Monza Granito Pvt Ltd vs Cerapave Ceramics Pvt Ltd
2024 Latest Caselaw 719 Guj

Gujarat High Court

Monza Granito Pvt Ltd vs Cerapave Ceramics Pvt Ltd on 29 January, 2024

Author: Sunita Agarwal

Bench: Sunita Agarwal

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     C/AO/279/2023                             ORDER DATED: 29/01/2024

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          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                 R/APPEAL FROM ORDER NO. 279 of 2023
                                 With
              CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
                In R/APPEAL FROM ORDER NO. 279 of 2023
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                       MONZA GRANITO PVT LTD
                               Versus
                     CERAPAVE CERAMICS PVT LTD
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Appearance:
MR S. P. MAJMUDAR with MR. HJ KARATHIYA(7012) for Appellant(s) No. 1
MR ABHINAV MATHUR for MR RISHIN R PATEL(7222) for RespondentNo. 1
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 CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
       SUNITA AGARWAL
       and
       HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE

                           Date : 29/01/2024
                            ORAL ORDER

(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)

1. The instant Appeal from Order under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act, 1996) is directed against the judgment and order dated 22.11.2023 passed by the Judge, Commercial Court, City Civil Court, Ahmedabad, in an application under Section 9 of the Act, 1996. The reliefs prayed in the application moved by the respondent herein are relevant to be noted as under :-

"a. Respondent, his employees, servants and/or agents or its Affiliate or otherwise be restrained by an order and injunction to not proceed with selling of Goods to Applicant's customer or any other customer, without the consent of Applicant, in Exclusive Territories.

b. Direct the Respondent to disclose the complete details of sale of Goods in relation to Exclusive Territories

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C/AO/279/2023 ORDER DATED: 29/01/2024

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(including Affiliate's sale) on Affidavit, more particularly for the period of January 2023 to June 2023.

c. Ad-interim reliefs in terms of prayer clause (a)

d. Direct the Respondent to pay the cost of the instant Application to the Applicant.

e. Pass any other order or further orders as this Hon'ble Court may deem fit, just, proper and reasonable in the facts and circumstances of the present case."

2. The reliefs granted in the impugned judgment and order dated 22.11.2023 are in terms of the reliefs sought in paragraphs 27(a) and 27(b) of the application under Section 9 of the Act, 1996 as noted herein above. The dispute arose out of the supply agreement between the parties dated 29.08.2017, a copy of which is appended along with the record. The issue raised in the application under Section 9 of the Act, 1996 is about violation of clause 8.1 of the aforesaid supply agreement, which reads as under :-

"During the Term of this Agreement, the Supplier and its Affiliate shall not, directly, or indirectly (through other supplier or otherwise) supply the Goods to any customer in the Exclusive Territories without prior consent of Cerapave. In case the Supplier receive any query from any person regarding the supply of Goods in the Territory, the supplier shall forthwith refer such queries/persons to Cerapave and inform in this regard."

3. It is submitted by Mr. S. P. Majmudar, the learned counsel appearing for the appellant that though there were assertions in the application of violation of clause 8.1 of the supply agreement, but the name of the affiliate company, to substantiate the allegations made in paragraph 5 of the application has not been disclosed. The assertions in the original application about the sale/supply of goods directly/indirectly to the customers of the applicant/respondent

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C/AO/279/2023 ORDER DATED: 29/01/2024

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herein by the affiliate of the appellant herein without previous consent of the applicant/respondent herein are vague. For the first time, in the rejoinder, the name of one Motto Ceramics Pvt. Ltd. as affiliate company of the appellant herein has been disclosed. The submission is that even the assertions in the rejoinder of Motto Ceramics Pvt. Ltd. being an affiliate company of the appellant herein are incorrect. The copy of the master data appended at pages 129 and 132 of the paper-book about Directors of the appellant company, i. e. Monza Granito Pvt. Ltd. and the Directors of the alleged affiliate company, i. e. Motto Ceramics Pvt. Ltd., does not substantiate the assertion in paragraph 8 of the rejoinder about the appellant company and the alleged affiliate company having common Directors on the Board. It is further pointed out by the learned counsel for the appellant that in the written submissions, a new plea was added unsupported by any documentary evidence on record about Mr. Manharlal Shivlal Fefar being common Director for the appellant company and the alleged affiliate company, i. e. Motto Bathware LLP. It is contended that two companies, i. e. Motto Bathware LLP and Motto Ceramics Pvt. Ltd. are different entities. Be that as it may, the contention is that any material brought on record by way of the written submissions could not have been taken note of by the Commercial Court to arrive at a finding of violation of clause 8.1 of the supply agreement. The submission, thus, is that the relief granted in terms of paragraphs 27(a) and 27(b) of the application under Section 9 of the Act, 1996 to the respondent herein/applicant cannot be sustained.

4. In rebuttal, it was argued by Mr. Abhinav Mathur, the learned counsel appearing for the respondent that no interference may be made in the relief granted in terms of paragraph 27(a) as it is for a

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C/AO/279/2023 ORDER DATED: 29/01/2024

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period of three months from the date of the order, which was passed in the month of November, 2023 and further, the said relief has been granted in terms of clause 8.1 of the supply agreement itself, which is in existence as on date. As regards the relief granted in terms of paragraph 27(b), it was argued that the material particulars to demonstrate that there was a case of violation of clause 8.1 of the supply agreement have been brought before the Commercial Court by way of rejoinder and the supporting documents filed during the course of the proceedings. No infirmity can be said to have been committed by the Commercial Court in granting the said relief.

5. Having noted the above arguments, suffice to note that paragraph 27(b) of the relief clause in the application when seen in terms of the averments in the application, we may note that there was no disclosure of the name of the affiliate company for the period of supply of the goods, in violation of clause 8.1 of the supply agreement. The application under Section 9 has never been amended in terms of the disclosure made in the rejoinder, which, according to the applicant/respondent herein came to its knowledge after filing of the application. As there was no amendment to the pleadings, the supporting documents filed in the proceedings, that too, along with the written submissions could not have been relied upon by the Commercial Court to arrive at a finding of violation of clause 8.1 of the supply agreement so as to require the appellant to furnish the details of the sale of goods, as sought in the relief clause of paragraph 27(b) of the application. In so far as the relief in terms of paragraph 27(a) is concerned, the same being in terms of clause 8.1 of the supply agreement, we do not find any error in the decision of the Commercial Court.

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      C/AO/279/2023                              ORDER DATED: 29/01/2024

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6. For the aforesaid, while modifying the judgment and order dated 22.11.2023 passed by the Judge, Commercial Court, City Civil Court, Ahmedabad, we dispose of the instant Appeal with the observation that the relief sought for in terms of paragraph 27(a), as granted by the Commercial Court in the judgment and order dated 22.11.2023, shall be subsisting till its lifespan as per the said order. As regards the relief in terms of paragraph 27(b) is concerned, the same ought not to have been granted in view of the fact that the application has not been amended to bring the material particulars on record and further the inquiry with regard to any sale in violation of clause 8.1 of the supply agreement can be made only during the course of the arbitration.

7. It is clarified that all the issues pertaining to the violation of clause 8.1 of the supply agreement are left open and we have not expressed any opinion on merits. The findings of the Commercial Court in the order impugned or any observation made herein-above will not come in the way of the parties while dealing with the matter on merits before the appropriate forum.

8. With the above observations and direction, the Appeal stands disposed of. The Civil Application for stay does not survive and the same is accordingly disposed of.

(SUNITA AGARWAL, CJ )

(ANIRUDDHA P. MAYEE, J.) cmk