Defendant No.1 Company. Defendant Nos.6 to 8 are
Directors/officers of various Severn Trent group companies.
Defendant No.6 is also the director of Defendant No.1.
6. Defendant No.9 is the Managing Director of Defendant No.5 and
Defendant Nos.10 (Milin M.Kocha) & 11 (Nilesh M.Kocha) are
whole time directors of Defendant No.5. The entire share holding
of the plaintiff is held by Defendant Nos.9 to 11, who shall
hereinafter be referred as the Kocha family.
7. Plaintiff instituted Suit No.233 of 2004 on 19.01.2004 interalia
praying for (a) a declaration that the Joint Venture Agreements
dated 16.11.1995 at Exhibit ‘B’ and Supplemental Collaboration
Agreement at Exhibit ‘M’ are valid, subsisting and binding and
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that the scope of business of Defendant No.5 includes
manufacture, sale, distribution and services of the entire range of
chlorination equipments, including electro chlorination
equipments of the Defendant Nos.1 & 2, their parents, associates
and affiliated companies as well as of the Kocha family/ Chloro
Controls Equipment Company; (aa) a declaration that the notice
dated 23.01.2004 (Exhibit ‘BBBB’) is illegal, invalid, malafide
and of no effect whatsoever; (aaa) a declaration that the notice
dated 21.07.2004 (Exhibit ‘CCCC’) is wrongful, illegal, invalid,
malafide in breach of the joint venture agreement and of no effect
whatsoever; (b) an order and permanent injunction restraining the
Defendant Nos.1 & 2, their parents, associates and affiliated
companies from committing breach of their obligations under the
joint venture agreements read with the supplementary
collaboration agreement (Exhibits B & M) and/or from
committing breach of their obligations as partners in Defendant
No.5; (c) an order and permanent injunction restraining the
Defendant Nos.1 & 2, their parents, associates and affiliated
companies from directly or indirectly selling, distributing,
manufacturing, dealing in or being financially interested in
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chlorination equipments, parts, accessories and related
equipments, including electro chlorination equipments in India
and the designated territory, save and except through Defendant
No.5 or from conducting any competing business in India or the
designated territory; (d) an order and permanent injunction
restraining Defendant Nos.1 & 2, their parents, associates and
affiliated companies from in any manner interfering with and/or
preventing Defendant No.5 from conducting its business of
chlorination
equipments, including electro chlorination
equipments, of the Kocha family/Chloro Controls Equipment
Company, Proprietary concern of Defendant No.9, among other
prayers. The plaintiff as beneficial and registered owners of
3,75,000 equity shares of th 5th Defendant has instituted this suit,
a derivative action to correct and remedy the illegality and wrong
done to the 5th Defendant and its share holders by Severn Trent
through Defendant Nos.1, 2 and 6 to 8.
8. It is the case of the plaintiff that Defendant No.5 was incorporated
on 14.11.1995 and the main object mentioned in the
Memorandum of Association of Defendant No.5 is to the
following effect:-
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1. To design, manufacture, import, export, act as agent,
deal in assembling, testing, erecting, servicing and
marketing of gas and electro chlorination equipments….”
Before formation of 5th Defendant company the Kocha family
carried on business of manufacture and sale of gas chlorination
equipments. On and from 1980 the Kocha family developed and
commenced manufacturing of electro chlorination equipments.
The business of Kocha family was done in the name of Chloro
Controls Equipments Company which is the sole proprietory
concern of Defendant No.9. Prior to formation of Defendant No.
5, the Chloro Controls Equipment Company was the distributor in
India for the products of Capital Controls for more than a decade.
The joint venture agreements between Defendant Nos.1 & 2 and
the plaintiff/ Defendant No.9 were executed on 16.11.1995. The
financial and technical know how licence agreement was entered
into between Defendant No.1 & Defendant No.5, under which
Defendant Nos.1 & 2 (Capital Controls) agreed to furnish
technical know how relating to the manufacture, quality control,
installation, testing and servicing of its products existing on the
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date of the agreement. The International Distributor Agreement
(being Appendix II to the Share Holders Agreement) was entered
into between Defendant No.1 and Defendant No.5 whereunder
Defendant No.1 appointed Defendant No.5 as its exclusive
distributor for the products manufactured and marketed by
Defendant No.1 viz.chlorination and water disinfection
equipments, machineries, parts, accessories and related
equipments and services in the territory of India, Afganisthan,
Nepal and Bhutan. The list of products offered for distribution at
attachment ‘A’ to the said agreement, included “Hypogen
Equipment Series 3300” which is electro chlorination equipment
and which was the only brand of electro chlorination equipment
of Capital Controls (Defendant Nos.1 & 2). However the plaintiff
has specifically asserted in Paragraph 20 of the plaint that the
Defendant No.5 did not deal with “Hypogen” brand in view of its
exorbitant pricing.
9. It is the case of the plaintiff that it was also the intention of the
parties that the business of Defendant No.5 would include the
entire range of chlorination business of Chloro Controls
Equipments Company (Proprietary concern of Defendant No.9)
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including its range of electro chlorination equipments. It was also
intended that the entire range of chlorination equipment of Severn
Trent which was initially divided between the Technical Know
How Agreement and Distributors Agreement, was ultimately to be
manufactured by Defendant No.5 indigenously. The purpose of
formation of Defendant No.5 was to fuse and pull together the
resources and technology and business in the range of
chlorination equipments including electro chlorination equipment
of Severn Trent (which at that time was conducted through
Defendant Nos.1 & 2 only) with that of Kocha family/ Chloro
Controls Equipment Company (Proprietary concern of Defendant
No.9). Plaintiff has set out various circumstances in the plaint to
contend that these circumstances establish that to the knowledge
and with the acquiescence of Defendant Nos.1 & 2, Defendant
No.5 was in fact carrying on business of manufacture, sale and
distribution of electro chlorination equipments.
10. It is the case of the plaintiff that some of the actions of Severn
Trent (including Defendant Nos.1 & 2) on and from December
1998 onwards were in breach of joint venture agreement, the
negative covenants contained therein and to the detriment of
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Defendant No.5. Some of those acts were clear systematic scheme
and design to thwart, scuttle and throttle the business of
Defendant No.5 and to illegally conduct the competing business
through their group, affiliated and associated companies, as
Severn Trent (including Defendant Nos.1 & 2) envisaged
Defendant No.5 becoming a serious competitor on the termination
of joint venture agreements and the Severn Trent did not have the
majority /controlling interest in Defendant No.5.
11.In or about December, 1998, Severn Trent acquired Exceltec Inc
and thereafter Defendant No.1 issued circular which was received
by Defendant No.5 on 01.02.1999 stating that Defendant Nos.1
& 2’s Hypogen brand of electro chlorination equipment was to be
completely replaced by Exceltec’s “Omnipure” and “Sanilec”.
Upon such replacement of Hypogen, Defendant No.5 was
exclusively entitled to conduct business of “Omnipure” and
“Sanilec” in India. As noted earlier, the plaintiff has asserted that
Defendant No.5 did not deal with “Hypogen” brand in view of its
exorbitant pricing.
12.Prior to acquisition of Exceltec by Severn Trent, Exceltec had
existing tie up and arrangement with Defendant No.4 in India.
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Upon such acquisition of Exceltec by Severn Trent and
replacement of Hypogen by Exceltec brand of “Omnipure” and
“Sanilec”, the said brands of electro Chlorination equipments
could only be dealt with in India through Defendant No.5.
However, upon such acquisition, Exceltec was none the less
supplying its products through both Defendant No.4 and
Defendant No.5. Plaintiff through Defendant No.9 repeatedly
protested against this conduct at the Board meeting of Defendant
No.5 of 26.09.2001.
13.While discussion with Exceltec were still pending, in or about
September 2001, Severn Trent Services Inc and one “Gruppo De
Nora” purported to merge their sea water and marine disinfection
business into a single joint venture under the name of “Severn
Trent De Nora LLC to market and service the products
manufactured by Exceltec and De Nora. As electro chlorination
equipment (Omnipure, Sanilec and Seaclor) fell within the range
of Severn Trent’s range of electro chlorination equipment, the
same could not be dealt with in India except through Defendant
No.5.
14.It is the case of the plaintiff that several discussions were held and
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it was pointed out that the failure to honour the joint venture
agreement and lack of support of Severn Trent was leading to
Defendant No.5’s market share in electro chlorination equipment,
being captured by competitor. In order to salvage the situation,
the Defendant No.9 at the Board meeting of 10.12.2001 and in e-
mail dated 12.01.2002 wrongly contended that the plaintiff be
permitted to conduct the business of electro chlorination
equipment of the Kocha family outside the scope of the joint
venture by interpreting the joint venture agreements to be in
respect of gas chlorination equipment only and keeping
Defendant No.5 away from electro chlorination business.
Defendant No.1 through their Advocate’s letter dated 06.09.2002
addressed to Defendant No.5, for the first time, alleged as an
afterthought, that the scope of the joint venture agreement was
restricted to marketing and sale of gas chlorination equipment
only, with the exception of right to distribute the “Hypogen
Equipment Series 3300” product line and that any venture by
Defendant No.5 into electro chlorination business was in violation
of the joint venture agreement. Plaintiff has referred to the
correspondence ensued between the parties. In substance, the case
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of the plaintiff is that having regard to the main object for which
Defendant No.5 was incorporated, as also by virtue of agreement
entered into between the parties, electro chlorination business of
both Severn Trent as well as Kocha family.
15.Chloro Controls Equipments Company (Proprietary concern of
Defendant No.9) clearly fell within the scope of business of
Defendant No.5. Defendant No.2 being the joint venture partner
cannot carry on competing business in gas or electro chlorination
equipments in India and cannot divert such business of Defendant
No.5 to other concerns either through device of acquisitions and
mergers or in any other manner whatsoever. Plaintiff relied upon
clause 4.5 of the Share Holders Agreement and contended that in
view thereof, the plaintiff is entitled to specific enforcement of
the said negative covenant.
16.During the pendency of the suit, Defendant Nos.1 & 2 issued
notice dated 23.01.2004 to be a notice to settle the dispute in
terms of clauses 22.2 (i) and 21.2.(iv) of the Share Holders
Agreement dated 16.11.1995, as also Defendant No.1 terminated
the joint venture agreements contained in (i) Shareholders
Agreement, (ii) International Distributors Agreement, (iii)
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Financial and Technical Know How Agreement, (iv) Export Sales
Agreement, (v) Trademark Registered User Agreement, by a fax
dated 21.07.2004. Plaintiff suitably amended the plaint and has
challenged the notice dated 23.01.2004 and the fax dated
21.07.2004. Plaintiff took out Notice of Motion No.553 of 2004
claiming interim reliefs during the pendency of the suit
substantially in terms of prayer clauses (c), (d), (e) & (k) of the
Plaint.
17.Affidavit in reply was filed by Mr.K.V.Ramesh on behalf of
Defendant No.1 on 27.04.2004. In substance, it was contended
that the Memorandum and Articles of Defendant No.5 cannot be
interpreted to expand the scope of activities as the object clause of
the Memorandum of Association is in general and broad based
terms and includes objects which the company may undertake in
future. The actual scope of activities of Defendant No.5 as well as
terms, rights and obligations of the parties are set out in the Joint
Venture Agreement alone. The Joint Venture Agreement clearly
describe and specifically set out the list of products which the
Defendant No.5 can manufacture, sell or distribute. Clause 4.5 of
the Shareholders Agreement dated 16.11.1995 clearly provides
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that the plaintiff, Defendant No.9 and Kocha family shall not
during the term of agreement, engage directly or indirectly or be
financially interested in the manufacture, sale or distribution of
chlorination equipments and related products which are similar to
those manufactured or sold by Defendant No.5 Joint Venture
Company. There is no such provision under the said clause
restricting the erstwhile Defendant No.2 now Defendant No.1,
and further goes on to say that during the term of this agreement
the erstwhile Defendant No.2 now Defendant No.1, its parents &
associates will not directly or indirectly engage and/or be
financially interested in the manufacture, sale and distribution in
India of the products manufactured or sold by Defendant No.5.
The non-compete obligations of the plaintiff and Defendant No.9
on one hand and that of Defendant No.1 on the other, are
conspicuously different. It is further contended that the specific
products list in the joint venture agreement and in particular
International Distributors Agreement (Appendix II to the
Shareholders Agreement) only lists the Hypogen Equipment
Series 3300″ brand line of electro chlorination equipments. At
the time of joint venture agreement, erstwhile Defendant No.2
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manufactured the Hypogen Equipment Series 3300, the electro
chlorination equipment. The erstwhile Defendant No.2
discontinued the manufacture of hypogen product line in U.S.A.,
and said discontinuation was done before acquisition of Exceltec.
Hypogen brand was not superseded by the brands of Exceltec viz.
“Omnipure” and “Sanilec”. It was further contended that had the
parties actually intended in 1995 to include all present and future
lines of Defendant No.1’s lines of electro chlorination products,
they would have (i) made the non-compete provision identical for
both parties, (ii) drafted the list of products to include all lines of
gas and electro chlorination equipment produced then or to be
produced in future. It was reiterated that the scope of joint
venture agreement can be clearly ascertained from the bare
perusal of these agreements, and by plaintiff’s own admission the
plaintiff has shown clearly that the scope of joint venture did not
extend to electro chlorination business.
18.By the impugned order dated 23.12.2004, the learned Single
Judge partly allowed the Notice of Motion No.553 of 2004 as
mentioned earlier and in view thereof disposed of the Notice of
Motion No.2382 of 2004 as it does not survive. It is against this
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order, Defendant No.1 has preferred Appeal No.24 of 2005 and
Defendant No.4 has preferred Appeal No.528 of 2005.
19.In support of Appeal No.24/2005 we have heard Mr.Rohit
Kapadia, learned Senior Advocate and Mr.J.P.Sen, learned
Advocate. In support of Appeal No.528/2005 we have heard
Mr.Pradip Sancheti, learned Senior Advocate. We have also
heard Mr.S.H.Doctor, learned Senior Advocate and Mr.Naval
Aggarwal, learned Advocate on behalf of Respondent No.1-
original plaintiff in both the appeals.
20.Mr.Kapadia in support of Appeal No.24/2005 submitted that the
learned Single Judge posed the question whether the joint venture
agreement between the parties was only for gas chlorination
equipment or whether it was also for electro chlorination
equipments. He submitted that the scope of business between the
parties has to be ascertained from the joint venture agreement
alone and that the learned Single Judge committed serious error in
issuing the injunction without considering the scope of negative
covenant viz. Clause 4.5 in the Shareholders Agreement. If the
joint venture agreement is carefully perused, it would be clear that
the joint venture agreement between the parties was only for gas
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chlorination equipments. In so far as electro chlorination
equipments are concerned, the only one product viz. Hypogen
Equipment Series 3300 manufactured by Defendant No.1 was to
be distributed by Defendant No.5. The joint venture agreement
did not contemplate manufacture or sale of electro chlorination
equipment by Defendant No.5.
21.On the other hand, Mr.Doctor appearing for Respondent No.1-
plaintiff submitted that having regard to the main object of
Defendant No.5 as mentioned in its Memorandum of Association,
it would be clear that Defendant No.5 was to design, manufacture,
import, export, act as an agent, deal in assembling, testing,
erecting, servicing and marketing of gas and electro chlorination
equipments. Thus manufacture and sale of electro chlorination
equipments was one of the main objects for which Defendant No.
5 was incorporated. This fact is fortified by the conduct of the
parties. At any rate, having regard to the circumstances and the
material on record, Defendant No.5 has a right to manufacture
and sell electro chlorination equipments, and the actions of
Defendant No.1 in acquiring Exceltec, as also merger with De
Nora LLC was with a view to competing with the business of
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Defendant No.5, which was wholly improper in view of clause
4.5 of the Shareholders Agreement. He therefore supported the
impugned order passed by the learned Single Judge.
22.We have considered the rival submissions made by learned
counsel appearing for the parties. In order to properly understand
and appreciate the controversy between the parties it would be
relevant and material to note some of the clauses of various
agreements entered into between the parties. Clauses 1, 4.5, 7,
14, 17, 20, 21, 26 and 28 of the Shareholders Agreement dated
16.11.1995 entered into by and between Defendant No.2 on one
hand and the plaintiff and Defendant No.9 on the other, are
relevant, and which read as under:-
“(1) Registration of the Company – The parties shall, subject
to obtaining all necessary approvals, licenses, and
authorizations from the Government of India, register a
company with the name “Capital Controls India Private
Limited”, or if such name is not available for any reason, then
with such other name as may be mutually agreed upon b y the
parties, (hereinafter called the “Company) having as its main
object the manufacture, sale and service of the Products (as
such terms is defined n the Financial and Technical Know-
How License Agreement between Capital Controls and the
Company referred to in Section 14 of this Agreement. The
company’s registered office shall be located in Bombay.”
“4.5 Mr.Kocha (and also his wife and sons) and Chloro
Controls shall not, during the terms of this Agreement, engage,
directly or indirectly, or be financially interested in the
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manufacture, sale or distribution of chlorination equipment
and related products which is similar to those manufactured or
sold by the Company. During the terms of this Agreement,
Capital controls, its parent and its associates will not directly
or indirectly engage in or be financially interested in the
manufacture, sale or distribution in India of the products
manufactured or sold by the Company.”
“7. Distributor Agreement: Capital Controls agrees to
appoint the Company as a Distributor in India of the Products
manufactured by Capital Controls subject to the terms and
conditions of the Distributor Agreement attached hereto as
Appendix II. This appointment will normally be renewed as
long as Capital Controls holds at least twenty-six (26%) of the
shares in the Company.”
“14. Financial and Technical Know-How License Agreement –
Chloro Controls and Capital Controls shall together cause the
Company to enter into the Financial Technical Know-How
License Agreement with Capital Controls attached hereto
(hereinafter referred to as the License Agreement). Under the
said License Agreement and subject to the terms and
conditions specified therein, Capital Controls agrees to grant
the Company the right and license to manufacture the products
in India in accordance with the Technical Know-How and
other technical information possessed by Capital Controls.”
“17. Sale and Purchase of Chlorination Equipment Assets. –
Chloro Controls and Mr.Kocha agree to transfer such of the
assets as related to the gas chlorination equipment business
presently carried on by Chloro Controls or Mr.Kocha as
per Appendix IV attached hereto.”
“20. Performance by Capital Controls – The subscription of
the equity shares of the Company and the performance of the
other obligations assumed by Capital Controls hereunder shall
be subject to the fulfillment of the following conditions:-
(i) Mr.Kocha and/or the Company shall have obtained
the necessaryh approval of the terms of foreign
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collaboration and the Company shall have received the
licenses, approvals and permissions described n Section
20.1 hereof or Chloro Controls shall have transferred and
assigned to the Company anysuch licenses and approvals, if
any, obtained by it for the manufacture of the products.
(ii) Chloro Controls shall have subscribed and paid for
the equity shares of the Company as provided in Section
4.1(ii) hereof.
(iii) Mr.Kocha/Chloro Controls shall have entered into the
Lease Agreement as provided in Section 2 hereof for
leasing the premises in Andheri to the Company.
(iv) Chloro Controls shall have transferred the assets of
the gas chlorination bus9ness to the Company as provided
in Section 17 hereof.
(v) The Company shall have obtained long-term loans as
provided in Section 12 hereof, on terms and conditions
satisfactory to Capital Controls or it shall have obtained a
commitment letter from the Financial Institutions for the
grant of the said loan or shall have made such other
arrangement, which is deemed adequate by Capital
Controls.
“21.Terms and Condition –
21.1 This agreement shall continue in force and effect for
so long as each party, its parents, associates, permitted
assigns, shall held not less than twenty-six percent (26%)
of the total paid up equity shares of the Company or in the
event that the Company fails to achieve a cumulative sales
valumen of Rupees 120 million over three (3) years and a
cumulative profit of fifteen percent (15%) per year over
three (3) years from the signing of this Agreement by both
parties, then either party may at its option, terminate this
Agreement and dispose of its shares as provided in Section
6.
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21.2 In the event of any of the following:
(i) any material breach of this Agreement (other than the
payment of money) not cured or revolved within ninety
(90) days after the date of written notice thereof;
(ii) Insolvency or bankruptcy of either party;
(iii) if either party is unable to pay its debts as they
become due, passes a binding resolution for winding up,
goes into liquidation or is dissolved, or has a received
appointed over any of its assets and undertakings, or makes
a composition with its creditors;
(iv) if there is a deadlock regarding the management of
the Company which shall remain unresolved for a period of
ninety (90) days following written notice thereof from one
party to the other;
then the party not in default may terminate this Agreement
by notice in writing to the other party.
21.3 In the event of the termination of this Agreement, the
Company will be would up and all obligations undertaken
by Chloro Controls under the Financial and Technical
Know-How Agreement or the Trademark Registered User
Agreement/Trademark License Agreement or Tradename
Agreement regarding the use of the tradename Capital
Controls in the name of the Company shall cease with
immediate effect. The name of the Company shall be
changed so that the word “Capital” either individually or in
combination with any other word or words does not appear
in the name of the Company and the said words shall not be
used by the Company in any manner in connection with its
business.”
“26. Entire Agreement – This Agreement sets forth the entire
agreement and understanding between the parties as to the
subject matter hereof and supersedes all negotiations,
commitments and writings prior to the date hereof pertaining
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to the subject matter of this Agreement.”
“28. Modifications – This Agreement shall not be altered,
modified or supplemented except with the prior written
approval of the parties hereto.”
23.Appendix II to the Shareholders Agreement which is referred in
clause 7 provides for International Distributors Agreement,
whereunder Defendant No.2 appointed the plaintiff as its
exclusive distributor of its products in India. The products offered
for distribution were set out in Attachment ‘A’. Attachment ‘A’
among other products included only one electro chlorination
equipment viz.Hypogen Equipment Series 3300. As noted earlier,
the plaintiff asserted that the Defendant No.5 did not deal with
“Hypogen” brand in view of its exorbitant pricing. It is not in
dispute, that the rest of the products in Attachment ‘A’ are the
equipments other than electro chlorination equipments. The
Financial and Technical Know How Licence Agreement dated
16.11.1995 was entered into by and between Defendant No.2 and
the plaintiff. Clauses 1.1, 1.2, 2.4, 2.5 and 24 thereof are relevant,
which read as under:-
1.1 The term “Products” shall mean Capital Controls
chlorination equipment as more fully described in Appendix I
attached hereto, and parts and components thereof. The
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Appendix forms an integral part of this Agreement.
1.2 The term “Technical Know-How” shall mean Capital
Controls’ secret drawings, designs, formulae and
manufacturing procedures and methods and other technical
information owned by capital controls or in respect of which
Capital Controls has the right to disclose and license
hereunder, relating to the manufacture, quality control,
installation, testing and servicing of the products, existing on
the date of this Agreement, and any improvement thereto, but
shall not include any manufacturing data with respect to
Appendix II.
2.4. Licensee agrees that it shall not during the terms of this
Agreement manufacture or have manufactured for it, sell or
offer for sale or be financially interested in any other venture
for the manufacture and sale of any goods similar to the
products, without the prior written permission of Capital
Controls.
2.5 During the terms of this Agreement, Capital Controls and
its affiliated companies shall sell the products in India only
through the Licensee.
24 Modifications – No modification or amendment of this
Agreement and no waiver of any of the terms or conditions
hereof shall be binding unless made in writing duly executed
by both parties.
24.Appendix-I to this agreement lists the products manufactured by
Defendant No.5 i.e. the Joint Venture, for chlorine service only.
Perusal of this Appendix-I would indicate that it does not include
any electro chlorination equipment. Appendix II to this agreement
specifically deals with the products and parts not manufactured by
Defendant No.5 viz.the Joint Venture and reads thus-
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“All Capital Control products not listed in Exhibit I and the
following series of parts –
All diaphrams,
All Springs.”
25.Thus Appendix II clearly sets out the list of products and parts not
manufactured by the Joint Venture and it further provides all
capital control products not listed in Exhibit I. We have already
noted that Appendix I to this agreement provides for products
manufactured by Defendant No.5 for chlorine service only, and
deals only with gas chlorination equipment and does not include
any electro chlorination equipment.
26.In order to succeed in getting interim reliefs, the plaintiffs will
have to establish first that Defendant No.5 is entitled to
manufacture and sell electro chlorination equipments under the
joint venture agreements, so as to enforce the negative covenants
contained in clause 4.5 of the Shareholders Agreement. We have
already extracted clause 4.5 of the Shareholders Agreement dated
16.11.1995. In our opinion, clause 4.5 is in two parts viz. (i)
Mr.Kocha, Defendant No.9 (including his wife and sons), Chloro
Controls, the Plaintiff shall not, during the term of this
agreement, engage, directly or indirectly, or be financially
interested in the manufacture, sale or distribution of
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chlorination equipments and related products which are
similar to those manufactured or sold by Defendant No.5
Company. In so far as obligation cast on Defendant No.9 and the
plaintiff is that during the term of this agreement, they shall not
deal in any manner, in the manufacture, sale or distribution of
chlorination equipments and related products which are
similar to those manufactured or sold by the Defendant No.5
Company. (ii) During the term of this agreement the Capital
Controls (Defendant Nos.1 & 2), its parents and associates will
not directly or indirectly engage in or be financially interested in
the manufacture, sale or distribution in India of the products
manufactured or sold by Defendant No.5 Company. Thus, in
so far as plaintiff and Defendant No.9 are concerned, the negative
covenant is wide enough to include chlorination equipment and
the related products which are similar to those manufactured or
sold by defendant No.5. Thus , the said negative covenant in so
far as plaintiff and Defendant No.9 are concerned, is widely
worded, whereas in so far as Defendant Nos.1 & 2 are concerned,
it only prohibits them from dealing in any manner with the
products manufactured or sold by Defendant No.5 Company. In
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other words, this covenant is not as widely worded as compared
with the wordings of negative covenant qua the plaintiff and
Defendant No.9.
27.With the assistance of learned counsel appearing for the parties,
we have been taken through the material on record. Learned
counsel for the plaintiff however could not point out any material
to substantiate that in fact, Defendant No.5 was manufacturing
and selling electro chlorination equipments. The prohibition
contemplated against Defendant Nos.1 & 2 in clause 4.5 is that
they shall not deal with the products manufactured or sold by
Defendant No.5. In the first place, perusal of the joint venture
agreements together with their annexures would indicate that the
electro chlorination equipments was not part of these agreements.
The only one product viz.Hypogen Equipment Series 3300 was to
be distributed by Defendant No.5. Thus, Defendant No.5 was not
authorised to manufacture and sell electro chlorination products.
Even otherwise, from the material on record, we do not find that
in fact Defendant No.5 was manufacturing or selling electro
chlorination equipments. As noted earlier, in the plaint the
plaintiff has asserted that Defendant No.5 did not deal with
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“Hypogen” brand in view of its exorbitant pricing. That apart,
plaintiff has not led any foundation in the plaint for invoking
clause 4.5 of the Shareholders Agreement.
28.Mr.Kapadia invited our attention to Section 27 of Indian Contract
Act, 1872 (for short ‘Act’) to contend that even otherwise Clause
4.5 is void. In support of this submission, he relied upon the
judgment of the Apex Court in the case of Superintendence
Company of India (P) Ltd.V/s.Shri.Krishan Murgai, 1981 (1)
LLJ 121. The appeal before the Apex Court preferred by the
Company-original plaintiff, principally raised two substantial
questions viz.(i) whether a post service restrictive covenant is in
restraint of trade, as contained in clause (10) of the Service
Agreement between the parties is void under section 27 of the
Indian Contract Act, 1872?, (ii) Whether the said restrictive
covenant assuming it to be valid, is on its terms enforceable at the
instance of the Appellant Company against the Respondent? In
that case, the Appellant company which was carrying on business
as valuers and surveyors, undertaking inspection of quality,
weighment, analysis, sampling of merchandise and commodities,
cargoes, industrial products, machinery, textile etc., having its
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head office at Calcutta and branch at New Delhi, appointed the
Respondent as Branch Manager of its New Delhi office on
27.03.1971. The letter of appointment contained terms and
conditions and clause (10) thereof placed the respondent under
post service restraint that he shall neither serve any other
competitive firm, nor carry on business on his own in similar lines
as that of the Appellant company for two years at the place of his
last posting. Clause (10) reads as under:-
“10.
That you will not be permitted to join any firm of our
competitors or run a business of your own in similar lines
directly and/or indirectly, for a period of two years at the place
of your last posting after you leave the company.”
On 24.11.1978 Appellant terminated services of the Respondent
w.e.f. 27.12.1978. Respondent started his own business under the
name and style of ‘Superintendence and Surveillance Inspectorate
of India’ in New Delhi on lines identical with or substantially
similar to that of Appellant company. On 19.04.1979, Appellant
company instituted suit in Delhi High Court on its original side
claiming Rs.55,000/- as damages on account of breach of the
negative covenant contained in clause (10) and for permanent
injunction restraining the Respondent, by himself, his servants,
agents or otherwise, from carrying on the said business or any
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other business on lines similar to that of Appellant company or
associating or representing any competitors of the Appellant
company before expiry of two years from 27.12.1979. After
filing the suit, the appellant company sought temporary injunction
by way of enforcing the negative covenant. On 29.04.1979 the
learned single Judge granted ad-interim injunction, and after
hearing the Respondent confirmed the ad-interim order on
25.05.1979. Learned Single Judge took a view that the negative
covenant being in partial restraint to trade was reasonable
inasmuch as it was limited both in point of time (two years) as
well as the area of operation (New Delhi which was his last
posting), and therefore was not hit by Section 27 of the Act.
Learned Single Judge was also of the opinion that the negative
covenant was enforceable as the expression “leave” in clause (10)
was not confined to voluntarily leaving of service by the
Respondent but was wide enough to include the termination of his
services by the Appellant company. On appeal by the Respondent,
the Division Bench of the High Court reversed the order of the
learned Single Judge on both the points. In the Apex Court,
Hon’ble Mr.Justice V.D.Tulzapurkar speaking for himself and
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Hon’ble Mr.Justice Untwalia disposed of the appeal on the 2nd
point whether the restrictive covenant contained in clause (10),
assuming to be valid, was on its terms enforceable at the instance
of the Appellant company against the Respondent. Hon’ble
Mr.Justice Tulzapurkar came to the conclusion that the expression
“leave” occurring in clause (10) of the agreement was intended
by the parties to refer only to a case where the employee has
voluntarily left the service of the company of his own, and since
the services of the Respondent were terminated by the appellant
company, restrictive covenant contained in clause (10) would be
inapplicable, and therefore, not enforceable against the
Respondent at the instance of the appellant company. In a
separate but concurring judgment Hon’ble Mr.Justice Sen was of
the view that the appeal cannot be decided without deciding the
question as to whether the negative covenant which restricts the
right of the employee after conclusion of the terms of service or
the termination of the employment for the other reasons to engage
in any business similar to or competitive with that of the
employer, is in restraint of trade, and therefore void under section
27 of the Act. Hon’ble Mr.Justice Sen considered various cases
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viz.(i) Niranjan Shankar Golikari V/s.Century Spinning and
Mfg.Co.Ltd., 1967 (1) LLJ 698, (ii) Brahmaput Tea
Co.Ltd.V/s.Skarth, ILR (1885) 11 Calcutta 545, (iii) Nordenfelt
V/s.Maxim Nordenfelt Guns and Ammunition Co.Ltd., L.R.
(1894) A.C.535, (iv) Satyavrata Ghosh V/s.Mugnee Ram Bangor,
(1954) SCR 310, (v) Madhub Chunder V/s.Rajcoomar Doss,
(1974) Beng.L.R.76, among others, and considered the english
law on this point in contrast with section 27 of the Indian Contract
Act, and in paragraph Nos.49 and 50 of the judgment, observed
thus:
“49. In Shaikh Kalu v.Ram Saran Bhagat, (1908) 13 C.W.N.
388, Mookerjee and Carnduff, J.J., referred to the history of
the legislation on the subject and observed that the framers of
the Act deliberately reproduced S.883 of Field’s Code, with
the full knowledge that the effect would be to lay down a rule
much narrower than what was recognised at the time by the
common law, while the rules of the common law, on the other
hand, had since been considerably widened and developed, on
entirely new lines. They held that the wider construction put
upon S.27 by Sir Richard Couch in Madhub Chunder
v.Rajcoomar Doss, (supra), is plainly justified by the language
used, and that the section had abolished the distinction
between partial and total restraints of trade and said.
“The result is that the rule as embodied in S.27 of the
Indian Contract Act presents an almost starting
dissimilarity to the most modern phase of the English rule
on the subject.”
They went on to observe:
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“As observed, however, by Sir Richard Couch in the case
to which we have referred, we have nothing to do with thepolity of the law, specially as the Legislature has
deliberately left the provision in S.27, in its original form,though other provisions of the Contract Act have from time
to time been amended. The interference would be almost
irresistible under these circumstances, that the Courts have
rightly ascertained the intention of the Legislature. Thesilence of the Legislature in a case of this description is
almost as emphatic as an express recognition of the
construction which has been judicially put upon the statute
during many years past. In this view of the matter, if we
adopt the construction of S.27 of the Indian Contract Act asfirst suggested by Sir Richard Couch and subsequently
affirmed in the cases to which we have referred, aconstruction which is consistent with the plain language of
the section, the agreement in this case must be pronouncedto be void.”
“50. The law Commission, in its Thirteenth Report, has
recommended that S.27 of the Act should be suitably amended
to allow such restrictions, and all contracts in restraint of trade,
general or partial, as were reasonable, in the interest of the
parties as well as of the public. That, however, involves a
question of policy and that is a matter for Parliament to decide.
The duty of the Court is to interpret the section according to its
plain language.”
29.Section 27 of the Contract Act reads as under:-
“27. Agreement in restraint of trade void – Every agreement by
which any one is restrained from exercising a lawful profession,
trade or business of any kind is to that extent void.
Exception 1: One who sells the goodwill of a business may
agree with the buyer to refrain from carrying on a similar
business within specified local limits, so long as the buyer or
any other person deriving title to the goodwill from him,
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carries on a like business therein,; provided that such limits
appear to the Court reasonable, regard being had to the nature
of the business.
30.Section 27 of the Contract Act is general in terms and declares all
agreements in restraint void pro tanto except in the case specified
in the exception. The observations of Sir Richard Couch, the
learned Chief Justice, in Madhub Chunder V/s.Rajcoomar Doss
(supra) which have become the locus class classicus were these :
“The words ‘restraint from exercising a lawful profession,
trade or business do not mean an absolute restriction, and are
intended to apply to a partial restriction, a restriction limited to
some particular place, otherwise the first exception would
have been unnecessary. Moreover, in the following S.28 the
legislative authority when it intends to speak of an absolute
restraint and not a partial one, has introduced the word
‘absolutely’. The use of this word in S.28 supports the view
that in S.27 it was intended to prevent not merely a total
restraint from carrying on trade or business, but a partial one.
We have nothing to do with the policy of such a law. All we
have to do is to take the words of the Contract Act, and put
upon them the meaning which they appear plainly to bear.”
31.Perusal of section 27 of the Indian Contract Act, in our opinion,
casts onus of proving reasonableness under Exception I on the
covenantee. The Plaintiff has not prima-facie established that the
agreements entered into between the parties fall in Exception 1 to
Section 27 of the Act. The view we are taking is also supported
by the decision of the Apex Court in the case of Percept D’Marle
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(India) (P) Ltd.V/s.Zaheer Khan, (2006) 4 SCC 227. Prima facie
we are not satisfied on the basis of material on record that the
negative covenant contained in clause 4.5 of the Shareholders
Agreement can be invoked by the plaintiff. As indicated earlier
the plaintiff has not prima-facie established that Defendant No.5
was manufacturing or selling electro chlorination equipments,
having regard to various joint venture agreements. Assuming that
the plaintiff is right in contending that clause 4.5 of the
Shareholders Agreement prohibits Defendant Nos.1 & 2 from
dealing in any manner with the products manufactured or sold by
Defendant No.5 that includes electro chlorination equipments,
none the less, having regard to the judgment of the Hon’ble Mr.
Justice Sen in the case of Superintendence (supra), the said clause
being in restraint of trade is prima facie void. That apart, even in
the minutes of the meeting No.3 of the Board of Directors of the
plaintiff held on 10.12.2001 which was attended by Defendant
Nos.9 to 11 and in particular clause 4.4.5 and 4.4.6 thereof clearly
set out the stand of the plaintiff and Defendant No.9. These
clauses read as under:-
“4.4.5. Mr.M.B.Kocha owns the company wherein the
electro chlorination business was developed since 1972
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onwards as mentioned above, along with Gas Chlorination
business. While the gas chlorination was covered in the said
JV Agreement, the electro chlorination was excluded in the JV
Agreement.”
“4.4.6. The technology is in the hands of Mr.M.M.Kocha.
Seeing the present scenerio between STS, CCI and CCU, it
would be prudent for all to keep JV Company away from the
electro chlorination business and continue the electro
chlorination business in the company owned by
Mr.M.B.Kocha. This will resolve most of the present problems
and no complications will take place at the time of bidding for
the tender and no embarrassing situations will arise at any time
in future between the companies.”
32.Perusal of clause 4.4.5 would indicate that the gas chlorination
was covered in the joint venture agreement and electro
chlorination was excluded in the joint venture agreement. Perusal
of clause 4.4.6 would indicate that it was suggested that it would
be prudent for all to keep the joint venture company away from
electro chlorination business and continue the electro chlorination
business in the company owned by Defendant No.9. This would
resolve the most of the problems and no complications would take
place at the time of bidding for the tender and no embarrassing
situations would arise at any time in future between the
companies. It is relevant to note that only Defendant Nos.9 to 11
attended the said meeting and none of the Directors of Defendant
Nos.1 & 2 attended the said meeting. This aspect has been sought
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to be explained in Paragraph No.23 of the plaint, which reads as
under:-
“23. Again the electro chlorination equipments were
initially supplied to both Defendant Nos.4 and the 5th
Defendant in India. Several discussions were held, and it was
pointed out that the failure to honour the Joint Venture
Agreements and the lack of support of Severn Trent was
leading to the 5th Defendant’s market share in electro
chlorination equipments being captured by competitors. In
view of the frustrating predicament in which Severn Trent had
placed the 5th Defendant and in view of its resultant
deteriorating financial position, the 9th Defendant, at the board
meeting of 10th December, 2001 and in e-mail dated 12th
January, 2002, in order to salvage the situation and in a state of
utter helplessness, wrongly contended that the plaintiff be
permitted to conduct the business of electro chlorination
equipments of the Kocha family outside the scope of the joint
venture by interpreting the Joint Venture Agreements to be in
respect of gas chlorination equipments only, and keeping the
5th Defendant away from electro chlorination business. Severn
Trent, however, refused to accept this suggestion.”
33.Prima-facie, at this stage, we are of the opinion that even the
plaintiff and Defendant No.9 accepted that the joint venture
agreements were only in respect of gas chlorination equipments
and did not cover electro chlorination business. Plaintiff strongly
relied upon various circumstances which found favour by the
learned Single Judge. Mr.Doctor strenuously contended that the
Under Secretary to the Government of India, Ministry of Industry,
addressed the letter dated 11.10.1996 to Defendant No.5 (Exhibit
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‘I’ to the plaint) conveying approval of the Government of India
to the proposal for foreign collaboration with Defendant No.2
subject to the terms and conditions set out therein. Defendant No.
5 replied this on 21.12.1996 (Exhibit ‘j’ to the plaint) and in so far
as point No.2 of letter dated 11.10.1996 is concerned, approval
was requested to be amended so as to include manufacture of gas
chlorination and electro chlorination equipments among other
products. This was responded by the Under Secretary to the
Government of India, Ministry of Industry on 21.04.1997 (Exhibit
‘L’ to the plaint) conveying the approval of the Government of
India to the amendment of clauses 2, 3 and 4 of the approval letter
dated 11.10.1996. Pursuant to the approval dated 21.04.1997
Supplementary Collaboration Agreement was executed between
Defendant No.2 and Defendant No.5 wherein parties confirmed
that they shall adhere to the terms and conditions as stipulated by
the Government of India vide letter dated 11.10.1996, amended
on 21.04.1997. The said Supplementary Collaboration Agreement
is at Exhibit ‘M’ to the plaint. Relying upon this correspondence
alongwith the other circumstances, Mr.Doctor contended that the
object of the Joint Venture Agreement was not only to
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manufacture gas chlorination equipments, but also to manufacture
electro chlorination equipments.
34.We do not find any substance in this contention. Clause 26 of the
Shareholders Agreement dated 16.11.1995 provides that the said
agreement sets-forth entire agreement and understanding between
the parties as to the subject matter and superseded all
negotiations, commitments and writings prior to the date of
agreement pertaining to the subject matter of the said Agreement.
Clause 28 thereof further provides that the Shareholders
Agreement shall not be altered, modified or supplemented except
with the prior written approval of the parties thereto. As noted
earlier the Shareholders Agreement was entered into by and
between Defendant No.2 on one hand and the plaintiff &
Defendant No.9 on the other. Similarly, clause 24 of the Financial
& Technical Know How Licence Agreement dated 16.11.1995
provides that no modification or amendment to the said
agreement and no waiver of any of the terms and conditions set
out therein shall be binding, unless made in writing, duly
executed by both the parties. Plaintiff has not brought on record
any material to indicate that various agreements entered into
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between the parties were suitably modified pursuant to the
approval dated 21.04.1997 accorded by the Government of India.
Even otherwise, no material is brought on record by the plaintiff
to substantiate that pursuant to the approval dated 21.04.1997,
Defendant No.5, was in fact manufacturing electro chlorination
equipments.
35.Clause 17 of the Shareholders Agreement provides that the
plaintiff and Defendant No.9 agreed to transfer such of the assets
as are related to gas chlorination equipments business presently
carried on by the plaintiff and Defendant No.9 as per the
Appendix IV of the said Agreement. Thus, prima-facie, the
assertions made by the plaintiff that the plaintiff and Defendant
No.9 transferred assets of their electro Chlorination equipment
business to Defendant No.5 Joint Venture Company, is also
factually incorrect, and further having regard to the joint venture
agreement there was inherent possibility of deadlock regarding
the management of the company viz.Defendant No.5. In that
regard clauses 6, 7, 8 and 9 of the Shareholders Agreement
indicate inherent possibility of deadlock in the management of the
Company and consequently, if there is a deadlock, obviously,
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Defendant No.5 would not be in a position to carry on its
business. Having regard to clauses 6, 7, 8 & 9 of the Shareholders
Agreement and having further due regard to the fact that the
disputes and differences arose between the plaintiff & Defendant
No.9 on one hand and Defendant Nos.1 & 2 on the other from
December, 1998 onwards and the said disputes and differences
continued between them even in the year 2001, would prima-facie
indicate that Defendant No.5 was not in a position to carry on
business. It is in these circumstances, we are of the opinion that
the plaintiff has not made out a prima-facie case for issuance of
injunction as prayed for. This is to be appreciated on the backdrop
of the fact that in for as Defendant No.4 is concerned, even in the
plaint the plaintiff has admitted that prior to acquisition of
Exceltec by Severn Trent, the Exceltec had an existing tie up and
arrangement with Defendant No.4 in India.
36.Even otherwise, there is one more reason for denying any interim
relief to the plaintiff and that is the delay in approaching the
Court. The Plaintiff has specifically averred in the plaint itself that
Defendant Nos.1 & 2 started committing breaches since
December 1998 and even in the year 2001 they continued to
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commit breaches. In the meeting of Board of Directors held on
10.12.2001 Defendant No.9 in terms of clauses 4.4.5 and 4.4.6
declared that the joint venture agreements are only in respect of
gas chlorination equipments and the electro chlorination was
excluded. Despite this position, the plaintiff has instituted a suit as
late as on 19.01.2004. This is the additional reason for denying
any interim relief to the plaintiff.
37.In view of the aforesaid discussion, we are of the opinion that the
interim order passed by the learned Single Judge on 23.12.2004 in
the Notice of Motion No.553 of 2004 and Notice of Motion No.
2382 of 2004 is liable to be quashed and set aside and is
accordingly set aside. Notice of Motion No.553 of 2004 and
Notice of Motion No.2382 of 2004 are dismissed. Both the
appeals are allowed, leaving the parties to bear their respective
costs.
38.At the request of learned counsel appearing for the Respondents,
it is directed that though we have dismissed the notices of motion
by our judgment, the interim arrangement which is presently in
force will continue for a period of eight weeks from today.
(R.G.KETKAR, J.) (D.K.DESHMUKH, J.)
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