ITC Limited Vs Adyar Gate Hotels Limited

ITC Limited Vs Adyar Gate Hotels Limited

**Date of Judgment:** 01.07.2026  

**Case No.:** FAO(OS)(COMM) 207/2025  

**Neutral Citation:** 2026:DHC:4533-DB  

**Court:** High Court of Delhi  

**Hon'ble Judge:** Justice C. Hari Shankar (for the Division Bench)

The court considered a dispute concerning trademark ownership, passing off, and copyright in the "DAKSHIN/Dakshin" mark for a South Indian restaurant. The case arose from allegations that Adyar Gate Hotels (AGH) continued using the mark after expiry of an Operating Service Agreement with ITC, leading to claims of infringement and passing off. The principal question before the Court was whether AGH could continue using the mark post-OSA expiry and whether Delhi courts had territorial jurisdiction.

After examining the material on record and the submissions of the parties, Justice C. Hari Shankar observed that the single judge erred in several findings on ownership, goodwill, and jurisdiction. The Court held that ITC retained rights under the OSA, AGH's use post-2015 constituted passing off, and territorial jurisdiction was established through online activities. 

Accordingly, the Court allowed the appeal in part, granted interim injunction against AGH's use of the mark, and directed further proceedings.

[Disclaimer: Readers are advised not treat this as a substitute for legal advise as it is based on limited information and is intended solely for general informational purposes.]

### Introduction

Trademark disputes in the hospitality industry often involve complex questions of ownership, goodwill, and post-contractual rights. This Delhi High Court Division Bench judgment in the long-standing "DAKSHIN" restaurant battle between ITC Limited and Adyar Gate Hotels Limited clarifies critical principles on trademark licensing, passing off, and territorial jurisdiction in the digital era. The ruling holds significant implications for businesses in hospitality, franchising, and IP owners navigating expired agreements and online presence.

### Factual and Procedural Background

In 1985, ITC and Adyar Gate Hotels entered into an Operating Service Agreement for the Welcomgroup Park Sheraton Hotel in Chennai. A South Indian restaurant named Dakshin opened there in 1989. The restaurant operated under the agreement until its expiry in March 2015. ITC claimed ownership of the DAKSHIN trademark, registered in its name, and the artistic logo. After expiry, AGH continued operating the restaurant in the same premises under a new hotel brand (Crowne Plaza) using the same mark without objection until 2023. In 2024, after demolition of the old building, AGH opened a standalone Dakshin restaurant nearby. ITC filed a commercial suit in Delhi seeking injunction against AGH's use of the mark, alleging infringement, passing off, and copyright violation. ITC also sought interim injunction. The single judge dismissed the application, finding no territorial jurisdiction in Delhi and no prima facie case on merits. ITC appealed.

### Dispute Before the Court

The core issues were whether Delhi courts had territorial jurisdiction over the dispute and whether ITC could restrain AGH from using the DAKSHIN mark post-OSA expiry on grounds of ownership, passing off, or copyright. ITC argued it owned the mark and goodwill under the OSA, AGH's continued use amounted to passing off, and online activities conferred jurisdiction. AGH contended it co-owned or independently acquired rights, ITC acquiesced, and no cause of action arose in Delhi.

### Reasoning and Analysis of the Court

The Division Bench reviewed Section 134 of the Trade Marks Act and Section 62 of the Copyright Act for jurisdiction, alongside Section 20 CPC. It relied on *Indian Performing Rights Society Ltd. v. Sanjay Dalia* (2015) to clarify that special IP provisions provide additional forums but do not allow forum shopping where cause of action arises elsewhere. However, online accessibility and commercial targeting via platforms like Zomato established sufficient nexus in Delhi.

On merits, the Court examined the 1985 OSA clauses, particularly Article XIII on trademarks, holding it vested rights in ITC. Precedents like *Wander Ltd. v. Antox* guided the interim relief scope. The Bench distinguished AGH's claims of independent conception, finding evidence supported ITC's role and goodwill. Acquiescence was rejected due to lack of dishonest adoption by AGH but overall balance favored ITC. Copyright in the logo was also addressed, with rebuttable presumption under the Copyright Act.

The Court emphasized purposive interpretation favoring the party building brand reputation through continuous use and contractual intent.

### Final Decision of the Court

The Division Bench allowed the appeal, set aside the single judge's order dismissing the interim application, granted injunction restraining AGH from using the DAKSHIN mark pending suit disposal, and restored the matter for further proceedings before the single judge.

### Point of Law Settled

The judgment reinforces that in trademark licensing and operating agreements, goodwill and rights often remain with the brand owner (ITC) unless explicitly transferred. It clarifies evolving standards for territorial jurisdiction in IP cases involving e-commerce and online reservations. This will guide future hospitality and franchise disputes, emphasizing contractual interpretation and preventing unjust enrichment post-agreement expiry.

**Case Details:**  

**Title of the Case:** ITC Limited & Anr. vs Adyar Gate Hotels Limited  

**Date of Judgment/Order:** 01.07.2026  

**Case Number:** FAO(OS)(COMM) 207/2025  

**Neutral Citation:** 2026:DHC:4533-DB  

**Name of Court:** High Court of Delhi  

**Name of Hon'ble Judge:** Justice C. Hari Shankar (Division Bench)

**Written By:** Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

**Disclaimer:** Images used herein do not reflect actual images used in Judgement and that the same are for illustrative purpose only. Readers are advised not to treat this as substitute for legal advice as it may contain errors in perception, interpretation, and presentation.  

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1. Delhi High Court Grants ITC Injunction in Dakshin Trademark Battle  

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4. Territorial Jurisdiction in IP Cases with Online Booking: Delhi HC View  

5. Hospitality Brand Disputes and Goodwill: 2026 Delhi High Court Judgment  

6. ITC vs Adyar Gate: Analysis of Dakshin Mark Passing Off Claim  

7. Copyright and Trademark in Restaurant Branding: Delhi Division Bench  

8. Operating Service Agreements and IP Rights: Lessons from ITC Case  

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**Headnote of the Judgment:** In FAO(OS)(COMM) 207/2025 before the Delhi High Court, ITC appealed dismissal of its interim injunction application against Adyar Gate Hotels' use of "DAKSHIN" mark post-OSA expiry. The Division Bench allowed the appeal, holding ITC owned the mark and goodwill, AGH's use constituted passing off, and Delhi had jurisdiction via online activities. Interim injunction granted; suit to proceed. (58 words)

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