MAHARASHTRA STATE ELECTRICITY BOARD, BOMBAY vs. STERKITE INDUSTRIES (IND.) LTD. AIR 2000 BOM 204

FACTS OF THE CASE:

Maharashtra State Electricity Board, Bombay, (hereinafter as M.S.E.B.) a statutory corporation established under Electricity (Supply Act, 1948) to provide, distribute and supply electricity within the state of Maharashtra. To explore the state schemes to distribute the electricity throughout the rural area of the state of Maharashtra, the M.S.E.B. Bombay required materials for the same, which includes conductors, wires, etc. the M.S.E.B. had floated tenders in the year 1983, and the respondents i) Sterlite Industries and ii) Pravin Trading Corporation accepted the tenders and contracted to supply the necessary materials by end of June in 1985. A general term, Clause 14(ii), of the contract, was that in the matter of termination of the contract by the purchaser, the purchaser reserves the right to purchase upon such terms and in such manner as he may deem appropriate and has the right to claim compensation for damages caused due to non-delivery of fixed contract material and reserves the right of the appellant to purchase the material from the open market. In both the contracts the i) Sterlite Industries ii) Pravin trading defaulted in the delivery of the subject material and did not deliver the sufficient material by the end of the time period of the contract. When the appellant came to know that the respondents were unwilling to perform their contractual obligation, they served demand notice of Rs. 77,66, 280/- and Rs. 52,16,945/- to Sterlite Industries Ltd. and Pravin Trading Corporation respectively for damages caused by respondents to the appellant. The matter went to Arbitration Bench according to Section 30 of the Arbitration Act where the majority gave judgment in favor of respondents by 2-1 and dismissed the application. Later appellant filed an appeal against the said decision of the Bench.

ISSUE:

Whether the appellant was entitled to invoke Section 73 of the Indian Contract Act, if yes, whether the appellant proves that they suffered the loss?

RULE OF LAW:

Section 73 of the Indian Contract Act
Section 62 of Sales of Goods Act
Section 30 of the Arbitration Act

JUDGEMENT:

The observation of the Hon’ble High Court was that the appellant has failed to prove any damage caused due to the non-performance of Sterlite Industries and Pravin Trading Corporation. The court relied on the judgment of Sitaram Bindraban vs. Chiranjilal Brijlal in which it was held that “the parties may exclude or implies any term and conditions which law attaches to contracts for the special rights and obligations that they please such as providing their own measure of damages in case of breach of contract and indeed the terms of Section 62 of the Indian Sale of Goods Act recognizes the right of parties to vary the ordinary incidence of a contract by express terms of the contract of sale of goods between them. Section 62 gives the right to parties of the contract to exclude the term and conditions according to them for the please of the parties. So, the view taken by the High Court was that Clause 14(ii) of the contract makes special provision for the appellants by reserving to the appellant’s rights to purchase materials and equipment from the open market and to claim damages from the respondents thus, the right to claim damages under section 73 of the Contract Act has been excluded. The appellant did not purchase any said material on account of the respondent from the open market after the termination of the contract as mentioned in Clause 14(ii) of the Contract signed between parties. Further-more the court mentioned that section 73 of the Contract Act does not give any cause of action otherwise if there is actual damage due to breach of contract.
The Hon’ble High Court reserved the decision of the Arbitration bench and dismissed the appeal of the appellant.

The post To invoke section 73 of the Indian Contract Act, the claimant must have to prove that damage is caused due to the respondent’s breach of contract appeared first on LexForti .

The Coca-Cola Company vs Bisleri International Pvt. Ltd.

Facts:

The plaintiff is the largest brand that provides soft drinks all around the world and operating in around 200 countries. The plaintiff allowed franchising, appointed bottlers and licenses were granted to them for specific use of trademarks concerned with the sale of beverages. The 1^st defendant used to be a subsidiary company of Parle Group. The defendants have sold the trademarks, know-how, formulation rights, intellectual property rights of their beverage products which are namely: Thums up, Limca, Gold Spot, Citra and also Maaza to the plaintiff through an agreement entered in September 1993. However, the present suit is  filed in respect to Maaza alone. An agreement in November 1993 was entered by the plaintiff and the 1^st Defendant with regards to Maaza in which many assignments were made. The important ones being:

1. The Know-how was transferred at a consideration price of 100,000 USD.
2. Non-compete agreement with the owners and their wives. (Ramesh Chauhan, Prakash Chauhan)
3. Agreement of License with Golden Products Pvt. Ltd.
4. Assignment of Goodwill for a consideration price of 50,000 USD

The trademark rights of Maaza in other countries where it had been registered were preserved by the 1^st Defendant. In March 2008, the plaintiff filed for registration of Maaza trademark in Turkey. However, the 1^st Defendant was informed about this and a legal notice was sent to the plaintiff repudiating the license agreement which would thereby cease the plaintiff from manufacturing Maaza. The legal notice stated that there was a breach of contract committed by the plaintiff by attempting to register Maaza in Turkey as the agreement between the parties specified India alone. The plaintiff has filed the present suit in the High Court of Delhi claiming permanent injunction and also damages for trademark infringement.

Issues:

• Does the Delhi High Court have the jurisdiction to order a permanent injunction to the plaintiff in the present case?
• Whether there is an infringement of trademark or not?
• Whether the plaintiff committed any breach of contract?

Court’s Decision:

It was held that the High Court of Delhi has the jurisdiction to decide in this case whether there exists any infringement threat. It was held by the Court that an assignment deed is a document which is legally enforceable between both the contracting parties. A breach of contract is only when one of the parties act contrary or ultra vires to what is stipulated in the contract. In the present case there is no breach of contract as the defendant transferred the trademark rights of Maaza to the plaintiff and hence the plaintiff is the registered owner of the trademark “Maaza”. These set of rights were considered to be absolute and the defendant could not claim anything to renounce terms. The Court granted an interim injunction to the plaintiff to avoid irreparable losses. The defendant’s appeal was quashed.

The post Expansion of Trade Boundary does not amount to Trademark infringement appeared first on LexForti .

Simpkins Vs Pays

FACTS:

The plaintiff was living in the defendant’s house as a lodger for a year. He almost became a family member of the family circle of the defendant. The plaintiff, defendant, the defendant’s granddaughter used to send a separate entry on one coupon to the fashion competition which was appearing in the Sunday newspaper which was offered a prize amount for a successful winner. Each of the three provided forecasts and the coupon was filed up by the plaintiff consolidating three forecasts and was sent to the newspaper in the name of the defendant. The cost of the postage and entry were informally shared by all of them. It was agreed between the plaintiff and the defendant that any money that is to be worn on the coupon sent by them from time to time will be shared by them. The granddaughter of the defendant was however not present at the time when the arrangement to share the money was made, but the plaintiff and the defendant knew that she would join the arrangement. The coupon sent on 27/06/1954 based on the current forecast made by the defendant’s granddaughter fetched the price 750 pounds. The defendant who received the prize refused to pay 1/3rd of the price to the plaintiff on the ground that the arrangement to share the wining was arrived at in a family association and therefore it was not intended to give rise to legal consequences. so the plaintiff filed this suit to recover the money which was won by them.

ISSUES:

Whether the plaintiff is liable to get the winning money from the defendant?

PLAINTIFF CONTENTION:

The plaintiff contended that the defendant is liable to pay the winning money as there is a contract between them. As they agreed to share the money among them.

DEFENDANT CONTENTION:

The defendant contended that there is no contract between them so he is not liable to pay the money.

OBSERVATION:

The court observed that the initial amount was shared between them from that time itself there is an offer and that offer is accepted by them and the contract took place when the sent the shared money to the newspaper. The prize money declared and all the three should share the money. Now the defendant refused to give the money to the two-member which amount to a breach of contract. 

JUDGMENT:    

The court held that the defendant is liable to pay the prize money to the plaintiff which is 1/3rd ie 250 pounds. As there is a breach of contract.

The post An offer must be one capable of creating legal relationship between the parties appeared first on LexForti .

Hyde Vs Wrench

FACTS:

In this case, the defendant made an offer to the plaintiff that he is going to sell his house and his property for a sum of 1000 pounds. The offer was conveyed to the defendant. The plaintiff to whom the offer was made agreed to buy his house and his property for 950 pounds. The defendant refused to sell his property for 950 pounds. Subsequently, the plaintiff immediately communicated his acceptance for buying his property for 1000 pounds. When the defendant refused to sell his property the plaintiff filed a suit for breach of contract.

ISSUES:

Whether the act of the defendant amount to breach of contract or not?

PLAINTIFF CONTENTION:

The plaintiff contended that the act of the defendant who refused to sell his property after it is accepted by him is the amount to a breach of contract. And he should pay compensation or he should accept his acceptance to the offer.

DEFENDANT CONTENTION:

The defendant contended that it is only an invitation to offer and there is no contract took place been between the plaintiff and the defendant. So he is not liable to pay any compensation.

OBSERVATION:

The court observed that the plaintiff to whom the offer was made agreed to buy the property for 950 pounds it amount to counter-offer the counteroffer made by the plaintiff the original offer of the defendant has lapsed. Communication of acceptance by the telex of the offer at the old rates when the tender has offered a revised rate before the communication of the acceptance can not be said to conclude the contract. Although an offer made in response to the tender notice which is like an invitation to offer is accepted by the person inviting tender with certain modification the acceptance cannot be termed as a counteroffer. So no contact took place between them.

JUDGMENT:   

The court held that no contract took place as the offer here is just an invitation to everyone. So here the defendant refused to sell his property is not amount to a breach of contract. Hence he is not liable to pay compensation.

The post An offer lapses when it is rejeted or a counter offer is made appeared first on LexForti .