Tractor majors locked in a design row

An impending Delhi High Court verdict on the legal battle between Punjab Tractors Ltd (PTL) and Sonalika Group’s International Tractors Ltd

An impending Delhi High Court verdict on the legal battle between Punjab Tractors Ltd (PTL) and Sonalika Group’s International Tractors Ltd (ITL) may be significant in the ongoing bidding for the former. The two Punjab based manufacturers are locked in a battle over Swaraj brand of tractors which was designed by Durgapur based Central Mechanical Engineering Research Institute (CMERI).

Prominent players like the Tata Motors, Ashok Leyland, Mahindra and Mahindra, Tractor and Farm Equipment (TAFE), New Holland and Sonalika Group itself have already evinced interest for 43.5 per cent stake in PTL. Stakes of private equity firm Actis and FMCG major Dabur’s Burmans are up for sale.

Technical know how for Swaraj was awarded to PTL in 1970 and more than 50,000 units have been manufactured based on the original design. But the owner of the agreement changed hands recently and ITL dragged PTL to court claiming exclusivity of the tractors.

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PTL had defended the charge saying that Swaraj tractors have been modified over the years and are different from CMERI’s original design. A verdict in favour of Mittal could mean PTL would have to stop production, further affecting its presence in the market.

“ITL does have the official rights for the design but PTL can continue to manufacture the tractors as they held the license once and the agreement is non-exclusive,” said CMERI head scientist B N Maitra.