RHODIA LIMITED Vs. NEON LABORATORIES LIMITED

JUDGEMENT

(1.) THIS civil revision application takes exception to the order dated March 19, 2002 passed by the Civil Judge, Senior Division, Palghar below Exh. 1 in Special Civil Suit No. 9 of 2002. This Special Civil Suit has been filed by the respondent for declaration and specific performance and consequential reliefs against the applicants. The applicant Nos. 1 and 3 are the English Public Limited Companies incorporated under the English Law. Whereas, the applicant No. 2 is an Indian Company and having its office at Mumbai; and whereas, the respondent company is incorporated under the provisions of the Indian Companies Act, 1956 having its registered office at Mumbai. The respondent claims that it is engaged in the business of manufacture, sale, marketing and distribution of pharmaceutical products. The respondent has its manufacturing facilities located at various places, including at Palghar. By a "distribution Agreement" dated August 1, 1997, the parties agreed to give exclusive right to the respondent to market and distribute the products, Isoflurane and Halothane, in the territories of India, Sri Lanka, Bangladesh and Nepal, for an initial period of 3 years at 23% margin of the price. The effective date under the agreement was the first day of the following month during which the respondent was granted the Product Licence. According to the applicants, the effective date is 1-1-1998. For the purpose of deciding the question that arises in the present case, it will be useful to advert Article 15 of the said "distribution Agreement", which reads thus :

(2.) IT is common ground that subsequently on November 30, 1998 the parties entered into another agreement known as "amendment 1: Mohit Project" whereunder the applicants agreed to supply Isoflurance and Halothane exclusively to the respondent in bulk for bottling and packaging and sale in India, Sri Lanka, Bangladesh and Nepal. According to the applicants, "amendment No. 1 Mohit Project" is not a separate agreement but only an amendment to the earlier agreement of "isoflurance and Halothane Distribution Agreement India" dated 1-8-1997; whereas, the respondent contends that both agreements are separate agreements. It is not necessary to elaborate on this aspect of the matter because, the question that needs to be examined at this stage is confined to the purport of Article 8 of this agreement. It is not in dispute that Article 8 of the latter agreement dated 30-11-1998 is verbatim Article 15 of the former agreement referred to above. In other words, the entire matter would revolve around the interpretation and construction of the aforesaid two clauses in the agreement which pertain to the governing language and the law of the subject agreements. To complete the narration of events, there was some disagreement between the parties for which the second applicant informed the respondent that the contractual relationship concerning distribution of the Isoflurance and Halothane was terminated with effect from 31-12-2000. This was informed by the 2nd applicant by a written notice dated 21-12-2000. As a consequence to the said intimation, the parties exchanged correspondence asserting their respective stands. It will not be necessary to burden this judgment with those events or claim. Suffice it to point out that the respondent eventually instituted a suit before the Court of the Civil Judge, Senior Division, Palghar being Special Civil Suit No. 9 of 2002 praying for the following reliefs :

(3.) THIS suit was filed on 22-1-2002 and on the same day the respondent filed application for interim injunction. The prayers in the said application read thus :-