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Calcutta High Court
Devesh Sonthalia & Anr vs Eversub India Private Limited & Ors on 8 January, 2026
Author: Aniruddha Roy
Bench: Aniruddha Roy
OCD-23+24
In the High Court at Calcutta
Commercial Division
Original Side
Judgment (2)
PRESENT :
THE HON'BLE JUSTICE ANIRUDDHA ROY
IA-GA-COM/1/2024
In CS-COM/827/2024
DEVESH SONTHALIA & ANR
VS
EVERSUB INDIA PRIVATE LIMITED & ORS.
IA-GA-COM/2/2025
In CS-COM/827/2024
DEVESH SONTHALIA & ANR
VS
EVERSUB INDIA PRIVATE LIMITED & ORS
For the plaintiff : Mrs. Suman Kr. Dutt, Sr. Adv.
Mr. Mihit Gupta, Adv.
Mr. A. P. Agarwal, Adv.
Ms. Samhita Mukherjee, Adv
For the defendant no.1 : Mr. Vipul Kundalia Sr, Adv.
Ms. Aritra Chakraborty, Adv.
Mr. Anindya Kannan, Adv.
For the defendant No. 2. Mr. Sattik Rout, Adv.
Heard on : January 08, 2026.
Judgment on : January 08, 2026.
[In Court]
2
ANIRUDDHA ROY, J :
Re: IA-GA-COM/2/2025.
1. This is an application taken out by the second
defendant, inter-alia, praying for deletion of its name from the
array of the parties in the suit.
2. The plaint case which is essential to deal with the instant
application is only narrated. The plaintiffs are the franchise of
defendant no. 1. Defendant no. 2 is the sole supplier of raw
materials. Some credit period was agreed to be provided to the
plaintiffs for procuring raw-materials from the defendant no. 2
as per the arrangement and understanding between the
defendant no. 1 and defendant no.2. The defendant no. 1 has
issued the pre-termination notice for the contract between
defendant no. 1 and the plaintiffs. As a result, the defendant
no. 2 would not provide any further credit period to the
plaintiffs.
3. The relevant averments to include defendant no. 2 in the
array of parties to the suit from the plaint are quoted below:
"9. The defendant no. 1 has nominated defendant no. 2 as
approved vendor and sole supplier of raw material for
preparation of food articles sold from the said outlet. As such
the plaintiffs can only purchase the raw materials, like bread
dough, seasonings, sauces, non vegetarian and vegetarian
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proteins, etc., all from the defendant no. 2 only for preparation
of various food articles sold from the said outlets and none
else except for perishable vegetables i.e. tomato, cucumber,
capsicum, lettuce and onion which are procured locally. The
plaintiffs are required to place orders on various dates for
respective outlets every week on the defendant no. 2 and the
raw materials are supplied by the defendant no. 2 two days
thereafter. A credit period of two weeks is allowed to the
plaintiffs under the arrangement between the defendant no. 1
and the defendant no. 2. However such credit facility is
withdrawn once a pre termination notice is issued in respect a
store and such store is required to pay within 24 hours of
placing the order and is also required to pay the all other dues
of the defendant no. 2.
*********** ************ ********
11. The defendant no. 1 also carries out regular
inspection of the said outlet and the inspection team grants
rating to the said outlets based on the standards set by the
defendant no. 1. The said reviews are of two types, one by
local employees of the defendant no. 1 and the other by
special review team engaged defendant no. 1, being
defendant no. 3. Under the said franchise agreements, if there
are three continuous failure reports by the special team, the
defendant no. 1 can issue pre termination notice requiring the
plaintiffs to address issues raised by the said team. In case
the same are not addressed within a certain time, the
defendant no. 1 was entitled to terminate the franchise
agreement. Another fall out of the issuance of pre termination
notice is that the defendant no. 2 who supplies the raw
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materials on credit to the plaintiffs, shall no longer provide
credit facility, i.e., the plaintiffs are required to make payment
to the defendant no. 2 as and when the plaintiffs place orders
for supply of raw materials. Another result of such pre
termination notice is that the plaintiffs are also required to
make payment of all the dues of the defendant no. 2. The
plaintiffs are also required to make payment of Rs. 7,876.29p.
for all subsequent special reviews in case the plaintiffs' outlet
does not match the standards of the defendant no. 1. In case
of Fourth Failure in such inspection the Licence is terminated.
The franchisee has a right to approach the parent brand of the
defendant no. 1 for reviewing the audit report.
12. Defendant no. 4 has been engaged by the defendant no. 1 to
provide financial advisory services to the defendant no. 1 involving
assisting/advising the defendant no. 1 in making acquisitions of
"Subway" stores that are owned by third party franchisees such as the
plaintiffs. To pressurize the franchisees to agree to sell restaurant
business to it, the defendant no. 1 through its inspection agency the
defendant no. 3 started giving Rev. Failure Reports for frivolous reasons
which could not be sustained in appeal and under pretext of such
Failure Reports, the defendant no. 1 started issuing Pre Termination
Notices to concerned restaurants resulting in denial of credit period by
the defendant no. 2.
******** *********** ***************
22. The plaintiffs by a letter dated 30th November 2024 sent by
email to the defendant no. 1 responded to email dated 25th November 2024.
A copy of the said email dated 30th November 2024 with copy of the said
letter dated 30th November 2024 are annexed hereto and collectively marked
with the letter "S";. In the said reply dated 30th November 2024 the
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plaintiffs have raised several issues objecting to the issuance of the said
email dated 25th November 2024 as also attempt to revive the pre-
termination notices dated 27th April 2024 and 27th September 2024 and
requested the defendant No. 1 to stop harassing the plaintiffs and allow
them to carry on the business till the said transfer is completed. By the said
letter the plaintiffs also protested against denial of credit period by the
defendant no. 2 and insistence of advance payments by the said defendant
no. 2 as because all the Rev. Failure Reports upon inspection by the
defendant no. 3 were reversed in appeal. The plaintiffs also called upon the
defendant no. 1 to stop offering predatory practice of offering discounts
ranging between 50% to 70% though Swiggy and Zomato on Subway
products sold from restaurants/stores run directly by the defendant no. 1 at
places nearly the restaurant run by the plaintiffs which were detrimental to
business of the plaintiffs. The said email dated 30thNovember 2024 was sent
by the plaintiffs from their office within the aforesaid jurisdiction."
4. On a plain and meaningful reading of the plaint, it
appears to this Court that the defendant no. 2 is a related party
in the transaction arising out of the contract between the
plaintiffs and the defendant no. 1. The reliefs from the plaint
are also quoted below:
"a) A decree declaring that the notices dated
27th April 2024, 27th September 2024 and 16th
December 2024 being Annexures "p", "Q" and
"T" are bad, of no effect and are liable to be set
aside, delivered up and cancelled.
b) A decree for specific performance of the
agreement contained in Annexure "M" in terms
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of Business Transfer Agreement as per
annexure "O" for the said 8 stores Nos. 43312,
47544, 49559, 49560, 57677, 68475, 58588
and 59754;
c) Injunction ;
d) Receiver;
e) Costs;
f) Further or other reliefs"
5. Mr. Sattik Routh, learned Advocate appearing for
defendant no. 2 submits that there is no privity between the
plaintiffs and the defendant no. 2. Defendant no. 2 had
supplied materials to the plaintiffs pursuant to the agreement
between defendant no. 2 and the defendant no.1. No liability
can be foisted upon defendant no. 2 by the plaintiffs. The
plaintiffs have no right to sue the defendant no. 2 in the given
set of facts pleaded in the plaint. The defendant no. 2 is not a
necessary party at all. Hence, learned Counsel prays for
deletion of the name of the defendant no. 2 from the array of
the parties in the suit.
6. Mr. Suman Kumar Dutt, learned senior Advocate with
Mr. Mohit Gupta, learned Advocate appears for the plaintiffs.
7. After hearing the parties, on perusal of the materials on
record and on a plain and meaningful reading of the plaint, it
appears to this Court that the transaction pleaded in the plaint
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arising out of an agreement between the plaintiffs and the
defendant no. 1 relates to defendant no. 2 also. The plaintiffs
may, ultimately, not succeed with its prayers against the
defendant no. 2 but from the statements made in the plaint it
appears to this Court that the defendant no. 2 may be a proper
party if not necessary, for the sake of argument, to be present
at the time of trial of the suit.
8. The law is well settled that while adjudicating such an
application, the Court must read the plaint taking the
statements therein to be true, correct and sacrosanct. Unless
the statements made in the plaint, ex-facie, shows that no case
has been made out against one of the defendants or that the
plaintiffs have no right to sue such defendants, then only the
prayer for deletion of the defendant from the array of parties
in the suit can be considered, otherwise not.
9. On a meaningful reading of the plaint this Court is of the
considered and firm view that the presence of defendant no. 2
is necessary to travel the plant upto the stage of trial.
Accordingly, the defendant no. 2 cannot be deleted at this
stage summarily from the array of the parties. The suit stands
for trial as against the defendant no. 2 also.
10. In view of the foregoing discussions and reasons this
Court is of the considered view that this application is devoid
of any merit.
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Resultantly, the application IA-GA-COM/2/2025 stands
dismissed, without any order as to cost.
Re: IA-GA-COM/1/2024.
This is an application for injunction filed by the
plaintiffs.
By an order dated December 24, 2024 an order of
injunction has been passed by a coordinate Bench. The same is
still in existence till January 30, 2026 after being extended.
The interim order stands further extended till March 31,
2026.
The application shall appear under the heading
'Adjourned Motion' on February 25, 2026.
.
(ANIRUDDHA ROY, J.)
dg/
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