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Consequently, the negative covenant in the contract or the non-compete clause cannot be enforced against the respondent inasmuch as the contract between the parties stands determined and ceases to exist.

53. Mr. Mukul Rohtagi, learned senior counsel has also urged at great length that in terms of the proposal which was laid before the FIPB, in order to set up a wholly owned subsidiary, the respondent has to invest more than US$ 200 million in the proposed new plant. This involves an amount of US $ 66 million in equity while an amount of US $ 134 million is to be raised from the market. Such an investment by Guardian strongly adds to India's economic growth. Learned senior counsel has urged at length that the new plant is not in any manner going to compete with the market or the business of the joint venture and that unless new technology and products are brought into India, the business of the joint venture itself would suffer. The two competitors of the joint venture i.e M/s Saint Gobain and M/s Asahi Glass have brought out the new products and new ranges in the product in a big way, strongly jeopardising the joint venture.

54. It is pointed out that in the light of the Guardian's huge stake in the joint venture, in case the business of the joint venture suffers, Guardian suffers the most. The submission is that it is in Guardian's commercial interest as well not to do anything which would jeopardise the business interest of the joint venture.

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55. Mr. Mukul Rohtagi, learned senior counsel for the respondent has pointed out that even the FIPB has required a guarantee that the health of the joint venture is not impacted in any manner by the proposed new subsidiary. Consequently, it is urged that instead of Guardian being like the 'big fish trying to eat a small fish', it is in fact, acting as the big brother protecting the smaller brother.

(x) Guardian cannot be compelled to share its cutting edge technology and new technologies for new products under any agreement with the MRL or with the existing joint venture.

(xi). M/s Saint Gobain and M/s Asahi Glass, the competitors to the joint venture GGL in India, have already set up second plants in India which has aggravated the need for a new project to be set up which would complement the joint venture GGL's production facility.

(xii). The Foreign Investment Promotion Board FIPB has granted permission to Guardian, USA to start a new project on terms and conditions stipulated in the permission granted to it. The FIPB stands satisfied that the joint venture would not be harmed or prejudiced if the Guardian is permitted to set up a new wholly owned subsidiary. The findings of the FIPB are those returned by the expert body set up by the Government of India which is prima facie evidence of the fact that the new venture shall not compete with the joint venture but rather complement it.

161. It would be useful to refer to the pronouncement of this Court reported at Welman Hindustan Ltd. v. NCR Corporation. In this case, the court was required to consider a letter of termination issued by a foreign partner in a joint venture company wherein a contention has been raised by the defendants that the agreement was not complete because further agreements had been required to be executed. The court was of the view that on prima facie ground, the plaintiff had a good case inasmuch as they were able to show that the parties have acted upon the terms of the letter of intent dated 10th June, 1986 for a long period of time and that the plaintiff had expended considerable sums of money relying on such terms as stated in the letter. In this view of the matter, it was held that balance of convenience was also in favor of the plaintiff and against the defendant; that in case it inducted a third party as their joint venture partner or associate for manufacturing, marketing and servicing of their products, the plaintiff was bound to suffer irreparable loss and injury. The plaintiff in this case had expended huge sums of money in acquiring land based on the mutual agreement between the parties for the joint venture; recruited new staff for the joint venture and given training at huge expenses. The government approval had also been sought for the joint venture.