KANCHAN UDYOG LIMITED Vs. UNITED SPIRITS LIMITED

JUDGEMENT

(1.) The appellant's suit, C.S. No.839 of 1990, for damages and wrongful termination of contract, was decreed by the learned Single Judge on 02.12.1999. It has been reversed in appeal preferred by the respondent, on 14.01.2005 in APD No.14 of 2000, and the suit dismissed.

(2.) The appellant entered into an agreement with the respondent for establishment of a non-alcoholic beverages bottling plant at Dankuni, West Bengal, and sale under the respondent's trade mark, 'Thrill', 'Rush', 'Sprint', and 'McDowell's Sparkling Soda.' The respondent provided technical consultancy for establishment of the plant, incorporated in the Project Engineering Services Agreement dated 11.09.1985. A Bottler's agreement dated 26.10.1985 was separately executed, valid for ten years with a renewal option, containing the respective rights and obligations of the parties, along with a Marketing agreement. The concentrate (Essence), for preparation of the non-alcoholic beverage, was to be supplied by the respondent. The beverage was to be sold in specified districts of West Bengal, as provided for in the marketing agreement.

(3.) 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 cost of Rs. 226.80 lakhs. 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'. Loan was then advanced to the appellant by the WBIDC, and the West Bengal State Financial Corporation. Commercial production commenced on 01.01.1987. The bottler's agreement was terminated by the respondent on 16.01988. Commercial production at the plant ceased in May, 1989, and the suit was instituted by the appellant in 1990. The learned Single Judge decreed the Suit, awarding damages for Rs. 2,73,38,000.00 towards loss of anticipated profits, and a sum of Rs. 1,60,00,000.00 towards costs for installation of the plant, after deducting Rs. 9.05 lakhs payable by the appellant to the respondent as consultancy charges. The respondent was held liable to pay to the appellant a sum of Rs. 4,24,33,000.00 with interest @ 10% from the date of suit till payment. The Division Bench in appeal reversed the decree, and dismissed the Suit.