The Bombay high court on Tuesday granted interim relief to the Mumbai branch of the Gandhi family behind the Vadilal brand in the trademark dispute with the Ahmedabad branch.
The court allowed the Mumbai group to continue using the 'Vadilal' brand to prevent “irreparable injury" to the group's decades of established goodwill.
The Ahmedabad group had argued that the Mumbai group was failing “quality tests” and violating food safety standards.
The court also granted both parties the liberty to challenge the order before a division bench of the high court.
Mint explains the case.
What is the dispute?
The case dates back to 1993, when family disputes over the company's management and future expansion led to the business's division.
A settlement was reached, allowing both groups to continue operating under the Vadilal name in different territories. The Shailesh Gandhi-led Mumbai group operates in western and southern India, while the Rajesh and Devanshu Gandhi-led Ahmedabad group has the right to operate elsewhere in India.
The deal began to unravel when the Ahmedabad group issued a notice on 26 May, threatening to terminate the registered user agreement over the quality of products manufactured by the Mumbai group.
It alleged that tests conducted at several NABL-accredited laboratories found high levels of bacteria, including E. coli, in products manufactured by the Mumbai group, amounting to a violation of the Food Safety and Standards Act.
What did the court say about food quality standards?
The Mumbai group argued that the products are fit for consumption and that the Ahmedabad group is misusing the process hygiene standards to allege quality issues. Process hygiene ensures that the manufacturing environment (facilities and equipment) remains sanitary to prevent contamination.
The court, however, explicitly ordered the Mumbai group to strictly manufacture and store all its products in compliance with the Food Safety and Standards Authority of India (FSSAI) norms.
The court also directed that, if any dispute arises regarding the quality of a product, the parties shall draw samples in the presence of representatives from both sides, properly seal them, and forward them to an NABL-accredited laboratory or to any laboratory directed by the arbitral tribunal.
“Alleged food-quality violations alone are ordinarily insufficient to terminate a trademark licence or brand-use arrangement,” said Alay Razvi, managing partner, law firm Accord Juris.
“Unless the agreement specifically treats regulatory breaches as a ground for termination, and the breach is established in accordance with the contract, mere allegations would not justify extinguishing valuable brand-use rights,” he said.
How big are the companies?
The Mumbai group operates under Vadilal Dairy International Ltd. The 1993 settlement among the families granted the Mumbai group exclusive, permanent rights to make and sell ice cream under the Vadilal brand in Maharashtra, Goa, Karnataka, Kerala, and Andhra Pradesh (including Telangana).
VDIL reported revenue of ₹27 crore in 2024-25, according to documents filed with the ministry of corporate affairs.
The Ahmedabad group operates its business under the listed entity Vadilal Industries Ltd and a few associates. It reported a consolidated revenue of ₹1,503 crore in FY26. In September 2025, VIL picked Himanshu Kanwar, a former Unilever executive, as its first non-family chief executive as the Gandhi family separated ownership from management.
"VDIL has separately placed on record before the Hon'ble Court its reasons for questioning the sampling methodology, the chain of custody, and the circumstances in which the tests were commissioned by the Ahmedabad Group in the period leading to VDIL's approaching the Hon'ble Court under Section 9," a spokesperson for the Mumbai group said.
What does this order mean for both companies?
The interim relief for the Mumbai-based faction is a major win. It can continue to sell the products under the reputed brand name Vadilal.
The high court did not decide the merits of the dispute but held that it can, prima facie, be resolved through arbitration.
The court also dismissed the Ahmedabad group's May notice, observing that the parties' rights and obligations would require a detailed examination by an arbitral tribunal.
“The next steps include a challenge to the interim order before a division bench, if preferred, while both sides continue litigating the underlying contractual and trademark issues. The final outcome will depend on the interpretation of the family settlement, trademark arrangements and related agreements," Razvi said.
Mint's emailed queries to the Ahmedabad group remained unanswered.