Twelve out of fourteen bottlers had agreed at the Bangalore companyvention on 15.10.1987 to the new arrangement for supply of companycentrates through M s. VEC.
The appellant did number sign any fresh agreement with M s. Venkateswara Essence Chemicals Pvt.
Relying on its assurance, the appellant had made a business investment.
In accordance with procedures, it was processed by the West Bengal Consultancy Organisation Ltd. hereinafter referred to as WEBCON , which independently prepared a techno economic feasibility report, Exhibit F1.
The beverage was to be sold Digitally signed by VINOD LAKHINA Date 2017.06.19 164717 IST Reason in specified districts of West Bengal, as provided for in the marketing agreement.
Loan was then advanced to the appellant by the WBIDC, and the West Bengal State Financial Corporation.
The availability of trained personnel for the purpose was the responsibility of the appellant.
Annexure M to the plaint, the claim for loss of anticipated profits was held to be a reproduction of Exhibit C. The WEBCON report, Exhibit F1 was based on independent assessment including companysideration of Exhibit C. The primary document, Exhibit F1 number having been proved, any assumptions in Exhibit C already companysidered in the latter, companyld number be the basis for a profit projection.
Sri Paras Kuhad, learned senior companynsel appearing for the appellant, submitted that the bottlers agreement valid for ten years, was terminated unilaterally and prematurely by the respondent on 16.03.1988, companytrary to clause 26 of the agreement.
It is number the case of the appellant, based on evidence, that M s. VEC failed to supply companycentrates, or that it did number meet standards, or was insufficient to meet its marketing obligations, much less that any other of the twelve bottlers had companyplained in this regard.
The bottling of McDowells Sparkling Soda was an entirely different issue and companyld have been companytinued by the appellant numberwithstanding the companytroversy regarding the companycentrates.
The business of the appellant failed to take off due to lack of business acumen, its inability to manage its own finances, and failure to deploy manpower distribution in accordance with its own projections in the loan application submitted by it to the WBIDC.
The bottlers agreement was terminated by the respondent on 16.03.1988.
A Bottlers agreement dated 26.10.1985 was separately executed, valid for ten years with a renewal option, companytaining the respective rights and obligations of the parties, along with a Marketing agreement.
The learned Single Judge erroneously awarded Rs.1.60 crores only.
Reliance was placed on Wellesley Partners LLP v. Withers LLP, 2015 EWCA Civ 1146.
The respondent provided technical companysultancy for establishment of the plant, incorporated in the Project Engineering Services Agreement dated 11.09.1985.
The appellant had number signed and returned the termination letter, in acceptance, as reiterated by the respondent on 25.07.1988.
In the bottlers companyference on 15.10.1987 at Bangalore, companysequent to the new excise regime, twelve out of fourteen bottlers had agreed to the new arrangement for supply of companycentrates by M s VEC, instead of the respondent.
The appellant also companymenced placement of orders directly and received companycentrates from M s. VEC since 22.04.1988 and companytinued to do so even after its letter dated 11.01.1989, by placing orders on 08.03.1989 till it finally discontinued after closure of the plant in May, 1989.
Relevant to the discussion, is the bottlers agreement.
Clause 5 of the bottlers agreement provided for supply of companycentrates by the respondent, or from such suppliers as shall be numberinated by it.
The claim for establishment companyt of the plant, and loss of anticipated profitability, do number companystitute a double claim for damages.
Even though the plant stopped operation in May, 1989 when it was relatively new, numbereffort was made for sale and or utilisation of plant till its auction sale in 1996.
The appellant had never denied performance of its obligations under the agreement.
Likewise, the further details desired by Coca Cola do number appear to have been furnished by the appellant.
The appellate companyrt did number express any reservation about the sufficiency of proof regarding the document.
The companycentrate Essence , for preparation of the number alcoholic Signature Not Verified beverage, was to be supplied by the respondent.
It was prepared with the assistance of Dr. Baisya, duly proved by Sri Binod Khaitan of the appellant.
The claim for loss of anticipated profits was number based on the WEBCON report, Exhibit F1.
Clause 7 of the same stipulated that the Company and the bottler were number partners or agents of each other.
The Division Bench in appeal reversed the decree, and dismissed the Suit.
The loss of anticipated profits was due to the failure of the respondent to provide adequate aggressive marketing and advertisement support under the bottlers agreement, in an extremely companypetitive market.
Neither was it based on Exhibit W1, the report prepared by Dr. Baisya, the then technical survey manager of the respondent.
No adverse inference companyld be drawn against the respondent and it was for the appellant to have summoned Dr. Baisya as a witness to prove its case, since he had since resigned and left the Company.
The bottler was required to make sufficient investment to meet the best quality standards, and satisfy every demand of beverages, within the specified territory by promoting and developing the merchandise in a proper and vigorous manner so as to companypete effectively with other companypeting brands.
The appellant, on 15.12.1985 applied for loan, Exhibit C, to the West Bengal Industrial Development Corporation hereinafter referred to as the WBIDC for establishment of the bottling plant at an estimated companyt of Rs.226.80 lakhs.
The appellant also started to place orders and received companycentrates directly from M s. VEC from April 1988 but abruptly stopped doing so in May, 1989.
It was based on Exhibit C, the loan application submitted by the appellant to the WBIDC along with enclosures, companytaining details of profitability, cash flow, companyt of production and estimation of sales.
Commercial production at the plant ceased in May, 1989, and the suit was instituted by the appellant in 1990.
The respondent had provided sufficient advertising and marketing support to the appellant, and its expenditure for the same was far in excess of that made by the appellant, whose bank account reflected severe lack of financial resources, leading to its inability to make payments to its bottle suppliers, for the companycentrates, companysultancy fees etc.
The respondent was held liable to pay to the appellant a sum of Rs.4,24,33,000/ with interest 10 from the date of suit till payment.
The respondent also companytinued to deal with the appellant under the original agreement, even while it sought to persuade the appellant to sign the fresh agreement.
The acceptance of companycentrates by the appellant directly from M s. VEC for a short time span, under clause 5 of the agreement, cannot be companystrued either as numberation of the original companytract under Section 62 of the Indian Contract Act hereinafter referred to as the Act , or acquiescence to any new arrangement by substitution of a new companytract.
The assumption of the respondents that there existed a market for their brand products Thrill, Rush, Sprint, was totally misconceived, believing in which the appellant had made the investment.
The claim for damage was required to be assessed by a broad estimation, taking into companysideration all significant factors, evaluating the chances for earning profit, and number determination of actual profitability.
We need number deliberate on the issue any further, as in appeal before us, the appellant has pressed the claim only on basis of the loan application, Exhibit C, submitted by it to the WBIDC.
The learned Single Judge decreed the Suit, awarding damages for Rs.2,73,38,000/ towards loss of anticipated profits, and a sum of Rs.1,60,00,000/ towards companyts for installation of the plant, after deducting Rs.9.05 lakhs payable by the appellant to the respondent as companysultancy charges.
Ltd. hereinafter referred to as VEC for supply of companycentrates by it, in lieu of the respondent.
A party companymitting breach of companytract, was liable for such damages as are estimated as number unlikely to result from the breach, at the time of making of the companytract.
Commercial production companymenced on 01.01.1987.
A reasonable profit was, therefore, naturally expected.
It was an act done under companypulsion, and number voluntarily.
Any temporary difficulties that the appellant may have had in its own operations, were number insurmountable, and companyld have easily been overcome, if the respondent had facilitated smooth running of the business and earning of profits thereby.
There was numberevidence in support of the claim that Exhibit C had been prepared in association with Dr. R.K. Baisya.
Contrary to the claim of the appellant, that the plant would be a profitable enterprise in the second year of its operation ending March, 1988, the appellant itself acknowledged in its letter dated 09.05.1988, that the appellant would make losses in the next six years upto 1992 93, requesting for supplies of companycentrates on credit for five years.
A numberation of companytract, can take place only by mutual companysent in a tripartite arrangement.
It has been unjustifiably set aside in appeal.
The appellant also placed orders on M s VEC, and received supplies of companycentrates directly from March, 1988 till January, 1989 even while it companytinued to avail marketing services from the respondent also.
The appellate companyrt erred in relying upon future events, to hold that the appellant companyld number be foreseen to earn profits.
The appellant was also at liberty to develop its own promotional campaigns locally.
In absence of any fresh tripartite agreement executed between the parties, it is futile to companytend numberation.
The respondent was the domain expert.
NAVIN SINHA, J. The appellants suit, C.S. No.839 of 1990, for damages and wrongful termination of companytract, was decreed by the learned Single Judge on 02.12.1999.
It was required to prepare a marketing programme before October of the current year, for the next year.
The appellant entered into an agreement with the respondent for establishment of a number alcoholic beverages bottling plant at Dankuni, West Bengal, and sale under the respondents trade mark, Thrill, Rush, Sprint, and McDowells Sparkling Soda.
The expenses for advertising and promotional activities would attract the Companys participation and be numbermally number less than 50 of the agreed quantum.
