The appellant, Adyar Gate Hotels Limited, challenged the ex parte ad-interim injunction passed by the Single Judge of the Delhi High Court on 13.02.2025 in CS(COMM) 119/2025, restraining it from using the mark "DAKSHIN" for its restaurant business. The mark in question had been used since 1989 in a hotel previously managed by the respondents, ITC Limited, under the Welcomgroup Park Sheraton name. The appellant claimed that it conceived and initiated the use of the name "Dakshin" in 1989 and continued using it even after the management agreement with the respondents ended in 2015. The appellant subsequently partnered with InterContinental Hotels and continued to operate the Dakshin restaurant until the property was redeveloped in 2024, when it temporarily shifted the restaurant to another location on the same street.
The appellant argued that it was not properly served the suit, which was only sent by email and landed in the spam folder. They contended that no cease and desist notice had been issued by the respondents before instituting the suit, and further objected to the territorial jurisdiction of the Delhi High Court, as neither the trademark was registered in Delhi nor did any cause of action arise there.
The respondents countered that "Dakshin" was their registered trademark with usage dating back to 1989 and that the appellant, being a former licensee, could not use the mark independently, especially from new premises. They argued that ex parte injunction was justified given the dilution and potential damage to their goodwill.
The Division Bench observed that while ex parte injunctions are permissible, they must comply with the standards of Order XXXIX Rule 3 of the Civil Procedure Code, which generally requires notice unless delay would defeat the purpose of the injunction. The Court found that the appellant had been using the mark openly since 2015 without prior legal challenge by the respondents and had even registered the mark, which remained uncontested. Moreover, the respondents did not show urgency or risk of irreparable harm justifying a unilateral order.
Considering these peculiar facts, the Division Bench set aside the ex parte ad-interim injunction dated 13.02.2025 and directed the appellant to file its response to the interim application within one week. The matter was remanded to the Single Judge to decide the injunction application on merits, uninfluenced by the observations of the appellate court.
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