PEPSI FOODS LIMITED Vs. JAI DRINKS PRIVATE LIMITED

JUDGEMENT

(1.) .The plaintiff in suit No. 15 70/92 is Pepsi Foods Limited (In short referred to as "PEPSI") This suit has been filed by "PEPSI" for declaration, injunction and rendition of accounts. Suit No.2110/ 92 has been filed by Jai Drinks Private Limited (In short referred to as "JAI") against Pepsi Foods Limited for declaration and for recovery of money. This order will dispose of the application for injunction filed by "PEPSI" in suit No. 1570/92 as also the application of "JAI" in the same suit for vacation of stay, which had been granted ex parte on April 29, 1992. It will also dispose of the application of "JAI" in suit No.2110/92 for an injunction against "PEPSI". The facts in short which have given rise to the filing of the sutis are that:

(2.) PEPSI being the proprietor of the trade mark Lehar Pepsi. Seven Up and Lehar Mirinda. manufactures soft drink concentrate for beverages being bottled under the aforesaid trade marks. "PEPSI" then enters into an agreement for sale of concentrates to various franchised bottlers for manufacturing and bottling soft drinks/beverages'. One such bottling agreement was entered into by "PEPSI" with "JAI" op or about 8th May, 1990 granting licensed to use the trade mark Lehar in conjunction with trade marks PEPSI Cola. PEPSI 7UP" and Lehar Mirinda This bottling agreement was in respect of a territory known as Jaipur territory which included 'many districts of Rajasthan. The agreement was initially for a term of 10 years from the date of the agreement with. a right to "PEPSI" to terminate the .same upon the failure of "JAI" to perform or comply with any one or more terms and conditions of the agreement. The agreement could be terminated by giving 12 months notice in writing without assigning any reason for such termination. It is the case of the "PEPSI" that ,it had received numerous complaints from the trade and consumers as to the quality of products manufactured by "JAI" and in spite of diverse directions given to "JAI" to improve the quality. "JAI" were not able to improve their performance. The "PEPSI", therefore by a notice . sent on or around December 31, 1991 terminated the, agreement effective immediately, without prejudice to, the second notice of termination. The second notice, gave 12 months notice for the termination and the notice was also stated to be without prejudice to the first police of termination. "JAI" did not, contest or challenge the saidtermination and subsequent to the date, of termination ''PEPSI" did not sell any concentrate to it. .However, it is alleged that ".JAI": despite termination continued to manufacture sub-standard quality beverages and market them,under the trade marks of "PEPSI", which acts of "JAI" were stated to be illegal without authority and malafide. The suit w as. therefore, filed .by the "PEPSI" for a declaration that the bottling agreement dated May 8, 1990 between the parties stood terminated and also for an injunction restraining "JAI" from rnanufacturing and selling beverages under the aforesaid bottling agreement under the trademarks Lehar Pepsi. Lehar 7 UP and Lehar Mirinda Damages for infringement and, passing off were also claimed in the suit

(3.) Alongwith the suit an application for an exparte order of injunction was also filed and this Court by order dated April 29. 1992 restrained "JAl" by an ex parte order of injunction from using the trade mark/brand name bf the "PEPSI''and also from using the trade mark/brand name Lehar Pepsi. Lehar 7 UP and Lehar Mirinda on the beverages manufactured by "JAI".