Delhi District Court
Also At vs Mcdowell & Company Limited on 19 March, 2010
1
IN THE COURT OF SHRI HARISH DUDANI,
ADDITIONAL DISTRICT JUDGE15 (CENTRAL) : DELHI
Suit No.21/08/05
Mr. Pradeep Jain,
Director
M/s Jainsons Beverages,
231 Tagore Park,
Delhi 110009.
Also at
214, Apsara Arcade
Pusa Road,
New Delhi 110085. ..........Plaintiff/Counter Claimant No.1
M/s Jainsons Beverages,
231 Tagore Park,
Delhi110009. ........Plaintiff/Counter Claimant No.2
Versus
McDowell & Company Limited
a Company incorporated under
Companies Act, 1956 and
having its corporate office at
Le Parc Richemond,
51, Richmond Road,
Bangalore - 560025. ..........Defendant No.1
Venkateswara Essences & Chemicals Private Limited
145/2 Benningnahalli,
Old Madras Road
Bangalore 560093. ..........Defendant No.2.
2
Date of Institution of Counter Claim:18.04.2001
Date of Decision:19.03.2010
J U D G E M E N T
1. This is a counter claim for recovery of Rs.13,50,000/ (Rupees thirteen lacs fifty thousand only) alongwith interest at the rate of 24% per annum filed by the defendants/counter claimant in the main suit No.293/04 titled as McDowell & Company Limited & Anr. versus Mr. Pradeep Jain & Anr. which was filed by the defendants herein.
2. The said main suit No.293/04 titled as McDowell & Company Limited & Anr. versus Mr. Pradeep Jain & Anr was filed by the plaintiff (defendants herein) against the counter claimant/plaintiffs herein (defendants in suit No.293/04) for permanent injunction restraining infringement of copyright, passing off, breach of contract, unfair competition, rendition of accounts of profits, delivery up etc. stating therein that plaintiff No.1 (in suit No.293/04) McDowell & Company Limited is a Company incorporated under the Companies Act, 1956 and the plaintiff No.2 (in suit No.293/04) Venkateswara Essences & Chemicals Private Limited (hereinafter referred to as VECPL) is also a company incorporated under the 3 Companies Act, 1956. It was further stated that the plaintiff No.1 had been distilling and selling whisky under the trade mark "No.1 McDowell's" since 1971 and over time, the plaintiff also adopted "No.1 McDowell's Centenary Whisky", "McDowell Premimum", McDowell Vintage Classic as its brands for whiskies and other alcoholic brands and the common factor between all these marks is the word mark McDowell which bears in itself the qualification of creating in the minds of the purchasing public and members of trades, an instant recognition for the goods to which it is applied as being superior quality goods originating from the said plaintiff. Together these marks are known and referred to as the "McDowell" family of marks. In addition to this the expression No.1 has also been used as a prefix with the brand McDowell. The expression 'No.1 McDowell forms a unique combination, thereby acquiring the highest degree of inherent distinctiveness. The plaintiff No.1 started as an importer of wine and spirits into India in 1989 and over time grew up to be the country's undisputed leaders in the spirit market. It is also stated that apart from the McDowell family of brands the plaintiff's brand portfolio also consists of 43 other brands. In the year 1982, the plaintiff company introduced 'McDowell Sparkling Soda' which received instant success as the 4 consumers perceived it to be another episode in the series of McDowell family of marks. It is further stated that the plaintiff is also the registered proprietor in India of the trademark McDowell's in Class 33 under number 134096 as of 5th June, 1948. It is also stated that the said registration has duly renewed and is valid and subsisting in favour of the plaintiff and the the said registration being more than seven years old has become conclusively valid under section 32 of the Trade and Merchandise Marks Act, 1958 and confer upon the plaintiff the exclusive right to the use of the said marks to the exclusion of all other under section 28 of the Act. It is also stated that the plaintiff has applied for the registration of the trade marks "No.1 McDowell" and "McDowell" in all the classes. It is also stated that the plaintiff No.1 represents its McDowell family of marks in a unique and distinctive manner.
3. It was further stated in the main suit No.293/04 that the plaintiff No.1 entered into a Deed of Assignment dated 16.03.1988 with VECPL, plaintiff No.2, under which the trade marks, 'Spirit, 'Rush' and Thrill' were assigned to the latter. Acting under the rights acquired by virtue of the Deed of Assignment, plaintiff No.2 entered into License Agreements and Bottler's Agreement with various parties and one such party with whom plaintiff No.2 entered into a Bottler's 5 Agreement on 28.03.1996 was M/s Jaisons Beverages, Defendant No.2 and Mr. Pradeep Jain, defendant No.1 is the director of defendant No.2 company. Under the said Bottler's Agreement, the defendants acquired the right to manufacture and sell aerated beverages not only under the marks 'Spirit', 'Thrill' and 'Rush', but also under the mark "McDowell" in respect of sodas. The plaintiff No.1 entered into a supplementary Deed of Assignment dated 22.06.1999 under which plaintiff No.2 was given the right to manufacture and sell soda and sparkling soda under the brand "McDowells". However, the plaintiff No.1 retained proprietorship of the brand McDowell, therefore, even subsequent to the supplementary Deed, the plaintiff No.1 continues to be the registered proprietor of the trademark "McDowell" and also reserves the right to appoint franchisees of products under the brand McDowell. In pursuance thereof, the plaintiff No.1 has been appointing franchisees from time to time, for the business of manufacture and sale of McDowell soda and sparkling soda, for various territories. The said Franchise Agreements mention that plaintiff No.1 is the proprietor of the mark McDowell. It was further stated in the said suit No.293/04 that the relationship of licensor and licensee continued between plaintiff no.2 and the defendants, though 6 the defendants were in default as regards the payment of royalties. Inspite of many reminders, the defendants reneged in their obligation to pay royalties to plaintiff No.2. The plaintiff No.2 was then left with no option but to terminate the said agreement under clause 18(d)(1)(iii) thereof. It was further stated in the main suit that plaintiff first wrote a letter dated 08.12.1997 to the defendants informing that it was suspending the francise agreement with immediate effect and when no reply was forthcoming, the plaintiff No.2 then wrote a further letter dated 31.01.1998 terminating the said agreement forthwith. Inquiries made by the plaintiff revealed that the defendants were no longer manufacturing or selling beverages under the mark "McDowell", however, marketing manager of plaintiff No.1 came across the goods of the defendants in December, 1999 bearing the marks 'McDowell Soda', 'No.1 McDowell Whisky Soda', 'No.1 McDowell Whisky White Soda' and 'Jain Shikanji McDowell Soda'. It was stated that defendants are in breach of the agreement dated 28.03.1996 with the plaintiff no.2 and is indulging in unfair competition by counterfeiting plaintiff No.1's well known and well reputed trade marks belonging to the McDowell family of marks, thereby passing off its products as and for those of the said plaintiff, hence, the said suit No.293/04. 7
4. The plaintiffs herein (defendants in the main suit No.293/04) had filed written statement to the said main suit No.293/04 and also made counterclaim. In Written Statement to the main Suit No.293/04, the defendant/counter claimant had taken objection that the suit had been filed with a view to not to return the security deposit lying with the plaintiff No.2. The plaintiff no.1 has no locus stand to file the present suit against the defendant as the agreement has been entered upon between the defendant and plaintiff No.2 and the plaintiff No.1 has nothing to do with the present transaction. There is no privity of contract between plaintiff No.1 and the defendants. The alleged termination which has been allegedly mentioned by the plaintiff is totally illegal, uncalled for and is liable to be set aside. It was also stated that alleged transactions are not covered with the territorial jurisdiction of this court. It was denied that the royalty is payable by the defendants to the plaintiff No.2 or that there was any default in this regard as has been falsely alleged. It is stated that the alleged termination of agreement is illegal. It is denied that any of the letters dated 08.12.1997 and 31.01.1998 have been served upon the defendants. The defendants denied the allegations of the plaintiffs and sought dismissal of the suit.
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5. In the counterclaim, the present plaintiffs/counter claimants have stated that they have deposited Rs.50,000/ as security deposit which is lying deposited with the defendant No.2 herein and the same has not been refunded to the counter claimants and as such the counter claimants are entitled to claim the sum of security deposit. It is further stated that as the plaintiff No.2 in the suit even after alleged termination of the agreement has not refunded the security deposit, the counter claimants are entitled to claim interest at the rate of 12% per annum on the said amount of Rs.50,000/. It is also stated that the defendant No.2 herein has illegally and unauthorisedly terminated the agreement between defendant No.2 herein and the counter claimants/plaintiffs, as such the counter claimants/plaintiffs have suffered the following various losses: a. The defendant have suffered a loss on account of goods which were destroyed/sold the same on scrap and not sold amounting to: Rs.200000/ b. Security deposit Rs.50000/ c. Loss on account of plant & machinery which were rendered useless due to the fact that plaintiff No.2 illegally terminated the agreement including the expenses of surrendering 9 various licences and meeting out formalities as required including the legal expenses: Rs.1000000/ d. Loss of reputation caused by the illegal and sudden termination: Rs.100000/ TOTAL Rs.1350000/
6. It is also stated that besides the above, the counter claimants are entitled to get the interest at the rate of 24% per annum from the defendants herein and as the counter claimants have suffered losses and security deposit has not been refunded by the defendant no.2 herein.
7. The defendants (herein in the counterclaim & plaintiffs in the main suit) have filed replication to written statement to the plaintiffs (herein in the counterclaim and defendants in the main suit) and as well as also filed written statement to the counterclaim of the plaintiffs (herein in the counterclaim). In the replication, the plaintiffs (in the main suit) have reiterated the contents of plaint/main suit and have controverted the allegations of the defendants (in the main suit) as alleged in the written statement.
8. In the written statement filed by the plaintiffs (in the main suit) to the counterclaim of the counter claimant/defendants (in the main suit), the plaintiffs (in the main suit & defendants in the 10 counterclaim) have taken objection that the the present counter claim has been filed without any reasonable basis just to harass the plaintiffs (in main suit) and the defendants (in the main suit) are making false and malicious statements which are lacking in merit without any documentary proof. It is further stated that the present counter claim does not disclose any cause of action. It is stated that since the defendants (in the main suit) have not paid any royalty for the sale of products covered under the Agreement and did not settle the accounts and not responded to the letters of the plaintiff (in the main suit), the plaintiff No.2 (in the main suit) cancelled the agreement and foreited the security amount as per agreement on account of non payment of the royalty amount by the defendant/counterclaimant. It is also stated that the counter claim has not been properly valued for the purpose of court fees. While denying rest of the case of the counter claimant, the counter claim is sought to be dismissed.
9. The counter claimant has filed replication to the written statement of defendants. In the replication, the counter claimant has reiterated the contents of counter claim and has controverted the allegations of the defendants (in the counter claim) as alleged in the written statement.
10. It is pertinent to mention that vide order 01.11.2004 learned 11 predecessor of this court had dismissed the main suit as withdrawn and the file of the counter claim was ordered to be separated.
11. From the pleadings of the parties, following issues were framed by my ld. Predecessor in the counter claim on 08.08.2005:
1.Whether Delhi Courts have territorial jurisdiction?OPP
2.Whether the plaintiff is entitled to refund of security deposit?OPP
3.Whether the plaintiff is entitled to interest on security deposit, if so at what rate?OPP
4.Whether the plaintiff suffered loss on account of goods which were destroyed/sold on scrap, if so, how much?OPP
5.Whether the plaintiff is entitled to loss on account of plant and machinery which were rendered useless due to the fact that defendant no.2 illegally terminated the agreement, if so, how much?OPP
6.Whether the plaintiff is entitled to loss of reputation caused by illegal and sudden termination, if so, how much?OPP
7.Relief.
12. To prove its case, the plaintiffs/counter claimants examined Shri Pradeep Jain (Plaintiff No.1) as PW1 and the PE was closed on 25.09.2008. However, the defendants did not 12 examine any witness in defence and closed DE on 30.01.2009.
13. I have heard the ld. Counsel for parties and carefully perused the record. My findings on the specific issues are as under : Issue No.1
14. The contention of the learned counsel for the plaintiffs/counter claimants is that it is the defendants, herein, who had filed the suit against the present plaintiffs/counter claimants at Delhi and the plaintiffs/counter claimants filed written statement and the counter claim and as the defendants, herein, had filed the suit against the plaintiffs/counters claimant at Delhi, in the circumstances, the defendants, herein, cannot plead that the court at Delhi has no territorial jurisdiction to try the counter claim. During course of arguments, learned counsel for defendants, herein, has contended that he is not disputing that this court has territorial jurisdiction and this issue may be decided accordingly. Accordingly, it is held that courts at Delhi have territorial jurisdiction to try the present counter claim. Accordingly, this issue is decided in favour of the counter claimants and against the defendants.
13Issues No.2 & 3
15. Since both these issues involve common discussion of facts and law, hence, for the sake of brevity both these issues are being taken up together.
16. In para i & ii of the counter claim, the plaintiffs/counter claimants have stated that they had deposited a sum of Rs.50,000/ (Rupees fifty thousand only) as security deposit with the defendants, herein and the same has not been refunded to the plaintiffs/counter claimants as on date and they are entitle to claim refund of the security deposit alongwith interest @ 24% per annum. In reply to the para ii & iii of the counter claim in written statement to the counter claim, the defendants, herein, have stated that the counter claimants had been informed by the plaintiff No.2 (defendant herein) vide letter dated 08.12.1997 that since they had not paid any royalty for the sale of the products covered under the agreement, the plaintiff No.2 (defendant herein) is left with no option but to suspend the Bottler's Agreement and the counter claimants were further advised to settle the accounts with the plaintiff No.2 (defendant herein) failing which the franchise agreement would be cancelled and the deposit amount would be forfeited but the counter claimants did not respond to said letter and the plaintiffs (defendant herein) 14 were constrained to despatch another letter dated 31.01.1998 whereby the Bottler's Agreement was terminated and the counter claimants were informed that the deposit amount is being forfeited. It is further stated in the written statement to the counter claim that the plaintiffs (defendant herein) forfeited the security amount after giving counter claimants option to settle the accounts and only in view of the non payment of the royalty amount by the defendants, plaintiffs/counter claimants herein, as a licensor and in lieu of the royalty which was due to them.
17. The defendants, herein, had filed the suit against the present counter claimants, wherein it was stated that a license agreement was executed on 28.03.1996 between M/sVenkateswara Essences & Chemicals Private Limited (plaintiff No.2 in the main suit) and M/s Jainsons Beverages (defendant No.2 in the main suit) and under the said agreement, the counter claimants had acquired right to manufacturer and sell aerated beverages not only under the marks 'Spirit', 'Thrill' and 'Rush', but also under the mark 'McDowell' in respect of sodas, and as per said license agreement, the counter claimants were to make payment of royalty and the plaintiffs (defendants herein) wrote letter dated 08.12.1997 to the counter claimants informing the 15 suspension of franchise agreement but no reply was received and thereafter vide letter dated 31.01.1998, the plaintiff (defendant herein) was constrained to terminate the agreement in view of clause 18 (d)(1)(iii). The counter claimants have filed written statement to the plaint filed by the plaintiffs (defendants herein) and in para 20 of the reply on merits in written statement, which was filed by counter claimants to the suit of defendants herein, the counter claimants have denied receipt of letters dated 08.12.1997 & 31.01.1998 and the counter claimants have further stated in the said para that there was no clause in the agreement by which the payment of royalty was to be made.
18. In order to prove its case, the counter claimants/plaintiffs examined Shri Pradeep Jain, partner of M/s Jainsons Beverages who adduced evidence by way of affidavit Ex.PW1/A.
19. PW1 admitted in the cross examination that an agreement was entered into between M/s Venkateswara Essences & Chemicals Private Limited and M/s Jainsons Beverages on 28.03.1996 and copy of the said agreement dated 28.03.1996 is Ex.PW1/D2. PW1 further admitted in the crossexamination that no other agreement was entered into between M/s Venkateswara Essences & Chemicals Private 16 Limited and M/s Jainsons Beverages. It is to be noted that the plea of the defendants herein is that as per agreement which was entered between M/s Venkateswara Essences & Chemicals Private Limited and M/s Jainsons Beverages payment of royalty was to be made by counter claimants to the defendants herein and the plaintiffs/counter claimants failed to make the payments of royalty and failed to abide by the terms of agreement and the counter claimants also failed to respond to the letters dated 08.12.1997 & 31.01.1998. In para 5 of the affidavit Ex.PW1/A, the plaintiff/counter claimant has mentioned that the plaintiff/counter claimant has not received the alleged letters dated 08.12.1997 & 31.01.998. However, PW1 admitted in the crossexamination the execution of agreement dated 28.03.1996 Ex.PW1/D2. PW1 stated in the crossexamination, which was conducted on 02.06.2008, that defendant company used to charge royalty from him for using the name McDowell. Thereafter, PW1 further stated in the crossexamination that he can not tell about rate of royalty which he was to pay to the defendants. The plaintiff has filed on record photocopy of a letter dated 23.06.1997 Ex.PW1/8 written by counter claimants/plaintiffs to M/s Vankateshwara Esscens & Chemicals (defendant No.2 herein) and in the said letter the plaintiffs/counter claimants 17 have stated that they have manufactured 2021 crates of Soda Water (McDowells) in the year 199596, 7366 crates in the year 199697 and thus in total they have manufactured 9387 crates from the year 1995 to 1997 and royalty of those crates is Rs.2346/ (Rupees two thousand three hundred forty six only) @ 25 Paisa per crate and the plaintiffs/counter claimants have requested to debit the said amount from their security deposited. After seeing Ex.PW1/8 the PW1 stated in the crossexamination that he was paying royalty @ 25 paisa per crate to the defendant company and there used to be 24 bottles in a crate. Hence, as per Ex.PW1/8, the plaintiffs/counter claimants had requested the defendants to debit the amount of royalty from the security deposit which was made by the plaintiffs with the defendants. The testimony of PW1 and Ex.Pw1/8 prove that the plaintiffs were to pay royalty to the defendants in terms of Bottler's Agreement dated 28.03.1996 executed between plaintiffs/counter claimants and defendant No.2.
20. The plea of the defendants is that the plaintiffs/counter claimants failed to adhere to the terms of agreement dated 28.03.1996 and did not furnish the required particulars and did not make the payment of royalty and the defendants had sent letters dated 08.12.1997 & 31.01.1998, thereby 18 terminating the license granted to the plaintiff to bottle the product of the defendants. The plea of the plaintiffs is that the agreement dated 28.03.1996 has been terminated in arbitrary manner by the defendants and letters dated 08.12.1997 & 31.01.1998 were not received by the plaintiffs. In order to make out the case that the agreement dated 28.3.1996 has been terminated by the defendants in arbitrary manner and without issuing any letter/notice to the plaintiffs, the plaintiffs have denied receipt of letters dated 08.12.1997 & 31.01.1998 by specifically pleading so in para 5 of affidavit Ex.PW1/5. However, in crossexamination PW1 admitted receipt of letters dated 08.12.1997 & 31.01.1998 Ex.PW1/D3 & Ex.PW1/D4 respectively. After admission of receipt of letters dated 08.12.1997 & 31.01.1998 Ex.PW1/D3 & Ex.PW1/D4 respectively, it is not open for the plaintiffs to plead that the defendants did not afford any opportunity to the plaintiffs to present their explanation before termination of agreement dated 28.03.1996. In letter dated 08.12.1997 Ex.PW1/D3, the defendants have stated to the plaintiffs to refer to the previous letter dated 08.08.1997 advising the plaintiffs to remit the royalty of McDowell soda and also for revival programme for bottling other range of products and that the plaintiffs have failed to send any communication to the said 19 previous letter dated 08.08.1997. In letter dated 31.01.1998 Ex.PW1/D4, the defendants have stated to the plaintiffs that plaintiffs have failed to submit any reply to the details asked for by the previous letter and the same is in violation of the terms of agreement dated 28.03.1996. In letter dated 31.01.1998 Ex.PW1/D4, the defendant has mentioned that as the plaintiffs have failed to comply with the terms of agreement dated 28.03.1996, hence, his franchise deposit is also being forfeited.
21. PW1 has admitted in the crossexamination that the defendant company used to charge royalty from the plaintiffs for using name McDowell. Moreover, PW1 also admitted in the cross examination that the said royalty was to be paid @ 25 paisa per crate. The PW1 was specifically asked a question, in the crossexamination on 02.06.2008, to the effect that whether he can show any document to show as to what was the total sale figure of plaintiff company as regards the defendants to which the PW1 replied that Ex.PW1/8 is the document which he has filed to prove the same and he has also admitted that Ex.PW1/8 is only a photocopy. Thereafter, PW1 stated in the cross examination that he had sent the original copy of Ex.PW1/8 to defendant through courier but he stated that he does not have receipt of courier 20 agency to prove that the said letter has been sent to Venkateshwara Essence & Chemicals. The plaintiff has not filed any document on record to prove that letter Ex.PW1/8 was put in the course of transmission to M/s Venkateshwar Essence & Chemicals, the addressee mentioned therein. PW1 was put a question in his cross examination on 25.09.2008 to the effect that whether he can show any document whereby it can be proved that M/s Jainsons Beverages has ever paid royalty to the defendant after the execution of the agreement dated 28.03.1996 to which, PW1 replied that no demand whatsoever was made by the defendant for the royalty. It is to be noted that the plaintiff has admitted that by virtue of agreement dated 28.03.1996 the plaintiffs were granted license to bottle the products of the defendants and PW1 himself admitted that the plaintiffs were to pay royalty to the defendants. The plaintiffs have failed to prove the quantity of various products which were bottled by them under the agreement dated 28.03.1996 and what was the royalty amount due thereon. The plaintiffs have also not proved that any amount on account of royalty was paid by the plaintiff to the defendants. The plaintiffs have relied on copy of letter dated 23.06.1997 Ex.PW1/8, allegedly sent by plaintiff to M/s Venkateshwar Essence & Chemicals wherein 21 the plaintiff has told M/s Venkateshwar Essence & Chemicals to deduct the royalty amount from the security deposit. It is to be noted that the plaintiffs have admitted that they were under obligation to make payment of royalty to the defendants but plaintiffs have concealed the quantity of the products manufactured by them in terms of agreement dated 28.03.1996 and the sale figures of the said products. As per letter Ex.PW1/8 it is evident that the plaintiffs admitted that in case the plaintiffs commit default in payment of royalty, the same was to be deducted from the security deposit. As the plaintiff has failed to furnish the true and correct statement of account of royalty which was to be paid by plaintiffs to defendants, in the circumstances, it is not open for the plaintiffs to plead that they are entitled for refund of the security deposit from the defendants when the plaintiffs have themselves defaulted in making payment of the royalty to the defendants. Accordingly, it is held that the plaintiff is not entitled for refund of the security amount or the interest thereon. Both these issues are accordingly decided in favour of defendants and against the plaintiffs.
Issues No.4 & 5
22. Since both these issues involve common discussion of facts 22 and law, hence, for the sake of brevity both these issues are being taken up together.
23. By way of present counter claim, the plaintiffs have claimed claimed a sum of Rs.2,00,000/ (Rupees two lacs only) which the counter claimants/plaintiffs suffered as loss on account of goods which were destroyed/sold as scrap and a sum of Rs.10,00,000.00 (Rupees ten lacs only) on account of plant and machinery which were rendered useless on account of illegal termination of agreement by the defendants. The contention of learned counsel for the defendants is that the plaintiffs are not entitled to any amount on these accounts as for that purpose, the plaintiffs have to prove that the bottling plant was set up by the plaintiff on the promise of the defendants and that after termination of Bottler's Agreement, the plaintiff could not run his business which was started on the promises of defendants and that the machinery which was installed by the plaintiffs had to be sold on loss.
24. PW1 Shri Pradeep Jain, partner of M/s Jainsons Beverages admitted in the crossexamination that agreement dated 28.03.1996 Ex.PW1/D2 was executed between parties whereby the license was granted to M/s Jainsons Beverages to bottle the products of the defendants. In affidavit Ex.PW1/A, the plaintiff has not stated that the plaintiffs were 23 not previously in the business of bottling and the said business was commenced by the plaintiff on the asking of defendants herein. In clause 'D' at page 2 of the agreement dated 28.03.1996 Ex.PW1/D2 it is stated that bottler (M/s Jainsons Beverages - plaintiff herein) desires to prepare and bottle the Beverages as herein prescribed for sale and distribution in and throughout the following territory, viz: (hereinafter referred to as the "Territory") Western Uttar Pradesh and Secondary Territory as State of Delhi. In para E at page 2 of Ex.PW1/D2 it is stated that with a view to compete with other brands of soft drinks and beverages and thereby increasing competition, the Bottler (M/s Jainsons Beverages) has approached the Company to sell to him the bases and to grant to the Bottler a licence to use the trade marks and the knowhow in and throughout the Territory which the company has agreed to do on the terms and conditions hereinafter appearing. As per aforesaid clause i.e. D & E of agreement Ex.PW1/D2, the plaintiff i.e. M/s Jainsons Beverages was already having facility of bottling and they had approached the defendants herein for grant of licence to bottle the products of the defendants. In the circumstances it cannot be said that the plaintiffs were not previously in the business of bottling and they had 24 commenced this business on any assurance of the defendants. PW1 Shri Pradeep Jain stated in the cross examination that during end of 1995 or in the beginning of 1996 M/s Jainsons Beverages had set up the bottling plant at plot No.729, Duhai, Delhi Meerut Road, Ghaziabad. Hence, as per testimony of PW1 the bottling plant was set up by M/s Jainsons Beverages before entering into Bottler's Agreement with the defendants. PW1 stated in the crossexamination that M/s Jainsons Beverages had surrendered Excise Licence on 12.05.1999. Thereafter, PW1 further stated in the crossexamination that on 12.05.1995 when M/s Jainsons Beverages surrendered excise licence, it only meant that M/s Jainsons Beverages had stopped production of branded goods & excisable products. PW1 further stated in the cross examination that thereafter M/s Jainsons Beverages started bottling mustard oil and mineral water and the name of mineral water which was being bottled by M/s Jainsons Beverages was Kempty Fall. This part of testimony of PW1 proves that on termination of agreement by the defendants on 31.01.1998 vide letter Ex.PW1/D4, M/s Jainsons Beverages, had started bottling muster oil and mineral water. Even in para 6 of affidavit Ex.PW1/A, the plaintiff also stated that after termination of agreement by defendants, the plaintiff 25 started doing other business of the mineral water. In the circumstances, it cannot be said that on account of termination of agreement by defendants, the plaintiff had to stop the bottling business. PW1 further stated in the cross examination that their plant was sold in the year 2001 to the junk dealer for Rs.1,25,600/. As per testimony of PW1 the plant was sold by the plaintiffs in the year 2001 i.e. after about three years of termination of agreement by the defendants vide letter dated 31.01.1998 Ex.PW1/D4. It is to be noted that firstly the plaintiff has not proved that they had commenced business of bottling on the assurance of defendants and secondly that they have also not proved at what cost the bottling plant was installed by the plaintiff and amount of damages suffered on account of closure of the bottling plant. PW1 has only made one bald statement in this cross examination that the plant was sold to junk dealer for Rs.1,25,600/ (Rupees one lacs twenty five thousand six hundred only) but no such junk dealer has been examined to prove the sale of plant by plaintiffs to the any junk dealer. Accordingly, both these issues are decided in favour of the defendants and against the plaintiffs.
26Issue No.6
25. By way of present counter claim, the plaintiffs have claimed a sum of Rs.1,00,00/ (Rupees one lac only) on account of loss of reputation caused by illegal and sudden termination of the agreement by defendants. The contention of the learned counsel for the defendants is that the plaintiffs are not entitled to any amount on this account as the plaintiffs have failed to examine any witness who could depose that they came to know about termination of agreement which was executed between defendant No.2 and plaintiffs and that esteem of the plaintiffs has fallen in their eyes on account of said termination of the agreement. It is to be noted that in order to make out the case that the agreement was terminated illegally by defendants without issuing any letter or notice to the plaintiffs, the plaintiffs have denied receipt of letters dated 08.12.1997 and 31.01.998 sent by defendants and in para 5 of affidavit Ex.PW1/4, the plaintiff has specifically pleaded that letters dated 08.12.1997 and 31.01.1998 were not received by the plaintiffs. However, in the crossexamination PW1 admitted receipt of letters dated 08.12.1997 Ex.PW1/D3 and 31.01.998 Ex.PW1/D4. In letter dated 08.12.1997 Ex.PW1/D3, the defendant has specifically mentioned that the plaintiffs have failed to reply to the 27 previous letter dated 08.08.1997 advising them to remit the royalty. However, the plaintiffs have not proved that they had sent any reply to the previous letter dated 08.08.1997 or that royalty amount was remitted in pursuance to letter Ex.PW1/D3 or that the plaintiffs have sent any reply to the letter Ex.PW1/D3 thereby pleading the case that the royalty has been paid or that the same is not payable. Plaintiff did not send any reply to letter Ex.PW1/D3, rather in order to make out case of illegal termination of agreement, the plaintiff has pleaded falsely in his affidavit Ex.PW1/A that he has not received said letter Ex.PW1/D3. The plaintiff has no where stated in his affidavit Ex.PW1/A that the alleged termination of the agreement came to knowledge of persons who held plaintiff in high esteem and that on knowing about the termination of agreement, esteem of plaintiffs was lowered in the estimation of said persons. The plaintiffs have also not examined any witness in order to prove that fact of termination of agreement vide letter dated 31.01.1998 Ex.PW1/D4 came to the knowledge of the persons who were known to the plaintiff and the esteem of the plaintiffs was lowered in estimation of said persons on account of termination of agreement. The plaintiffs have failed to prove that the plaintiffs are entitled to any amount on account of 28 loss of reputation as claimed by way of present counter claim. This issue is accordingly decided in favour of defendants and against the plaintiffs.
Issue No.7:Relief
26. In view of findings on aforesaid issues the plaintiffs are not entitled to the reliefs, as claimed. The counter claim of the plaintiffs is dismissed. Parties are left to bear their own costs. Decree sheet be prepared accordingly. File be consigned to Record Room.
(Announced in the open Court
th
on 19 March, 2010 (HARISH DUDANI)
ADDL. DISTRICT JUDGE15
(CENTRAL) : DELHI