GUJARAT BOTTLING CO vs COCA COLA CO — C.A. No. 6839 - 6840/1995

Case Summary: Gujarat Bottling Co. v. Coca Cola Co. Court Decision: The Supreme Court upheld the High Court's interim injunction restraining Gujarat Bottling Company (GBC) and Pepsi-affiliated entities from manufacturing or selling beverages other than Coca-Cola products until January 25, 1996. Key Reasoning: The Court held that the negative covenant in the 1993 franchise agreement between Coca Cola and GBC—prohibiting GBC from dealing with competing brands during the agreement's subsistence—was valid and enforceable. The Court rejected GBC's arguments that the covenant violated Section 27 of the Indian Contract Act (restraint of trade doctrine), finding it was a legitimate commercial restriction incidental to the franchise arrangement, not an unreasonable restraint. The Court also determined that Pepsi's acquisition of GBC control constituted a material breach triggering Coca Cola's contractual termination rights, and that GBC had acted inequitably by concealing the ownership transfer. This case analysis is maintained by casestatus.in based on publicly available court records.