calcutta high court

Calcutta High Court: In an application seeking directions for repurchasing unsold stock of “Power Team” products and adjustment of the amount payable under the decree, a single-judge bench comprising of Krishna Rao,* J., the defendant’s application and the Review application, stating that the issues raised should be resolved during the trial of the suit and it is inappropriate to grant relief seeking in the application at the interlocutory stage of the ongoing suit.

Factual Matrix

In the instant matter, an International Distribution Agreement was entered between the plaintiff and defendant on 15-07-2005, wherein the defendant was appointed as a distributor of “Power Team” products. Despite the agreement’s expiry, the parties continued their business relationship on a principal-to-principal basis. The plaintiff filed a suit against the defendant for a decree of US$ 1,60,708.16 along with interest due to the defendant’s failure to pay for goods supplied. The defendant contested the suit, leading to the judgment and decree dated 18-09-2018. The defendant filed an application seeking various reliefs including leave to file a Memorandum of Review from a judgment and decree dated 18-09-2018, issuance of directions to the plaintiff, appointment of a Special Officer, and other related directions. By an order dated 10-10-2018, the court directed that the application shall not be treated as a review application but as a substantive application for appointment of a Special Officer and other specified directions. An order dated 26-11-2019, appointed a Special Officer who verified the stocks and submitted a report. The defendant made the present application, seeking directions for repurchasing unsold stock of “Power Team” products and adjustment of the amount payable under the decree.

Moot Point

  1. Whether the defendant’s application for relief, based on Clause 20(a) of the agreement, maintainable?

  2. Whether the plaintiff’s actions, including refusal of certificates and trademark notices, justify the relief sought by the defendant?

  3. Whether the Court can grant interim relief resembling final relief?

Parties’ Contentions

The defendant claimed that the plaintiff’s refusal to provide necessary certificates hindered sales and relied on the agreement’s Clause 20(a) and previous court orders for relief. It was contended that the application is maintainable, as it was treated as a substantive application by the Court. It was further contended that the agreement’s termination does not negate the plaintiff’s obligation to repurchase unsold stock. On the other hand, the plaintiff contended against the maintainability of the application and disputed the defendant’s claims regarding the goods and enforceability of the agreement post-expiration.

Court’s Observation

Regarding the agreement’s expiration, the Court acknowledged the ongoing business relationship but found that the specific obligations required careful consideration, especially in light of the plaintiff’s trademark concerns. The Court noted that the plaintiff contended that the labels appearing on stocks are as “SPX POWER TEAM” but the Trademark of the plaintiff is only “Power Team” and the goods are not of the plaintiff. The Court found no merit in the defendant’s arguments regarding the trademark infringement notices hindering sales. The Court held that the defendant’s claims regarding the distribution agreement and trademark infringement should be decided during the trial of the suit.

The Court noted that the application had been treated as a substantive one and clarified that the withdrawal of the review aspect did not invalidate the present application. The Court reiterated the substantive nature of the application and upheld its previous order treating the application as substantive, not a review.

The Court observed that the relief sought in the present application overlapped with the defendant’s counterclaim, indicating a duplication of claims. The Court emphasised on the need for resolution of factual disputes in the ongoing suit before granting relief. The Court also asserted the need for caution in granting interim relief that resembles final relief, particularly considering the complexities of the case and the ongoing suit proceedings.

“It is well settled law that the Court can pass interim relief in the nature of final relief but such power is required to be used springily and with utmost caution.”

Considering the complexity of the issues raised, the Court concluded that they were better suited for resolution during the trial of the suit rather than through an interlocutory application. The Court dismissed the application finding it inappropriate to grant relief seeking in the application at the interlocutory stage of the ongoing suit.

Court’s Decision

The Court dismissed both the defendant’s present application seeking directions for repurchasing unsold stock of “Power Team” products in order to adjust the amount payable under the decree and defendant’s review application.

[SPX Flow Technology Singapore Pte Ltd. v. Sanjay Jain, 2024 SCC OnLine Cal 1295, order dated 08-02-2024]

*Judgment by Justice Krishna Rao

Advocates who appeared in this case :

Mr. Soumabho Ghose, Ms. R.V. Kundalia, Ms. Tiyana Bhattacharyya, Ms. Aritra Chakraborty and Ms. S. Rai Singhania, Counsel for the Plaintiff

Mr. Sanjeev Kr. Trivedi, Mr. Shaunak Mitra, Mr. Aritra Basu, Ms. Iram Hassan and Mr. Sanket Sarawagi, Counsel for the Defendant

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