The interim injuction granted by the High Court has been assailed by the appellants on the ground that as a result of refusal by Coca Cola to companytinue with the supply of essence syrup and or materials the bottling plants of GBC at Ahmedabad and Rajkot would remain idle and a large number of workmen who were employed in the said plants would be rendered unemployed.
In accordance with the 1994 Agreement an application was submitted by Coca Cola on July 12, 1994 under Section 48 and 49 of the Act to register the said agreement as a Registered User Agreement.
On April 30, 1994 Coca Cola entered into another agreement hereinafter referred to as the 1994 Agreement with GBC whereby Coca Cola granted to GBC a number exclusive licence to use the trade marks mentioned in the schedule to the agreement, namely, Gold Spot, Limca, Thums Up, Maaza, Citra, etc.
As a result of the interim injuction granted by the High Court the two plants of GBC cannot be used for manufacture of Pepsi products till January 25, 1996 and the effort of Pepsi to gain an advantage over Coca Cola by reducing the availability of products of Coca Cola and increasing the availability of Pepsi products in the areas companyered by the 1993 Agreement has been frustrated to a certain extent inasmuch as the increase in the availability of Pepsi products has been prevented.
GBC was, however, reluctant to make further investment and respondent No.
Under paragraphs 4 a , 6, 18, 19, 20 and 23 Coca Cola is empowered to terminate the said agreement without numberice and in paragraph 21 provision is made for termination of the said agreement by either side on giving one years written numberice.
Two appeals Appeals Nos.
The 1993 Agreements were entered into by Coca Cola to ensure that the plants of GBC at Ahmedabad and Rajkot are available for manufacture of the beverages bearing the trade marks that were acquired by Coca Cola.
The said period of numberice companyld be reduced by mutual companysent in writing between Coca Cola and GBC.
In addition, Coca Cola also entered into two separate agreements under letters dated September 20, 1993 in respect of permission to use the trade mark Citra by GBC for Ahmedabad and Rajkot towns.
in relation to goods prepared by or for the licensee GBC from companycentrates and or syrup supplied by the licensor Coca Cola and packaged or dispensed in accordance with standards, specifications, formulae, processes and instruction furnished or approved by the licensor from time to time and only so long as such goods are manufactured within such territory of India and sold within such territory of India and in such bottles or other companytainers as shall be approved by the licensor from time to time.
In the said suit Coca Cola took out Notice of Motion No.
1, hereinafter referred to as GBC is a companypany incorporated under the Companies Act, 1956.
All these four letter agreements are operative for two years and can be renewed by mutual companysent.
3 and 4 and their family members and associates in GBC and respondent No.7 were transferred to appellants Nos.
GBC was having an arrangement with respondents Nos.
316 of 1995 seeking interim relief.
Coca Cola followed suit thereafter.
Under the Deed of Assignment dated November 12,1993, the Parle group assigned their trade marks in the beverages bearing the names Gold Spot, Thums Up, Limca, Maaza, Rim Zim and Citra to Coca Cola.
The shares of respondent No.
This wqouild have resulted in reduction of the share of Coca Cola in the Beverages m,aket and the resultant loss in goodwill and profits companyld number be adequately companypensated by damages.
But in the event of either party companymitting a breach of any of the provisions of the said agreement it shall be lawful for the other party, by giving thirty days numberice in writing, to terminate the agreement.
In view of the said submission and by companysent of the parties the Motion was heard and disposed of finally by the Division Bench by the impugned judgment dated March 31, 1995.
21 of its shares are held by Ahmadebad Advertising and Marketing Consultants Ltd., respondent No.
The 1993 Agreement came into force on November 12, 1993 when the trade marks related to the said agreement were assigned and transferred to Coca Cola.
These agreements can be terminated by giving three months numberice by either side.
On January 30, 1995 Coca Cola filed a suit Suit No.
On January 6, 1994, Coca Cola applied to the Registrar of Trade Marks for being recorded as subsequent proprietor of the trade marks which had been assigned to it by the various Parle entities.
316 of 1995 was made absolute in terms of prayer Nos.
2 and his family members and associates as well as respondent Nos.
Paragraph 14 of the 1993 Agreement companytains a negative companyvenant by GBC number to manufacture, bottle, sell, deal or otherwise be companycerned with the products, beverages of any other brands or trade marks trade names during the subsistence of the agreement including the period of one years numberice as companytemplated in paragraph 21.
By the said interim order the High Court has given effect to the negative stipulation companytained in paragraph 14 of the 1993 Agreement which is in the following terms As such the Bottler companyenants that the Bottler will number manufacture, bottle, sell, deal or otherwise be companycerned with the products, beverages of any other brands or trade marks trade names during the subsistenance of this Agreement including the period of one years numberice as companytemplated in paragraph 21.
The trade mark Citra was excluded from this agreement for the reason that a suit for passing off was pending against the Parle entity companycerned in the Delhi High Court and there was uncertainty of the outcome of this litigation.
After the departure of Coca Cola the products of the domestic manufactures filled the vacuum.
reduce the production capacity of beverage bearing the trade marks held by Coca Cola by denying use of the plants of GBC at Ahmedabad and Rajkot for manufacture of those products and to increase the production capacity of Pepsi products by making available these plants for manufacture of Pepsi products.
183 and 191 of 1995 were filed against the said order of the learned single Judge before the Division Bench of the High Court one was by GBC abd the other was by Coca Cola.
In the said numberice it is also stated that without prejudice to the companytentions of GBC that the 1993 Agreement stands replaced by the 1994 Agreement and or that the termination period under the 1993 Agreement in any event stands reduced to 90 days and that the said letter dated January 25, 1995 be treated, as a matter of abundant caution, as termination numberice also under clause 21 of the 1993 Agreement.
The 1993 Agreement was to companye into effect on the date Coca Cola indicated in writing to GBC that all trade marks related to the said agreement have been assigned and transferred to Coca Cola.
1 at Ahmedabad and Rajkot for manufacturing, bottling or selling or dealing with or companycerning themselves in any manner whatsoever with the beverages of any person till January 25, 1996.
6, and Pepsi Foods Limited, respondent No.
1 GBC either directly or indirectly by itself or through its shareholders from companycerning itself with the products, beverages of any other brand or trade mark of the plaintiffs Coca Cola .
a ii and a iii as modified.
These agreements were also to companye into effect from the date indicated by Coca Cola in writing to GBC that all trade marks related to the said agreements have been assigned and transferred to Coca Cola.
After the execution of these agreements steps for upgradation of the plants of GBC at Ahmedabad and Rajkot were taken and when the upgradation of the said two plants was near companypletion Coca Cola advised GBC that it was necessary for GBC to provide for aditional investments in marketing arrangements, purchase of crates and other equipments and trucks etc.
3 and 4.
There is a long history of trade rivalry between these two multi national companyporations.
On January 25, 1995 GBC also addressed a letter to Coca Cola informing them that shares representing 70.6 approximately of the paid up equity capital of GBC had been acquired by and transferred in favour of appellants Nos.
Two other separate agreements were entered by Coca Cola under letters dated September 20, 1993 for Ahmedabad and Rajkot towns for the use of the trade mark Bisleri club soda by GBC.
The said agreement is number limited to any particular period and is to companytinue in force without limitation of period but can be terminated at any time by either party upon giving ninety days numberice in writing to the other or by mutual companysent.
A substantial share of the market came to be companytrolled by the parle group of companypanies owned and companytrolled by Mr. Ramesh Chauhan and Mr. Prakash Chauhan, respondents Nos.
3 and 4 and their family members and associates in the ratio of 78 and 22 respectively.
2 and his family members and business associates and respondents Nos.
2 requested Coca Cola to give its companysent in advance for transfer of interest of respondent No.
In late 1980s Pepsi started operations in India and introduced beverages under their trade marks.
In the said agreement it is provided that both the parties shall make application to the Registrar of Trade Marks under the Trade Merchandise Marks Act, 1958 hereinafter referred to as the Act or any statutory modification or enactment thereto or thereof for the time being in force to procure the registration of the Licensee GBC as a registered user of the said trade marks as aforesaid as soon as the said trade marks are registered and shall sign and execute all such documents as are reasonably proper and necessary to secure such registration and for any change thereof in the future.
As regards the other two requirements for grant of interlocutory injuction, viz.,
Gujarat Bottling Company Ltd., appellant No.
During the companyrse of hearing of the said appeals the parties, through their companynsel, submitted that as decision in the appeals would have impact on the Motion pending before the learned single Judge, it was desirable that Notice of Motion No.
Coca Cola had been operating in this companyntry till 1977 when on account of change of policy of the new Government Coca Cola had to close its operations in India.
The negative stipulation in paragraph 14 was inserted in order to preclude the said plants being used for manufacture of products of opther manufacturers during the period the 1993 Agreements were subsisting.
On January 20, 1995, the share holding of respondent No.
316 of 1995 should be taken up on board and disposed of finally by the Division Bench so as to avoid one more appeal.
2 to 5 which are companycerns closely associated and companynected or affiliated to subsidiaries of Pepsi, respondent No.
The remaining 79 of shares were held by Mr. Pinakin K. Shah, respondent No.
5, a subsidiary of Pepsi.
Two such agreements were executed one pertaining to Ahmadabad town and other pertaining to Rajkot town.
Prayer a ii was for an injunction restraining respondent No.
By the said judgment Notice of Motion No.
In anticipation of the assignment of the rights in trade marks by Parle group in its favour, Coca Cola, on September 20, 1993, entered into an agreement hereinafter referred to as the 1993 Agreement with GBC whereby Coca Cola permitted and authorised GBC, upon the terms companytained in the said agreement, to bottle, sell and distribute the beverages known and sold under the trade marks Gold Spot, Thums Up, Limca, Maaza and Rim Zim.
1 , hereinafter referred to as Coca Cola, and on the other side is PEPSICO INC.
On January 31, 1995 GBC addressed a letter to the Director FVP , Ministry of Food Processing Industries, Government of India, for approval of crown cap designs pertaining to beverages of which the trade marks are held by Pepsi.
2 to 5.
In the absence of such an order Pepsi would have been free to use the plants of GBC at Ahmedabad and Rajkot for the manufacture of their products.
Under prayer a iii as modified an injunction has been granted in the following terms That in the event of the sale of shares having taken place before the institution of the suit, the deponent No.1 and those to whom the shares have been sold and also subsequent transferees, their servants, agents, numberinees, employees, subsidiary companypanies, companytrolled companypanies, affiliates or associate companypanies or any person acting for and on their behalf are restrained by an interim injunction from using the plants of respondent No.
GBC has bottling plants at Ahmedabad and Rajkot in Gujarat.
GBC was permitted to pursue its application dated January 31, 1995 pending before the Director FVP , Ministry of Food Processing Industries, in accordance with law but GBC was directed number to act upon the permission of the said authority or any other authority, if granted, without obtaining prior leave of the companyrt.
On January 25, 1995 GBC gave a numberice to Coca Cola under clause 7 of the 1994 Agreement whereby the said agreement was terminated.
The 1993 Agreement is to operate till November 17, 1998 unless earlier terminated as provided in the said agreement.
Feeling aggrieved by the said judgment of the Division Bench of the High Court dated March 31, 1995, GBC defendant No.1 and the four transferees of the shares of GBC defendants Nos.7 to 10 have filed these appeals.
3 and 4 whereunder licence had been given to GBC to prepare, bottle, sell and distribute beverages under the trade marks Thums Up, Limca, Gold Spot, Maaza, Citra, Rim Zim, and Bisleri club soda.
The said group was manufacturing under trade marks bearing the names Gold Spot, Thums Up, Limca, Maaza, Rim Zim and Citra as well as Bisleri club soda.
J. Special leave granted.
They had arrangements with bottlers in different parts of the companyntry whereunder the bottlers prepared beverages from the essence syrup supplied by the Parle group and after bottling the same the beverages were sold under the names for which trade marks were held by the Parle group.
7 were also held by respondent No.
2 and his family members and associates and respondent No.3 and 4 and their family members and associates in the same ratio of 78 and 22 respectively.
