Delhi High Court Rejects ITC's Plea To Restrain Adyar Gate Hotels From Using 'Dakshin' Mark

The Delhi High Court on Thursday rejected ITC Limited's interim plea to restrain Chennai-based Adyar Gate Hotels Limited from using the restaurant brand Dakshin. The court held that ITC had failed to establish territorial jurisdiction and had not made out a prima facie case of infringement or passing off. It said ITC could not rely on online reservations or the existence of their Dakshin outlet in Delhi to invoke the court's jurisdiction, and noted that the balance of convenience and the long history of Adyar's use of the mark weighed against granting injunctive relief. A bench of Justice Amit Bansal held that interim relief cannot be considered unless the court first satisfies itself that the suit is maintainable. Referring to the Supreme Court's ruling in Asma Lateef, the court reiterated that relief of any kind may be granted only upon the court first forming and recording a prima facie satisfaction that the suit is maintainable and not barred in law.After examining ITC's assertions of statutory jurisdiction, the defendant's online presence, and apprehensions of potential expansion to Delhi, the court concluded that Delhi had no territorial connection to the alleged infringement. "The plaintiffs have failed to make out a prima facie case on the aspect of territorial jurisdiction of this Court, and hence, would not be entitled to grant of interim injunction", it said. The dispute traces back to 1989 when the Dakshin restaurant was launched at the Welcomgroup Park Sheraton Hotel in Chennai, a property owned by Adyar but operated by ITC under an Operating Services Agreement signed in 1985. The agreement ended in 2015, and the hotel was later demolished in 2024. In October 2024, Adyar opened a standalone Dakshin restaurant in Chennai, prompting ITC to file a suit in Delhi claiming prior adoption and trademark and copyright rights dating back to 1989. An ex-parte injunction granted in February 2025 was subsequently set aside by a division bench. ITC argued that trademarks arising from the 1985 agreement belonged exclusively to it and that Adyar had no right to use Dakshin after the agreement expired. It also relied on the resturanat's listings on platforms such as Zomato and Instagram to establish jurisdiction. Adyar countered that bookings through aggregators did not create commercial activity in Delhi because dining and payment took place in Chennai. It asserted that it had conceived the Dakshin concept in the 1980s and had operated the restaurant continuously for decades. It relied on Section 28(3) of the Trade Marks Act, which prevents one registered proprietor from asserting exclusivity against another, and argued that ITC had acquiesced to its independent use since 2015. Applying the targeting test from Banyan Tree (2009), the court held that listings accessible in Delhi could not confer jurisdiction to a Delhi Court. It observed, "Therefore, the commercial transaction cannot be linked to reservation. The 'commercial transaction' would take place when the customers physically dine in the restaurant in Chennai and make payment for the same there. It is not the case of the plaintiffs that the defendant is delivering food in Delhi on the basis of orders placed through any e-commerce platforms. Hence, it cannot be said that any commercial transaction takes place in Delhi or that there is specific targeting of consumers in Delhi through the website.”On the merits, the court found that ITC could not claim infringement because both ITC and Adyar hold valid registrations for the Dakshin mark for restaurant services, and one registered owner cannot assert exclusivity against another. It also observed that Adyar had been involved in the “conceptualization” of Dakshin since inception. It added that “this is not a case where the defendant has copied the mark of the plaintiffs so as to ride on the goodwill or reputation of the plaintiffs.” The court also agreed that ITC had waited too long to object and had effectively allowed Adyar to use the Dakshin name for years without challenge, which weakened ITC's claim. Dismissing the plea, the court recorded Adyar's statement that it will not expand the operation of its Dakshin restaurant outside Chennai until the suit is finally decided.Case Title: ITC Ltd and Anr vs Adyar Gate Hotels Ltd.Case Number: CS(COMM) 119/2025 with I.A. 3768/2025For Plaintiffs: Senior Advocates Mukul Rohtagi, Arvind Nigam, Arvind Nayar with Advocate Mamta Rani Jha, Saurabh Agarwal, Shrutimma Ehersa, Aiswarya Debardarshini and Jahanvi AgarwalFor Defendants: Senior Advocates Rajiv Nayyar, Amit Sibal with Advocates Adarsh Ramanujan, Prateek Chadha, Sreekar Aechuri, Surbhi Soni, Aniket Chauhaan, Saksham Dhingra, Darpan Sachdeva and Ankit Handa,Click Here To Read/Download Judgment

Delhi High Court Rejects ITC's Plea To Restrain Adyar Gate Hotels From Using 'Dakshin' Mark

Ayushi Shukla

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