[This post is authored by SpicyIP intern Anushka Dhankar. Anushka is a third-year student at the National Law School of India University. She is interested in the AI/copyright interface and hopes to pursue a career in IP litigation, with a dash of AI policy on the side.]
Recently, a Division Bench (“DB”) of the Delhi High Court (“DHC”) clarified the evolving jurisprudence on ex-parte interim injunctions in ITC v. Adyar Gate Hotels. Hearing an appeal against an injunction against passing off granted by a Single Judge (“SJ”), the Court emphasized that under Order XXXIX Rule 3, long use of the plaintiff’s mark by the defendant without objections is a relevant factor in granting ex-parte relief.
The dispute concerned the trademark “Dakshin,” associated with a restaurant in a hotel owned by Adyar Gate Hotels Ltd. (“Adyar”) and formerly managed by ITC Ltd. (“ITC”) under an agreement. ITC registered the mark in 2000 and permitted Adyar’s use of the same until the agreement’s expiry in 2015, after which a competitor took over the hotel’s management. Despite the mark having accrued significant goodwill, ITC did not contest the restaurant’s continued use until Adyar relocated the restaurant in 2024. ITC then filed the present suit for passing off and trademark and copyright infringement. To complicate matters, Adyar had registered a similar mark in 2004, and explained the similarity by representing ITC’s mark as owned by its “group company”. While ITC did not object to this at the time, they challenged the validity of the registration in the present application.
Ex-parte order by the SJ
The SJ granted ex-parte relief based on a prima facie case of passing off, balance of convenience and irreparable injury. On first glance, it is unclear whether a prima facie case of passing off is indeed established. S. Syed Mohideen v. Sulochana Bai (Supreme Court 2015) held that passing off requires establishing goodwill, misrepresentation and actual damage. The SJ overlooked the issue of whether ITC suffered any actual damage at all, a crucial question given Adyar’s alleged long-term actions of passing off. In fact, it is unclear whether ITC pleaded any actual damage at all – I believe it unlikely, considering that actual evidence of damage would make their continued inaction harder to explain.
The DB Order
Taking a step in the right direction, the DB highlighted ITC’s inaction as a crucial consideration in light of Order XXXIX Rule 3, which mandates notice to the defendant unless delay caused by notice justifies ex-parte relief. The Court was swayed by the absence of an urgency factor – ITC did not allege Adyar to be a recent infringer, such that if relief was denied, the purpose of seeking it would be defeated due to passage of time. Thus, the mere factum of Adyar’s unobjected use of the mark for nearly nine years entitled Adyar to the opportunity to file a reply.
The DB’s decision comes as a welcome addition to Dabur v. Emami, (analysed here) where the DHC held that the defendant’s use of the mark before the institution of the suit warranted a rudimentary opportunity to oppose the application for an interim injunction. While Dabur did not establish a blanket rule against ex-parte relief (see here), it highlighted that the defendant’s use was a relevant circumstance to be considered while giving reasons. Kailash Kumar Jain v. Kundan Electro (analysed here) later reinforced this, criticising unreasoned ex-parte relief and underlining use of the defendant, plaintiff’s knowledge of such use, and acquiescence as critical factors. While Dabur framed the opposite party’s right to oppose in terms of the ultimate purpose of injunctive relief (i.e., “the ends of justice”), both ITC and Kailash Kumar Jain strengthen this right by grounding it in Order XXXIX Rule 3.
A Flawed Precedent? Examining the Grounds of Appeal
However, the DB’s order suffers from a flaw. It fails to engage with a key ground of appeal: the lack of territorial jurisdiction. The order does not address Adyar’s challenge to the SJ’s ruling on jurisdiction, which should have been considered before delving into the merits of ex-parte relief. If the DHC lacked territorial jurisdiction, the relevant party would have to apply to the Supreme Court for transfer of the suit to the Court of appropriate jurisdiction.
Moreover, the second ground of appeal was improper service of the advance copy of the suit. While the DB did not scrutinize whether service of notice was procedurally sound, it acknowledged that such service was an important aspect of Adyar’s right to be heard before ex-parte relief was granted. Rather than engaging with the technicalities of service, the DB thus framed the issue in terms of a broader principle—ensuring that the defendant was given a fair opportunity to be heard.
While the DB tried to address the major flaw with the Single Judge order i.e. passing an order without hearing the defendant, it would’ve lent more rigour to the decision had it addressed all the grounds raised by the defendant.