Decided on: 4th December 2025
Coram: Justice Amit Bansal
Citation: CS (Comm) 119 of 2025
Introduction
The Delhi High Court, on 4 December 2025, declined interim relief in ITC Limited & Anr. v. Adyar Gate Hotels Limited, holding that the plaintiffs failed to establish territorial jurisdiction and, in any event, did not make out a case for interim injunction on merits. The decision brings into focus settled principles governing jurisdiction in internet era intellectual property law disputes, the effect of long and continuous use, delay in bringing an action and the limits of inter se rights between registered proprietors.
Facts of the Case
The “Dakshin” restaurant was conceived and launched in April 1989 at the Welcomgroup Adyar Gate Hotel, Chennai. The hotel property was owned by Adyar Gate Hotels Limited (“AGHL/ Defendant”), which had engaged ITC (“ITC”/ “Plaintiff”) under an Operating Services Agreement for technical, operational, and hospitality services.
ITC claimed that it adopted the mark “DAKSHIN” in 1989 for its South Indian cuisine restaurant, first launched at the Welcomgroup Park Sheraton, Chennai. In additional to building substantial goodwill and reputation for its DAKSHIN restaurant across India, including Delhi, ITC obtained statutory rights by way of trademark registrations for the “DAKSHIN” trademarks, claiming prior use of the mark since 1989 and copyright registrations in the artistic logo.
On the other hand AGHL claimed that under the Operating Services Agreement, ITC was expressly not a promoter or co-promoter of the hotel and did not invest in the hotel or its restaurants. AGHL claimed that it bore the costs of infrastructure, personnel, licences, permits, capital expenditure, and working capital.
ITC filed suit against AGHL in Delhi seeking injunction on their use of the “DAKSHIN” trademark, relying on:
- online listings (Zomato, Instagram, etc.) accessible in Delhi,
- alleged “dynamic effect” on its goodwill in Delhi,
- apprehension of future expansion into Delhi, and
- Sections 134 Trade Marks Act and 62 Copyright Act.
Final Judgment
Territorial Jurisdiction: Online Listings and “Dynamic Effect”
ITC sought to invoke the jurisdiction of the Delhi High Court on the basis that reservations for the Chennai restaurant could be made online from Delhi, and that any adverse experience at Dakshin Chennai would impact the goodwill of Dakshin restaurants operated by ITC elsewhere.
The Court rejected this submission applying the settled law laid down in Banyan Tree. The Court held that mere accessibility of websites or ability to make reservations does not amount to commercial transactions within the jurisdiction of Delhi. Restaurant services can only be availed in Chennai. The Court noted that a customer might be able to reserve a table sitting in Delhi but the transaction can only be concluded once the customer goes to Chennai and eats at the particular restaurant. Thus, the Court held that prima facie ITC does not have any presence in Delhi and therefore, Delhi High Court has no jurisdiction.
The Court further held that the “dynamic effect” doctrine relied upon by the ITC arises in the context of online sale of goods or services, and not in cases involving location-specific hospitality services. No material was produced to show confusion, deception, or reputational injury in Delhi.
Quia Timet and Apprehension of Expansion
Essentially, the Latin phrase Quia timet refers to an action initiated “because he fears”, as a preventive legal action initiated even before any actual violation or damage has occurred – in anticipation of an imminent infringement or passing off.
ITC’s plea that the suit was a Quia timet action, based on apprehended future expansion by AGHL, was found to be unsupported by the Ccourt. The Court took note of the statement of AGHL that it had no plans to expand out of Chennai.
Trademark Ownership and Concurrent Registration
Both parties held trademark registrations for the “DAKSHIN” trademarks in the relevant class, each claiming user from 1989. AGHL consistently claimed first use from 14 April 1989, the date of launch of the restaurant. ITC’s claim of use from 1 April 1989 arose from a belated amendment to its trademark application.
The Court noted that AGHL’s trademark registration stands on record and enjoys statutory presumption of validity. No rectification or cancellation proceedings were pending. In such circumstances, Section 28(3) of the Trade Marks Act operates to bar infringement actions between two registered proprietors of identical or similar marks. The dispute, if at all, could only be examined on the principles of passing off relying upon the judgment of Supreme Court in S Syed Mohideen v P. Sulochana Bai.
Acquiescence and Long, Uninterrupted Use
A central feature of the case was ITC’s admitted conduct between 2015 and 2024. After ITC exited the Chennai hotel in 2015, AGHL continued to operate the Dakshin restaurant, first in collaboration with another hospitality group and thereafter independently.
The Court came to the conclusion that the AGHL was involved in conceptualization of the “DAKSHIN” restaurant; and was involved in running the same from 14th April 1989 till 31st December 2023 at its hotel in Chennai. During this period, ITC did not object to AGHL’s use of the “DAKSHIN” trademark, despite being aware of it and despite opposing the use and registration of “DAKSHIN” trademarks by other third parties.
The Court accepted the submission that such long, uninterrupted use, with plaintiff’s knowledge and inaction on the part of the plaintiff, attracts the doctrine of acquiescence under Section 33 of the Trade Marks Act, disentitling the ITC from interim equitable relief.
Conclusion
On a prima facie assessment, the Court held that it lacked territorial jurisdiction to grant interim relief. Independently, it found that the ITC had failed to establish passing off, or irreparable injury, particularly in light of registrations, long and continuous use by the defendant, no misrepresentation and acquiescence. The application for interim injunction was accordingly dismissed.
The case is significant as it clarifies that online visibility of a physical service does not expand the territorial enforceability of trademarks. It also underscores the doctrine of acquiescence and highlights the importance of timely enforcement of trademark rights.
Aggrieved by the judgment of the Single Judge, the ITC preferred an appeal before the Division Bench. By order dated 17 December 2025, the Division Bench refrained from granting any stay on the impugned judgment. The Division Bench recorded that AGHL would remain bound by its statement that it would confine the use of the mark “DAKSHIN” to the existing restaurant premises in Chennai, and would not expand the business to any other location.