PEPSI FOODS Vs. JAI DRINKS PRIVATE LIMITED

JUDGEMENT

(1.) The plaintiff in suit No.l570/92 is Pepsi Foods Limited (In short referred to as "PEPSI").

(2.) This suit has been filed by "PEPSI" for declaration, injtinction 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.l570/92 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 applica- tion of "JAI" in suit No.2110/92 for an injunction against "PEPSI". The facts in short which have given rise to the filing of these suits are that : -

(3.) "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" on or about 8th May, 1990 granting license 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 notice of termination. "JAI" did not contest or challenge the said termination 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 was, 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 manufacturing and selling beverages under the aforesaid bottling agreement under the trade marks Lehar Pepsi, Lehar 7 UP and Lehar Mirinda. Damages for infringement and passing off were also claimed in the suit.