M/S KASHYAP'S Vs. BATA INDIA LTD.

JUDGEMENT

(1.) THE plaintiff has instituted this suit for mandatory injunction directing the defendant to remove itself and its products and to stop displaying and selling its products from the basement, ground and first floors admeasuring 5900 sq. ft. in property No.E -16, South Extension Part -II, New Delhi and/or from using the said property in any manner whatsoever and for damages/mesne profits from the date of institution of the suit till the defendant uses the said portion of the property, together with interest thereon, pleading: that the parties on 9th December, 1989 entered into a Joint Retail (i) Venture Agreement in terms of which the plaintiff had allowed the defendants products to be sold from the basement and ground floor of the said property for a period of 15 years renewable for another 5 years on mutually acceptable terms with either party being entitled to terminate the Agreement by giving six months prior written notice; that the terms and conditions were changed in terms of defendants (ii) letter dated 19th July, 1999 which inter alia extended the term of the Agreement by 12 years with effect from 1 st October, 1999 and made the Agreement terminable by a 12 months prior notice; (iii) that the terms and conditions were again changed in terms of defendants letter dated 2 nd August, 1999; that the plaintiff vide letter dated 27 th August, 2001 gave 12 (iv) months notice of termination; (v) that fresh negotiations were held between the parties and a fresh offer was made by the plaintiff to the defendant vide letter dated 14 th January, 2003 and which was accepted by the defendant; (vi) that again modifications were made in the terms and conditions vide plaintiffs letter dated 31 st January, 2003 and which the defendant accepted vide its reply dated 1st February, 2003; (vii) that the defendant in its reply dated 1 st February, 2003 supra suggested certain other changes qua termination but which were not accepted by the plaintiff; (viii) that the plaintiff gave six months notice dated 11th April, 2011 of termination with effect from 31st October, 2011; that the defendant vide its reply dated 27th May, 2011 inter alia (ix) took a stand that only the defendant could terminate the Agreement by one year notice and the plaintiff had no right to termination; and hence this suit.

(2.) SUMMONS of the suit and notice of the application for interim relief were issued. The defendant has contested the suit filing a written statement pleading: (a) that the defendant is in exclusive possession of the said 5900 sq. ft. area in the basement, ground and first floors since 1 st February, 2003 and the suit as framed is not maintainable; that the arrangement contained in the Agreement dated 9 th (b) December, 1989 continued till 14th January, 2003 when the plaintiff vide letter dated 14th January, 2003 offered to enter into the Joint Retail Venture Agreement for a period of 20 years effective from 1 st February, 2003 for the aforesaid area of 5900 sq. ft. with minimum guaranteed commission of Rs.5,25,000/ - per month or 5% of the turn over whichever was higher with increment of guaranteed commission by 15% after every 5 years and with only the defendant having right of termination of the Agreement; the defendant vide its reply dated 14 th January, 2003 accepted the said offer and a binding Agreement came into existence; (c) that the plaintiff in consideration of enhanced commission and huge advance/security deposit and other terms and conditions had given up the right of termination; that certain other changes were made vide letter dated 31 st January, (d) 2003; that a fire broke out in the basement on 12 th November, 2008 and (e) the plaintiff vide letter dated 14th November, 2008 threatened to wriggle out of the Agreement which was binding for 20 years; (f) that CS(OS) No.2426/2008 was filed by the defendant in this Court in this regard and which was disposed of vide order dated 22 nd May, 2009 after the plaintiff restored status quo ante as before the fire and in terms of the Agreement; (g) that the plaintiff agreed to the aforesaid being fully aware that it had no right of termination of the Agreement under the garb of fire incident; that thus the termination vide letter/notice dated 11 th April, 2011 is (h) bad as the plaintiff has no right of termination of the Agreement; (i) that the plaintiff by its conduct has accepted the counter offer of the defendant in the letter dated 1st February, 2003.

(3.) AS would be obvious from aforesaid, the only defense of the defendant insofar as for the relief of mandatory injunction is that the agreement between the parties is for a period of 20 years i.e. till 13 th January, 2023 and the plaintiff has no right of termination.