White Eagle Entertainment Pvt Ltd v. Outline S.R.L, Italy & Anr

RAJIV SAHAI ENDLAW, J. JANUARY 30, 2019 "bs/ak" (corrected & released on 12th February, 2019)

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 30th January, 2019. + WHITE EAGLE ENTERTAINMENT PVT LTD ..... Plaintiff Through: Mr. L.M. Asthana, Mr. Siddhant Asthana and Mr Peeyush ranjan, Advs. Versus OUTLINE S.R.L, ITALY & ANR ..... Defendants Through: Mr. Mohit Chadha and Ms. Sukriti Mago, Advs. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. The plaintiff instituted this suit for (i) permanent injunction restraining the two defendants namely (a) Outline s.r.l., Italy; and, (b) Giorgio Biffi, from indulging in sales directly with any entity based in India or appointing any other entity as distributor for the goods of the defendants in India; (ii) for recovery of damages in the sum of Rs.1,62,28,370/- with interest pendente lite and future; and, (iii) for rendition of accounts. 2. The suit came up before this Court first on 19th October, 2016, when summons thereof were ordered to be issued. Though the suit was accompanied with an application for ex-parte ad-interim relief restraining the defendants from selling goods directly in India but the counsel for the plaintiff on 19th October, 2016 did not press the said application and rather withdrew the same. 3. Pleadings have been completed. 4. The plaintiff filed IA No.6293/2018 under Order XIII-A of the Code of Civil Procedure, 1908 (CPC) as applicable to summary suits for a decree forthwith of permanent injunction and for damages as sought. The said application came up before this Court first on 17th December, 2018, when the counsel for the plaintiff withdrew the same and the application was dismissed with costs. 5. Not only so, the counsel for the plaintiff on 17th December, 2018 also withdrew the suit insofar as for the relief of permanent injunction and on the counsel making such statement, the suit insofar as for the relief of permanent injunction was dismissed as withdrawn. 6. Having gone through the file on 17th December, 2018, it appeared that the claims of the plaintiff for damages and for rendition of accounts which were the only surviving reliefs, were also not maintainable and had no basis in law. Certain observations in this regard were made in the order dated 17th December, 2018 and on the request of the counsel for the plaintiff, hearing was adjourned. 7. Today, the counsel for the plaintiff has been further heard and the counsel for the defendants has also been heard in response. 8. The basis of the surviving claims of the plaintiff for recovery of damages to the tune of Rs. 1,62,28,370/- and for rendition of accounts is, (I) that the defendants, to facilitate sale of their products in India, appointed the plaintiff as exclusive distributor in the territory of India and an Exclusive Distributorship Agreement dated 2nd July, 2012 for a period of three years was entered into between the parties; (II) that the Agreement of exclusive distributorship was renewed on 15th October, 2015 for a further period of one year; (III) that the agreement is "subsisting till date by the conduct of the parties as per the initial agreed terms contained in the Agreement dated 2nd July, 2012"; (IV) that the Agreement could have only been terminated by a three months notice assigning reasons for termination; (V) that the defendants, during the term of the Agreement were not entitled to sell their products directly to any customer in India; (VI) that the plaintiff, under the Exclusive Distributorship Agreement, was entitled to 25% of the sales generated by the plaintiff at the price list sent by the defendants; (VII) that the plaintiff kept on placing orders on the defendants and the defendants kept on supplying the goods and therefore the plaintiff continued to be the exclusive distributor of the defendants in India; (VIII) that though the period of one year for which the Agreement was extended vide extension letter dated 15th October, 2015 came to an end on 2nd July, 2016, the defendants thereafter also continued selling to the plaintiff and even as on 3rd October, 20