TAPROGGE GESELLSCHAFT MBH Vs. IAEC INDIA LTD

JUDGEMENT

(1.) The plaintiff company, engaged in the business of manufacturing cooling water filters and allied products, incorporated under the laws of the Federal Republic of Germany, seeks a declaration that the defendants, an Indian Company and the plaintiffs erstwhile agents in India, are not entitled to sell or offer for sale two of the plaintiffs' products known as Taprogge Cooling Water Filters and Taprogge Condenser Tube Clearing systems, hereinafter referred to as the "covered products". This Notice of Motion is for interim injunction restraining the defendants from recommending, offering for sale or selling any of the covered products for a period of five years from 27th Aug. 1985. (i) THE FACTS The undisputed facts are, as set out in paras 2, 3, 4 and 5 below.

(2.) On or about 1st Mar. 1979 Ludwig Taprogge, an individual whose name the plaintiff company bears and the defendant entered into an agreement of agency whereunder the latter was to sell in India the covered products manufactured by Taprogge Ludwig. Clause 13.1 of the contract of agency which imposes trade restriction on the defendant reads as under :-

(3.) Owing to certain differences Taprogge cancelled the "agency agreement concluded on 1st Mar. 1979" and informed the defendant that "from Jan. 1986 you will no longer be our representative". The defendants replied by letter dt. 27th Aug. 1985. In para 2 of this letter, the defendant asserted that it was always ready and willing to discuss the matter at Bombay. After accusing Taprogge of "wrongful conduct", the defendant declared "we are....... hereby terminating the agency agreement with immediate effect.......". The termination of the agency agreement was based on two reasons. The first reason was that the defendant had, under Cl.17.3 of the agreement the right to terminate the agreement for "important reasons". The second reason was the existence of such "important" reason. Thus, the defendant acted under the agreement of agency.