Gujarat High Court
Monza Grantio Pvt. Ltd vs Cerapave Ceramics Pvt. Ltd on 23 June, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/AO/68/2025 ORDER DATED: 23/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 68 of 2025
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025
In R/APPEAL FROM ORDER NO. 68 of 2025
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MONZA GRANTIO PVT. LTD.
Versus
CERAPAVE CERAMICS PVT. LTD.
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Appearance:
MR. HJ KARATHIYA(7012) for the Appellant(s) No. 1
MR. ABHINAV MATHUR FOR MR VATSAL M PATEL(13752) for
the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 23/06/2025
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE
MRS. JUSTICE SUNITA AGARWAL)
1) The short issue raised in the present appeal challenging
the validity of the order dated 07.12.2024 passed by the
Judge, Commercial Court is that the original order dated
22.11.2023 for grant of interim injunction in terms of
paragraph No. '27(a)' of the application being Civil
Application No.125 of 2023, extended vide order dated
15.05.2024, has outlived its life, with the expiry of the tenure
of the agreement as on 29.08.2024, after seven years, as per
the terms of the agreement in Clauses '5' and '8' executed
between the parties.
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C/AO/68/2025 ORDER DATED: 23/06/2025
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2) Attention of this Court is invited to Clause '5.1' of the
clause "Term and Termination" of the agreement, which reads
as under:-
"5.1. The term of this Agreement shall be five (5) years from the
Execution Date which shall be automatically renewed for a term of
two (2) years successive unless either Party gives notice of its
intention to not renew the Agreement at least one (1) year before
the date of renewal ("Term")."
3) The Exclusivity Clause '8', which was the basis of
passing the interim injunction order dated 22.11.2023 in
terms of paragraph No. '27(a)' of the interim injunction
application is relevant to be noted hereinunder:-
"8.1. During the Term of this Agreement, the Supplier and its
Affiliates shall not, directly or indirectly (through other supplier of
otherwise), supply the Goods to any customer in the Exclusive
Territories without prior written consent of Cerepave. In case the
Supplier receives 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.
8.2. For a period of five (5) years from the expiry/ termination of
this Agreement, the Supplier and its Affiliates shall not, directly or
indirectly (through other supplier or otherwise), supply the Goods
to the customer of Cerapave without prior written consent of
Cerapave
8.3. The Supplier and its Affiliates shall not supply the Goods,
directly or indirectly (through other supplier or otherwise), to any
exporter for sale in territories other than Exclusive Territories at a
price which is lower than the Threshold Price.
8.4. Further, the Supplier and its Affiliates hereby covenant to take
undertaking from their other purchasers of the Goods ("Other
Purchaser") for not selling the Goods in Exclusive Territories in the
format prescribed by Cerapave ("Undertaking"). The Supplier shall
at the end of each month, not beyond the 7th (Seventh) of
succeeding month, handover a list of purchasers who have given
undertaking to the Supplier in the concerned month. In case the
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C/AO/68/2025 ORDER DATED: 23/06/2025
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Supplier or any of its Affiliate come to know about Other Purchaser
breaching the Undertaking, they shall immediately inform
Cerapave in this regard. The Supplier or its Affiliate covenant to
take strict legal action, as per the instructions of Cerapave with
due process of law, against such Other Purchaser. In the event that
Supplier commences litigation with respect to the Undertaking,
Cerapave shall (i) reimburse Supplier for all reasonable costs
incurred by Supplier in connection with such litigation (and
Supplier hereby agrees to provide any assistance reasonably
requested by Cerapave), (ii) be entitled to control any such
litigation, (iii) bear the costs, expenses and damages (if any are
awarded) in connection with any such litigation, and (iv) be entitled
to all damages, including the attorney's fees and disbursements,
awarded or obtained based on such litigation.
8.5. The Supplier agrees and confirms that during the Term and
five (5) year thereafter, the Supplier shall not solicit, approach,
hire, cause to be solicited or approached, hired, assist any other
person in soliciting or approaching, hiring any person, who is or
has been an officer, employee or customer of Cerapave;
8.6. The obligations of the Supplier under this Clause and Clause 9
shall be deemed to material obligations of this Agreement and in
case of any failure, the Supplier shall be liable to pay Liquidated
Damages to Cerapave for each failure. Further, in case the
Supplier refuses to Supply the Goods to Cerapave during the Term
of this Agreement on the Sale Price for any reason whatsoever, the
same shall be deemed to be a material breach of this Agreement
and Supplier shall be liable to pay Liquidated Damages to
Cerapave for such material breach.
8.7. The Supplier acknowledges that the restrictions, prohibitions
and other provisions hereof are reasonable, fair and equitable in
terms of duration and scope are necessary to protect the legitimate
business interests of Cerapave and are a material inducement to
Cerapave to enter into the transaction contemplated by this
Agreement. The benefits, the Supplier is receiving from the
consummation of the transaction contemplated under this
Agreement, constitute adequate consideration for the covenants in
this Clause.
8.8. In the event Cerapave fails to fulfill its commitment as per
Clause 2.3 above, the Supplier shall inform Cerapave in writing
and upon receipt of such intimation, Cerapave shall submit its
revised commitment to the Supplier within a period of three (3)
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C/AO/68/2025 ORDER DATED: 23/06/2025
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months from the date of such intimation. The Supplier shall
communicate its acceptance or non-acceptance to Cerapave within
fifteen (15) days from the receipt of such revised commitment. In
case the said revised commitment is acceptable to the Supplier,
commitment as per Clause 2.3 above shall stand revised and
Cerpave shall endeavour to fulfill such revised commitment. In the
event, the said revised commitment is not acceptable to the
Supplier, the Parties shall excluded such territories from the
Exclusive Territory as mutually agreed between the Parties."
4) A perusal of Clause '8.1' and the relief sought in the
original application for interim injunction, show that the relief
sought therein was in terms of clause '8.1', inasmuch as, the
appellant was prohibited from supply of goods to any
customer in the exclusive territories without prior written
consent of the respondent during the term of the agreement.
However, after expiry of the tenure of the agreement, for a
period of five years from the date of such expiry, the
exclusivity conditions as contained in clause '8.2' of the
agreement would apply, where the appellant is prohibited
from supply of goods to the customer of the opponent
(respondent) without prior consent of the opponent.
5) It is, thus, demonstrated before us that the relief claimed
in paragraph '27(a)' of the original application for interim
injunction was referring to clause '8.1' of the agreement,
which has been granted on 22.11.2023 and extended on
15.05.2024.
6) Taking note of the above, when we perused the order
impugned, it may be noted that a specific stand has been
taken by the appellant herein objecting to the application
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C/AO/68/2025 ORDER DATED: 23/06/2025
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dated 12.08.2024 filed by the respondent seeking extension of
the interim injunction order dated 22.11.2023, by stating that
after expiry of the term of the agreement, the relief granted in
the original order dated 22.11.2023 cannot survive and, as
such, there is no question of extension of the same. This
argument made by the learned advocate appearing for the
appellant herein namely the opposite party before the
Commercial Court, has been brushed aside with the only
observation that the Court has previously considered the issue
of prima facie case, irreparable loss and balance of
convenience while granting the injunction and, as such, there
is no room for further discussion on this aspect.
7) From a bare perusal of the order dated 07.12.2024 of
the extension of the interim injunction granted by the
Commercial Court on 22.11.2023, it is evident that the
Commercial Court has completely ignored the Clause '5' read
with clause '8.2' of the agreement executed between the
parties.
8) It may not be out of place to mention here that the
original interim injunction order dated 22.11.2023 was
challenged before this Court in an Appeal from Order No.279
of 2023 wherein, while modifying the said order, a specific
observation has been made 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 life span from the said order."
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C/AO/68/2025 ORDER DATED: 23/06/2025
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9) Thus, the initial grant of injunction was for a period of
three months with effect from 27.11.2023 and with the expiry
of the term of the agreement, there was no question of
continuance of the interim injunction order, which was passed
by reading of Clause '8.1' of the agreement, which has no
application after 29.08.2025, the date of expiry of the tenure
of the agreement.
10) With the above, while setting aside the order dated
07.12.2024 passed by the Judge, Commercial Court, it is held
that the original interim injunction order dated 22.11.2023
has outlived its life. The present appeal stands allowed,
accordingly. However, it is clarified that any observation
made by this Court hereinabove, will not come in the way of
the parties on the merits of their case in the pending
proceedings.
(SUNITA AGARWAL, CJ )
(D.N.RAY,J)
SAHIL S. RANGER
