U K MEHRA Vs. UNION OF INDIA

JUDGEMENT

(1.) This is a petition for issue of a writ restraining first respondent from granting approval to the application of third respondent, a company incorporated in USA, for setting up a unit under Electronic Hardware Technology Park Scheme through the agency of its proposed Indian subsidiary.

(2.) According to the case set up in the writ petition, the second petitioner, aprivate company incorporated under the Indian Companies Act and comprising of relations of the first petitioner, entered into an international distributorship agreement dated June 9, 1986 with the third respondent, a company incorporated in USA, manufacturing computer hardware and software and Automatic Teller Machines (for short 'ATMs') etc., whereby the second petitioner was appointed as the sole distributor in India with the right and licence to market and service the product of the third respondent. It is also claimed that they entered into ajoint venture agreement dated June 10,1986 for establishing a company in India with 40% equity participation by the third respondent or its nominee and 60% by the second petitioner or its nominee to manufacture, market and service NCR products.

(3.) The petitioners allege that pursuant to the joint venture agreement they bought three acres of land, situate in electronic city, developed by Electronic Development Corporation at Bangalore, for a sum of Rs.5,10,000.00 . According to the petitioners necessary application was made to respondent No. I for seeking approval for the joint venture. Besides, an application to Government of India is also said to have been made for grant of industrial licence. It is further averred that the petitioners on June 19,1987 and 26, 1987 got the approval for foreign colloboration and industrial licence for joint venture respectively from Government of India. It is the case of the petitioners that they had also expended large sums of money to achieve the purpose of the joint venture agreement, but the third respondent has backed out from the same. It seems that the second petitioner and respondent No.3 developed differences, which do not require any further elaboration, resulting in a Civil Suit, being Suit No.2107 of 1992, which is pending before a single Judge of this court. In the suit a prayer was made for grant of prohibitory injunction restraining the third respondent from inducting/taking any other party as their joint venture partner and from appointing any third party as their distributor for the distribution, sales marketing and servicing of their products in India. Anapplication for an ad interim injunction was also moved in thesuit,for restraining the third respondent from signing any agreement with any other party in India for joint venture and distributorship till the disposal of the suit.