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2005 DIGILAW 785 (CAL)

UNIVERSAL PETRO-CHEMICALS LIMITED v. B. P. P. L. C.

2005-12-23

ANIRUDDHA BOSE

body2005
ANIRUDDHA BOSE, J. ( 1 ) THE core dispute in the present suit relates to the construction of an agreement between the plaintiff and the defendant no. 3, and its current status. The plaintiff is an Indian Company engaged in the business of manufacturing and marketing of various types of petroleum products including lubricants. The defendant No. 3 also is a company which appears to be organised and existing under the laws of the Federal Republic of Germany, also engaged in the same line of business. I shall henceforth describe the plaintiff as UPCL and defendant No. 3 as Aral. ( 2 ) THE subject agreement, which is Exhibit "b" is in the nature of a collaboration agreement, and is accompanied with a trade mark and design licensing agreement, which were entered into by and between the plaintiff and defendant No. 3 on 1st November, 1994. This agreement shall be described as the Original Agreement. Under the collaboration agreement. Aral was to grant UPCL exclusive license and right to distribute in India, what has been described as ARAL product lines. UPCL derives from this agreement broadly three categories of rights, comprised in the first three clauses as also in clause 11 thereof, against payment of royalty and discharge of certain other obligations. These clauses are reproduced below: -" 1. Distribution Rights: Aral will grant UPCL an exclusive licence and right to market and distribute Aral product lines of finished automotive and industrial lubricants (Aral Products), including any and all modifications, improvements and additions thereto in India (Distribution Right ). 2. Blending Rights: Aral will provide the additive packages (Aral concentrates) for certain lubricants, which have to be agreed upon, whereas UPCL will supply the base oils. Aral will try to make use of special additive suppliers UPCL has other firm relationship with. UPCL will be entitled to manufacture and market lubricants (Blended Aral Products) under the tradename of Aral in India, provided aral approves such products by written notice in each individual case. ( 3 ) REBRANDING: UPCL will be permitted to market certain commodity lubricants which, have to be agreed upon. (Rebranded products) manufactured in accordanee with international specifications under the brandname of Aral in India, provided Aral approves such products by written notice in each individual case. 11. Agreement upon Trademarks and Design: The Distribution rights shall include the right to use all trademarks, tradenames. (Rebranded products) manufactured in accordanee with international specifications under the brandname of Aral in India, provided Aral approves such products by written notice in each individual case. 11. Agreement upon Trademarks and Design: The Distribution rights shall include the right to use all trademarks, tradenames. service marks, and related copyrights of Aral under the Aral brandname in connection with the marketing and distribution of the Product in India. The use of the registered Aral trademarks and design is being regulated by the "agreement upon Trademarks and design" attached hereto and forming an integral part of this agreement. "the basic scheme of this agreement is that Aral would provide the technology of the lubricants as also permit UPCL to use their Trade mark and Design, whereas UPCL would remain obliged to promote and extend the distribution of these products, and pay composite royalty at the stipulated rate, for usage of the brandname of Aral and the marketing and technical support. There is an embargo on Aral from marketing and distributing their products in India during the subsistence of the agreement, contained in Clause 9 of the agreement, entitled "non-Competition", which runs as follows:-"9. Non-Competition: During the currency of this Agreement, Aral and its subsidiaries or affiliates will not market or distribute the aral Products within India, nor permit or authorize or support any other person to market or distribute products under the Aral brandname within India. Aral will promptly notify UPCL of any and all inquiries concerning the products from persons or entities located within India and will promptly refer any such person to UPCL. UPCL will, during the currency of this contract, not enter into any collaboration with a national or international corporation for products that are in competition to Aral Products. Blended Aral Products or rebranded Products. UPCL will inform Aral immediately upon each request coming up from such a competitor. "3. Subsequent to the execution of this agreement, application was made for approval of the Reserve Bank of India, which, it has been submitted by the learned counsel for the plaintiff, was necessary as per (he provisions of section 9 of the Foreign Exchange Regulation Act, 1973 ("fera" in short) and the approval was granted by the Reserve Bank of India by their letter dated 25th November 1994, which is marked as exhibit "d". I shall refer to this letter as the "first approval letter. I shall refer to this letter as the "first approval letter. " ( 4 ) THE original agreement also stipulated provisions for duration of the agreement in Clause 5. and major part of the dispute involved in the present suit revolves around the construction of this clause. This clause is also reproduced below: -"term and termination: After the initial three years term, the agreement may be terminated by UPCL or Aral by registered letter (six months notice) if the objectives mutually agreed upon are not reached for what reason ever. After the initial term the Agreement shall be prolonged for a term of additional five years and shall be extended automatically for periods of two years if notice of termination is not given by registered letter six months before the date of termination by either party. At any time during the term, either Aral or UPCL may terminate the Agreement in the event of either party fails to fulfill this agreement, after written notice and giving an opportunity to cure the failure, within a time given. Aral may terminate this Agreement if major changes in the majority of shareholders of UPCL occur. This is in order to safeguard aral's interest and Aral should give good reason for any objection. " ( 5 ) THE "first approval letter" stipulated certain conditions, one of which was that the letter of approval should form part of the collaboration agreement. This was contained in paragraph 3 of the first approval letter. Certain stipulations relating to the rate of royalty was also prescribed in this approval letter. There was another paragraph, being paragraph 2. which also stipulated certain conditions, which are reproduced below:-"2. You have our approval to enter into technical collaboration with m/s. Aral Aktiengesellschaft, Germany, for the manufacture of lubricating Oil subject to the conditions enumerated in the annexure. The terms of the collaboration will be as follows: a) Lumpsum fees : Nil. b) Royalty : 5% on domestic sales, for 3 years, net. of taxes. c) The total payment should not exceed 8% of sales over a period of 10 years form the date of agreement or 7 years from the date commencement of commercial production. d) Duration of the agreement will be ten years from the date of agreement or seven years from the date of commencement of commercial production. of taxes. c) The total payment should not exceed 8% of sales over a period of 10 years form the date of agreement or 7 years from the date commencement of commercial production. d) Duration of the agreement will be ten years from the date of agreement or seven years from the date of commencement of commercial production. " ( 6 ) AFTER receiving this approval, UPCL requested ARAL to execute a supplementary agreement with themselves, incorporating the first approval letter therein. The request was made by a letter dated 28th december 1994 (exhibit 1 ). In the third paragraph of this communication, UPCL had indicated: -"please note that terms and conditions of this approval are common to other collaborations being approved by the Government and this Supplementary Agreement does not disturb our original agreement in letter or in spirit. As and when the original agreement between ourselves is extended, the Reserve Bank of India approval will also be extended. " ( 7 ) THEREAFTER, a Supplementary Agreement was executed by and between UPCL and Aral, which specified that the first approval letter should form an integral part of the collaboration agreement. This agreement is dated 3rd January, 1995 (Exhibit "f") and shall be referred to henceforth as the first supplementary agreement. ( 8 ) AFTER the execution of these agreements, the arrangement between the parties was running smoothly, and Aral products had reasonable success in the Indian market. There is evidence to the effect that the plaintiff had spent substantial sum of money towards sales promotional, expenses. There was no dispute between the parties, i. e. between Aral and UPCL and the agreement ran nearly its full course, as stipulated by the Reserve Bank of India. ( 9 ) THERE was, however, certain alteration in the status of the ARAL in the intervening period. The first defendant, who, in the economic parlance can be described as a multinational company had acquired majority share holding in Burma Castrol Holdings Limited. U. K. , being the holding company of Castrol Ltd. U. K. , who in turn is the holding company of the second defendant in the instant suit, being Castrol India ltd. ("castrol" in short ). The first defendant also acquired Veba Oil, which was the parent company of Aral. This acquisition appears to have taken place between the months of February and July, 2002. ("castrol" in short ). The first defendant also acquired Veba Oil, which was the parent company of Aral. This acquisition appears to have taken place between the months of February and July, 2002. Thus both castrol India and Aral came under effective control of BP plc. (i. e. the first defendant ). All these companies are engaged in the same line of business, that is manufacturing and marketing of lubricants. ( 10 ) IT appears that UPCL, sometime during the end of 2001 became aware of market rumours, that Castrol India would start marketing Aral products because of BP pic's acquisition of Aral. Such rumour was brought to the notice of Aral, and Aral had assured UPCL that it was the policy of Aral and its potential new owner to honour legal rights. This state of affairs appears inter alia from a communication dated 20th december, 2001 of Motor Industries Co. Ltd. (MICO), a distributor of plaintiff addressed to UPCL (Exhibit "i"), and Aral's response to this communication (Exhibit. J) through facsimile, of even date. Motor industries Co. Ltd. is a distributor of UPCL, and the UPCL appears to have had directly sent the communication received from MICO to Aral. ( 11 ) THE association between UPCL and Aral, however, had continued. As the duration of the original agreement as stipulated by the Reserve bank of India was lapsing, UPCL's application for extension of time for the operation of Original agreement was granted. The approving authority this time, however, was the Department of Industrial Policy and Promotion, under the Ministry of Commerce and Industry of the government of India. This application appears to have been made on 3rd July 2005, and the approval was granted in the form of a communication dated 13th November, 2002 (Exhibit. "n" ). I shall refer to this communication as the second approval letter. The approval was granted subject, to certain terms and conditions specified therein, and i reproduce below some of these terms which I consider material for the purpose of adjudicating the subject-dispute. 4. Payments authorised herein under: (a) Royalty % age (Net of/sub. To taxes) (i ) Internal Sales 5. 00% (Five percent) Net of taxes (ii) Exports 8. 00% (Eight percent) The Royalty shall be payable for new products only. The Royalty shall be payable w. e. f. 1/1/2003 to 31/12/2009 during the extended period of the Collaboration Agreement. 4. Payments authorised herein under: (a) Royalty % age (Net of/sub. To taxes) (i ) Internal Sales 5. 00% (Five percent) Net of taxes (ii) Exports 8. 00% (Eight percent) The Royalty shall be payable for new products only. The Royalty shall be payable w. e. f. 1/1/2003 to 31/12/2009 during the extended period of the Collaboration Agreement. The Royalty shall be net of taxes. Tax liability, if any, will be borne by you. 5. Duration of the agreement: Duration of the Technology collaboration Agreement shall be 7 (Seven) years from the date of expiry of the earlier Agreement. I. e. w. e. f. 1/1/2003 to 31/12/2009. 14. This approval letter is made a part of the foreign collaboration agreement to be executed between you and the foreign collaborator and only those provisions of the agreement which are covered by this letter or which are not in variance with the provisions of this letter shall be binding on the Government of India or Reserve Bank of India. 15. The approval is valid for a period of two years from the date of issue. Within this period, you are required to file the collaboration agreement with the Reserve Bank of India/authorised Foreign exchange Dealer. 17. The agreement shall be subject to India laws. 20. A copy of the collaboration agreement, signed by both parties may be furnished to the following authorities: (A) Administrative Ministry/department as mentioned above. (B) Secretariat for Industrial Assistance (PAB-IL SECTION), department of Industrial Policy and Promotion, Udyog Bhavan, new Delhi - 110011. (C) Department of Scientific and Industrial Research, Technology bhavan, New Mehrauli Road, New Delhi. II. You are required to confirm acceptance of the above terms and conditions to Secretariat for Industrial Assistance (PAB -IL section)/rbi. III. All future correspondence for amendments/ changes in terms and conditions of the approval letter or for extension of validity, etc. , if required, may be addressed to the Entrepreneurial Assistance Unit of the Secretariat for Industrial Assistance, Udyog Bhavan, New delhi-110011. (Tel No. 011-3014088, Fax No. 011-3011770 ). " ( 12 ) A per the stipulation of Clause 14 of the second approval letter a further Supplementary Agreement, dated 27th December, 2002 was executed between UPCL and Aral, being Exhibit "o". Text of this supplementary Agreement is reproduced below: - SUPPLENTARY AGREEMENT Between Aral Aktiengesellschaft , Wittener Strasse 45, Bochum , Germany . " ( 12 ) A per the stipulation of Clause 14 of the second approval letter a further Supplementary Agreement, dated 27th December, 2002 was executed between UPCL and Aral, being Exhibit "o". Text of this supplementary Agreement is reproduced below: - SUPPLENTARY AGREEMENT Between Aral Aktiengesellschaft , Wittener Strasse 45, Bochum , Germany . And Universal Petro -Chemicals Ltd. , P-34, India Exchange Place , Kolkata , India. Both parties of the collaboration Agreement dated November 1st, 1994 hereby declare that the letter of approval from the Reserve Bank of India under FERA 1973. Ref. No. EC CO fitt/324/12. 51. 00/u-32/94/95, dated November 25th, 1994. Regn . No. FT 94 car 0633. And Extension No. : 109 (2002)/264 (2002)/pab-II. Of Secretariat for Industrial Assistance (PAB-IL section), Department of Industrial Policy & Promotion, ministry of Commerce & Industry, Government of India dated November 13, 2002. Should form an integral part of the Collaboration Agreement mentioned above. ( 13 ) THE plaintiffs case is that in November 2002. they received a hint of move by Castrol to take over the Aral brand in India. Thereafter, in the month of July 2003. Pradeep Halwasiya, a director of UPCL had visited Germany to discuss business prospects with Aral, and came across a communication sent to Aral by an executive of Castrol India. In this communication (Exhibit Q ). UPCL's exit from its arrangement with Aral in India was proposed in a probable scheme of controlling Aral business in India. However, the proposal in general was to not to continue the arrangement contemplated in the agreement dated 1st november, 1994. This was not acceptable to the plaintiff. However, castrol India continued interaction with Aral towards this end, which appears to have had been met with some resistance from Aral themselves. The plaintiff had taken up its case with the Chairman of the first defendant in U. K. seeking his intervention to enable UPCL to retain its position vis-a-vis Aral products under the said agreement. 13. 1. Eventually, however, by a letter dated 14th, April 2004 which is Exhibit "cc", Aral gave notice to the plaintiff to the effect that as provided in clause 5 of the said agreement, the aforesaid agreement would stand terminated on 31st October, 2004 and would not stand extended any further after 31st October, 2004. 13. 1. Eventually, however, by a letter dated 14th, April 2004 which is Exhibit "cc", Aral gave notice to the plaintiff to the effect that as provided in clause 5 of the said agreement, the aforesaid agreement would stand terminated on 31st October, 2004 and would not stand extended any further after 31st October, 2004. In the same notice it was also pointed out that the agreement upon trade market and design dated 1st November, 1994 would also stand terminated on 31st October,2004. ( 14 ) IT is the legality of this termination letter which the plaintiff has in substance questioned in the present suit, instituted on 12th august. 2004. The reliefs claimed in this suit is reproduced below: "the plaintiff prays for leave under Clause 12 of the Letters Patent and claim:a) Perpetual injunction restraining the defendants No. 1 and 2 from marketing in India any lubricant and in particular finished automative and industrial lubricant under the brand name of 'aral' or by using the design of 'aral';b) Perpetual Injunction restraining the defendant No. 3 and/or its servants and/or its agents from allowing or permitting anybody other than the plaintiff to market finished automative and industrial lubricant in India under the trade mark 'aral' or design of 'aral':c) Declaration that the collaboration agreement dated November1, 1994 read with supplementary agreements dated January3, 1995 and December 27, 2002 incorporated therein and agreement upon trade mark and design, copies whereof are annexured hereto are operative, subsisting and binding upon the defendant No. 3 and its associates including the defendants no. 1 and 2 herein till December 31, 2009;d) Declaration that letter of termination dated April 14, 2004, a copy whereof being annexures "g" hereto, be directed to be delivered up so that the same may be adjudged void and cancelled;e) Perpetual injunction restraining the defendant No. 3 and their associate, affiliate or agents from taking any step or from giving any effect to the letter of termination dated April 14, 2004 in any manner whatsoever;f) Perpetual injunction restraining the defendant No. 3 from acting in any manner contrary to or in breach of the collaboration agreement dated November 1, 1994 as modified by supplementary agreements dated January 3, 1995 and dated december 27, 2002 and the agreement upon trade mark and design being annexures "a", "b", "d" and "f" hereof and the defendants No. 1 and 2 from procuring breach thereof or acting contrary thereto in any manner whatsoever;g) Decree for specific performance of the said collaboration agreement and agreement upon Trade Marks dated November1, 1994 as modified by the supplementary agreement dated january 3, 1995 and December 27. 2002 executed by and between the plaintiff and the defendant No. 3;h) Perpetual injunction restraining the defendant No. 3 and/or its servants and/or its agents from interfering with the right of the plaintiff to market its products of finished automative and industrial lubricants under the trade mark 'aral' and by use of 'aral' design;i) Receiver; j) Injunction; k) Costs: 1) Further and other reliefs. " ( 15 ) THE plaintiffs main case is that the agreement in question cannot be terminated before 31st December, 2009 in terms of the second approval letter. The plaintiff also founded its case on two torts, being that of conspiracy and procuring breach of contract and claimed specific performance of the said agreement. On this count, the plaintiffs contention is that Castrol India is primarily responsible for causing the termination, which is illegal, and for this purpose the Castrol India conspired with the other two defendants. ( 16 ) THE defendant No. 3 has primarily resisted the claims of the plaintiff and the ground that the second approval letter only prescribed outer limit of the duration of the agreement, to travel beyond which parties were required to obtain fresh approval and right of the defendant no. ( 16 ) THE defendant No. 3 has primarily resisted the claims of the plaintiff and the ground that the second approval letter only prescribed outer limit of the duration of the agreement, to travel beyond which parties were required to obtain fresh approval and right of the defendant no. 3 to terminate the agreement by giving six months notice within the additional two year period as contained in clause 5 of the Original agreement survived the terms contained in the second approval letter. It has also been contended that the subject agreement was not capable of being specifically performed as it involved continuous activities from both the sides and if a decree for specific performance of the contract is granted that would require constant monitoring or supervision by the Court. ( 17 ) THE other limb of defence of Aral is that even if the plaintiffs case was proved, the compensation in money would have been adequate relief. On the aspect of the torts of conspiracy and procuring breach of contract, arguments were advanced by the learned counsel appearing for the first and second defendant as also by the learned counsel for aral. Their defence on this count has been that upon the first defendant effectively acquiring control of Castrol India and Aral, the question of combining together for conspiracy or for procuring breach of contract could not arise as all the three defendants ought to be treated as the same entity. It was also submitted that even if there was any connection among the defendants for acquiring the Aral business in india, this was in furtherance of their common economic objective and a lawful pursuit which could not give rise to cause of action for either of these two tortous actions. In particular, on behalf of the second and third defendant it was contended that even if the termination was illegal, they could not be held responsible for any civil wrong or illegal acts for the purpose of interacting with the third defendant. This in short is the summary of the nature of the dispute between the parties and their respective stand in this dispute. ( 18 ) ON the basis of these facts and pleadings, the following issues were framed by this Court for the purpose of adjudication of the present suit. "1) Is the suit maintainable? This in short is the summary of the nature of the dispute between the parties and their respective stand in this dispute. ( 18 ) ON the basis of these facts and pleadings, the following issues were framed by this Court for the purpose of adjudication of the present suit. "1) Is the suit maintainable? 2) Does this Court have the jurisdiction to try and determine this suit? 3) Whether the applicable law for construing the collaboration agreement dated 1st November. 1994 would be the law of germany or it would be the Indian law? 4) Having regard to the approval given by the Reserve Bank of india in respect of the collaboration agreement what would be the duration of the contract entered into by and between the parties? 5) Whether the agreement dated 1st November, 1994 is terminable by six months notice and whether the letter of termination as alleged in paragraph 44 of the plaint is legal and valid or is the contract valid till 31st December. 2009? 6) Did the defendant Nos. 1 and 2 conspire together, as alleged in the plaint for the purpose of procuring breach and consequential termination of the contract between the defendant No. 3 and the plaintiff? 7) Whether having regard to the status of the contract the plaintiff is entitled to exclusive right of use of the brand 'aral' in India? 8) Whether the plaintiff has any right to sell lubricants under the brand name 'aral' with 'aral' design in India? 9) To what reliefs, if any the plaintiff is entitled to?" ( 19 ) ARGUMENT has been advanced by two learned senior counsels, mr. B. K. Bachawat for the first and second defendants and Mr. Sudipto sarkar for this third defendant. However, both the learned counsels have made submissions on several similar issues in favour of their clients, and I shall, in this Judgment refer to the defendants' arguments collectively, barring on issues on which independent arguments have been advanced by the learned counsels on behalf of their clients. ( 20 ) ON the first issue I do not find any reason as to why the instant suit would not be maintainable and no argument has been advanced by the defendants on this issue, and accordingly I decide this issue in favour of the plaintiff. ( 20 ) ON the first issue I do not find any reason as to why the instant suit would not be maintainable and no argument has been advanced by the defendants on this issue, and accordingly I decide this issue in favour of the plaintiff. On the aspect of the jurisdiction of this Court, learned counsel for Aral did not raise any objection as regards the jurisdiction of this Court to try the present suit. The suit was filed upon obtaining leave under Clause 12 of the Letters Patent and from paragraphs 7, 8, 10, 21, 23, 26. 42. 48 and 58 of the plaint. I find that the cause of action pertaining to the present suit has partly arisen within the jurisdiction of this Court. As such I am of the view that this court has the jurisdiction to entertain, try and determine the instant suit. The second issue thus is answered in the affirmative. ( 21 ) THE third issue, being the applicable of law for adjudication of the dispute also was not contested by the defendants in course of hearing though this point was taken in the written statement of Aral. I also find from clause 17 of the second approval letter that the agreement shall be subject to the Indian laws. I am thus satisfied that indian law would be applicable in adjudication of the present suit. ( 22 ) I propose to deal with the issue No. 4 and 5 together as both these issues relate to the right of Aral to terminate the contract. Before I do that, however, I would briefly discuss the nature of the evidence given by the witnesses of the respective parties. On behalf of the plaintiff, three witnesses have been examined. They are Mr. Pradeep Halwasiya, a director of the plaintiff, and two chartered accountants, Sanjay dharamraj Sonawane and J. D. Thakkar. Both these chartered accountants were involved with accounting of UPCL, and have deposed on financial position of the plaintiff and the turnover and expenses concerning Aral products. The broad theme of Mr. Halwaisya's evidence has been that the agreement between the plaintiff and Aral was meant to be an "evergreen" one, implying a continuing arrangement, which was disrupted primarily by Castrol India Ltd. His further evidence has been that before 2009. there could be no termination. ( 23 ) MR. Hans Herman Brunholt. The broad theme of Mr. Halwaisya's evidence has been that the agreement between the plaintiff and Aral was meant to be an "evergreen" one, implying a continuing arrangement, which was disrupted primarily by Castrol India Ltd. His further evidence has been that before 2009. there could be no termination. ( 23 ) MR. Hans Herman Brunholt. Manager of Aral has been examined on behalf of the defendant No. 3. His evidence, in sum. is that the understanding of the parties was that the agreement was terminable as per clause 5 of the original agreement, and this position was not altered by the two approval letters. However, he accepted the participation of Castrol India Ltd. in the process which eventually resulted in the issuance of the termination letter, and has admitted that there was divergence of opinion within the Aral regarding terminating the agreement with UPCL, and he himself was against such termination. ( 24 ) ON the aspect of termination of the agreement, the plaintiff has founded their case on two main planks. It has been contended the second approval letter is statutory in nature and it has specified the duration of the agreement to be uptil 31st December, 2009. The expression "shall" has been used to describe the length of time the agreement should operate, and hence clause 5 of the original agreement which permits termination upon giving notice of six months cannot survive during the period specified in the second approval letter. For the proposition that the statutory provision should override the contractual terms, plaintiff has relied on a decision of an Hon'ble division Bench of this Court being Universal Petro Chemicals Ltd. v. Rajasthan State Electricity Board. 2001 (2) CHN 300 . ( 25 ) THE second limb of the plaintiffs submission on the impact of clause 5 of the second approval letter and clause 5 of the original agreement is that since the parties engrafted the approval letter as part of their contract, on a plain reading of the two clauses, even if it is assumed that clause 5 of the Original Agreement survives, the effect would be that the right of termination would stand overridden by the "duration term" contained in clause 5 of the second approval letter i. e. uptil 31st December, 2009. On this basis, it has been argued, I should avoid taking extrinsic aid to construe the meaning and import of these clauses. On this aspect the plaintiff has relied on three authorities being Chunchun Jha v. Ebadat All, AIR 1954 SC 345 , L/c of India v. Dharamvir Anand, 1998 (7) SCC 348 , Rabin and Ors. v. Gerson Berger association Ltd. and Ors. . 1985 (1) All ER 1041. ( 26 ) ON behalf of the Aral, however, it has been submitted that the sole object of seeking approval of the RBI at the fist stage and the government of India at the second stage was for the purpose of remitting royally in foreign exchange and the clause relating to duration in the approval letter was standard clause which is attached to all such approvals and the same could not be held to have overridden the agreement reached between the parties. It has been the understanding of the plaintiff themselves that a similar clause in the letter of first approval was not meant to effect in variation to the terms of the agreement and on this point learned counsel for Aral placed reliance on a letter of the plaintiff under which the first supplementary agreement was forwarded to Aral. The date of this letter of UPCL is 28th december, 1994 which is exhibit 1, and the specific clause on which reliance has been placed, I have already adverted to in the earlier part of this Judgment. The witness of the defendant No. 3, one Hans herman Brunholt in his affidavit-evidence has also referred to this letter. On behalf of the defendants, argument on this count has been that the approval of the Government of India was only for the purpose of permission to remit royalty, and other terms and conditions were mere standard forms which could not override the agreement between the parties. It was argued that these standard clauses bound the parties to the Reserve Bank of India or Government of India, but even a contrary term agreed by and between the parties was not overridden by this letter of approval. In support of this argument, my notice was drawn to clause 14 of the Second Approval Letter. It was argued that these standard clauses bound the parties to the Reserve Bank of India or Government of India, but even a contrary term agreed by and between the parties was not overridden by this letter of approval. In support of this argument, my notice was drawn to clause 14 of the Second Approval Letter. Since the original agreement continued to subsist, the right to terminate giving six months' notice within the two year period also survived Reliance has been placed on the decision of the Hon'ble Supreme Court of India in the case of the Godhra Electricity Company Ltd. and Anr. v. The State of gujarat and Anr. , AIR 1975 SC 32 for the proposition that if the parties interprete the terms of a document in a particular way, that interpretation would be a reasonable guide for construction of the document if there remains doubt as to its true meaning. ( 27 ) THE guiding rule on this issue, in my opinion, has been laid down in the case of Chunchun Jha (supra) and paragraph 6 of this Judgment is reproduced below:"the first is that the intention of the parties is the determining factor: see- 'balkishen Das v. Loggo,' 22 Ind. App. 48 (PC) (A ). But there is nothing special about that in this class of cases and here, as in every other case, where a document has to be construed, the intention must be gathered, in the first place, from the document itself. If the words are express and clear, effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out. The real question in such a case is not what the parties intended or meant but what is the legal effect of the words which they used. If, however, there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended. " ( 28 ) IN my opinion, authorities are quite clear on the point that one can revert to extrinsic aid for construction of a document only if its meaning cannot be ascertained from a plain reading of the document. This is the consistent view of the Courts of both India and the U. K. as would appear from the case of L/c of India (supra) and Rabin and Ors. (supra ). This is the consistent view of the Courts of both India and the U. K. as would appear from the case of L/c of India (supra) and Rabin and Ors. (supra ). The decision of the Hon'ble Supreme Court relied upon by the defendants do not also depart from this rule of construction. ( 29 ) NOW I am to see the impact of clause 5 of the second approval letter on clause 5 of the original agreement. As it would appear from clause 5 of the original agreement, there was a trial period of three years followed by a five year freeze period during which the contract could not be terminated unless there was a breach. The agreement has completed this five year freeze period. Thereafter, the contract was supposed to continue automatically for a duration of two years at a time. Within this period of two years the parties had the liberty of terminating by giving advance notice of six months. As I have observed earlier, the eight year term of the agreement has run its course and the dispute has arisen within the first two year period. The letter of termination had been issued relying on clause 5 of the Original Agreement. However, while construing this clause I cannot overlook clause 5 of the approval letter, which by virtue of the second supplementary agreement has become engrafted in the main agreement by express intention of the parties. I do not think the defendants can draw any assistance from the provisions of clause 14 of the second letter of approval as the duration clause has been made a specific term of the agreement. This clause does not. in my opinion, exonerate the parties from complying with the terms imposed by the second letter of approval. It only exempts the Government of India or the Reserve Bank of India from being saddled with any condition independently agreed upon by the parties. ( 30 ) IS there an ambiguity between these two clauses? This is what i am to test first, for resolving this part of the controversy. Cases were cited and substantial argument was advanced on behalf of the defendants that if an agreement contains a manuscript part as also printed clauses, or standard forms, the manuscript part would prevail over the printed clause. This is what i am to test first, for resolving this part of the controversy. Cases were cited and substantial argument was advanced on behalf of the defendants that if an agreement contains a manuscript part as also printed clauses, or standard forms, the manuscript part would prevail over the printed clause. The authorities on this proposition are: m/s. China Cotton Exporters v. Beharilal Ramcharan Cotton Mills Ltd. , air 1961 SC 1295 united Bank of India Ltd. v. Nederlandsche. Standard Bank, AIR 1962 cal 325 glynn and Co. and Ors. v. Margetson and Ors. , (1891-94) All ER Reprint 693 at 697 ( 31 ) IN my opinion, however, the second letter of approval could not be treated as standard form. This is so, firstly because this was introduced by way of a statutory requirement and parties consciously engrafted this clause as part of the agreement. I am also unable to accept the argument that just because this approval was necessary for the purpose of remitting royalty in foreign currency, other conditions imposed by the approval letter shall be of inferior legal strength. These are the conditions based on which the approval to remit royalty abroad was granted and all of these conditions do not directly relate to payment of royalty. Both the parties have engrafted these clauses in the agreement, and thereby have made themselves bound by the clauses stipulated therein. It was also argued on behalf of the defendants that this "freeze period" could not be made operable when there was breach of the agreement and hence it could not be held to be a "freeze period" overriding the termination right with six months notice. This is, however, a hypothetical issue and in any event there is a stipulation in clause 20 of the second approval letter that for amendments/changes in terms and conditions of the approval letter if required were to be addressed to certain government department. ( 32 ) HAVING considered all these aspects and the authorities cited by the respective parties, I am of the view that though these two clauses cannot survive together, there is no ambiguity in the agreement at present. ( 32 ) HAVING considered all these aspects and the authorities cited by the respective parties, I am of the view that though these two clauses cannot survive together, there is no ambiguity in the agreement at present. Use of the expression "shall" in clause 5 of the second approval letter clearly confers on this clause a mandatory status or character and in my opinion this clause in effect freezes the right of the parties to terminate the agreement before 31st December, 2009. This may be contrary to the provisions of clause 5 of the original agreement, but there is no ambiguity in this. If the agreement continues in its present form beyond 31st December. 2009. and without a similar condition being imposed by the Government of India, the termination right of the parties within the two year period would revive. A condition imposed by the Government of India subsequently engrafted in the original agreement should prevail over the original term. The introduction of such a term, in my opinion, is a modification of the original agreement. And introduction of this clause is not a mere "standard clause", to be ignored by the Court. There are three other aspects on which arguments have been advanced by the parties on this issue. On behalf of plaintiff, it was submitted. that as per the Press Note No. 18 (1998 series) (which forms part of Exhibit "aa") issued by the Government of india, Ministry of Industry, approval of foreign/technical collaborations under the automatic route with previous ventures/tie-ups in India ought not to jeopardise the interests of the existing joint venture or technology/trade mark partner or other stake holder. On behalf of the defendants, however, it has been argued that this press note has since been superseded and the embargo does not survive. However, no evidence has been led on behalf of either of the parties as regards applicability of this Press Note on the subject-dispute and as I have proceeded on the basis that clause 5 has become part of the agreement between the parties. I am of the view that the question of applicability of the Press Note in question on the subject-dispute is not necessary for deciding these two issues. I am of the view that the question of applicability of the Press Note in question on the subject-dispute is not necessary for deciding these two issues. ( 33 ) ON behalf of the defendants, the decision of the Hon'ble Supreme court in the case of Chunchun Jha (supra) was sought to be distinguished on the point that in the dispute involved in that case, construction of only one document was involved. In my opinion, however, number of documents involved in a dispute is not of material importance for deciding as to whether the documents should be construed on their face, or extrinsic aid shall be reverted to for their construction. If the meaning can be gathered even from reading together multiple documents, in my opinion it does not become necessary to revert to extrinsic aids or surrounding circumstances. ( 34 ) A letter addressed to Lord Browne of Madingley by the plaintiff dated 3rd March 2004. which is exhibit "aa", has been relied upon by the learned counsel for Aral, to demonstrate that the plaintiff had acknowledged the right of Aral to terminate the agreement. This letter, however, in my opinion cannot be construed in that manner. In this communication itself, it has been stated that the "purported cancellation of contract between Aral and UPCL may or may not stop UPCL's access to the 'aral' brand: but the provisions of the Government Notification will still not allow Castrol India the rights to the 'aral' brand in India. " ( 35 ) THIS, that is the object of approval under foreign exchange laws was one of the grounds on the basis of which the interlocutory motion taken out by the plaintiff was rejected by the Hon'ble Interlocutory judge, which order was confirmed by an Hon'ble Division Bench of this court, and was challenged before the Hon'ble Supreme Court of India. This was adopted as part of Aral's submissions. There was some argument on the question as to whether these orders would have any persuasive value at the time of trial, but I am of the opinion that these issues should be considered afresh because the order of the Hon'ble interlocutory Judge was only on a prima facie appreciation of facts and law. There was some argument on the question as to whether these orders would have any persuasive value at the time of trial, but I am of the opinion that these issues should be considered afresh because the order of the Hon'ble interlocutory Judge was only on a prima facie appreciation of facts and law. ( 36 ) ACCORDINGLY, I am of the opinion that the Aral is not entitled to terminate this agreement before 31st December, 2009 save for breach of any clause thereof, and the letter of termination dated 14th April, 2004 was issued in violation of the terms agreed upon by and between the parties, and the termination of the agreement was illegal. ( 37 ) I shall deal with the issue No. 6 now which, calls for adjudication as to whether the defendants were guilty of committing the tort of conspiracy or procuring breach of the contract between the Aral and upcl. These are in fact two independent torts, but arguments was advanced by the plaintiff on these two torts in a composite manner. These two torts belong to the genre of economic torts, and the basic ingredient of these torts are combined acts of more than one person to cause injury to a third party. As I have understood from the authorities cited by the learned counsels appearing for the parties to which I shall refer to in the following paragraphs, to sustain an action of conspiracy, unlawful object of the combiners is necessary, whereas in the case of procurement of breach of contract, mere interference by a combination of persons into a subsisting arrangement between two or more parties to disrupt such arrangement may constitute commission of this tort. ( 38 ) IN the present case, the evidence of Castrol India prompting Aral for terminating the contract is there. There is a letter of Castrol India to Aral dated 3rd July. 2003 (exhibit Q) in which there is suggestion for enhancing Aral's business in India to capture UPCL's business, by castrol India. Exhibit "u" is an e-mail originating from Castrol India's roger Elston-Green, informing Aral Castrol's lawyers's advise that six months' termination notice should b'e given to UPCL. Exhibit "w", again an E-mail from the same individual, i. e. Roger Elston-Greene informing aral that they were taking advise of their lawyers. Exhibit "u" is an e-mail originating from Castrol India's roger Elston-Green, informing Aral Castrol's lawyers's advise that six months' termination notice should b'e given to UPCL. Exhibit "w", again an E-mail from the same individual, i. e. Roger Elston-Greene informing aral that they were taking advise of their lawyers. Thus, involvement of Castrol India in the decision making process for terminating the contract, which I- have already held, was not lawful, stands established. On this point the plaintiff has relied on the English decision being Esso petroleum Co. Ltd. v. Kingswood Motors, 1974 (1)) Q:b. 142 in which an earlier english authority, being Torqay Hotel Co. Ltd. v. Cousins, (1969)2 ch 106 has been relied on. In the case of ESSO, the following observation in the case of Torqay Hotel Co. Ltd. has been quoted:"first, there must be interference in the execution of a contract. The interference is not confined to the procurement of a breach of contract. It extends to a case where a third person prevents or hinders one party from performing his contract, even though it be not a breach. Second, the interference must be deliberate. The person must know of the contract or, at any rate, turn a blind eye to it and intend to interfere with it. . . . . Third, the interference must be direct. " ( 39 ) THIS case is an authority on the tort of inducing breach of contract. ( 40 ) ON behalf of the defendants it has been contended that use of unlawful means is necessary procuring the tort of conspiracy or procuring breach of contract and for this purpose reliance has been placed on the case of Torqay Hotel case (supra ). In addition five other authorities have been cited, being Electrosteel Casting Ltd. v. Saw Pipes (2005) (1) CHN 612, Crofter Hand Woven Harris Tweed Co. Ltd. and Ors. v. Veitch and Anr. . (1942) Appeal Cases 435. Lonrho Ltd. and Ors. v. Shell Co. Ltd. and Ors. (1981)2 All ER 456 and Lonrho PLC v. Fayed and Ors. , (1991)3 all ER 303 and Morgan v. Fry and Ors. , being a decision of Court of Appeal, civil Division, reported in (1968)3 All ER 452. Both the Lonrho cases are decisions of the House of Lords. Lonrho Ltd. and Ors. v. Shell Co. Ltd. and Ors. (1981)2 All ER 456 and Lonrho PLC v. Fayed and Ors. , (1991)3 all ER 303 and Morgan v. Fry and Ors. , being a decision of Court of Appeal, civil Division, reported in (1968)3 All ER 452. Both the Lonrho cases are decisions of the House of Lords. These authorities have been cited in support of the proposition that the tort of conspiracy or procuring breach of contract would not be sustained if the predominant intention is to advance certain economic objective, even if the same causes injury to another party. On this aspect, it has been argued that since all the three defendants are presently inter-connected, defendant No. 1 and 3 being under the control of the first defendant, these three corporations should be treated as a single entity having same economic interest and as such the whole question combining to commit either of these to torts do not arise. For this proposition four authorities have been relied on by the learned counsel for the defendants. These authorities are LIC of India v. Escorts Ltd. . AIR 1986 SC 1370 . New Horizons Ltd. and anr. v. Union of India and Ors. , reported in (1995) 1 SCC 478 and Delhi development Authority v. Skipper Construction Co. Pvt. Ltd. and Anr. . reported in (1996)4 SCC 622 , DHAT Food Distribution Ltd. and Ors. v. London Borough of Tower Hamlets. (1976) 3 All ER 462. ( 41 ) ANOTHER technical objection has been taken by the defendants' counsel that no particular of conspiracy or procuring breach of contract has been pleaded in the plaint. To establish the necessity to do so the decision of the Honble Supreme Court in the case of V. S. Viswavidyalaya v. Raj Kishore. AIR 1977 SC 615 has been cited. ( 42 ) I shall deal with this technical point first while testing the pleading to see if particulars have been given. The trend in legal circles in India is to generally match the practise of pleading with the english practise, where the details of the allegations are composed in sub-paragraphs in a plaint, in a separate paragraph entitled "particulars". In India, as per Order 6 Rule 4 of the Code of Civil Procedure, requirement to give particulars has been mandated in certain cases, though no specific format has been specified. In India, as per Order 6 Rule 4 of the Code of Civil Procedure, requirement to give particulars has been mandated in certain cases, though no specific format has been specified. In the case of V. S. Viswavidyalaya (supra), in a case involving allegation of collusion, an earlier decision of the Hon'ble Supreme Court Bishundeo v. Seogeni Rai, air 1951 SC 280 was referred to, in which it was held:"general allegations are insufficient even to amount to an averment of fraud of which any Court ought to take notice, however, strong the language they are couched may be, and the same applies to undue influence and coercion. " ( 43 ) THIS decision, is an authority that the pleading must contain specific allegations, but does not stipulate any format in which they may be expressed. In the pleading of the plaintiff, I find at least the allegations of these two torts are fairly specific, and hence do not accept this technical objection. ( 44 ) THE plaintiff has countered the argument of the defendants, which in essence invites the Court to lift the corporate veil, on the ground that in the written statement this defence of common identity was not taken and all the three defendants have been represented as independent corporate activities. I am also inclined to agree with the plaintiff on this aspect. The cases in which the Hon'ble Supreme Court and the English Courts considered lifting of corporate veil are entirely different from the facts of the present case. In the case of LIC (supra)the observation of the Hon ble Supreme Court is that the corporate veil may be lifted in cases where improper or fraudulent conduct is sought to be prevented by associated or inextricably linked companies. I do not think this authority is applicable in the facts of the present case. The case of New Horizons (supra) relates to ascertaining as to whether a company is a joint venture corporation or not and the Delhi Development authorities case (supra) is a case involving charge of fraud. The factual basis of this case is, however, entirely different from these four authorities and as all the three corporations in the present case are admittedly distinct corporate entities as pleaded in the written statement filed by the first defendant in the following manner:"1. The factual basis of this case is, however, entirely different from these four authorities and as all the three corporations in the present case are admittedly distinct corporate entities as pleaded in the written statement filed by the first defendant in the following manner:"1. (b) The entire cause of action in the present suit is governed by two agreements between the plaintiff and the defendant No. 3 and the rights and liabilities of the parties arising therefrom. The defendant No. 1 is not a party nor is it concerned with the said two agreements in any manner whatsoever. The mere fact that this defendant is the holding company of Burmah Castrol Holdings limited or that Burmah Castrol Holdings Limited is the holding company of the holding company of the defendant No, 2 does not make this defendant either a necessary or proper party in this suit. Further, the fact that Veba Oil being the parent company of the defendant No. 3 became a wholly owned subsidiary of this defendant does not make this defendant either a necessary or a proper party to the above suit. This defendant is not concerned with the letter of termination dated 14th April, 2004 which was issued by the defendant No. 3 from Germany, being the subject matter of challenge in the present suit. " ( 45 ) SINCE the controlling company themselves have taken the stand that the other two companies are independent entities, I decline to accept the plea that the corporate veil is required to be lifted to confer common identity on the defendants in the facts of the present case. ( 46 ) NOW that I have decided not to lift the corporate veil, I am to see as to whether the defendants have committed either of these two torts. The defence is broadly same in response to the allegation of commission of both the torts. This defence is that the acts complained against was committed in pursuance of legitimate objective of the defendants to further their own economic interest and the ensuing injury to the plaintiff was incidental to achieving such objective. This appears to be the ratio of the three English decisions being Crofter Hand woven Harris Tweed (supra) and the two decisions involving Lonrho PLC. The decision in the case of Morgan v. Fry (supra) relates to the Tort of conspiracy. This appears to be the ratio of the three English decisions being Crofter Hand woven Harris Tweed (supra) and the two decisions involving Lonrho PLC. The decision in the case of Morgan v. Fry (supra) relates to the Tort of conspiracy. While considering this aspect of the dispute, I am to consider the fact that I have already held that the termination of the agreement was in breach of the provisions contend therein and hence not legal. The best exposition on this branch of law in my opinion appears from the speech of law Diplock in the first Lonrho case where as his lordship observed:"my Lords, conspiracy as a criminal offence has a long history. It consists of the agreement of two or more persons to effect any unlawful purpose whether as their ultimate aim, or only as a means to it, and the crime is complete if there is such agreement, even though nothing is done in pursuance of it. I cite from Viscount simon LC's now classic speech in Crofter Hand Woven Harris Tweed co. Ltd. v. Veitch, (1942), All ER 142 at 146, (1942) AC 435 at 439. Regarded as a civil tort, however, conspiracy is a highly anomalous cause of action. The gist of the cause of action is damage to the plaintiff, so long as it remains unexecuted, the agreement, which alone constitutes the crime of conspiracy causes no damage, it is only acts done in execution of the agreement that are capable of doing that. So the tort. unlike the crime, consists not of agreement but of concerted action taken pursuant to agreement. As I recall from my early years in the law, first as a student and then as a young barrister, during its chequered history between Lord coleridge CJ's Judgment at first instance in Mogul Steamship Co. v. Mcgregor. Gow Co. , (1888)21 QBD 544 and the Crofter case, the civil tort of conspiracy attracted more academic controversy than success in practical application. Why should an act which causes economic loss to A but is not actionable at his suit if done by B alone become actionable because B did it pursuant to an agreement between B and C? Gow Co. , (1888)21 QBD 544 and the Crofter case, the civil tort of conspiracy attracted more academic controversy than success in practical application. Why should an act which causes economic loss to A but is not actionable at his suit if done by B alone become actionable because B did it pursuant to an agreement between B and C? An explanation given at the close of the nineteenth century by Bowen LJ in the Mogul case 23 QBD 598 at 616 when it was before the Court of Appeal was, "the distinction is based on sound reason, for a combination may make oppressive or dangerous that which if it proceeded only from a single person would be oppressive or dangerous that which if it proceeded only from a single person would be otherwise. . . . But to suggest today that acts done by one street-corner grocer in concert with a second are more oppressive and dangerous to a competitor than the same acts done by a string of supermarkets under a single ownership or that a multinational conglomerate such as Lonroho or oil company such as Shell or BP does not exercise greater economic power than any combination of small business is to shut one's eyes to what has been happening in the business and industrial world since the turn of the century and. in particular, since the end of the 1939-45 war. The civil tort of conspiracy to injure the plaintiffs commercial interests where that is the predominant purpose of the agreement between the defendants and of the acts done in execution of it which cause damage to the plaintiff must I think be accepted by this House as too well-established to be discarded, however, anomalous it may seem today. It was applied by this House eighty years ago in Quinn v. Leathern, (1901) AC 495. (1900-3) All ER Rep 1, and accepted as good law in the Crofter case in 1942, where it was made clear the injury to the plaintiff and not the self-interest of the defendants must be the predominant purpose of the agreement in execution of which the damage-causing acts were done. " ( 47 ) IN the present case, from the evidence, particularly Exhibit "q", being the letter of Roger Elston Green of Castrol India, the economic object for "capturing the value UPCL extracts from this business is quite clear. " ( 47 ) IN the present case, from the evidence, particularly Exhibit "q", being the letter of Roger Elston Green of Castrol India, the economic object for "capturing the value UPCL extracts from this business is quite clear. At the same time, there is evidence, in Exhibit "i", "k", "z" and "kk" that Castrol was informing the market about their taking over Aral products. ( 48 ) ON this point, I am of the view that since object of Castrol India was predominantly economic, and there is evidence that they tried to accommodate UPCL within the proposed scheme of things, though in a different role, defendant Nos. 1 and 2 cannot be held to have committed any of these two torts, though their persuasion may have resulted in wrongful termination of contract. From the evidence, I cannot come to a conclusion that their main intention was to harm or injure the plaintiff. The motivating factor for this step was to obtain greater control of market. In this regard, Lord Diplock's observation in first Lonrho case is relevant:"i am against extending the scope of the civil tort of conspiracy beyond acts done in execution of an agreement entered into by two or more persons for the purpose not of protecting their own interests but of injuring the interests of the plaintiff. " ( 49 ) THE issue Nos. 7, 8 and 9 in a way are interlinked in that these issues relate to the relief the plaintiff would be entitled to. If I am to answer the issue No. 7 and 8 in the affirmative that would amount to decreeing the specific performance of the agreement. Thus, I propose to deal with these three issues together. ( 50 ) THE plaintiff in the suit has not claimed any damages or monetary compensation. The reliefs claimed are primarily in the nature of specific performance of the contract. The defence to this claim is also the usual defences in any suit for specific performance of contract, being (i) Monetary compensation was adequate in the present suit, (ii) The plaintiff is seeking specific performance for agreement relating to movable property, (iii) The agreement in question involves performance of an agreement in minute details, which cannot be monitored or supervised by the Court. On this aspect I propose to refer to the defendants case first. On this aspect I propose to refer to the defendants case first. On the question whether the relief in monetary terms would be adequate or not, learned counsel for the defendants have relied on the decision of the Judicial Committee of Privy Council in the case of Ramji v. Rao Kishore Singh, reported in 56 Indian Appeals, page 280. In this case there was a specific finding that the compensation in money would be adequate relief to the plaintiff. That is what I am to test now in the facts of the present case. Learned counsels for the defendants have resisted the reliefs claimed by the plaintiff on this ground on the basis of section 14 (l) (a) of the Specific relief Act, 1963. ( 51 ) THERE is no cogent evidence from the plaintiff as to why compensation in monetary terms would not be adequate relief for them in the present case. But this Court again cannot lose sight of the fact that the modern commercial world has undergone substantial changes and a large part of business are conducted through this kind of franchise or joint venture agreements. In the case of Evans Marshall and Co. Ltd. v. Bertola SA, reported in 1973 (1) All ER. 1992, it was held:"the Courts have repeatedly recognised that there can be claims under contracts in which, as here, it is unjust to confine a plaintiff to his damages for their breach. Great difficulty in estimating these damages is one factor that can be and has. been taken into account. Another factor is the creation of certain areas of damage which cannot be taken into monetary account in a common law action for breach of contract: loss of goodwill and trade reputation are examples- see also, in another sphere, the Judgment of Jenkins LJ in Vine v. National Dock Labour Board which, albeit a dissenting judgment, was unanimously adopted in toto in the House of Lords. Generally, indeed, the grant of injunctions in contract cases stems from such factors. " ( 52 ) PRADEEP Halwaisya, the plaintiffs witness in answer to question 237 has stated that their profitability has drastically come down ever since sale of Aral has come down. There is evidence, however, that they have introduced another product of their own in the market. Generally, indeed, the grant of injunctions in contract cases stems from such factors. " ( 52 ) PRADEEP Halwaisya, the plaintiffs witness in answer to question 237 has stated that their profitability has drastically come down ever since sale of Aral has come down. There is evidence, however, that they have introduced another product of their own in the market. It has been submitted that sale of Aral has come down because of uncertainty created in the market. It has also been submitted that if the contract is terminated, UPCL's' trade reputation shall suffer to a great degree. The drop in sale of Aral products appear from Exhibits 4 which is statement of sale of Aral products in the month-wise break-up from april 2000. There is another aspect on which the learned counsel for the plaintiff has advanced argument on is that overall loss of goodwill is incapable of being valued so far as the plaintiff is concerned if the contract is terminated. In support of this argument, reliance has been placed on the case of Gujrat Petroleum Company Ltd. and Ors. v. Coca Cola, (1995)5 SCC 545 . ( 53 ) THE current authorities on this aspect appears to be running against the strict rule for declining grant of decree of specific performance of a contract on the ground of adequacy of relief in terms of compensation in monetary terms. Two authorities in this regard cited by the plaintiff are Vipin Mehra v. Star India Pvt. Ltd. , reported in Arb LR 2003 (3) at page 178 and Vijaya Mineral v. Bikash Chandra Dev, reported in AIR 1996 Cal. 67 . In the light of these facts and the authorities I am of the view that reliefs claimed by the plaintiff cannot be rejected solely on the ground that damages would have been adequate to compensate the low caused to the plaintiff. ( 54 ) NEXT defence was based on section 14 (l) (b) of the Specific Relief act. ( 55 ) THE learned counsel for the plaintiff has submitted that the law on this aspect has advanced substantially, and in appropriate cases, to prevent injustice, specific performance of a contract can be decreed, even though some element of supervision becomes necessary. ( 54 ) NEXT defence was based on section 14 (l) (b) of the Specific Relief act. ( 55 ) THE learned counsel for the plaintiff has submitted that the law on this aspect has advanced substantially, and in appropriate cases, to prevent injustice, specific performance of a contract can be decreed, even though some element of supervision becomes necessary. The decisions relied on by the plaintiff in support of this argument are: (i) Tito v. Waddell, 1977 (1) Ch D 106, (ii) Vijaya Mineral's case (supra), (iii) Barrow v. Chappel, 1976 RFC 355 (iv) Cookev. Chilcott, (1876)3 Ch D 694 ( 56 ) THE alternative argument on this count has been that if a decree in terms of prayer (h) is granted, that would not require arm kind of monitoring. This relief, if granted, would in effect entitle UPCL the exclusive use of the brand Aral in India till 31st December, 2009. ( 57 ) I find from the original agreement that there is requirement of close association between the parties thereto, that is the plaintiff and the defendant for giving effect to the original agreement. For instance, as per Clause 2 of the original agreement, for blending Aral is to provide additive packages for certain lubricants, which is to be agreed upon in future. To manufacture and market blended Aral products. Aral's written approval is necessary. For Rebranding, under clause 3, again the Aral's approval is necessary. The price of Aral products and Aral concentrate to UPCL are also to be agreed upon. UPCL is required to promote and extend distribution of Aral products, and Aral is to provide technical and promotional support as contemplated in clause 7 of the agreement. All these clauses, to be given effect to require continuous association and collective steps by the parries to the agreement. ( 58 ) ON behalf of the plaintiff, however, it has been submitted that this would not be necessary and for this purpose. I have been taken through the answer of Hans Herman Brunholdt to questions 88 and 89, in course of his examination, where he stated that Aral has made no contribution in respect of the agreement other than receiving royalty. I have been taken through the answer of Hans Herman Brunholdt to questions 88 and 89, in course of his examination, where he stated that Aral has made no contribution in respect of the agreement other than receiving royalty. However, just because in this wise in the past it has happened like this, if I direct the specific performance of the agreement on the assumption that such close association involving performance of the agreement in details would not be necessary in future, it would amount to presuming situations contrary to what has been agreed upon between and by the parties in writing, and would also be contrary to the terms set by Government of India in clause 4 of the second approval letter. This clause stipulates that Royalty shall be for new products only. The three authorities cited by the plaintiff being Vijaya Mineral's case (supra), TWo v. Waddell (supra) Barrow v. Chappel (supra) and the case of Jairam Valjee v. Indian Iron and Steel Company, AIR 1940 Cal 466 deal with situations entirely different from that involved in the present case. The case of Tito v. Waddel was concerned with mining lease in which continuous joint participation and performance of mutual obligations for giving full effect to the contract was not necessary. The Vijaya mineral's case (supra) also related to agreement on mining lease. In the case of Jairam Valjee, again the contract was for purchase of certain minerals, which were specific goods, and the contract involved monopoly purchase. In the present case, however, at present evidence shows that aral products at present form less than 10% of the plaintiffs turnover. In the case of Barrow v. Chappel (supra), the contract again related to publication of musical work, for execution of which requirement of supervision was minimal. ( 59 ) ON this aspect, on behalf of the defendant No. 3, three authorities were cited, being: (i) Gujarat Bottling Co. Ltd. v. Coca Cola Co. and Ors. (supra) (ii) S. A. Mills Corporation v. Custodian of Evacuee Properties, AIR 1957 Bom 119 (iii) Vinod Chandra v. Vivekanand Mills, AIR 1967 Guj 255 ( 60 ) THE case of Gujarat Bottling Co. Ltd. v. Coca Cola Co. and Ors. (supra) (ii) S. A. Mills Corporation v. Custodian of Evacuee Properties, AIR 1957 Bom 119 (iii) Vinod Chandra v. Vivekanand Mills, AIR 1967 Guj 255 ( 60 ) THE case of Gujarat Bottling Co. was cited for the proposition that under section 42 of the Specific Relief Act, a Court is not bound to grant injunction in every case involving negative covenant, and the cases of S. A. Mills and Vinod Chandra were cited for the proposition that for enforcing a negative covenant, it must be distinct. ( 61 ) BUT the present agreement, as I have already observed above requires continuous association between the parties. From Exhibit "b", i. e. the original agreement, I find that the contract runs into minute details and is also dependant on volition of both the parties. Large part of the contract involves performance of future unspecified obligations and duties and it would not be possible for the Court to enforce specific performance of the material terms of the contract. Moreover, it was upcl's own case, while applying to the Government of India extension of approval, that the collaboration "is for a continuous flow of technology for innovating and overhauling the products in this field, upgraded from time to time to meet world class standards. This is, the precise reason that the agreement is an open ended agreement. " This application dated 3rd July 2002 forms part of Exhibit 3. Such provisions contained in the contract and attracts the bar contemplated in section 14 (l) (b) of the Specific Relief Act, 1963. ( 62 ) I have already held that the termination of the agreement is not in accordance with law. Because of this specific bar under section 14 (l) (b) of the Specific Relief Act I have not been able to grant a decree of specific performance of the agreement. This does not preclude the court from granting decree for enforcement of negative covenant. Such a covenant is engrafted in clause 9 of the agreement. I am of the view that the obligation imposed on the defendant No. 3 under this clause should be enforced against the defendant No. 3 uptil 31st December, 2009 unless there are other circumstances in the intervening period which may give rise separate cause of action. Such a covenant is engrafted in clause 9 of the agreement. I am of the view that the obligation imposed on the defendant No. 3 under this clause should be enforced against the defendant No. 3 uptil 31st December, 2009 unless there are other circumstances in the intervening period which may give rise separate cause of action. I am satisfied that this is a distinct clause casting independent obligation on the defendant no. 3. This suit, accordingly, succeeds partly. There shall be a decree of injunction on defendant No. 3 their subsidiaries and affiliates restraining them from marketing or distributing in India Aral products uptil 31st December, 2009. The defendant No. 3 is also restrained from permitting or authorising or supporting any other person to market or distribute products under the Aral brandnarne within India uptil 31st december, 2009. All interim orders passed in this matter stands vacated. The suit is decreed in the above terms. Let the decree be drawn up expeditiously. Parties to bear their own cost.