CASE STUDY : Gujarat Bottling Company vs The Coca Cola and Others

FINAL DRAFT IN THE FULFILMENT OF THE COURSE

Code of Civil Procedure

Submitted By

Swaraj Siddhant

Roll No. 1860

Course : B.B.A., LL.B. (Hons.)

Submitted To

Meeta Mohini Ma’am

Faculty, Code of Civil Procedure

CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

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 Declaration

I hereby declare that the work reported in the B.B.A. LL.B. (Hons.) project report titled “CASE
STUDY : Gujarat Bottling Company vs The Coca Cola and Others” submitted at Chanakya
National Law University is an authentic record of my work carried out under the supervision of
Meeta Mohini Ma’am. I have not submitted this work elsewhere for any other degree or diploma.
I am fully responsible for the contents of my project report.

Signature of the Candidate

Name of the Candidate : Swaraj Siddhant

Chanakya National Law University, Patna

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 Acknowledgement

First of all I would thank Meeta Mohini Ma’am for her guidance and support because of which
this project has a shape.

I would also extend my gratitude to my family, my friends and all those who helped my while I
was preparing this project.

I would also thank the Chanakya National Law University administration for the magnificent
library and extensive curricular support because of which we, the students of the institution, have
gained knowledge. For the support of everyone who helped me make this project, I extend my
gratitude.

Swaraj Siddhant

1860

B.B.A. LL.B. (Hons.)

Chanakya National Law University

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 Aims and Objectives

The researcher aims to analyse the aforementioned case, and related statutory provisions from
the Code of Civil Procedure, 1908.

Hypothesis

For the purpose of seeking injunction, the person himself must not be the one responsible for the
worsened state of affairs on the basis of which the said injunction is being sought.

Research methodology

The researcher will be undertaking doctrinal mode of research for the said research report.

Limitations

 There is a time limitation for the researcher to finish the research.

 The researcher is limited to his own self for the research.

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Table of Contents
Declaration .................................................................................................................................................... 2
Acknowledgement ........................................................................................................................................ 3
Aims and Objectives...................................................................................................................................... 4
Hypothesis..................................................................................................................................................... 4
Research methodology ................................................................................................................................. 4
Limitations .................................................................................................................................................... 4
Introduction .................................................................................................................................................. 6
Injunction under CPC .................................................................................................................................... 7
Scope ......................................................................................................................................................... 7
Principles ................................................................................................................................................... 7
Prima Facie Case ....................................................................................................................................... 9
Prima facie case ........................................................................................................................................ 9
Irreparable Injury .................................................................................................................................... 10
Balance of Convenience .......................................................................................................................... 10
Other Factors .......................................................................................................................................... 10
Inherent Powers...................................................................................................................................... 11
Ad Interim Injunction .............................................................................................................................. 11
Enforcement of a Decree for Injunction ................................................................................................. 13
Appeal ..................................................................................................................................................... 13
Judgment of the Supreme Court................................................................................................................. 15
Analysis ....................................................................................................................................................... 21
Conclusion ................................................................................................................................................... 23
Bibliography ................................................................................................................................................ 24

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 Introduction

GBC entered into an agreement in 1993 with Coke for grant of franchisee to prepare, bottle, sell
brands of latter, but not to be concerned with the beverages of any other brand during the
subsistence of the agreement and of 1 year period notice for its termination (Para 14) Under the
agreement, GBC also had right to discontinue supplying syrup on effective transfer of control of
GBC by transfer of shares or any other indicia without the prior express consent of Coke (Para
19). In all, 1993 agreement was for grant of license to GBC under common law by Coke.

GBC, however entered into another agreement with Coke in 1994 where under it was required to
make an application to register the agreement under the statute as Registered User Agreement.
Though the period of termination notice was reduced to 90 days but no similar provision as that
of Para 14 of 1993 agreement was stipulated and neither was 1993 agreement expressly
substituted.

The shareholding of GBC was transferred subsequently to Pepsi and it served Coke with a notice
of 90 days to terminate 1994 agreement, and as a matter of abundant precaution, as 1 year notice
terminating 1993 agreement, notwithstanding the contention that 1993 stands replaced by 1994
agreement. Coke sought GBC to be refrained from dealing with the beverages of Pepsi for the
period of 1 yr. of termination notice.

The Supreme Court held that since the relief is wholly equitable in nature, the party invoking the
jurisdiction of the Court has to show that he himself was not at fault, and that he himself was not
responsible for bringing about the state of affairs complained of and that he was not unfair or
inequitable in his dealing with the parties against whom he was seeking his conduct should be
fair honest. These considerations will arise not only in respect of the person seeking injunction
under order XXXIX but also in respect of the party approaching the Court for vacating the ad
interim injunction order already granted in the pending suit or proceeding in a case a lessee under
permanent lease has already a permanent structure on the lease has held the land back without
any objection in this regard on the part of the lessor.

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 Injunction under CPC
Scope : It provides that when the defendant threatens to dispossess the plaintiff or otherwise
cause injury to the plaintiff in relation to any property in dispute in suit, the Court may grant a
temporary injunction to restrain such an act or make other order for the purpose of preventing the
dispossession of the plaintiff or for the purpose of preventing the causing of injury to the plaintiff
in relation to any property in dispute. If the defendants are creating third party interest/rights as
he is trying to dispose of part of the property, the plaintiff can claim the injunction. Temporary
injunction is a provisional remedy that is invoked to preserve the subject matter in its existing
condition. Its purpose is to prevent dissolution of the plaintiff's rights. The main reason for use of
a temporary injunction is the need for immediate relief. Section 94 1 (c) and (e) of Code of Civil
Procedure contain provisions under which the Court may in order to prevent the ends of justice
from being defeated, grant a temporary injunction or make such other interlocutory order as may
appear to the Court to be just and convenient. Section 95 of Civil Procedure Code further
provides that where in any suit a temporary injunction is granted and it appears to the Court that
there were no sufficient grounds, or the suit of the plaintiff fails and it appears to the Court that
there was no reasonable or probable ground for instituting the same, the Court may on
application of the defendant award reasonable compensation which may be to the extent of the
pecuniary Jurisdiction of the Court trying the suit

Principles : In Agricultural Produce Market Committee Case2, the Apex Court has held that "a
temporary injunction can be granted only if the person seeking injunction has a concluded right,
capable of being enforced by way of injunction” The Apex Court through catena of judgments
like landmark judgment in Gujarat Bottling Co. Ltd. Case3, held that the Court needs to follow
certain guidelines while considering an application for grant of temporary injunction, some of
which are briefly stated hereunder:

 The applicant seeking relief of temporary injunction shall have to establish a prima facie
case in his favor. For this purpose, the Court will not examine the merits of the case
rather only the basic facts on which it is established that the applicant has a prima facie
case to contest. Thereafter the applicant also has to establish that the allegations/

1
S. 94, Code of Civil Procedure (Act 5 of 1908).
2
(2001) 10 SCC 697.
3
1995 AIR 2372.

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 averments made in the application on which the temporary injunction is sought are
plausible.
 The court will also examine the conduct of the applicant and such conduct needs to be
examined even at the stage where the application for setting aside an order under Order
XXXIX Rule 4 of the Code of Civil Procedure, 1908 is filed.
 The court has to examine the balance of convenience i.e. the balance of comparative loss
caused to the applicant and the respondent in the case of not passing the order.
 The court will first of all will examine what is the extent of loss that would be caused to
the applicant if the order is not passed and also whether it is reparable by monetary
compensation i.e. by payment of cost. Then it will examine the loss suffered by
respondent if the order is passed and thereupon it has to see which loss will be greater
and irreparable. The party who would suffer greater loss would be said to be having
balance of convenience in his favor and accordingly, the court will pass or refuse to pass
the order. The court has the power also to ask the party to deposit security for
compensation or to give an undertaking for the payment of the compensation, if ordered.
 Whether the plaintiff would suffer irreparable injury if his prayer for temporary
injunction is disallowed.

The court while granting or refusing to grant injunction should exercise sound judicial discretion
to find the amount of substantial mischief or injury which is likely to be caused to the parties, if
the injunction is refused, and compare it with that which is likely to be caused to the other side if
the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of
injury and if the court considers that, pending the suit, the subject matter should be maintained in
status quo, an injunction would be issued. Thus the court has to exercise its sound judicial
discretion in granting or refusing the relief of ad interim injunction pending the suit.

At the stage of deciding the application for temporary injunction, the Court is not required to go
into the merits of the case in detail. Generally, before granting the injunction, the court must be
satisfied about the following aspects:

 One who seeks equity must come with clean hands

 One who seeks equity must do equity.

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  Whenever there is a right there is remedy.

The power to grant a temporary injunction is at the discretion of the court. This discretion,
however, should be exercised reasonably, judiciously and on sound legal principles. Injunction
should not be lightly granted as it adversely affects the other side. The grant of injunction is in
the nature of equitable relief, and the court has undoubtedly power to impose such terms and
conditions as it thinks fit. Such conditions, however, must be 6 reasonable so as not to make it
impossible for the party to comply with the same and thereby virtually denying the relief which
he would otherwise be ordinarily entitled to.

Prima Facie Case:

It is well settled that in granting or refusing to grant temporary injunction, the Court has very
wide discretion. The exercise of the discretion should be in a judicial manner, depending upon
the circumstances of each case. No hard and fast rule can be laid down for the guidance of the
Court to that effect. It is well settled that while granting injunction plaintiff must show:

i. Existence of Prima Facie case

ii. Balance of convenience
iii. The injury must be of an irreparable loss that cannot be compensated in terms of
money

The first rule is that the applicant must make out a prima facie case in support of the right
claimed by him. The court must be satisfied that there is a bonafide dispute raised by the
applicant, that there is a strong case for trial which needs investigation and a decision on merits
and on the facts before the court there is a probability of the applicant being entitled to the relief
claimed by him. The existence of a prima facie right and infraction of such right is a condition
precedent for grant of temporary injunction. The burden is on the plaintiff to satisfy the court by
leading evidence or otherwise that he has a prima facie case in his favor.

Prima facie case, however, should not be confused with a case proved to the hilt. It is no part
of the court's function at that stage to try to resolve a conflict of evidence nor to decide
complicated questions of fact and of law which call for detailed arguments and mature
considerations. These are matters to be dealt with at the trial. In other word, the court should not

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examine the merits of the case closely at that stage because it is not expected to decide the suit
finally. In deciding a prima facie case, the court is to be guided by the plaintiff's case as revealed
in the plaint, affidavits or other materials produced by him.

The plaintiff should come before the Court with clean hands. If he suppresses material facts,
documents then he is not entitled for the relief of injunction and further points of balance of
convenience, irreparable injury even not required to be considered in such case.

Irreparable Injury
The existence of the prima facie case alone does not entitle the applicant for a temporary
injunction. The applicant must further satisfy the court about the second condition by showing
that he will suffer irreparable injury if the injunction as prayed is not granted, and that there is no
other remedy open to him by which he can protect himself from the consequences of
apprehended injury. In other words, the court must be satisfied that refusal to grant injunction
would result in 'irreparable injury' to the party seeking relief and he needs to be protected from
the consequences of apprehended injury. Granting of injunction is an equitable relief and such a
power can be exercised when judicial intervention is absolutely necessary to protect rights and
interests of the applicant. The expression irreparable injury however does not mean that there
should be no possibility of repairing the injury. It only means that the injury must be a material
one, i.e., which cannot be adequately compensated by damages. An injury will be regarded as
irreparable where there exists no certain pecuniary standard for measuring damages.

Balance of Convenience
The third condition for granting interim injunction is that the balance of convenience must be in
favor of the applicant. In other words, the court must be satisfied that the comparative mischief,
hardship or inconvenience which is likely to be caused to the applicant by refusing the injunction
will be greater than that which is likely to be caused to the opposite party by granting it.

Other Factors
There are some other factors which must be considered by court while granting injunction. The
relief of injunction may be refused on the ground of delay, laches or acquiescence or whether the
applicant has not come with the clean hands or has suppressed material facts, or where monetary

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compensation is adequate relief. As per amended Sec.9-A (2)4 of the C.P.C. The Court is
empowered to grant such interim relief as it may consider necessary, pending determination by it
of the preliminary issue as to the jurisdiction.

Inherent Powers
There was a conflict of Judicial opinion on the question whether the Court could issue a
temporary injunction U/s.1515 of Civil Procedure Code when the case did not fall within the term
of Order XXXIX Rule 1 and 2 of Civil Procedure Code. However now that point is concluded by
the Hon'ble Apex Court in the case of Manmohanlal Vrs. Seth Hiralal6 by observing that the
Court has powers U/s.151 of Civil Procedure Code to issue an injunction in cases not falling
within Order XXXIX Rule 1 and 2; however that discretion should be exercised judiciously,

For the purpose of implementation of an injunction order Police protection can be ordered
U/s.151 of Civil Procedure Code. However the Court shall not order for Police protection on the
basis of an ad-interim ex-parte order and only final order under Order XXXIX Rule 1,2 can be
enforced with police assistance. An order granting Police aid without giving a chance to the
defendant to submit his objections is not proper.

Ad Interim Injunction
Whenever the Court does grant an injunction without notice to the opposite party i.e. ex-parte the
proviso to Rule 3, Order 39, C.P.C. provides duty on the Court to record the reasons for its
opinion as to the object of granting the injunction would be defeated by delay. It also puts an
obligation on the party in whose favour such order is passed to communicate the order along
with all relevant documents to the other side by registered post and to file an affidavit stating
that, he complied the requirement.

The Supreme Court in Ramrameshwari Devi and ors. Vs. Nirmala Devi and or7s has held that:
“the Court should be extremely careful and cautious in granting ex parte ad interim injunctions
or stay orders. Ordinarily short notice should be issued to the defendants or respondents and only
after hearing concern parties appropriate order should be passed.”

4
Inserted by State Amendment( Maharashtra Act no. 65 of 1977)
5
S. 151, Code of Civil Procedure, 1908 (Act 5 of 1908)
6
A.I.R. 1962 SC 527.
7
Civil Appeal No.49/2011

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The Apex Court in the case of Shiv Kumar Chadha Vs. Municipal Corporation of Delhi 8,
emphasized the need to give reason before passing ex-parte orders of injunction by observing;
“... the court shall 'record the reasons' why an ex-parte order of injunction was being passed in
the facts and circumstances of a particular case. In this background, the requirement for
recording the reasons for grant of ex-parte injunction, cannot be held to be a mere formality. This
requirement is consistent with the principle, that a party to a suit, who is being restrained from
exercising a right which such party claims to exercise either under a statute or under the common
law, must be informed why instead of following the requirement of Rule 3, the procedure
prescribed under the proviso has been followed. The party which invokes the jurisdiction of the
court for grant of an order of restrain against a party, without affording an opportunity to him of
being heard, must satisfy the court about the gravity of the situation and court has to consider
briefly these factors in the ex-parte order.”

In the case of Morgan Stanley Mutual Fund v. Kartick Das9 Apex Court held that, ex-parte
injunction could be granted only under exceptional circumstances. The factors which should
weigh with the court in the grant of ex-parte injunctions are –

(a) whether irreparable or serious mischief will ensue to the plaintiff;

(b) whether the refusal of ex-parte injunction would involve greater injustice than the grant of it
would involve;

(c) the court will also consider the time at which the plaintiff first had notice of the act
complained as that the making of improper order against a party in his absence is prevented;

(d) the court will consider whether the plaintiff had acquiesced for sometime and in such
circumstances it will not grant ex-parte injunction;

(e) the court would expect a party applying for ex-parte injunction to show utmost good faith in
making the application;

(f) even if granted, the ex-parte injunction would be for a limited period of time;

8
(1993) 3 SCC 161
9
(1994) 4 SCC 225

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(g) General principles like prima facie case, balance of convenience and irreparable loss would
also be considered by the court.

Enforcement of a Decree for Injunction

The wording as framed in Order XXI, Rule 32(1)10 would indicate that in enforcement of the
decree for injunction a judgment-debtor can either be put in civil prison or his property can be
attached or both the said courses can be resorted to. But Sub-rule (5) of Rule 32 shows that the
Court need to resort to either of the above two courses and instead the Court can direct the
judgment-debtor to perform the act required in the decree or the Court can get the said act done
through some other person appointed by the Court at the cost of the judgment-debtor.

Thus, in execution of a decree the Court can resort to a three-fold operation against disobedience
of the judgment-debtor in order to compel him to perform the act. But, once the decree is
enforced the judgment-debtor is free from the tentacles of Rule 32. A reading of that rule shows
that the whole operation is for enforcement of the decree. If the injunction or direction was
subsequently set aside or if it is satisfied the utility of Rule 32 gets dissolved. The Decree Holder
entitle to execute the decree for injunction and partition, without impediment if not executed the
decree within 12 years as per Article 136 of the Limitation Act then Decree Holder has to face
the consequences thereof at least to the extent of executability of decree for partition. As per the
provisions of Article 13511 of the said Act, decree granting mandatory injunction, shall have to
be executed within three years from the date of decree or where a date is fixed for performance,
from such date. However, here it is clear that proviso attached to Article 13612 is self explanatory
to the effect that for the enforcement of execution of a decree granting perpetual injunction shall
not be subject to any period of limitation.13

Appeal
In Ramji Gupta Vs. Gopi Krishan14, it was held: “Under the Code of Civil Procedure, certain
specific orders mentioned in Section 104 and Order XLIII Rule 1 of C.P.C. are only appealable
and no appeal shall lie from any other orders. Therefore, the order made under Section 151 of

10
Schedule I, Order XXI Rule 32, Code of Civil Procedure, 1908 (Act 5 of 1908)
11
Schedule to the Act, Article 135 The Limitation Act, 1963, (Act 36 of 1963).
12
Schedule to the Act, Article 136 The Limitation Act, 1963, (Act 36 of 1963).
13
M. A. Raja S. Vs. Vedhantham Pillai reported in 2000(2) C.T.C. page 199 (Madras High Court).
14
AIR 2013 SC 3099.

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C.P.C. being not included in the category of appealable orders, no appeal is maintainable against
such orders”.

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 Judgment of the Supreme Court
The case of heard and decided by a Division bench of Hon’ble Mr. Justice S.C. Agarwal and
Hon’ble Mr. Justice S. Ahmad Saghir. The Judgment was delivered by Hon’ble Mr. Justice S.C.
Aggarwal.

Facts of the Case :

Coca Cola had been operating in this country till 1977 when on account of change of policy of
the new Government Coca Cola had to close its operations in India. After the departure of Coca
Cola the products of the domestic manufactures filled the vacuum. A substantial share of the
market came to be controlled by the parle group of companies owned and controlled by Mr.
Ramesh Chauhan and Mr. Prakash Chauhan, respondents Nos. 3 and 4. The said group was
manufacturing under trade marks bearing the names "Gold Spot", "Thums Up", "Limca",
"Maaza", "Rim Zim" and "Citra" as well as "Bisleri" club soda. They had arrangements with
bottlers in different parts of the country whereunder the bottlers prepared beverages from the
essence/syrup supplied by the Parle group and after bottling the same the beverages were sold
under the names for which trade marks were held by the Parle group. In late 1980s Pepsi started
operations in India and introduced beverages under their trade marks. Coca Cola followed suit
thereafter. Under the Deed of Assignment dated November 12,1993, the Parle group assigned
their trade marks in the beverages bearing the names "Gold Spot", "Thums Up", "Limca",
"Maaza", "Rim Zim" and "Citra" to Coca Cola. On January 6, 1994, Coca Cola applied to the
Registrar of Trade Marks for being recorded as subsequent proprietor of the trade marks which
had been assigned to it by the various Parle entities.

Gujarat Bottling Company Ltd., appellant No. 1, (hereinafter referred to as `GBC') is a company
incorporated under the Companies Act, 1956. 21% of its shares are held by Ahmadebad
Advertising and Marketing Consultants Ltd., respondent No. 7. The remaining 79% of shares
were held by Mr. Pinakin K. Shah, respondent No. 2 and his family members and business
associates and respondents Nos. 3 and 4 and their family members and associates in the ratio of
78% and 22% respectively. The shares of respondent No. 7 were also held by respondent No. 2
and his family members and associates and respondent No.3 and 4 and their family members and
associates in the same ratio of 78% and 22% respectively. GBC has bottling plants at
Ahmedabad and Rajkot in Gujarat. GBC was having an arrangement with respondents Nos. 3

15
and 4 whereunder licence had been given to GBC to prepare, bottle, sell and distribute beverages
under the trade marks "Thums-Up", "Limca", "Gold Spot", "Maaza", "Citra", "Rim Zim", and
"Bisleri" club soda. In anticipation of the assignment of the rights in trade marks by Parle group
in its favour, Coca Cola, on September 20, 1993, entered into an agreement (hereinafter referred
to as the "1993 Agreement") with GBC whereby Coca Cola permitted and authorised GBC, upon
the terms contained in the said agreement, to bottle, sell and distribute the beverages known and
sold under the trade marks "Gold Spot", "Thums Up", "Limca", "Maaza" and "Rim Zim". The
trade mark "Citra" was excluded from this agreement for the reason that a suit for `passing off'
was pending against the Parle entity concerned in the Delhi High Court and there was
uncertainty of the outcome of this litigation. The 1993 Agreement was to come into effect on the
date Coca Cola indicated in writing to GBC that all trade marks related to the said agreement
have been assigned and transferred to Coca Cola. The 1993 Agreement is to operate till
November 17, 1998 unless earlier terminated as provided in the said agreement. Under
paragraphs 4(a), 6, 18, 19, 20 and 23 Coca Cola is empowered to terminate the said agreement
without notice and in paragraph 21 provision is made for termination of the said agreement by
either side on giving one year's written notice. The said period of notice could be reduced by
mutual consent in writing between Coca Cola and GBC. Paragraph 14 of the 1993 Agreement
contains a negative convenant by GBC not to manufacture, bottle, sell, deal or otherwise be
concerned with the products, beverages of any other brands or trade marks/ trade names during
the subsistence of the agreement including the period of one years' notice as contemplated in
paragraph 21. Under paragraph 19 Coca Cola has the right to dis-continue supplying to GBC
with essence/ syrup and/ or other materials on the happening of any of the events mentioned in
clauses (a) to (e) of the said paragraph. Clause (b) of paragraph 19 relates to transfer of stock,
share or interest or other indicia of ownership of GBC resulting in effective transfer of control
without the prior express written consent of Coca Cola. The 1993 Agreement came into force on
November 12, 1993 when the trade marks related to the said agreement were assigned and
transferred to Coca Cola. Two such agreements were executed

- one pertaining to Ahmadabad town and other pertaining to Rajkot town. In addition, Coca Cola
also entered into two separate agreements under letters dated September 20, 1993 in respect of
permission to use the trade mark "Citra" by GBC for Ahmedabad and Rajkot towns. Two other
separate agreements were entered by Coca Cola under letters dated September 20, 1993 for

16
Ahmedabad and Rajkot towns for the use of the trade mark "Bisleri" club soda by GBC. All
these four letter agreements are operative for two years and can be renewed by mutual consent.
These agreements can be terminated by giving three months notice by either side. These
agreements were also to come into effect from the date indicated by Coca Cola in writing to
GBC that all trade marks related to the said agreements have been assigned and transferred to
Coca Cola.

On April 30, 1994 Coca Cola entered into another agreement (hereinafter referred to as the
"1994 Agreement") with GBC whereby Coca Cola granted to GBC a non-exclusive licence to
use the trade marks mentioned in the schedule to the agreement, namely, "Gold Spot", "Limca",
"Thums Up", "Maaza", "Citra", etc. in relation to goods prepared by or for the licensee (GBC)
from concentrates and/or syrup supplied by the licensor (Coca Cola) and packaged or dispensed
in accordance with standards, specifications, formulae, processes and instruction furnished or
approved by the licensor from time to time and only so long as such goods are manufactured
within such territory of India and sold within such territory of India and in such bottles or other
containers as shall be approved by the licensor from time to time. In the said agreement it is
provided that both the parties shall make application to the Registrar of Trade Marks under the
Trade & Merchandise Marks Act, 1958 (hereinafter referred to as `the Act') or any statutory
modification or enactment thereto or thereof for the time being in force to procure the
registration of the Licensee (GBC) as a registered user of the said trade marks as aforesaid as
soon as the said trade marks are registered and shall sign and execute all such documents as are
reasonably proper and necessary to secure such registration and for any change thereof in the
future. The said agreement is not limited to any particular period and is to continue in force
without limitation of period but can be terminated at any time by either party upon giving ninety
days' notice in writing to the other or by mutual consent. But in the event of either party
committing a breach of any of the provisions of the said agreement it shall be lawful for the other
party, by giving thirty days' notice in writing, to terminate the agreement. In accordance with the
1994 Agreement an application was submitted by Coca Cola on July 12, 1994 under Section
48 and 49 of the Act to register the said agreement as a Registered User Agreement.

After the execution of these agreements steps for upgradation of the plants of GBC at
Ahmedabad and Rajkot were taken and when the upgradation of the said two plants was near

17
completion Coca Cola advised GBC that it was necessary for GBC to provide for aditional
investments in marketing arrangements, purchase of crates and other equipments and trucks etc.
GBC was, however, reluctant to make further investment and respondent No. 2 requested Coca
Cola to give its consent in advance for transfer of interest of respondent No. 2 in GBC. Coca
Cola declined to give its consent to such transfer in advance without being aware as to who the
prospective purchaser was and informed GBC and respondent No. 2 that the transfer can be
permitted provided GBC does not lose controlling power or management in favour of an
outsider. On January 20, 1995, the share holding of respondent No. 2 and his family members
and associates as well as respondent Nos. 3 and 4 and their family members and associates in
GBC and respondent No.7 were transferred to appellants Nos. 2 to 5 which are concerns closely
associated and connected or affiliated to subsidiaries of Pepsi, respondent No. 6, and Pepsi Foods
Limited, respondent No. 5, a subsidiary of Pepsi. As a result Pepsi acquired control over GBC.
On January 25, 1995 GBC gave a notice to Coca Cola under clause 7 of the 1994 Agreement
whereby the said agreement was terminated. In the said notice it is also stated that without
prejudice to the contentions of GBC that the 1993 Agreement stands replaced by the 1994
Agreement and/or that the termination period under the 1993 Agreement in any event stands
reduced to 90 days and that the said letter dated January 25, 1995 be treated, as a matter of
abundant caution, as termination notice also under clause 21 of the 1993 Agreement. On January
25, 1995 GBC also addressed a letter to Coca Cola informing them that shares representing
70.6% approximately of the paid up equity capital of GBC had been acquired by and transferred
in favour of appellants Nos. 2 to 5. On January 31, 1995 GBC addressed a letter to the Director
(F&VP), Ministry of Food Processing Industries, Government of India, for approval of crown
cap designs pertaining to beverages of which the trade marks are held by Pepsi.

On January 30, 1995 Coca Cola filed a suit (Suit No. 400 of 1995) in the Bombay High Court
seeking various reliefs.

On January 30, 1995 Coca Cola filed a suit (Suit No. 400 of 1995) in the Bombay High Court
seeking various reliefs. In the said suit Coca Cola took out Notice of Motion No. 316 of 1995
seeking interim relief. During the course of hearing on the said Notice of Motion before the
learned single Judge of the High Court (Dhanuka J.) the learned counsel for Coca Cola sought
interim relief in terms of prayers (a)(i), (a) (ii), (a)(iii) and (a)(viii) of the Notice of Motion. By

18
his order dated February 22, 1995 the learned single Judge declined the application for grant of
interim relief in terms of prayers (a)(i), (a)(iii) and (a)(viii) but issued an interim injunction
restraining GBC from manufacturing, bottling or selling or dealing with the products, beverages
of any brand or trade mark owned by respondents Nos. 5 and 6 or anyone else other than Coca
Cola. GBC was permitted to pursue its application dated January 31, 1995 pending before the
Director (F&VP), Ministry of Food Processing Industries, in accordance with law but GBC was
directed not to act upon the permission of the said authority or any other authority, if granted,
without obtaining prior leave of the court. Two appeals (Appeals Nos. 183 and 191 of 1995)
were filed against the said order of the learned single Judge before the Division Bench of the
High Court - one was by GBC abd the other was by Coca Cola. During the course of hearing of
the said appeals the parties, through their counsel, submitted that as decision in the appeals
would have impact on the Motion pending before the learned single Judge, it was desirable that
Notice of Motion No. 316 of 1995 should be taken up on board and disposed of finally by the
Division Bench so as to avoid one more appeal. In view of the said submission and by consent of
the parties the Motion was heard and disposed of finally by the Division Bench by the impugned
judgment dated March 31, 1995. By the said judgment Notice of Motion No. 316 of 1995 was
made absolute in terms of prayer Nos.

(a)(ii) and (a)(iii) as modified. Prayer (a)(ii) was for an injunction restraining respondent No. 1
(GBC) either directly or indirectly by itself or through its shareholders from concerning itself
with the products, beverages of any other brand or trade mark of the plaintiffs (Coca Cola).
Under prayer (a)(iii) as modified an injunction has been granted in the following terms:

"That in the event of the sale of shares having taken place before the institution of the suit, the
deponent No.1 and those to whom the shares have been sold and also subsequent transferees,
their servants, agents, nominees, employees, subsidiary companies, controlled companies,
affiliates or associate companies or any person acting for and on their behalf are restrained by an
interim injunction from using the plants of respondent No. 1 at Ahmedabad and Rajkot for
manufacturing, bottling or selling or dealing with or concerning themselves in any manner
whatsoever with the beverages of any person till January 25, 1996."

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Hon’ble Mr. Justice S.C. Aggarrwal by the medium of his judgment stated that, in this context, it
would be relevant to mention that in the instant case GBC had approached the High Court for the
injunction order, granted earlier, to be vacated. Under order XXXIX of the Code of Civil
Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary
injunction is purely equitable and, therefore, the Court, on being approached, will, apart from
other considerations, also look to the conduct of the party invoking the jurisdiction of the Court,
and may refuse to interfere unless his conduct was free from blame. Since the relief is solely
equitable in nature, the party invoking the jurisdiction of the court has to show that he himself
was not at fault and that he himself was not responsible for bringing about the state of things
complained of and that he was not unfair or inequitable in his dealings with the party against
whom he was seeking relief. His conduct should be fair and honest. These considerations will
arise not only in respect of the person who seeks an order of injunction under order 39 Rule 1 or
Rule 2 of the Code of Civil Procedure, but also in respect of the party approaching the Court for
vacating the ad-interim or temporary injunction order already granted in the pending suit or
proceedings.

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 Analysis
The Apex Court through the landmark judgment in Gujarat Bottling Co. Ltd. Case15, held that
the Court needs to follow certain guidelines while considering an application for grant of
temporary injunction, some of which are briefly stated hereunder:

 The applicant seeking relief of temporary injunction shall have to establish a prima facie
case in his favor. For this purpose, the Court will not examine the merits of the case
rather only the basic facts on which it is established that the applicant has a prima facie
case to contest. Thereafter the applicant also has to establish that the allegations/
averments made in the application on which the temporary injunction is sought are
plausible.
 The court will also examine the conduct of the applicant and such conduct needs to be
examined even at the stage where the application for setting aside an order under Order
XXXIX Rule 4 of the Code of Civil Procedure, 1908 is filed.
 The court has to examine the balance of convenience i.e. the balance of comparative loss
caused to the applicant and the respondent in the case of not passing the order.
 The court will first of all will examine what is the extent of loss that would be caused to
the applicant if the order is not passed and also whether it is reparable by monetary
compensation i.e. by payment of cost. Then it will examine the loss suffered by
respondent if the order is passed and thereupon it has to see which loss will be greater
and irreparable. The party who would suffer greater loss would be said to be having
balance of convenience in his favor and accordingly, the court will pass or refuse to pass
the order. The court has the power also to ask the party to deposit security for
compensation or to give an undertaking for the payment of the compensation, if ordered.
 Whether the plaintiff would suffer irreparable injury if his prayer for temporary
injunction is disallowed.

The court while granting or refusing to grant injunction should exercise sound judicial discretion
to find the amount of substantial mischief or injury which is likely to be caused to the parties, if
the injunction is refused, and compare it with that which is likely to be caused to the other side if
the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of

15
1995 AIR 2372.

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injury and if the court considers that, pending the suit, the subject matter should be maintained in
status quo, an injunction would be issued. Thus the court has to exercise its sound judicial
discretion in granting or refusing the relief of ad interim injunction pending the suit.

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 Conclusion

An injunction is an equitable remedy and as such attracts the application of the maxim that he
who seeks equity must do equity. Granting of injunction is entirely in the discretion of the Court,
though the discretion is to be sound and reasonably guided by Judicial Principles. This
discretion, however, should be exercised reasonably, judiciously and on sound legal principles.
Injunction should not be lightly granted as it adversely affects the other side. The grant of
injunction is in the nature of equitable relief, and the court has undoubtedly power to impose
such terms and conditions as it thinks fit. Such conditions, however, must be reasonable so as not
to make it impossible for the party to comply with the same and thereby virtually denying the
relief which party would otherwise be ordinarily entitled to. The general rule is that grant of an
injunction is a matter of discretion of the court and it cannot be claimed as of right. However, the
discretion has to be exercised in a judicious manner and in accordance with the provisions
relating to the grant of injunction contained in the specific Relief Act. It is well settled that no
interim injunction would be issued if final relief cannot be granted. When plaintiff has no
personal interest in the matter, injunction cannot be granted.

The hypothesis presumed by the researcher was that for the purpose of seeking injunction, the
person himself must not be the one responsible for the worsened state of affairs on the basis of
which the said injunction is being sought. The same stands proved.

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 Bibliography
Books

 Code of Civil Procedure with Limitation Act, 1963, Hon’ble Mr. Justice C.K. Thakker (Takwani), 8th
Edition, Eastern Book Company,
 The Code of Civil Procedure, Sir Dinshaw Fardunji Mulla, 19th Edition, LexisNexis Publication.

Websites

 www.manupatrafast.com
 www.shodhganga.com
 www.scconline,com

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