NESTLE S A Vs. I D KANSAL

JUDGEMENT

(1.) I have heard arguments in order to decide whether thispetition seeking a winding up order against respondent No. 3 company shouldbe admitted or not.

(2.) . Facts of the case, inbrief, are that respondent No. l, Sh. I.D,Kansal, floatedrespondent No. 3 company which was incorporated on 19/02/1987 andCertificate of Commencement of its business was obtained on 12/03/1987. Theobjects of the company were manufacture, produce, refine, preserve, distributeand deal in import and export of all kinds of processed foods, etc. In early part of1988 respondent No. 1 approached M/s Food Specialities Limited (later onconverted as Nestle India Limited ) for setting up a joint venture. Nestle IndiaLimited is one of the major manufacturers, producers and sellers of food productsand it has the brand backing of Nestle SA, petitioner No. 1, which is amultinational company incorporated in Switzerland.

(3.) Under the then prevailing law in India, petitioner No.1 could acquire only40% equity share holding and the management of the Nestle India Limited seeingthe possible viability of the project brought about the manufacturing license andtechnical assistance agreement between petitioner No.1 and respondent No. 3.That agreement contemplated the provision of know-how and technical assistanceto be provided by petitioner No. 1 for commissioning the project and for efficientmanufacturing of high quality breakfast cereals. At that time Nestle India.Limitedmade it clear to respondent No. 1 that there would not be any equity participationon its behalf. Respondent No. 1 was, however, not agreeable and again the termswere negotiated between respondent No.1 and Nestle India Limited andrespondent No.l wanted participation in equity share holding by Nestle IndiaLimited and assured that he would have no objection in manufacturing the finalproducts exclusively under the Nestle's brand name.