LINDSAY INTERNATIONAL PVT. LTD. Vs. LAXMI NIWAS MITTAL

JUDGEMENT

(1.) The apparent conflict between the shareholders of the plaintiff No.1 has resulted in the institution of a suit by the plaintiffs seeking specific performance of several agreements between the petitioners and the respondent Nos.1 to 38 and a declaration that the petitioner- Company is exclusively entitled to be the sole purchasing representative in perpetuity of the respondent Nos.2 to 38 for procurement of the goods and services from India. The petitioners have also claimed perpetual injunction restraining the respondent Nos.39 to 42 from acting in breach of negative covenant as pleaded in Paragraph 42 of the Plaint.

(2.) The reliefs in the suit as well as in this application are based on a plea of pre-incorporated contracts, oral agreements, collaboration agreement and a shareholder's agreement followed by conduct of the parties for almost 20 years giving a special right in favour of the plaintiff to exclusively supply materials to ArcelorMittal Companies (hereinafter referred to as "AM Companies") outside India after procuring the materials, inter alia, from the respondent Nos.39 to 42. The plaintiff claims that apart from the agreements pleaded in the last 20 years, the parties have proceeded on the basis that the plaintiff No.1 shall act exclusively as a sole purchasing representative of the respondent Nos.2 to 38 for procurement of goods and services from India and the petitioner No.1 in performance of the terms of the agreement have identified the respondent Nos.39 to 42 as vendors for export of goods and services to the ArcelorMittal Group of Companies.

(3.) Under the arrangement, it is alleged that the proposed company would have the exclusive right to purchase for and on behalf of the ArcelorMittal Group of Companies, all their requirements from India, and no other party would be permitted or authorized to perform any such function whatsoever. The proposed company would be permitted to earn and retain a net profit not to be in excess of 5% of the modalities for disbursement of any excess profit over and above 5 % would be decided by the first defendant at his absolute discretion. Following such arrangement, it is alleged that on 12th August, 1996, the plaintiff company was promoted, established and incorporated at Calcutta. Between the years 1996 and 2003, the total sales in terms of the aforesaid arrangement by the plaintiff company were Rs.292 crores approximately. All the said sales were made to the ArcelorMittal Companies only. The process of procurement of the materials under the aforesaid arrangement as pleaded is:-