Itc Limited & Anr. vs Adyar Gate Hotels Limited

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 27 February 2026
Pronounced on: 01 July 2026
+ FAO(OS) (COMM) 207/2025 & CM APPL. 79554/2025
ITC LIMITED & ANR. .....Appellants
Through: Mr. Arvind Nigam and Mr.
Arvind Nayar, Sr. Advs. with Mr. Saurav
Agarwal, Ms. Mamta Rani Jha, Mr. Nikhil
Rohatgi, Ms. Shruttima Ehersa, Ms.
Aiswarya Debardarshini, Ms. Jahanvi
Agarwal, Mr. Agnish Aditya, Mr. Akshay
Joshi, ⁠Ms. Prachi Dubey, Mr. Aarya Bhat
and Mr. Tanishq Kashyap, Advs.
versus
ADYAR GATE HOTELS LIMITED .....Respondent
Through: Mr. Rajiv Nayar and Mr. Amit
Sibal, Sr. Advs. with Mr. Prateek Chadha,
Mr. Adarsh Ramanujan, Mr. Sreekar
Aechuri, Ms. Surbhi Soni, Mr. Aniket
Chauhaan and Mr. Parth Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
% J U D G M E N T
01.07.2026
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:01.07.2026
17:59:04
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C. HARI SHANKAR, J.
Facilitative Index to the Judgment
S. No. Subject Para Nos
1 A The lis 1 – 13
2 B The Impugned Judgment 14 – 59
3 I Submissions of ITC before the learned Single
Judge
14 – 23
4 II Stand of AGH before the learned Single Judge 24 - 30
5 III Analysis and conclusions of the learned Single
Judge
31 – 59
6 C Rival Contentions, and our view thereon 60 – 187
7 I Could the learned Single Judge have dealt with
the dispute on merits, having found that he had no
territorial jurisdiction in the matter?
61 – 69
8 II Scope of interference – Wander and thereafter 70 – 74
9 III Re. territorial jurisdiction 75 - 119
10 IIIA Section 134 would not apply, as the suit can lie
only for passing off
76 - 79
11 IIIB Submissions of Mr. Nigam 80 - 82
12 IIIC Submissions of Mr. Ramanujan 83 – 84
13 IIID Our View 85 – 119
14 IV Whether AGH obtained registration of the
DAKSHIN trade mark, in its favour, in Class 42,
by misrepresentation
120 – 125
15 V Interpretation of the OSA, ownership of the
DAKSHIN trade mark and the aspect of passing
off
126 - 172
16 VA The OSA 127
17 VB A Prefatory Overview 128 – 133
18 VC Rival Submissions 134 – 135
19 VD Issues that arise – Date of commencement of user
136 – 143
of the DAKSHIN/
mark by AGH and situs
of goodwill under the OSA
20 VE Date of commencement of user, by AGH, of the
144 – 153
DAKSHIN/
mark
21 VF In whose favour did goodwill of the
154 – 165
DAKSHIN/
mark, under the OSA, enure?
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:01.07.2026
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22 VG Re. misrepresentation 166 – 169
23 VH Re. injury/damage 170 – 171
24 V.I The sequitur 172
25 VI Acquiescence 173 - 182
26 VII Re. copyright infringement 183 – 187
27 D Summarizing our findings 188
28 E Conclusion 189 – 191
A. The lis
1
1. The Welcomgroup Park Sheraton Hotel was set up in a
2
building owned by Adyar Gate Hotels Ltd. in Chennai in 1985
3
consequent to an Operating Service Agreement dated 12 February
1985 executed between the appellant ITC Ltd. and AGH.
2. With effect from 14 April 1989, a South Indian restaurant
named Dakshin, using the logo
, started operations in the
Park Sheraton. The restaurant continued to operate, under the aegis of
the OSA, till expiry of the OSA on 31 March 2015.
3. Thereafter, ITC withdrew from the hotel. AGH entered into a
fresh agreement with the Inter-Continental Hotel chain, pursuant to
which a new hotel, under the name Crowne Plaza Chennai Adyar
4
Park was started in the same premises.
4. ITC objects to the fact that, even after the expiry of the OSA,
between ITC and AGH on 31 March 2015, AGH continued to run the
1
“the Park Sheraton” hereinafter
2
“AGH” hereinafter
3
“OSA” hereinafter
4
“Crowne Plaza” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:01.07.2026
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Dakshin restaurant in the Crowne Plaza using the same trade mark
DAKSHIN/
. It is however a matter of record that ITC never
objected to the use, by AGH, of the DAKSHIN/
mark for
running the restaurant in the Crowne Plaza, which continued till 2023.
5. In April-July 2024, the building housing the Crowne Plaza was
demolished. Thereafter, AGH opened a new restaurant under the name
DAKSHIN/
in the same road, some distance away.
6. At this point, ITC approached this Court by means of CS
(Comm) 119/2025 objecting to the use, by AGH, of the
DAKSHIN/
mark. ITC contended that, by using the said mark
even after the right to do so had come to an end with the expiry of the
OSA in 2015, AGH was infringing the said mark which was registered
in favour of the ITC under Section 23 of the Trade Marks Act 1999 as
well as the copyright held by ITC in the artistic work comprised in the
logo.
7. It was also alleged that, by doing so, AGH was seeking to pass
off the services provided by it in its Chennai Dakshin restaurant, as
associated with ITC.
8. Accordingly, ITC, in the suit, sought a decree of permanent
injunction, restraining AGH from using the DAKSHIN/
mark
for any purpose whatsoever. Additionally, the suit also claimed
delivery-up, damages and costs.
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KUMAR
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9. ITC filed, along with the suit, IA 3768/2025, seeking an
interlocutory injunction restraining AGH from using
DAKSHIN/
mark pending disposal of the suit. An ad interim
injunction, in terms of the said prayer, was granted by a learned Single
Judge of this Court on 13 February 2025.
10. By the impugned order dated 4 December 2025, however, the
learned Single Judge has dismissed IA 3768/2025.
11. Aggrieved thereby, ITC has filed the present appeal under
Section 13 of the Commercial Courts Act 2015.
12. We have heard Mr. Arvind Nigam, learned Senior Counsel for
the ITC and Mr. Ramanujan, learned Counsel for AGH at great length.
13. Learned Counsel for both parties have also placed on record
detailed written submissions.
B. The Impugned Judgment
I. Submissions of ITC before the learned Single Judge
14. ITC claimed, before the learned Single Judge, to have been the
first adopter of the DAKSHIN/
mark, when the restaurant,
bearing that name, was opened in the Park Sheraton on 14 April 1989.
Pursuant thereto, the mark DAKSHIN/
was registered in
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:01.07.2026
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favour of ITC, under Section 23 of the Trade Marks Act, with effect
from 13 September 2000, in Classes 29 and 30. Class 29 covered
meat, fish, poultry and game, meat extracts, preserved dried and
cooked fruits and vegetables, jellies, jams, fruits, sauces, egg, milk
and milk products, edible oils and fats, cooked food and snacks and
Class 30 covered coffee, tea, rice, sugar, rice, tapioca, sago, artificial,
coffee, flour and preparations made from cereals, breads, biscuits,
pastry and confectionary, ices, honey, treacle, yeast, baking powder,
salt, mustard, vinegar, sauces, spices including indian snacks, papads
and savories. Though the mark was initially registered on “proposed
to be used” basis, the user claim was amended, on application by ITC,
to 1 April 1989, in 2005. Moreover, the
logo was also
registered as an artistic work, under the Copyright Act, 2000 in favour
of ITC, on 15 November 1989.
15. By dint of continuous user, ITC claimed to have acquired
considerable goodwill in the DAKSHIN/
mark, with the
revenue earned, by use of the mark, being to the tune of ₹ 12.38 crores
during the period 2023-2024 alone. Other material evidencing
goodwill was also cited, such as followers on social media, etc. ITC
further submitted that, under the clauses of the OSA, the entire
goodwill relatable to the DAKSHIN/
mark was ITC’s and
ITC’s alone, and AGH could lay no claim thereto.
16. AGH, it was submitted, was an owner of real estate. AGH
entered into the OSA with ITC on 12 February 1985 to operate and
run the Park Sheraton in the building owned by AGH. Article XIII of
Signature Not Verified
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KUMAR
Signing Date:01.07.2026
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the OSA clearly stated that all present as well as future trade marks
and trade names, as well as other intellectual property, would belong
to ITC and that AGH’s right was limited to user thereof. A similar
OSA, with similar covenants, was executed between ITC and AGH in
respect of a property owned by AGH in Vishakapatnam, on 8 February
1997.
17. With the expiry of the OSA., claimed ITC, also came to an end
the right of AGH to use the DAKSHIN/
mark. AGH,
however, continued to run the restaurant in the same premises, now
functioning as the Crowne Plaza hotel following a fresh agreement
with the Inter-Continental Hotel chain, using the DAKSHIN/
mark.
18. AGH applied for registration of the DAKSHIN/
mark, in
its favour, in Class 42, dealing with restaurants alone, on 23 April 2004,
claiming user of the mark in association with ITC since 14 April 1989,
when the restaurant had opened in the Park Sheraton. ITC’s DAKSHIN/
mark was cited by the Trade Marks Registry as a competing
mark, whereupon AGH claimed that the mark belonged to a group
Company. AGH was ultimately granted registration of the
DAKSHIN/
mark on 16 September 2005, subject to
association with ITC’s DAKSHIN/
mark.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:01.07.2026
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19. ITC claimed that AGH had, therefore, even before the Trade
Marks Registry, acknowledged that ITC was the owner of the
DAKSHIN/
mark.
20. ITC, per contra
21. , relied on the following documents to show user and goodwill
in the “Dakshin” trademark:
(i) invoices relating to the Dakshin restaurant for the period
prior to 2015,
(ii) a CA certificate, certifying the turnover from various
Dakshin restaurants of ITC for the period 2014-2015 to 2023-
2024,
(iii) News articles which refer to ITC’s Dakshin restaurants,
(iv) brochures and pamphlets published by ITC to promote
the Dakshin restaurant across India,
(v) awards and recognitions earned by ITC and
(vi) extracts from social media accounts of ITC referring to
the use and promotion of the Dakshin restaurants.
22. Admittedly, however, ITC never objected to the use, by AGH,
of the DAKSHIN/
mark, which continued till 2023, when the
Crowne Plaza shut down, and the building itself was demolished. It
was only in October 2024, when ITC claimed to have come across a
standalone restaurant being run by AGH, some distance away on the
same road, under the DAKSHIN/
mark, that ITC moved this
Court, by means of the present suit, seeking an injunction against use
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
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of the mark by AGH, alleging infringement and passing off by AGH
by unauthorized use of the DAKSHIN/
mark.
23. AGH contested the suit on the ground of territorial jurisdiction
as well, in response to which ITC sought to justify invocation of the
jurisdiction of this Court on the ground that (i) AGH was soliciting
business across the country, including Delhi, through the listing of its
DAKSHIN restaurant on e-commerce platforms such as Zomato, (ii)
the suit was also maintainable as a quia timet action, as ITC
anticipated that AGH would expand its business to other cities,
including Delhi, (iii) the dynamic effect of AGH’s tortious action was
felt by ITC wherever it was running its DAKSHIN restaurant as, at
each and every such place, there was a likelihood of consumers
mistaking AGH’s DAKSHIN to be associated with ITC and (iv) ITC
was also entitled to maintain the suit before this Court in view of
5
Section 134 of the Act.
II. Stand of AGH before the learned Single Judge
24. AGH advanced, as a preliminary objection, the plea of
territorial jurisdiction. It was submitted that (i) no part of the cause of
5
134. Suit for infringement, etc. to be instituted before District Court .—
(1) No suit—
(a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or
(c) for passing off arising out of the use by the defendant of any trade mark which
is identical with or deceptively similar to the plaintiff's trade mark, whether registered or
unregistered,
shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
(2) For the purpose of clauses (a) and (b) of sub-section (1), a “District Court having
jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of
1908) or any other law for the time being in force, include a District Court within the local limits of
whose jurisdiction, at the time of the institution of the suit or other proceeding, the person
instituting the suit or proceeding, or, where there are more than one such persons any of them,
actually and voluntarily resides or carries on business or personally works for gain.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:01.07.2026
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action in the suit had arisen within the jurisdiction of this Court, (ii)
the apprehension that AGH would expand its activities, qua the
Dakshin restaurant, was baseless, as AGH had been running the
restaurant in Chennai, with no branches, for over 30 years, (iii) the
ability to reserve a table at the Chennai restaurant of AGH over an e-
commerce website from Delhi would not confer territorial jurisdiction
on this Court, (iv) the mere fact that AGH’s social media accounts, or
third party websites referring to AGH’s DAKSHIN restaurant were
accessible from Delhi would also not confer jurisdiction on this Court,
as it would not result in specific targeting of Delhi as a market by
AGH and (v) Section 134 of the Trade Marks Act was not applicable.
25. On merits, AGH claimed that, as co-registrants of the
DAKSHIN/
mark under the Trade Marks Act, neither ITC,
nor AGH, could maintain an action against the other for infringement,
6 7
in view of Section 28(3) and Section 30(2)(e) thereof. ITC, it was
pointed out, had never opposed the registration of the DAKSHIN
trade mark in favour of AGH. Having allowed AGH to use the
DAKSHIN/
mark , ITC was further proscribed from
8
injuncting use of the mark by AGH, in view of Section 33(1) of the
Trade Marks Act, which incorporated the principle of acquiescence.
6
(3) Where two or more persons are registered proprietors of trade marks, which are identical with or
nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far
as their respective rights are subject to any conditions or limitations entered on the register) be deemed to
have been acquired by any one of those persons as against any other of those persons merely by registration
of the trade marks but each of those persons has otherwise the same rights as against other persons (not being
registered users using by way of permitted use) as he would have if he were the sole registered proprietor.
7
(2) A registered trade mark is not infringed where—
*
( e ) the use of a registered trade mark, being one of two or more trade marks registered under
this Act which are identical or nearly resemble each other, in exercise of the right to the use of that
trade mark given by registration under this Act.
8
33. Effect of acquiescence .—
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
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26. Apropos the copyright registration held by ITC in the
9
logo, AGH submited that, unlike Section 31(1) of the Trade Marks
10
Act, registration of a copyright did not operate, under Section 48 of
the Copyright Act, as prima facie proof of ownership of the
copyrighted artistic work.
27. It was further submitted that, under the OSA, all expenses, in
respect of the Park Sheraton Hotel, were met by AGH, which included
the expenses to the agency which created the
logo. ITC could
not seek to arrogate, for itself, the goodwill which had developed in
the DAKSHIN/
mark, during its use from 1989 to 2015. In
fact, submitted AGH, ITC was merely a service provider under the
OSA, and the goodwill in the DAKSHIN/
mark entirely
enured in favour of AGH. AGH also claimed to have coined and
devised the DAKSHIN/
mark, contrary to ITC’s claims in that
regard.
(1) Where the proprietor of an earlier trade mark has acquiesced for a continuous period of
five years in the use of a registered trade mark, being aware of that use, he shall no longer be
entitled on the basis of that earlier trade mark—
( a ) to apply for a declaration that the registration of the later trade mark is invalid,
or
( b ) to oppose the use of the later trade mark in relation to the goods or services in
relation to which it has been so used,
unless the registration of the later trade mark was not applied in good faith.
9
31. Registration to be prima facie evidence of validity .—(1) In all legal proceedings relating to a
trade mark registered under this Act (including applications under Section 57), the original registration of the
trade mark and of all subsequent assignments and transmissions of the trade mark shall be prima
facie evidence of the validity thereof.
10
48. Register of Copyrights to be prima facie evidence of particulars entered therein .—The
Register of Copyrights shall be prima facie evidence of the particulars entered therein and documents
purporting to be copies of any entries therein, or extracts therefrom certified by the Registrar of Copyrights
and sealed with the seal of the Copyright Office shall be admissible in evidence in all courts without further
proof or production of the original.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
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28. AGH, in order to substantiate its assertion that the “Dakshin”
trademark was conceptualised by it, placed reliance on
11
(i) excerpts from T.T. Vasu ’s “The Man who could never
say No”,
(ii) “The story of Adyar Gate” published by the madras
Heritage and Carnatic Music,
(iii) the New York Times article “Fare of the Country”,
(iv) documents which purported to show that AGH had
initially conceptualised the opening of a South Indian restaurant
(v) documents which purported to show that AGH was
involved in the architecture and the interior designs of the
Dakshin restaurant, and
(vi) the Annual Report of the year 1988-1989 of AGH, which
purported to state that the DAKSHIN restaurant was
commissioned by AGH in the said financial year.
29. AGH further relied on the following documents to assert that
the Dakshin restaurant was being operated by it:
(i) a Chartered Accountant’s certificate, certifying AGH’s
turnover from the Dakshin restaurant,
(ii) invoices generated by AGH in respect of the services
provided at the restaurant from 2016 to 2024,
(iii) evidence of promotions carried out by AGH at the
restaurant and
(iv) the Public Performance license to play at the restaurant,
which was in the name of AGH.
11
“Vasu” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
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30. No case of infringement being maintainable in view of the fact
that AGH held a valid registration of the DAKSHIN/
mark, it
was submitted that the highest claim of ITC could only be of passing
off, for which none of the three classical requirements of existence of
goodwill of ITC in the mark, misrepresentation by AGH and damage
suffered by ITC as a result, was satisfied in the present case.
III. Analysis and conclusions of the learned Single Judge
31. Addressing, first, the aspect of territorial jurisdiction, the
learned Single Judge observes, relying on the judgments of the
12
Supreme Court in Asma Lateef v. Shabbir Ahmad and of the
Division Bench of this Court in Allied Blenders & Distillers v. R.K.
13
Distilleries , that the aspect of territorial jurisdiction is relevant even
at the stage of consideration of the prayer for interim relief, and that it
is permissible for a defendant to raise want of territorial jurisdiction as
an objection against the grant of injunction. Thereafter, the learned
Single Judge proceeds to rely on paras 38, 41 and 45 of Banyan Tree
14
Holdings v. A Murali Krishna Reddy , paras 50 and 104 of Cable
15
News Network v. CTVN Calcutta Television Network and
16
Impresario Entertainment & Hospitality v. S & D Hospitality , to
hold that mere accessibility of the website of the plaintiff or the
defendant within the territorial jurisdiction of a particular Court would
not suffice to invest it with jurisdiction, in the absence of proof of a
concluded commercial transaction over such website. The learned
12
(2024) 4 SCC 696
13
2017 SCC OnLine Del 7224
14
2010 42 PTC 361
15
2023 SCC OnLine Del 2436
16
2018 SCC OnLine Del 6392
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KUMAR
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Single Judge holds that there is no evidence of any such concluded
commercial transaction, with AGH, from Delhi.
32. ITC, notes the learned Single Judge, had sought to contend that
reservation for a seat in AGH’s Chennai Dakshin restaurant could be
made online, over the Zomato e-commerce platform, even sitting in
Delhi and had, in support thereof, placed on record an affidavit dated
21 April 2025. The learned Single Judge holds that the mere making
of such a reservation would not amount to concluding a commercial
transaction, as such a transaction would be concluded only when the
person visited the Dakshin restaurant in Chennai and availed of the
services provided there, by partaking of food. It is quite possible that,
after having made a reservation online over the Zomato website, the
person may not choose to visit the restaurant at all, and may even
cancel the reservation. As such, the learned Single Judge holds, in the
impugned judgment, that the “commercial transaction” could not be
linked merely to making of a reservation. The commercial transaction
would take place only when the customer physically visits the
Dakshin restaurant in Chennai and makes payment there. The learned
Single Judge notes that it is not ITC’s case that AGH was delivering
food in Delhi on the basis of an order placed on the e-commerce
platform from Delhi. As such, no commercial transaction, in the
opinion of the learned Single Judge, could be concluded at Delhi with
AGH, apropos the Dakshin restaurant at Chennai. There is, therefore,
no specific targeting, by AGH, of Delhi as a market for its Chennai-
based Dakshin restaurant, through any website or e-commerce
platform.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
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33. The learned Single Judge thereafter proceeds to deal with ITC’s
contention that the dynamic effect of the alleged infringement/passing
off, by AGH, was felt by ITC at every place where it had a Dakshin
restaurant. It was sought to be contended that, if a customer was to
dine at AGH’s Chennai Dakshin restaurant, and not have a good
experience, it would affect the reputation and goodwill of all Dakshin
restaurants run by ITC, as the customer would associate AGH’s action
restaurant with ITC. Apropos this submission, the learned Single
Judge observes that, while ITC had placed on record certain negative
reviews by customers who had visited AGH’s Chennai Dakshin
restaurant, there was no evidence to indicate that the reputation of
goodwill of ITC’s Dakshin restaurant in Delhi had thereby been
adversely affected. The learned Single Judge also notes that there is
no evidence to indicate that any customer was associating AGH’s
Dakshin restaurant at Chennai with ITC or with ITC’s Dakshin
restaurants in other cities.
34. Addressing ITC’s contention that the suit was maintainable as a
quia timet action, as it apprehended that AGH would expand its
activities to Delhi, the learned Single Judge observes that no material,
in support of the moment, was forthcoming and that, in fact, AGH had
clearly stated, in its written statement, that it had no commercial
presence or any business activity or office within the jurisdiction of
this Court. Admittedly, AGH had not opened any restaurant outside
Chennai, and had also stated that it had no intention of doing so,
within the jurisdiction of this Court. The attempts to invoke the
territorial jurisdiction of this Court, on the grounds that the suit was
Signature Not Verified
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KUMAR
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maintainable as a quia timet action has also, therefore, been negatived
by the learned Single Judge.
35. The learned Single Judge, thereafter, proceeds to address ITC’s
invocation of Section 134 of the Trade Marks Act and Section 62 of
the Copyright Act. The impugned judgment holds, on the basis of the
decision of the Supreme Court in Indian Performing Rights Society
17
Ltd v. Sanjay Dalia , followed by the Division Bench of this Court in
18
Ultra Homes Construction v. Purushottam Kumar Chaubey , that,
where the cause of action arises, wholly or in part, at the location of
the principal or head office of the plaintiff, the plaintiff cannot sue the
defendant at a distant location on the ground that it also has a
subordinate office at such place, though no part of the cause of action
has arisen there. In the present case, holds the learned Single Judge, it
was undisputed that the registered office of ITC was in Kolkata.
Inasmuch as the learned Single Judge had not found any prima facie
case of the whole, or part of the cause of action having arisen at Delhi,
the mere fact that ITC also has an office at Delhi has been found, by
the learned Single Judge, not to be sufficient to confer jurisdiction on
this Court.
36. Following the above discussion, the learned Single Judge holds
that, prima facie , this Court does not have territorial jurisdiction to
deal with the present lis and that, therefore, even on this sole ground,
ITC would not be entitled to any injunction.
17
(2015) 10 SCC 161 , hereinafter referred to as " IPRS "
18
2016 SCC OnLine Del 376
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KUMAR
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37. The impugned judgment, thereafter, proceeds to the merits of
the dispute.
38. The learned Single Judge holds that the documents provided by
AGH demonstrated that the idea of opening a South Indian restaurant
by the name “Dakshin” was conceived by Vasu as the Chairman of
AGH, and that Vasu had engaged his brother’s cook, Paramasivam
Iyer, to cook South Indian dishes in the restaurant. Hindustan Times
19
Agency was engaged by AGH to suggest a name for the restaurant,
and one of the names suggested by HTA was “Dakshin”.
39. The learned Single Judge observes that, from 1989 to 2015, ITC
and AGH were jointly running the Dakshin restaurant in collaboration
with each other. The documents on record indicated that AGH
continued to run the restaurant even after its association with ITC had
come to an end.
40. Though the invoices filed by ITC had been issued in the name
of the Park Sheraton Hotel, the registered office address, the
20 21
Permanent Account Number , the Value Added Tax number, the
22
Sales Tax number and the FSSAI registration details were all of
AGH.
19
"HTA" hereinafter
20
“PAN” hereinafter
21
“VAT” hereinafter
22
Food Safety and Standards Authority of India
Signature Not Verified
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41. From these details, the learned Single Judge arrives at the prima
facie conclusion that the Dakshin restaurant was conceptualised by
AGH and ran from 14 April 1989 to 31 December 2023 at Chennai.
42. Apropos the OSA, the learned Single Judge holds that, under
the OSA, the role of ITC was merely that of a service provider. In fact,
the OSA also provided the details of the service fee and the incentive
fee payable to ITC.
43. ITC’s contention that it was not a mere consultant, but had
independent control over the operations of the Park Sheraton Hotel,
including branding and brand value, and that it had expended
considerable time and financial resources in promotion thereof, was
found unworthy of acceptance. The learned Single Judge holds that
the money spent by ITC for marketing and promotion was only as per
Article IV read with Appendix II of the OSA.
44. ITC had placed considerable reliance on Article XIII of the
OSA which, according to ITC, clearly indicated that ITC alone held
rights over the trade mark “DAKSHIN”. The learned Single Judge,
however, holds that Article XIII of the OSA cannot come to the aid of
ITC. Emphasis has been placed, in the impugned judgment, on the
words “such of ITC’s trade names and trade marks”, as employed in
Article XIII. The learned Single Judge observes that, as the OSA was
executed in 1985, and the trademark “DAKSHIN” was conceived only
in 1989, with no evidence of any prior use, by ITC, of, “DAKSHIN”
earlier to 1985, “DAKSHIN” could not be included in the trade names
and trade marks envisaged in Article XIII of the OSA.
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45. With reference to ITC’s reliance on the words “any other
identifying marks present or future as may be decided by ITC to its
sole discretion”, also contained in Article XIII, the learned Single
Judge observes that ITC never communicated to AGH that the
“DAKSHIN” trademark belonged to ITC and that AGH was only
being permitted to use it. Even though the OSA was amended several
times, “DAKSHIN” was never added to the list of trademarks owned
by ITC, as envisaged in the OSA.
46. On the basis of this discussion, the learned Single Judge has
held that ITC was not, prima facie , the owner of the trademark
“DAKSHIN”.
47. With respect to ITC’s allegation that AGH obtained registration
of the DAKSHIN trade mark in its favour by misrepresenting ITC to
be a “group Company”, the learned Single Judge notes that, at the
time when AGH applied for registration of the Dakshin trademark,
ITC and AGH were in collaboration and that, therefore, even if AGH
loosely referred to ITC as a “group company”, it could not be
regarded as misrepresentation. Moreover, in the affidavit filed by
AGH in support of its application, AGH declared that it was using the
“DAKSHIN” trade mark since 14 April 1989 and also provided its
annual sales turnover figures.
48. In any event, notes the learned Single Judge, ITC never filed
any opposition against AGH’s application. Even after the
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“DAKSHIN” trade mark was registered in favour of AGH in Class 42,
ITC never chose to file any rectification application.
49. In the circumstances, the learned Single Judge holds that it was
not possible to accept ITC’s contention that AGH had obtained the
registration of the “DAKSHIN” trade mark in its favour in Class 42 by
misrepresentation.
50. Following the above prima facie findings, the learned Single
Judge holds that no case of passing off was made out, as (i) AGH had
conceived the “DAKSHIN” Mark, (ii) AGH had been running the
restaurant at Chennai, under the DAKSHIN mark since April 1989
and (iii) AGH had continued to use the DAKSHIN mark even after the
expiry of the OSA without mentioning any association with ITC. By
dint of continuous user, holds the learned Single Judge, AGH had
acquired goodwill in the DAKSHIN trademark and could not,
therefore, be alleged to be riding on the goodwill of ITC.
51. Besides, holds the learned Single Judge, there was no evidence
to show that any customer had associated AGH’s Chennai-based
Dakshin restaurant with ITC, or of any injury to ITC’s goodwill or
reputation as a result of running of the said restaurant.
52. Thus, holds the learned Single Judge, no prima facie case of
passing off was made out.
53. The learned Single Judge has also accepted the plea of
acquiescence, advanced by AGH. In doing so, the learned Single
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Judge has noted that AGH had been using the “DAKSHIN” Mark
independently since 2015, even after the expiry of the OSA, with no
objection by ITC at any point of time. AGH had also placed, on
record, a certificate by its Chartered Accountant, indicating that,
during the period 2016-2017 to 2023-2024, AGH had developed a
sizeable turnover in respect of its DAKSHIN restaurant at Chennai.
54. ITC sought to rely, in response to the plea of acquiescence
advanced by AGH, on the judgment of the Supreme Court in Midas
23
Hygiene v. Sudhir Bhatia . The learned Single Judge holds the said
decision not to be applicable, as the adoption of the mark DAKSHIN
by AGH had not been found, by the learned Single Judge, to be
dishonest, whereas the principle in Midas Hygiene applied in a case of
a dishonest defendant.
55. The learned Single Judge holds, therefore, that, prima facie , the
plea of acquiescence, advanced by AGH, was acceptable.
56. Proceeding, thereafter, to ITC’s plea of copyright infringement,
the learned Single Judge accepts AGH’s submission that, unlike
Section 31(1) of the Trade Marks Act, Section 48 of the Copyright Act
only creates a presumption of authorship of the owner of the copyright
over the copyrighted artistic work, which is rebuttable. In the present
case, notes the learned Single Judge, the Copyright Registration
Certificate notes the author of the
logo to be Indu
Balachandran, who was an employee of HTA. By virtue of clause (c)
23
(2004) 3 SCC 90
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24
of the proviso to Section 17 of the Copyright Act, therefore, HTA
became the first owner of copyright in the
logo. Moreover,
the Conceptualisation Note filed by AGH revealed that AGH had
commissioned HTA to create the name for the newly opened
restaurant in the Park Sheraton. As against this, ITC had placed
nothing on record to indicate that HTA was commissioned by it.
57. In the circumstances, holds the learned Single Judge, the mere
fact that the copyright registration certificate might have been issued
in ITC’s name would not suffice to prove ITC’s ownership over the
logo, as an artistic work under the Copyright Act.
58. Besides, notes the learned Single Judge, relying on para 19 of
the judgment of the Supreme Court in Brihan Karan Sugar Syndicate
25
v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana , the
defence of acquiescence would also apply to the plea of copyright
infringement advanced by ITC.
59. The learned Single Judge finally holds that, keeping in mind the
longevity of user, by AGH, of the “DAKSHIN” Mark, with no
objection by ITC, the balance of convenience was also in AGH’s
favour. In this context, the learned Single Judge has relied on the
judgment of the Supreme Court in Wander Ltd v. Antox (India) Pvt
24
17. First owner of copyright .—Subject to the provisions of this Act, the author of a work shall be the
first owner of the copyright therein:
Provided that—
*
( c ) in the case of a work made in the course of the author's employment under a contract of
service or apprenticeship, to which clause ( a ) or clause ( b ) does not apply, the employer shall, in the
absence of any agreement to the contrary, be the first owner of the copyright therein;
25
(2024) 2 SCC 577
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26
Ltd , to hold that longevity of user of the disputed mark by the
defendant is a factor which has to be taken into consideration while
examining a plea for interim injunction.
C. Rival Contentions before us, and our view thereon
60. Having thus distilled the view of the learned Single Judge in the
impugned judgment we, in order to avoid repetition and prolixity,
propose to deal with the various submissions advanced before us by
learned Counsel on both sides, seriatim.
I. Could the learned Single Judge have dealt with the dispute on
merits, having found that he had no territorial jurisdiction in the
matter?
61. The first issue which arises for consideration is whether, having
held, prima facie , that he had no territorial jurisdiction to adjudicate
on the dispute, the learned Single Judge could have proceeded to
render an opinion on the merits of the case. ITC relies on para 2 of the
27
judgment of the Supreme Court in Sathyanath v. Sarojamani and on
the order of the Division Bench of this Court in Vikrant Chemico v.
28
Shri Gopal Engineering to submit that he could not have done so.
62. The order in Vikrant Chemico merely contains certain tentative
observations, while issuing notice in the appeal. We fail to understand,
therefore, how it is being cited as a precedent.
26
1990 (Supp) SCC 727
27
(2022) 7 SCC 644
28
MANU/DEOR/111427/2025
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63. In advancing this contention, we are of the opinion that ITC has
overlooked the fact that the judgment under challenge is in the nature
of an interim order, disposing of an application under Order XXXIX
of the CPC. The views expressed by the learned Single Judge are,
therefore, necessarily interim and tentative in nature. They do not
propose to decide, finally, any of the issues in controversy. Thus, even
the view which is expressed on the aspect of territorial jurisdiction is a
tentative view. In holding that this Court does not have territorial
jurisdiction to adjudicate on the dispute, therefore, the learned Single
Judge is merely expressing an interim and prima facie opinion. By its
very nature, therefore, such an opinion would not foreclose discussion
on all other aspects of the dispute. The aspect of territorial jurisdiction
would itself remain open for further adjudication as the suit
progresses. At the Order XXXIX stage, therefore, there can be no
embargo on the learned Single Judge proposing to address the merits
of the controversy, despite forming a prima facie opinion that the suit
is not maintainable for want of territorial jurisdiction.
64. Sathyanath , in fact, requires the decision to be taken by the
Court on all issues, but merely states that, if the suit is bad for want of
territorial jurisdiction, the aspect of territorial jurisdiction should
ideally be decided as a preliminary issue. The decision can, therefore,
have no impact on the aspect of whether, while adjudicating the
application filed by ITC under Order XXXIX of the CPC, the learned
Single Judge erred in rendering his view on the merits of the dispute,
having held that he had, prima facie , no territorial jurisdiction.
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65. In fact, in a recent decision in Hemlata Eknath Pise v.
29
Shubham Bahu-uddeshiya Sanstha Waddhama , the Supreme Court
has observed as under:
“9. Law is pretty well-settled that when several issues arise for
being answered by a Court in the facts of a given case, ideally,
disposal thereof ought to be preceded by recording the Court's
answers to each of such issues with reasons rather than the
decision of the Court focusing on just one decisive point. This
approach, apart from ensuring that all issues are considered
providing clarity and assuring some sort of a finality, would
respect the rights of the litigants to a comprehensive decision; also,
if an appeal were carried from such decision, the appellate court
would be benefitted by a reasoned decision of the original court.”
30
66. In fact, Order XIV Rule 2(1) of the CPC requires the Court to
pronounce judgement on all issues even if a case can be disposed of
31
on a preliminary issue. Rule 2(2) of Order XIV merely clarifies that,
if a case can be disposed of on a question of law, that issue may be
tried and determined by the Court, and the suit proceeded with on the
basis of such determination.
67. ITC also places reliance on the judgment of the Division Bench
32
of this Court in Tata Sons v. Hakunamatata . That decision, to our
mind, is entirely tangential to this issue. The issue before the Division
Bench was as to whether a prima facie view could have been
29
2026 SCC OnLine SC 193
30
2. Court to pronounce judgment on all issues .—
(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall,
subject to the provisions of sub-rule (2), pronounce judgment on all issues.
31
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case
or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates
to—
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force,
and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has
been determined, and may deal with the suit in accordance with the decision on that issue.
32
2022 SCC OnLine Del 2968
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expressed by the learned Single Judge on the aspect of territorial
jurisdiction and, on that basis, relief denied under Order XXXIX of
the CPC. The Division Bench held that, if the learned Single Judge
was of the view that the suit was bad for want of territorial
jurisdiction, the proper course of action available to him was to return
the plaint under Order VII Rule 10 of the CPC, and not to proceed to
dismiss the Order XXXIX application.
68. Incidentally, the view expressed in Tata Sons is directly
contrary to the view expressed in para 23 of the judgment of an earlier
Division Bench of this Court in Allied Blenders , in which it was held
as under:
“Thus, while for the purposes of an examination under Order VII
Rule 10, CPC, the court may come to the conclusion that it has
territorial jurisdiction, this would not come in the way of the
defendant in raising a question as to territorial jurisdiction, both
when the issue of temporary injunction under Order XXXIX Rules
1 & 2, CPC is being considered and when an issue as to territorial
jurisdiction is being decided in the course of trial of the suit. To put
it differently, while a plaintiff may succeed in demonstrating, for
the purposes of Order VII Rule 10 CPC that this court has
territorial jurisdiction and that the plaint ought not to be returned,
he may fail in obtaining an order of interim injunction on the
ground that the plaintiff's entitlement is itself shaky because the
issue of territorial jurisdiction is highly debatable and prima
tenable. Therefore, the decision of the court in putting down an
objection of the defendant and in rejecting the defendant's prayer
for return of the plaint under Order VII Rule 10, CPC, would not
come in the way of the defendant raising the question of territorial
jurisdiction, both as an objection to the grant of an interim
injunction as also at the time of decision of the issue of territorial
jurisdiction, if framed, at the time of trial of the suit .”
(Emphasis supplied)
The attention of the Division Bench in Tata Sons does not appear to
have been drawn to the earlier decision in Allied Blenders .
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69. We, therefore, do not find any infirmity in the decision of the
learned Single Judge to also pronounce, prima facie , on the merits of
the dispute, even after holding, prima facie , that the suit was bad for
want of territorial jurisdiction.
II. Scope of interference – Wander and thereafter
70. We are sitting in appeal over a judgment of a learned Single
Judge rendered under Order XXXIX of the CPC. Three decisions of
the Supreme Court have clearly demarcated the boundaries of
appellate jurisdiction in such cases.
71. Wander states the law thus:
“14. The appeals before the Division Bench were against the
exercise of discretion by the Single Judge. In such appeals, the
appellate court will not interfere with the exercise of discretion of
the court of first instance and substitute its own discretion except
where the discretion has been shown to have been exercised
arbitrarily, or capriciously or perversely or where the court had
ignored the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of discretion
is said to be an appeal on principle. Appellate court will not
reassess the material and seek to reach a conclusion different from
the one reached by the court below if the one reached by that court
was reasonably possible on the material. The appellate court
would normally not be justified in interfering with the exercise of
discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have come to a
contrary conclusion. If the discretion has been exercised by the
trial court reasonably and in a judicial manner the fact that the
appellate court would have taken a different view may not justify
interference with the trial court's exercise of discretion. After
referring to these principles Gajendragadkar, J. in Printers
33
(Mysore) Private Ltd. v. Pothan Joseph :
33
AIR 1960 SC 1156
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“... These principles are well established, but as has been
observed by Viscount Simon in Charles Osenton &
34
Co. v. Jhanaton ‘...the law as to the reversal by a court
of appeal of an order made by a judge below in the exercise
of his discretion is well established, and any difficulty that
arises is due only to the application of well settled
principles in an individual case’.”
35
72. Ramakant Ambalal Choksi v. Harish Ambalal Choksi
reiterated the position in greater detail:
20. The law in relation to the scope of an appeal against grant
or non-grant of interim injunction was laid down by this Court
in Wander Ltd. v. Antox India (P) Ltd. Antox brought an action of
passing off against Wander with respect to the mark Cal-De-Ce.
The trial court declined Antox's plea for an interim injunction,
however, on appeal the High Court reversed the findings of the
trial Judge. This Court, upon due consideration of the matter, took
notice of two egregious errors said to have been committed by the
High Court:
(a) First , as regards the scope and nature of the appeals
before it and the limitations on the powers of the appellate
court to substitute its own discretion in an appeal preferred
against a discretionary order; and
(b) Secondly , the weakness in ratiocination as to the
quality of Antox's alleged user of the trade mark on which
the passing off action is founded.
21. With regard to (a), this Court held thus:
“14. … In such appeals, the appellate court will not
interfere with the exercise of discretion of the court of the
first instance and substitute its own discretion, except
where the discretion has been shown to have been
exercised arbitrarily or capriciously or perversely, or where
the court had ignored the settled principles of law
regulating grant or refusal of interlocutory injunctions. …
The appellate court will not reassess the material and seek
to reach a conclusion different from the one reached by the
court below.… If the discretion has been exercised by the
trial court reasonably and in a judicial manner the fact that
the appellate court would have taken a different view may
34
1942 AC 130
35
(2024) 11 SCC 351
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not justify interference with the trial court's exercise of
discretion.”
22. This Court, while arriving at the above findings, relied on
its earlier judgment in Printers (Mysore) (P) Ltd. v. Pothan
Joseph , wherein it was held thus:
“9. … as has been observed by Viscount Simon LC
in Charles Osenton & Co. v. Johnston , the law as to
reversal by a court of appeal of an order made by a Judge
below in the exercise of his/her discretion is well
established, and any difficulty that arises is due only to the
application of well-settled principles in an individual case.”
23. It is pertinent to note that in Printers this Court had held
that ignoring relevant facts is also a ground for interfering with the
discretion exercised by the trial court. Furthermore, Viscount
Simon LC in Charles Osenton & Co. v. Johnston , after stating the
above, went on to quote Lord Wright's decision
36
in Evans v. Bartlam :
“… It is clear that the court of appeal should not interfere
with the discretion of a judge acting within his jurisdiction
unless the Court is clearly satisfied that he was wrong. But
the court is not entitled simply to say that if the judge had
jurisdiction and had all the facts before him, the court of
appeal cannot review his order unless he is shown to have
applied a wrong principle. The court must, if necessary,
examine anew the relevant facts and circumstances in order
to exercise a discretion by way of review which may
reverse or vary the order.”
24. In Evans , Lord Wright made it clear that while adjudicating
upon the discretion exercised by the trial court, the appellate court
is obliged to consider the case put forward by the appellant in
favour of its argument that the trial court exercised its discretion
arbitrarily or incorrectly in the circumstances.
25. What flows from a plain reading of the decisions
in Evans and Charles Osenton is that an appellate court, even
while deciding an appeal against a discretionary order granting an
interim injunction, has to:
(a) Examine whether the discretion has been properly
exercised i.e. examine whether the discretion exercised is
36
1937 AC 473 (HL)
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not arbitrary, capricious or contrary to the principles of law;
and
(b) In addition to the above, an appellate court may in a
given case have to adjudicate on facts even in such
discretionary orders.
26. The principles of law explained by this Court
in Wander have been reiterated in a number of subsequent
decisions of this Court. However, over a period of time the test laid
down by this Court as regards the scope of interference has been
made more stringent. The emphasis is now more on perversity
rather than a mere error of fact or law in the order granting
injunction pending the final adjudication of the suit.
37
27. In Neon Laboratories Ltd. v. Medical Technologies Ltd. ,
this Court held that the appellate court should not flimsily,
whimsically or lightly interfere in the exercise of discretion by a
subordinate court unless such exercise is palpably perverse.
Perversity can pertain to the understanding of law or the
appreciation of pleadings or evidence. In other words, the Court
took the view that to interfere against an order granting or
declining to grant a temporary injunction, perversity has to be
demonstrated in the finding of the trial court.
38
28. In Mohd. Mehtab Khan v. Khushnuma Ibrahim Khan ,
this Court emphasised on the principles laid down in Wander and
observed that while the view taken by the appellate court may be
an equally possible view, the mere possibility of taking such a view
must not form the basis for setting aside the decision arrived at by
the trial court in exercise of its discretion under Order 39CPC. The
basis for substituting the view of the trial court should be mala
fides, capriciousness, arbitrariness or perversity in the order of the
trial court. The relevant observations are extracted below:
“ 20 . In a situation where the learned trial court on a
consideration of the respective cases of the parties and the
documents laid before it was of the view that the
entitlement of the plaintiffs to an order of interim
mandatory injunction was in serious doubt, the appellate
court could not have interfered with the exercise of
discretion by the learned trial Judge unless such exercise
was found to be palpably incorrect or untenable. The
reasons that weighed with the learned trial Judge, as
already noticed, according to us, do not indicate that the
view taken is not a possible view. The appellate court,
37
(2016) 2 SCC 672
38
(2013) 9 SCC 221
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therefore, should not have substituted its views in the
matter merely on the ground that in its opinion the facts of
the case call for a different conclusion. Such an exercise is
not the correct parameter for exercise of jurisdiction while
hearing an appeal against a discretionary order . While we
must not be understood to have said that the appellate court
was wrong in its conclusions what is sought to be
emphasised is that as long as the view of the trial court was
a possible view the appellate court should not have
interfered with the same following the virtually settled
principles of law in this regard as laid down by this Court
in Wander Ltd. v. Antox India (P) Ltd . ”
(emphasis supplied)
29. This Court in Shyam Sel & Power Ltd. v. Shyam Steel
39
Industries Ltd. observed that the hierarchy of the trial court and
the appellate court exists so that the trial court exercises its
discretion upon the settled principles of law. An appellate court,
after the findings of the trial court are recorded, has an advantage
of appreciating the view taken by the trial Judge and examining the
correctness or otherwise thereof within the limited area available.
It further observed that if the appellate court itself decides the
matters required to be decided by the trial court, there would be no
necessity to have the hierarchy of courts.
30. This Court in Monsanto Technology LLC v. Nuziveedu
40
Seeds Ltd. , observed that the appellate court should not usurp the
jurisdiction of the Single Judge to decide as to whether the tests of
prima facie case, balance of convenience and irreparable injury are
made out in the case or not.
31. The appellate court in an appeal from an interlocutory order
granting or declining to grant interim injunction is only required to
adjudicate the validity of such order applying the well-settled
principles governing the scope of jurisdiction of the appellate court
under Order 43 CPC which have been reiterated in various other
decisions of this Court. The appellate court should not assume
unlimited jurisdiction and should guide its powers within the
contours laid down in Wander .”
Thus, Ramakant Ambalal Choksi seems, at least facially, to restrict
the scope of interference, in appeal, with a discretionary order passed
under Order XXXIX of the CPC, to cases of perversity.
39
(2023) 1 SCC 634
40
(2019) 3 SCC 381
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73. Even more recently, the Supreme Court, after reiterating
Wander , observed, apropos Ramakant Ambalal Choksi , thus, in
41
Pernod Ricard India (P) Ltd v. Karanveer Singh Chhabra :
“19.10. In a more recent decision in Ramakant Ambalal
Choksi v. Harish Ambalal Choksi , this Court reaffirmed the
narrow scope of appellate interference with orders granting or
refusing interlocutory injunctions. It was held that unless the
discretion exercised by the trial court is shown to be perverse,
arbitrary, or capricious, appellate courts ought not to substitute
their views.”
74. We intend to restrict our appellate peregrinations to the
boundaries drawn by Wander , Ramakant Ambalal Choksi and
Pernod Ricard .
III. Re. territorial jurisdiction
75. We now turn to the aspect of territorial jurisdiction. The learned
Single Judge has held that the suit instituted by ITC is, prima facie ,
bad for want of territorial jurisdiction. Mr. Arvind Nigam, for ITC, has
contested this finding, while Mr. Ramanujan, for AGH, seeks to
support it.
IIIA. Section 134 would not apply, as the suit can lie only for passing
off
76. No action for infringement can lie against the proprietor of a
registered trade mark, in view of Section 28(3) and Section 30(2)(e) of
41
2025 SCC OnLine SC 1701
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the Trade Marks Act. This position also stands settled by the judgment
42
of the Supreme Court in S. Syed Mohideen v. P. Sulochana Bai and
the judgment of the Division Bench of this Court in Vaidya Rishi
43
India Health Pvt Ltd v. Suresh Dutt Parashar . However, an action
for passing off does lie against the proprietor of a registered trade
mark. This position was not, in fact, seriously disputed by either side.
77. Section 134(1) envisages institution of suits for infringement of
a registered trademark [in clause (a)], relating to any right in a
registered trade mark [in clause (b)], and for passing off [in clause
(c)], before a court not inferior to the District Court. Section 134(2),
which permits such a suit to be instituted before the Court where the
plaintiff voluntarily recides, carries on business or personally works
again, is restricted to suits falling within clauses (a) and (b) of Section
134(1). As such, the latitude to file the suit before the Court within
whose jurisdiction the plaintiff resides or carries on business, as is
provided in Section 134(2), does not extend to suits which are only
for passing off.
78. Territorial jurisdiction, in the case of passing off suits has,
44
therefore, to be assessed on the basis of Section 20 of the CPC.
42
(2016) 2 SCC 683
43
2025 SCC OnLine Del 6147
44
20. Other suits to be instituted where defendants reside or cause of action arises .—
Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of
whose jurisdiction—
( a ) the defendant, or each of the defendants where there are more than one, at the
time of the commencement of the suit, actually and voluntarily resides, or carries on
business, or personally works for gain; or
( b ) any of the defendants, where there are more than one, at the time of the
commencement of the suit, actually and voluntarily resides, or carries on business, or
personally works for gain, provided that in such case either the leave of the Court is
given, or the defendants who do not reside, or carry on business, or personally work for
gain, as aforesaid, acquiesce in such institution; or
( c ) the cause of action, wholly or in part, arises.
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79. We, therefore, agree with Mr. Ramanujan in his contention that
Section 134 of the Trade Marks Act cannot operate to justify the
filing, by ITC, of the present suit before this Court. ITC cannot,
therefore, seek to justify the filing of the suit before this Court on the
ground that it is carrying on business, by way of operating its Dakshin
restaurant, within the territorial jurisdiction of this Court.
IIIB. Submissions of Mr Nigam
80. We proceed, now, to enumerate the submissions of Mr. Nigam
and Mr. Ramanujan, on the aspect of territorial jurisdiction.
81. Mr. Nigam would contend that the suit lies before this Court,
for the following reasons:
(i) ITC was carrying on business, in Delhi, through its
Dakshin restaurant. As such, the cause of action for instituting
the suit has arisen within the territorial jurisdiction of this
Court.
(ii) AGH was also carrying on business in Delhi by offering
its services for sale through e-commerce websites such as
Zomato. It was possible, over the Zomato website, to book a
table at the Chennai Dakshin restaurant of AGH. Reliance was
*
Explanation —A corporation shall be deemed to carry on business at its sole or principal office in
India or, in respect of any cause of action arising at any place where it has also a subordinate office,
at such place.
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placed, for this purpose, on an affidavit dated 14 April 2025 of
Mr. Sumit Bothra of ITC, placed on record by ITC before the
learned Single Judge. The affidavit indicated that AGH was not
merely providing services at its Chennai Dakshin restaurant
over the Zomato e-commerce platform, but was also responding
to critical comments and reviews of customers posted on the
platform.
(iii) AGH had also publicised, over social media platforms
and through its advertisements, that the Chennai Dakshin
restaurant of AGH was a resurgence/revival of ITC’s original
Dakshin restaurant. This advertisement resulted in creating
confusion and deception among the consumers who visited
ITC’s Dakshin restaurants situated elsewhere in India, including
Delhi.
(iv) AGH’s Dakshin restaurant had a “looming online
presence” extending to Delhi.
(v) The dynamic effect of the act of infringement/passing
off, of AGH, was also felt in Delhi, where there was imminent
threat to ITC’s goodwill and reputation owing to consumers
associating ITC’s Dakshin restaurants with the Dakshin
restaurant run by AGH at Chennai.
(vi) The Division Bench of this Court has, in Diamond
45
Modular (P) Ltd v. Vikash Kumar , held that an infringement
suit would lie wherever the services of the defendant can be
45
2025 SCC OnLine Del 3755
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accessed and use of the mark seen by way of advertising or
promotion.
(vii) AGH was using the deduction mark within Delhi by way
of
(a) online presence,
(b) social media listings and promotions,
(c) online delivery,
(d) private catering and
(e) option to make a reservation at the restaurant over
e-commerce platforms.
(viii) The Division Bench of this Court has, in Kohinoor Seed
Fields , held that the possibility of placing orders over an e-
commerce platform was sufficient to vest a Court with
territorial jurisdiction.
(ix) AGH was, in the present case, carrying on business
within the territorial jurisdiction of this Court, in view of the
understanding of the concept in the judgment of the Division
Bench in World Wrestling Entertainment v. Reshma
46
Collection .
(x) ITC has a legitimate apprehension that AGH would
expand its activities, with respect to the Dakshin restaurant, to
other cities. In fact, AGH had actually started catering and
private dining services, which were available across the
46
2014 SCC OnLine Del 2031
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country, and ceased doing so only after an undertaking was
provided to the Division Bench of this Court on 24 February
2025. Moreover, AGH had, in its reply to IA 3768/2025 filed by
ITC before the learned Single Judge under Order XXXIX of the
CPC, stated that it was not going to confine its activities to
Chennai.
(xi) The learned Single Judge has misapplied the decision of
the Division Bench in Ultra Homes Construction , on the
ground that ITC has a subordinate office at Chennai. In so
observing, the learned Single Judge has omitted to notice the
fact that no part of the cause of action, in the present case, arose
at Chennai.
82. Ergo, submits Mr. Nigam, the learned Single Judge has erred in
holding that the suit instituted by ITC would not lie within the
territorial jurisdiction of this Court.
IIIC. Submissions of Mr. Ramanujan
83. Mr. Ramanujan advances the following contentions by way of
response to Mr. Nigam:
(i) The “dynamic effect” principle applies only to
rectification petitions under Sections 47 or 57 of the Trade
Marks Act, and it was in this context that the principle had been
applied by this Court in Girdhari Lal Gupta .
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(ii) No part of the cause of action has, in the present case,
arisen within the territorial jurisdiction of this Court.
(iii) AGH has no presence in Delhi.
(iv) AGH does not target any patrons in Delhi.
(v) No commercial transaction, in respect of the Chennai
Dakshin restaurant of AGH, can be concluded over any e-
commerce platform, including making of a reservation or
delivery of food or availing of dining facilities.
(vi) AGH has no website of its own.
(vii) The mere accessibility of listings of AGH, online, in
Delhi, would not clothe this Court with territorial jurisdiction.
(viii) Tata Sons , in fact, clearly holds that a court, within
whose jurisdiction the defendant targets customers, could
adjudicate on the dispute. “Targeting” is understood, in the said
decision, as the ability to conclude a commercial transaction. In
World Wrestling Entertainment , the interactive website of the
plaintiff permitted commercial transactions to be concluded in
Delhi. The ability to conclude a commercial transaction was
also treated as the definitive test by the Division Bench of this
Court in Kohinoor Seed Fields . As no commercial transaction,
with respect to the Chennai Dakshin restaurant of AGH, could
be concluded within the territorial jurisdiction of this Court, the
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invocation of such territorial jurisdiction could not be justified
under Section 20(a) of the CPC.
(ix) The “Order Online” link on the Zomato e-commerce
platform worked only if “Chennai” was selected as the drop-
down option on the website.
(x) This Court has held, in para 19 of Kohinoor Seed Fields ,
para 42 of Banyan Tree and paras 2, 8, 10, 19, 22 and 23 of
World Wrestling Entertainment , that the ability to obtain goods
or avail of services, even if over a website, as could be availed
in a brick and mortar store, was the sine qua non for a Court to
exercise territorial jurisdiction in an infringement of passing off
action. No goods or services, pertaining to AGH’s Chennai
Dakshin restaurant, could be sourced or availed in Delhi. There
was no pleading to the effect that AGH was delivering any
goods in Delhi. AGH provided dine-in services only in
Chennai.
(xi) No private catering services, which could be availed
within the territorial jurisdiction of this Court, were provided by
AGH. No such services were advertised in Delhi. Even third-
party listings referred to providing of such services only in
Chennai.
(xii) There was, therefore, no evidence of any injury having
been suffered by ITC’s Dakshin restaurant at Delhi, or of ITC
having a reasonable apprehension of suffering any such injury,
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within the territorial jurisdiction of this Court, as a result of the
use, by AGH, of the DAKSHIN trademark.
(xiii) No dynamic effect of the act of AGH was, therefore, felt
by ITC within the territorial jurisdiction of this Court.
(xiv) That apart, applying the law laid down by the Supreme
Court in IPRS and by the Division Bench of this Court in Ultra
Home Constructions , ITC would have to file the suit at
Chennai, inasmuch as it had a subordinate office at Chennai and
the cause of action had arisen within Chennai.
(xv) At the highest, the suit could be instituted in Kolkata, as
ITC has its principal place of business in Kolkata.
84. Mr Ramanujan submits, therefore, that the learned Single Judge
was justified in holding that the suit instituted by ITC would not lie
before this Court.
IIID. Our view
85. As already noticed, the aspect of territorial jurisdiction has to be
tested on the anvil of Section 20 of the CPC.
86. Clause (b) of Section 20 obviously does not apply. As such, it
has to be seen whether the suit would lie before this Court under
clauses (a) or (c) of Section 20.
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87. Section 20(a) would apply if AGH actually and voluntarily
resides, or carries on business, or personally works for gain, within the
territorial jurisdiction of this Court.
88. There is no dispute that AGH’s Chennai Dakshin restaurant has
no branch or outlet in Delhi and that it is not physically possible to
avail the services provided in the Chennai Dakshin restaurant from
Delhi. ITC seeks to contend, however, that AGH has purposefully
availed the jurisdiction of this Court by making its services available
on e-commerce websites such as Zomato. It is specifically contended
that, on Zomato, there is an “Order Online” link, through which the
services provided in the Chennai Dakshin restaurant of AGH could be
accessed and availed in Delhi. For ease of understanding, we deem it
appropriate to reproduce the following screenshot of the website from
the Zomato e-commerce platform, on which ITC places reliance:
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89. The Zomato website of the Chennai Dakshin restaurant of AGH
is, needless to say, accessible in Delhi. Mr. Nigam’s contention is that
the availability of the “Order Online” link on the website indicates
that, sitting in Delhi, it is possible to order the services provided at the
Chennai Dakshin restaurant of AGH through this link.
90. Mr. Nigam has also placed reliance on the fact that AGH was in
fact responding, on the same Zomato e-commerce platform, to
comments of persons who had dined at the Chennai Dakshin
restaurant and were dissatisfied. By way of an example, the following
screenshots have been filed by ITC, in para 7 of an affidavit dated 14
April 2025, filed by ITC in the suit:
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91. We may note, here, that the affidavit dated 14 April 2025, filed
by ITC, incorporating the above details, regarding the possibility of
placing of an order online over the Zomato e-commerce platform, and
the responding, by AGH, to queries and comments posted on the
platform, was not filed pursuant to any order passed by the learned
Single Judge in the suit. The opening paragraph of the affidavit
reveals that the assertions contained therein were intended to clarify
the factual position, following the arguments which had taken place in
Court on 15 April 2025. There is no order, by the learned Single
Judge, taking the affidavit on record.
92. We may not, therefore, ordinarily have been inclined to allow
Mr. Nigam to place reliance on the assertions contained in the
affidavit. However, he has done so, and Mr. Ramanujan has not
objected. Rather, in its written submissions, AGH has addressed the
argument that the services at the Chennai Dakshin restaurant could be
availed through the Zomato e-commerce platform. In response,
however, all that AGH says is that it was not possible to conclude a
commercial transaction with the Chennai Dakshin restaurant over the
Zomato platform.
93. Mr. Nigam contends that, by making such services available,
AGH has purposefully availed the jurisdiction of this Court and
cannot, therefore, complain about the suit having been instituted here.
94. This Bench has had an occasion to deal, in detail with the
evolution of the law relating to territorial jurisdiction, from Banyan
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Tree Holding to World Wrestling Entertainment to Ultra Home
Construction and Tata Sons , in our decisions in Kohinoor Seed
Fields and, later, Sauss Home Products (P) Ltd v. Reckitt Benckiser
47
India Pvt Ltd . The prevailing legal position, following these
decisions, is that, if it is possible to access and avail the goods or
services of the defendant online, irrespective of whether the platform
or the website over which this is possible is hosted by the defendant or
by a third party, then the defendant would be deemed to be carrying
on business within the jurisdiction of every court, within whose
jurisdiction such access is possible.
95. The learned Single Judge has dealt with this aspect in para 45
of the impugned judgment, thus:
“45. In the present case also, the plaintiffs claim that the
reservation for the defendant's restaurant in Chennai can be made
sitting in Delhi and in this regard, they have filed an affidavit dated
st
21 April, 2025. Even though a reservation/booking can be made
through an e-commerce website, but the person would have to visit
the restaurant to avail its services and conclude a commercial
transaction. Despite making a reservation, a customer may not
visit the restaurant or may even cancel the reservation. 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.”
(Emphasis supplied)
96. The learned Single Judge has, therefore, adverted to the
affidavit dated 21 April 2025 filed by ITC. In that affidavit, there is a
47
2026 SCC OnLine Del 937
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specific assertion that, against an order which was placed on the
Chennai Dakshin restaurant of AGH from Delhi, a customer visited
the restaurant at Chennai and dined there.
97. We are unable to endorse the view, expressed by the learned
Single Judge, that a commercial transaction would be concluded only
when a person physically dined at the restaurant in Chennai. There is
no substantial rebuttal, by Mr. Ramanujan, or in the submissions
placed on record by AGH, to Mr. Nigam’s assertion that, by accessing
the “Order Online” link on the Zomato webpage of the Chennai
Dakshin restaurant of AGH, it was possible to reserve a table at the
restaurant, where someone could physically dine. In such
circumstances, ITC, to our mind, has prima facie discharged its onus
to demonstrate that AGH was carrying on business relating to its
Chennai Dakshin restaurant at Delhi and, in fact, at every place where
the Zomato page could be accessed and a reservation booked using
the “Order Online” link.
98. As per the law which has developed over the decisions in
Banyan Tree Holding , World Wrestling Entertainment , Ultra Home
Construction , Tata Sons , Kohinoor Seed Fields and Sauss Home
Products , among others, interactive accessibility is the key to
determining territorial jurisdiction. The accessibility must be
interactive. In other words, a mere webpage which provides
information, and with which it is not possible to interact but only to
learn about the goods or services of a defendant, may not confer
jurisdiction over a Court from within whose jurisdiction the website
can be accessed. However, if the website is interactive and, more
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particularly, if it is possible to conclude a commercial transaction over
the website, territorial jurisdiction would prima facie exist.
99. At the Order XXXIX stage, a plaintiff is only required to prima
facie demonstrate the existence of territorial jurisdiction. In view of
the fact that there is, on the Zomato webpage of the Dakshin
restaurant of AGH, admittedly a link which reads “Order Online”, in
the absence of any sufficient or satisfactory rebuttal by AGH, it has to
be held that ITC has discharged its prima facie onus to demonstrate
the fact that AGH is, apropos its Dakshin restaurant, carrying on
business within the jurisdiction of this Court.
100. This position is fortified by the responses given by AGH to the
critical reviews of certain customers, who visited the Dakshin
restaurant and were not satisfied with the services provided there. In
this regard, the finding of the learned Single Judge, in para 47 of the
impugned judgment, reads thus:
“47. The plaintiffs have only placed on record some negative
reviews by the customers who visited the defendant's restaurant in
Chennai. Nothing has been placed on record to show that the
reputation/goodwill of the plaintiffs' restaurant in Delhi was
adversely affected by the customer reviews in relation to the
defendant's restaurant in Chennai. There is nothing to show that
any of the plaintiffs' customers associated the defendant's
restaurant with that of the plaintiffs.”
101. We are of the opinion that, in para 47, the learned Single Judge
has erroneously conflated the considerations which guide clause (a)
with those which guide clause (c) of Section 20 of the CPC. The
observation that the negative reviews placed by customers on the
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Zomato webpage of the Chennai Dakshin restaurant of AGH were not
shown to have adversely affected the reputation of ITC’s Dakshin
restaurant at Delhi may be a consideration which is relevant to
examine whether any part of the cause of action has arisen at Delhi, as
envisaged by Section 20(c). It is not, however, relevant while
examining the aspect of whether AGH was, with respect to its
Dakshin restaurant, “carrying on business” within the meaning of
Section 20(a) of the CPC, within the territorial jurisdiction of this
Court.
102. The fact that AGH was responding to adverse reviews placed by
customers on the Zomato webpage fortifies our conclusion that there
was meaningful interaction by AGH, with respect to the services
provided at its Dakshin restaurant in Chennai, over the Zomato
webpage, irrespective of where the customer was located. This would
additionally confer jurisdiction on this Court, being a Court within
whose jurisdiction such interaction was possible with AGH.
103. We are, therefore, prima facie of the view that ITC was entitled
to invoke the territorial jurisdiction of this Court, by virtue of Section
20(a) of the CPC, as, by providing services over the e-commerce
platform Zomato, which could be accessed and availed by customers
located in Delhi, AGH has, with respect to its Dakshin restaurant,
purposefully availed the jurisdiction of this Court.
104. We now turn to Section 20(c) of the CPC.
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105. ITC has also sought to justify the invocation of the territorial
jurisdiction of this Court on the basis of Section 20(c) of the CPC.
Section 20(c) allows a suit to be filed before every court within the
local limits of whose jurisdiction the cause of action arises, wholly or
in part. For this purpose, ITC has sought to press, into service, the
“dynamic effect” principle. It is sought to be contended that, as a
consumer would be inclined to associate the Dakshin outlets of ITC,
including that at Delhi, with the Dakshin outlet of AGH at Chennai, it
results in confusion and deception and, therefore, the cause of action
to institute the suit arises at every place where ITC has a Dakshin
outlet, including Delhi.
106. The learned Single Judge has ruled that the “dynamic effect”
principle applies only to rectification petitions. We find no basis for
this assumption. No doubt, in earlier decisions, the Court may have
applied the “dynamic effect” principle in rectification actions; that
would not, however, constitute the basis to hold that the principle
applies only in cases of rectification.
107. We do not feel, however, that it is necessary to advert to any
“dynamic effect” principle. Section 20(c) refers to the “cause of
action”. Every Court, within whose jurisdiction the whole, or part, of
the cause of action, arises, can be approached by way of an
infringement or passing off proceeding.
108. The “cause of action”, it is well-settled, refers to the bundle of
facts which, if traversed, a plaintiff would have to establish in order to
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48
succeed in a suit. In a passing off action, the three main ingredients
are goodwill, misrepresentation by the defendant, and damage which
49
arises to the plaintiff as a result of such misrepresentation. The fact
that the Dakshin outlet of AGH is situated in Chennai, and has no
branches or outlets elsewhere cannot, therefore, be determinative of
whether a part of the cause of action has arisen outside Chennai. If,
because of the use of the DAKSHIN mark by AGH at Chennai, injury
or damage is suffered by a plaintiff elsewhere, the suit could be
legally instituted at such other place as well.
109. To succeed in a passing off action, ITC would have to establish,
inter alia , that it has suffered damage – or injury – owing to AGH’s
use of the DAKSHIN mark. One of the facts that ITC would have to
prove is, therefore, the existence of such injury or damage. AGH has,
in fact, specifically raised, as a defence, the plea that ITC has not
suffered any injury as a result of the use of the DAKSHIN mark by
AGH. One of the facts which ITC would have to establish to succeed
in its suit is, therefore, the suffering of injury by it. This, therefore,
becomes part of the “cause of action” – in fact an inescapable part
thereof – for instituting the suit.
110. ITC has no Dakshin outlet at Chennai. The functioning of the
Dakshin restaurant by AGH at Chennai does not, therefore, result in
any injury to ITC at Chennai. ITC’s contention is that the association
which a customer who visits a Dakshin outlet of ITC located in
another city, with the Chennai Dakshin outlet of AGH, makes, results
48
Refer A.B.C Laminart Pvt Ltd. v. A.P. Agencies, Salem, AIR 1989 SC 1239, South East Asia Shipping
Co. Ltd v. Nav Bharat Enterprises (P) Ltd., (1996) 3 SCC 443
49
Refer Pernod Ricard v. Karanveer Singh Chhabra 2025 SCC OnLine SC 1701 , Colgate Palmolive v.
Hindustan Lever, (1997) 7 SCC 1
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in confusion and brand dilution of ITC’s Dakshin brand. Such
association would necessarily be made only at the place, and in the
city, where ITC has its Dakshin outlet. The injury that ITC would
suffer would also be where ITC’s Dakshin outlets operate.
111. Mr. Nigam is, therefore, correct in his submission that the entire
cause of action, insofar as ITC’s grievance is concerned, arose outside
Chennai and, inter alia , at Delhi.
112. Whether, in fact, the opening and running of the Dakshin
restaurant by AGH at Chennai result in any injury to ITC, or to its
Dakshin restaurant at Delhi, or does not so result, is a matter of trial,
which would have to be established by ITC in evidence. That cannot
constitute a determinative consideration, at least at the Order XXXIX
stage, while examining the prima facie aspect of existence of
territorial jurisdiction. Inasmuch as the Dakshin outlet of ITC is
located in Delhi, it cannot be said that no part of the cause of action
has arisen in Delhi.
113. Mr. Ramanujan also sought to contend that, even if a part of the
cause of action has arisen at Delhi, a part has also arisen at Chennai.
In such circumstances, he submits that the judgment of the Supreme
Court in IPRS , and the judgment of the Division Bench of this Court
in Ultra Home Construction , would require the suit to be instituted at
Chennai, and not at Delhi.
114. Paras 18 to 20, 25 and 26 of IPRS read as under:
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“18. On a due and anxious consideration of the provisions
contained in Section 20 CPC, Section 62 of the Copyright Act and
Section 134 of the Trade Marks Act, and the object with which the
latter provisions have been enacted, it is clear that if a cause of
action has arisen wholly or in part, where the plaintiff is residing or
having its principal office/carries on business or personally works
for gain, the suit can be filed at such place(s). The plaintiff(s) can
also institute a suit at a place where he is residing, carrying on
business or personally works for gain dehors the fact that the cause
of action has not arisen at a place where he/they are residing or any
one of them is residing, carries on business or personally works for
gain. However, this right to institute suit at such a place has to be
read subject to certain restrictions, such as in case the plaintiff is
residing or carrying on business at a particular place/having its
head office and at such place cause of action has also arisen
wholly or in part, the plaintiff cannot ignore such a place under the
guise that he is carrying on business at other far-flung places also .
The very intendment of the insertion of provision in the Copyright
Act and the Trade Marks Act is the convenience of the plaintiff.
The rule of convenience of the parties has been given a statutory
expression in Section 20 CPC as well. The interpretation of
provisions has to be such which prevents the mischief of causing
inconvenience to the parties.
19. The intendment of the aforesaid provisions inserted in the
Copyright Act and the Trade Marks Act is to provide a forum to the
plaintiff where he is residing, carrying on business or personally
works for gain. The object is to ensure that the plaintiff is not
deterred from instituting infringement proceedings “because the
court in which proceedings are to be instituted is at a considerable
distance from the place of their ordinary residence”. The
impediment created to the plaintiff by Section 20 CPC of going to
a place where it was not having ordinary residence or principal
place of business was sought to be removed by virtue of the
aforesaid provisions of the Copyright Act and the Trade Marks Act.
Where the corporation is having ordinary residence/principal place
of business and cause of action has also arisen at that place, it has
to institute a suit at the said place and not at other places. The
provisions of Section 62 of the Copyright Act and Section 134 of
the Trade Marks Act never intended to operate in the field where
the plaintiff is having its principal place of business at a particular
place and the cause of action has also arisen at that place so as to
enable it to file a suit at a distant place where its subordinate office
is situated though at such place no cause of action has arisen .
Such interpretation would cause great harm and would be
juxtaposed to the very legislative intendment of the provisions so
enacted.
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20. In our opinion, in a case where the cause of action has
arisen at a place where the plaintiff is residing or where there are
more than one such persons, any of them actually or voluntarily
resides or carries on business or personally works for gain would
oust the jurisdiction of other place where the cause of action has
not arisen though at such a place, by virtue of having subordinate
office, the plaintiff instituting a suit or other proceedings might be
carrying on business or personally works for gain.
*
25. Considering the first aspect of the aforesaid principle, the
common law which was existing before the provisions of law were
passed was Section 20 CPC. It did not provide for the plaintiff to
institute a suit except in accordance with the provisions contained
in Section 20. The defect in existing law was
inconvenience/deterrence caused to the authors suffering from
financial constraints on account of having to vindicate their
intellectual property rights at a place far away from their residence
or the place of their business. The said mischief or defect in the
existing law which did not provide for the plaintiff to sue at a place
where he ordinarily resides or carries on business or personally
works for gain, was sought to be removed. Hence, the remedy was
provided by incorporating the provisions of Section 62 of the
Copyright Act. The provisions enabled the plaintiff or any of them
to file a suit at the aforesaid places. But if they were residing or
carrying on business or personally worked for gain already at such
place, where cause of action has arisen, wholly or in part, the said
provisions have not provided additional remedy to them to file a
suit at a different place. The said provisions never intended to
operate in that field. The operation of the provisions was limited
and their objective was clearly to enable the plaintiff to file a suit at
the place where he is ordinarily residing or carrying on business,
etc. as enumerated above, not to go away from such places. The
legislature has never intended that the plaintiff should not institute
the suit where he ordinarily resides or at its head office or
registered office or where he otherwise carries on business or
personally works for gain where the cause of action too has arisen
and should drag the defendant to a subordinate office or other place
of business which is at a far distant place under the guise of the
fact that the plaintiff corporation is carrying on business through
branch or otherwise at such other place also. If such an
interpretation is permitted, as rightly submitted on behalf of the
respondents, the abuse of the provision will take place.
Corporations and big conglomerates, etc. might be having several
subordinate offices throughout the country. Interpretation
otherwise would permit them to institute infringement proceedings
at a far-flung place and at an unconnected place as compared to a
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place where the plaintiff is carrying on their business, and at such
place, cause of action too has arisen. In the instant cases, the
principal place of business is, admittedly, in Mumbai and the cause
of action has also arisen in Mumbai. Thus, the provisions of
Section 62 of the Copyright Act and Section 134 of the Trade
Marks Act cannot be interpreted in a manner so as to confer
jurisdiction on the Delhi Court in the aforesaid circumstances to
entertain such suits. The Delhi Court would have no territorial
jurisdiction to entertain it.
26. The avoidance of counter-mischief to the defendant is also
necessary while giving the remedy to the plaintiff under the
provisions in question. It was never visualised by the lawmakers
that both the parties would be made to travel to a distant place in
spite of the fact that the plaintiff has a remedy of suing at the place
where the cause of action has arisen where he is having head
office/carrying on business, etc. The provisions of the Copyright
Act and the Trade Marks Act provide for the authors/trade mark
holders to sue at their ordinary residence or where they carry on
their business. The said provisions of law never intended to be
oppressive to the defendant. The Parliamentary debate quoted
above has to be understood in the manner that suit can be filed
where the plaintiff ordinarily resides or carries on business or
personally works for gain. Discussion was to provide remedy to
the plaintiff at convenient place; he is not to travel away. Debate
was not to enable the plaintiff to take the defendant to farther
place, leaving behind his place of residence/business, etc. The right
to remedy given is not unbridled and is subject to the prevention of
abuse of the aforesaid provisions, as discussed above. Parliament
never intended that the subject provisions be abused by the
plaintiff by instituting suit in wholly unconnected jurisdiction. In
the instant cases, as the principal place of business is at Mumbai
the cause of action is also at Mumbai but still the place for suing
has been chosen at Delhi. There may be a case where the plaintiff
is carrying on the business at Mumbai and cause of action has
arisen in Mumbai. The plaintiff is having branch offices at
Kanyakumari and also at Port Blair, if interpretation suggested by
the appellants is acceptable, mischief may be caused by such
plaintiff to drag a defendant to Port Blair or Kanyakumari. The
provisions cannot be interpreted in the said manner devoid of the
object of the Act.”
(Emphasis supplied)
115. It is apparent, on a bare reading of the above passages from
IPRS , that they intend to curb mischief, by a plaintiff, on the basis of
Section 134 of the Trade Marks Act or Section 62 of the Copyright
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Act. They clearly do not envisage a situation in which neither Section
134 of the Trade Marks Act nor Section 62 of the Copyright Act
would apply, and the aspect of territorial jurisdiction would have to be
decided solely by reference to Section 20 of the CPC.
116. Clearly, the afore-extracted passages from IPRS forbid the
filing of a suit where the cause of action has arisen at the place where
the plaintiff has its principal place of business, but may also have
arisen at some distant place where the plaintiff has a subordinate
office. In such a case, the Supreme Court holds that the plaintiff
cannot elect to file the suit at the distant place where it has its
subordinate office, even though a part of the cause of action has arisen
at the principal place of business of the plaintiff.
117. Besides, paras 25 and 26 of IPRS place the matter beyond the
pale of controversy. In the said passages, the Supreme Court has
clearly held that a plaintiff was entitled to file a suit where the whole
or part of the cause of action arose, and that Section 134 of the Trade
Marks Act and Section 62 of the Copyright Act were never intended to
dilute that right. These passages make it further clear that, if a plaintiff
carries on business at a place where the whole, or part, of the cause of
action has arisen, it is ipso facto entitled to institute a suit at that place,
by virtue of Section 20 of the CPC.
118. We cannot, therefore, agree with Mr. Ramanujan in his
submission that, as ITC has a subordinate office at Chennai, or as ITC
has its head office at Kolkata, it would have to institute the suit either
at Chennai or at Kolkata. Inasmuch as part – in fact the determinative
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part – of the cause of action has arisen at Delhi, where ITC’s Dakshin
restaurant is situated and where, therefore, the injury resulting from
the use, by AGH, of the “Dakshin” Mark would be felt by ITC, we are
of the opinion that ITC cannot be foreclosed from filing the present
suit at Delhi.
119. We are not in agreement, therefore, with the learned Single
Judge in his view that the suit instituted by ITC was bad for want of
territorial jurisdiction.
IV. Whether AGH obtained registration of the DAKSHIN trade
mark, in its favour, in Class 42, by misrepresentation
120. Mr. Nigam sought to submit that AGH had obtained registration
of the DAKSHIN trade mark in Class 42, with effect from 23 April
2004, on a misrepresentation that the mark belonged to a “group
Company”.
121. The learned Single Judge has addressed this submission thus:
“101. It has been contended on behalf of the plaintiffs that the
defendant has obtained registration of the mark ‘DAKSHIN’ by
misrepresentation. It is submitted that in response to the objection
raised by the Trade Marks Registry citing the plaintiffs'
registration, the defendant falsely stated that the cited mark
belongs to a group company of the defendant and therefore the
refusal may be waived.
102. Admittedly, the plaintiffs and the defendant were in a
collaboration at that point of time. Therefore, the defendant loosely
referring to the plaintiffs as a group company cannot be said to be
an act of misrepresentation. In fact, in the affidavit filed by the
defendant before the Trade Marks Registry, the defendant has
categorically stated that it has been using the mark ‘DAKSHIN’
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th
since 14 April 1989 and has also provided its annual sales
turnover in respect of the said mark.
103. To be noted, the plaintiffs never filed any opposition
petition against the defendant's trademark application. It is also a
matter of record that plaintiffs have not filed any rectification in
respect of the defendant's registration of the trademark
‘DAKSHIN’. Therefore, in my view, it cannot be stated that the
defendant obtained the registration of the mark ‘DAKSHIN’ by
way of misrepresentation.”
122. We find the reasoning of the learned Single Judge to be
unexceptionable. There is no dispute about the fact that, at the time
when AGH applied for registration of the DAKSHIN mark, AGH and
ITC were in collaboration. If, therefore, AGH referred to ITC as a
“group company”, it is not necessarily fatal to the registration. In any
event, this is a plausible understanding of the representation made by
AGH, and does not merit interference within the Wander parameters.
123. More significantly, however, the impugned judgment
adjudicates an application under Order XXXIX of the CPC. The
matter has, therefore, to be viewed prima facie . Section 31(1) of the
Trade Marks Act clearly stipulates that the very fact of registration
operates as prima facie evidence of the validity of the mark. Thus, at
the prima facie stage, the fact that the DAKSHIN mark was registered
in favour of AGH operates as prima facie evidence of the validity of
the registration.
124. Again, we are in agreement with the learned Single Judge that
AGH’s contention could not be countenanced at the prima facie stage,
in view of the fact that ITC never chose to challenge the validity of
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50
AGH’s registration of the DAKSHIN trade mark under Section 57 of
the Trade Marks Act, or to seek removal of the mark from the Register
of Trade Marks. Neither was the mark opposed at the stage when it
was proceeding to registration, nor was any post-grant proceeding
initiated under Section 57 to nullify the registration.
125. At the prima facie stage, therefore, we are in agreement with
the learned Single Judge that it is not possible to hold that AGH
obtained registration of the DAKSHIN trade mark in its favour, in
Class 42, by misrepresentation.
V. Interpretation of the OSA, ownership of the DAKSHIN trade
mark and aspect of passing off
126. These are intrinsically interconnected issues, and have,
therefore, to be considered together.
V.A The OSA
127. Before adverting thereto, however, we deem it appropriate to
reproduce the relevant clauses of the OSA dated 12 February 1985, as
an estimation of the prima facie merits of the case must necessarily
50
57. Power to cancel or vary registration and to rectify the register.—
(1) On application made in the prescribed manner to the Appellate Board or to the Registrar
by any person aggrieved, the tribunal may make such order as it may think fit for cancelling or
varying the registration of a trade mark on the ground of any contravention, or failure to observe a
condition entered on the register in relation thereto.
(2) Any person aggrieved by the absence or omission from the register of any entry, or by
any entry made in the register without sufficient cause, or by any entry wrongly remaining on the
register, or by any error or defect in any entry in the register, may apply in the prescribed manner to
the Appellate Board or to the Registrar, and the tribunal may make such order for making,
expunging or varying the entry as it may think fit.
.
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largely pivot on its covenants. The relevant clauses read thus
(sequentially as contained in the OSA):
“WHEREAS The Owner owns a complete modern fully equipped
first class and quality hotel named Adayar Gate Hotel at 132 TTK
Road, in the city of Madras catering to International Tourist and
Business Trade (such hotel hereinafter being referred to as the
‘hotel’).
AND WHEREAS
The Owner is of the view that in the light of the obtaining trends in
the Industry particularly in the field of marketing and sales of
Hotels Services among the foreign travelling public it would be its
interest and advantage to associate with a competent Company
having a chain of hotels under its operations and service and
having already established a wide and well organised sales and
marketing network.
AND WHEREAS
The Owner has confidence that ITC has sufficient specialized
knowledge expertise and experience to be able to offer expert
consultancy services in the field of hoteliering and the Owner has
been satisfied that ITC is possessed of skilled export organisation
for offering its personal services in a consultancy and advisory
capacity for the Hotel post-opening Project Technical Personnel
Financial Hotels Supplies Operating Marketing Advertising and
Reservations Services (for brevity referred to hereinafter as
“Operating Services”) and all other incidental services.
AND WHEREAS
The Owner contemplates to retain the personal services of ITC in a
Consultancy and advisory capacity for such Operating Services in
which the Owner has full trust and confidence.
AND WHEREAS
ITC through its Hotels Division owns and/or services the
‘WELCOM GROUP’ chain of over (20) Twenty Hotels in major
cities and tourist centres in India and abroad and has developed
modern and sophisticated techniques for operating technical
servicing personnel services purchasing hotel supplies selling and
marketing hotels through marketing technical operational and other
specialists and well-run marketing sales and reservation offices at
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all its hotels and in different parts of India and has developed
sophisticated advanced hotel reservation system and in instant
reservation network within India for making and confirming of
reservations at all ITC-owned and/or serviced hotels.”
*
1. “Hotel” shall mean the entire structure and all buildings and
equipment installed therein to be used for the purpose of the Hotel
including but not limited to all plumbing, heating and lighting
equipment, elevators, air conditioning equipment, exterior and
interior design, telephone equipment (except that leased from the
Telephone Board or any telephone company) furniture and
equipment, operating equipment, operating supplies and all related
facilities, shops, shopping arcades, salons, galleries, recreation
areas, car parking, space etc., constructed, installed or kept in or
appurtenant to the Hotel as also all additions extensions
modifications thereto as may be effected by the Owner after
written approved by ITC. For the purposes of this Agreement
‘Hotel’ shall be distinct from the Owner or the Owning Company).
*
12. "Gross Operating Expenses" for each Fiscal Year shall
mean all amounts elsewhere in the Agreement expressly provided
to be included therein relating to the operation of the Hotel in
addition to the following amounts :-
a) Salaries wages and employees benefits in relation to
the personnel employed in the operation of the Hotel
according to the terms and conditions of their employment:
b) Salaries wages and employee benefits and all other
terms and conditions of services of personnel of ITC
seconded or assigned to the Hotel;
c) All Administrative and general expenses relating to
the running and operation of the Hotel;
d) Charges for heat water pool light power other
facilities and related services
e) cost of food and beverages
*
l) Cost of Advertisements sales kits brochures tariff
sheets sales promotion and public relations and publicity
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KUMAR
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material including the proportionate cost to the Hotel of and
for 'cluster advertising' and/or 'package' promotion and
other expenses as more specifically referred in Appendix II
to this Agreement;
*
ARTICLE II - ENGAGEMENT OF ITC
Subject to the terms and conditions herein contained the Owner
hereby agrees to engage ITC to render personal services as
Technical Operational Personnel Hotel Supplies including
Purchasing Marketing Advertising and Reservations services and
Technical Consultants and Advisors for operation of the hotel and
ITC agrees to render such personal services.
*
ARTICLE IV - RESPONSIBILITIES AND OBLIGATIONS OF
THE PARTIES HERETO
PART A. - RESPONSIBILITIES AND OBLIGATIONS OF THE
OWNER
The Owner expressly agrees and declares that :-
*
3. The selection of all furniture and equipment and operating
equipment operating supplies to be ordered installed in or supplied
to the Hotel shall be as per schedules and specifications approved
by ITC.
4. It shall be the responsibility of the Owner to provide all
tools plant and machinery furniture and equipment operating
supplies and all other ancillary or necessary parts stores equipment
to enable ITC to render services under this Agreement. ITC will
not be required to provide the Owner with any such equipment and
tools. ITC will only be required to provide their personal skill and
expertise in their Consultancy and Advisory capacity.
*
PART B - RESPONSIBILITIES and OBLIGATIONS OF ITC
1. ITC's services to be rendered under this Agreement in
respect of the Hotel will consist of the serviced specified in
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Appendices I, II, III, IV and V hereto which shall form part of this
Agreement covering respectively:
a) PRE-OPENING SERVICES AS CONTAINED IN:
APPENDIX I
b) MARKETING ADVERTISING AND
RESERVATION SERVICES AS HEREIN CONTAINED
IN: APPENDIX II
C) OPERATING AND PERSONNEL SERVICES AS
HEREIN CONTAINED IN: APPENDIX III
d) TECHNICAL SERVICES AS HEREIN
CONTAINED IN: APPENDIX IV
e) HOTEL SUPPLIES PURCHASING SERVICES AS
HEREIN CONTAINED IN: APPENDIX V
IT BEING HEREBY EXPRESSLY AGREED AND DECLARED
that the performance and discharge of such services by ITC will be
subject to the owner carrying out and discharging all the
responsibilities, obligations and conditions herein specified on the
owner's part to be observed, performed, carried out and discharged
and that ITC shall operate the Hotel and shall within the limits
stipulated in this Agreement be specifically responsible for the
operation of the Hotel and shall in conformity with this Agreement
formulate, execute and implement policies in respect of the above-
stated services.
2. Without limiting the generality of the foregoing IT IS
HEREBY FURTHER AGREED AND DECLARED that the
Owner will observe perform and discharge those preconditions
specified in Appendices I II III IV and V hereto as would enable
ITC to initiate and render the services therein specified and fulfil
and discharge the responsibilities and obligations accepted by it
under these terms. Such pre-conditions are binding on the owner
and shall be carried out by it and any failure on the Owner's part to
observe, discharge, carry out or fulfil such pre-conditions will be
treated as a breach of this Agreement.
3. In addition to the forgoing in Appendix VI are specified the
acts deeds matters and things which ITC would carry out and fulfil
in order to give effect to and implement the provisions of this
Agreement in so far as they relate to the performance and discharge
of the responsibilities and obligations undertaken by ITC and
specified in Appendices I II III IV and V hereto.
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KUMAR
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ARTICLE V - ITC'S SERVICE FEE AND INCENTIVE FEE
SERICES RENDERED UNDER THIS AGREEMENT
1. The owner shall pay to ITC in consideration of the services
to be rendered by ITC under this Agreement, the following fees :
a. For the services to be rendered by ITC under appendix
II of this Agreement, the Owner shall pay to ITC each fiscal
year or part thereof a comprehensive marketing advertising
and reservations services fees “Service Fee” equivalent to 3
(three) percent of the Gross Operating Income of the hotel
in that Fiscal Year or part thereof; and
b. In consideration of the services to be rendered by
ITC pursuant to Appendices I, III, IV and V of this
Agreement, the Owner shall pay to ITC during each fiscal
year of the Operating terms of this Agreement (and
proportionately for a fraction of such fiscal year) an annual
incentive fee at the rate of 10 (ten) percent of the Gross
Operating Profit as defined in Article I of this Agreement.
Fifty percent (50%) of such Incentive Fee shall be deemed
to be in consideration of the services rendered by ITC as
specified in Appendices I, IV and V hereto and the
remaining fifty percent (50%) shall be deemed to be in
Appendix III hereto (Technical Services).
*
2. In the event there is an operating loss in any fiscal year
such loss shall be borne exclusively by the owner and will not be
applied against the Gross Operating Profit of any other fiscal year
for the purpose of determining ITC’s Incentive Fee.
*
ARTICLE VI – FINANCING FUNDS AND PAYMENT TO ITC
OF ITC’s SERVICE FEES AND INCENTIVE FEES AND ITC’s
COSTS AND EXPENSES
1. ITC shall not be promoter or a co-promoter nor shall it
invest in the Hotel in any way. ITC shall not be party to any
Financing arrangement nor shall ITC be a lender to or guarantor
for the Hotel or owner.
*
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6. It will be the responsibility of the owner to maintain at all
times sufficient funds in the Hotel Receipts Saving Account for
transfers to the Hotel Operating Current Account and the
Renovation and Refurbishing Saving Account respectively to meet
the disbursements and outgoing as specified above.
7. The Owner hereby expressly authorises ITC to open in the
name of the Hotel such Bank Accounts as are specified in
Appendix VI hereto and to operate the said Bank Accounts as are
specified in Appendix VI hereto and to operate the said Bank
Accounts in the manner indicated therein.
*
ARTICLE XIII - TRADE NAMES, MARKS, SIGNS ETC.
1. To facilitate recognition of quality of standing and
acceptance of the Hotel through ITC's India-wide network and
subject to the Hotel and all its facilities being certified by ITC as
meeting the standards and specifications of the WELCOMGROUP
chain ITC shall allow the utilisation and use by the Hotel of such
of ITC's Trade Names Trade Marks and Signs and any other
identifying marks sign, logos, emblems present and future as may
be decided by ITC's Hotels Division at its sole discretion.
2. ITC shall have the right to determine and withdraw such
permitted use by the Hotel at ITC’s sole discretion depending upon
the standard image reputation efficiency and goodwill of the Hotel.
3. Any use or the right to use by the Hotel of any such trade
names, trade marks, signs, logos, emblems and other identifying
symbols shall cease upon the termination or earlier determination
or expiry of this Agreement.
4. The above-stated trade names, trade marks, signs, logos,
emblems and other identifying symbols shall at all times be and
remain the exclusive property of ITC and Owner undertakes not to
sub-lease or sub-licence or utilise any or all of such trade names,
trade marks, signs, logos, emblems etc, for the benefit of any other
Hotel of the Owner or any other business of the Owner present and
future.
5. The Owner agrees that it will always acknowledge and
recognise both before and after the expiration of this Agreement
the exclusive right of ITC to use or to grant to others the right or
licence to use whether separately or as part of or in connection with
other words, slogans, symbols, designs any of the trade names,
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KUMAR
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trade marks, emblems, signs, logos or other identifying symbols
which may now or in the future be generally used in connection
with the operation of any of the ITC-owned and/or serviced Hotels
restaurants, motels, resorts, palaces indovilles etc.
6. Upon termination or earlier determination or expiry of this
Agreement the Owner shall forthwith cease to use or utilise the
said above marks in connection with the Hotel or any of its
Operating Supplies operating equipment or furniture and
equipment including but not limited to all silver linen cutlery tools
utensils crockery glassware uniforms furniture and movable
equipment.
7. The patent rights of ITC in any innovations inventions
processes plant and equipment operating equipment etc., shall
remain vested in ITC and the Owner will have no right to the use,
enjoyment or benefit of the same except with the consent and
licence of ITC during the operating term of this Agreement and the
same shall stand automatically revoked on the termination of this
Agreement for any reason whatsoever.
*
ARTICLE XVI – INDEMNITY
1 In taking any action pursuant to this Agreement ITC shall
be deemed to be acting entirely for the benefit of and assistance to
the Owner and the Owner shall indemnify ITC and any of ITC's
personnel/staff or ITC's authorised representatives) or agent(s)
acting under this Agreement harmless from and against any and all
claims actions and demands whatsoever.
*
ARTICLE XIX- MISCELLANOUS
*
8. It is expressly understood that this Agreement is a contract
of personal service to be rendered by ITC to the Owner and must
not be construed in any form and manner to be otherwise. ITC
shall not have any managerial powers other than such as are
expressly delegated to ITC and also such as are necessarily
required by ITC in rendering proper services in its capacity as
Marketing Operational and Technical Consultants and Advisors
and Operators of the Hotel in respect of the Hotel and in respect of
the services mentioned herein.
Signature Not Verified
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KUMAR
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*
11. Nothing herein shall constitute a partnership or joint
venture between the Owner and ITC. All debts and liabilities to
third persons incurred by ITC in the course of their operation of the
Hotel shall be the debts and liabilities of the Owner and ITC may
so inform third parties with whom it deals on behalf of the Owner.
*
APPENDIX I
PRE-OPENING SERVICES
1. Prior to the Opening of the Hotel ITC shall have the
following duties and responsibilities (‘Pre-Opening Services’)
hereby delegated by the Owner provided that sufficient funds as
hereinafter specified by ITC are made available to ITC by the
Owner to defray the necessary expenditure and provided that the
owner fulfils and discharges all the pre-conditions to be fulfilled
and discharged by it as hereinafter specified:
*
APPENDIX II
MARKETING ADVERTISING AND RESERVATIONS
SERVICES.
A Preamble
1. The totality of the Marketing Function is a complex weave
of various elements in the Marketing mix, specifically comprising
of the following elements:
1. Product
2. Product Development
3. Pricing
4. Terms and Conditions of sale
5. Direct Sales
6. Advertising
7. Promotion
8. Merchandising
9. Public Relations
10. After sales service
11. Market knowledge and intelligence including
competition
12. Distribution of material.
Signature Not Verified
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KUMAR
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ITC’s background knowledge goodwill and expertise as a leading
Marketing Organisation both in the national and international
context of tobacco consumer products Hotels paper board printed
materials marine foods and products and general exports will be
made available to the Owner specifically as relevant to the sphere
of Hotel Marketing.
2. ITC will render to the Hotel the services herein stated in
connection with the Marketing Advertising and Publicity of the
Hotel in the local national and international markets through its
chain of Regional Sales Offices Hotel Sales Offices Travel Industry
Sales Office and Control Head Quarters Marketing Services such
as Advertising Department Entertainment and Promotion
Department Data and Statistics Cell Provided always that the
Owner fulfils his obligations and pre-conditions herein stated in
this Appendix and elsewhere in this Agreement.
3. All Services herein stated in connections with the above
Marketing Advertising Reservations Public Relations Reservation
Systems Direct Sales etc. will be strictly in accordance with a
complete Marketing Plan developed by ITC in all detail, projecting
both revenue and cost as related to each element of the marketing
mix presented to the owner by ITC as part of the Annual Plan as
detailed hereto in Appendix VI, a minimum of three months in
advance of the Fiscal Year. Such plan shall cover the fiscal year in
terms of strategy and action and present a prospective for the next
two years.
4. ITC shall endeavour to adhere to the Plan unless market
conditions necessitate a change in which event such action as
deemed necessary by ITC in the interest of the Hotel shall be taken
by ITC to ensure corrective action. However, any additional
financial outlays as and if necessitated for such corrective action
subject to such additional outlays being within ten percent (10%) of
the approved Marketing Plan Budget shall form part of Gross
Operating Expenses of the Hotel. In the event of extraordinary
circumstances necessitating even further expenditure, such further
expenditure shall be undertaken after the approval of the Owner.
B. SERVICES TO BE RENDERED BY ITC.
I. In consideration of the Service Fee as specified in Article V
of this Agreement payable by the owner to ITC, the following
services shall be made available to the Hotel:
1. Use of the WELCOMGROUP name as a prefix to
the Hotel Brand name in the manner as decided by ITC
Including Hotel frontage Hotel Graphics all advertising and
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publicity material developed for or by the Hotel and public
relations campaigns released for or by the Hotel in the
international, national and local market in order that the
Hotel shall at all times benefit from the goodwill attached
to the Welcomgroup name with its positive association of
quality, standard and consumer confidence.
2. Use of ITC's Welcomgroup ‘Namaste’ logo in
relation to all above in the international, national and local
markets but always in the form manner and style approved
in all respects by ITC.
3. Use of ITC's Welcomgroup slogans related to all
aspects of Marketing Advertising and Public Relations in
the international, national and local markets so that the
good-will related to such slogans as developed by ITC may
by association be of benefit to the Hotel.”
4. Use of such other signs and symbols of ITC as may
be deemed by ITC to be in the interest of the Hotel in all
aspects of Marketing Advertising and Public Relations
thereof in the international national and local markets with
the intention of a positive association for the Hotel with
Welcomgroup good-will.
Provided always that the use by Hotel of such
Welcomgroup names logos, signs symbol, slogans
mottos designs etc. in the manner above-stated shall
at all times be subject to and, in accordance with the
provisions contained in Article XIII of this
Agreement and ITC shall at all times have the
exclusive right to direct or withdraw the use of such
signs symbols logos slogans mottos designs etc. as
it may in its sole discretion decide.
5. Use of the extensive and widespread ITC Marketing
and sales infrastructure/offices present and future for the
benefit of the Hotel through.
*
21. Use of personalisation systems as developed by ITC
for in-house selling from time to time in line with
Welcomgroup chain policy.
II. The following services in connection with Marketing
Advertising and Reservations will be made available to the Hotel
by ITC provided always that the proportionate cost of such services
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as related to the Hotel’s share of the total expenses incurred by ITC
in respect of such activities shall be borne by the Hotel and shall be
paid out of the Hotel Operating Current Account as detailed
hereinafter. All such costs and expenses will be pro-rated directly
to the account of the Gross Operating Expenses of the Hotel in the
proportion that the number of rooms of the Hotel bears to the total
number of rooms advertised promoted or marketed in the
Welcomgroup chain as a whole. All such cost and expenses as are
to be part of Gross Operating Expenses of the Hotel in relation to
such activities as herein mentioned shall be estimated in advance
by ITC and built into the above mentioned Marketing Plan and
payments of such expenses shall be made from the Hotel Operating
Current Account to ITC’s Hotels Division Head Quarters at New
Delhi in advance in order to enable ITC to undertake the necessary
activities in accordance with the annual Plan and more specifically
the Marketing Plan therein presented to and approved by the
Owner as hereinafter stated:
1. Cluster advertising whether in the national or
international context and circumstance which allows groups
of Hotels with like facilities and/or like markets to advertise
together with a cost lower than that which would have been
incurred by the Hotel doing the same on its own
independent account.
2. Representation of the Hotel on all brouchers,
booklets and other printed or published material depicting
the Hotel along with other Hotels in the Welcomgroup
chain such printed material including:
(a) Welcomgroup’s Chain Brochure
(b) Welcomgroup’s Chain Facilities Guide
(c) Welcomgroup’s Chain GIT Tariff Sheet
(d) Welcomgroup’s Chain FIT Tariff Sheet
(e) Welcomgroup’s Film
(f) Welcomgroup Audio Visual
(g) Welcomgroup’ s Instant Reservation
Campaign
(h) Welcomgroup Image Campaign
*
III. The following marketing advertising and reservation
services shall be provided by ITC to the Hotel provided always that
the cost of such services shall entirely be to the account of the
owner and shall be part of the Gross Operating Expenses of the
Hotel and specifically built into the above stated Marketing Plan
thereof and Payable from the Hotel's Operating Current Account
and Payable to ITC Welcomgroup in advance when the
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disbursement of such expenses is against any such service to be
subsequently developed and executed by ITC.
*
7. Promotion Publicity and Advertising of the Hotel
overseas or nationally with the explicit understanding and
agreement herein that all Travel, Living, Hospitality and
other' costs in connection with such overseas or national
activities carried out directly for the Hotel shall be to the
account of the Owner and shall Form part of the Gross
Operating Expenses of the Hotel payable from the Hotel
Operating current account.
*
APPENDIX VI
EXPLANATORY NOTES AND BANKING ARRANGEMENTS
*
B. Bank Accounts:
1. The Hotel operating -accounts shall always be maintained
separate and distinct and shall
be maintained as such from the Owner's own accounts and ITC’s
own accounts.
2. For the maintenance of Hotel operating Accounts there
shall be kept three bank accounts
to be designated respectively:
i) Hotel Receipts savings Account
ii) Hotel Operating Current Account
iii) Hotel Renovation and Refurnishing savings
Account.
all of which will be operated solely by ITC through two authorised
signatories of ITC in the following manner:
(a) Receipts savings account-2 joint signatories one of
whom will be either the ITC’s appointed General Manager
or Unit Financial Controller of the Hotel and the other
designated signatory in the ITC’s Finance Department at its
Hotels Divisional Headquarters.
(b) Operating Current Account- 2 joint signatories one
of whom will be the General Manager and the other the
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Unit Financial Controller of the Hotel both being
employees of ITC.
(c) Renovation and Refurbishing savings Account- as in
‘a’ above namely Hotel Receipts savings Account.
3. All revenues forming part of the Gross Operating Income
of the Hotel for each fiscal year as defined above in Article I shall
immediately on receipt be credited exclusively into the above-
stated Hotel Receipts Saving Account.
*
5. Notwithstanding anything herein contained, it shall be
responsibility of the owner to maintain at all times sufficient funds
in the Hotel Receipts Savings Account for transfers to the Hotel
Operating Current Account and the Renovation and Refurnishing
Saving Account sufficient in quantum to meet the disbursement
and outgoings as specified above.”
V.B A Prefatory Overview
The three ingredients of passing off are (i) goodwill of the plaintiff in
the mark in question, (ii) misrepresentation by the defendant, so as to
exploit the plaintiff’s goodwill in the mark, in the result passing off
the goods or services of the defendant as those of the plaintiff, and
51
(iii) resultant damage to the plaintiff .
128. The onus to establish the existence of these three ingredients is
on the plaintiff. Existence of goodwill in the mark has to be
established by the plaintiff prior to commencement of user of the mark
52
by the defendant .
51
Refer Syed Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683, Toyota Jidosha Kabushiki Kaisha v.
Prius Auto Industries Ltd, Cadila Health Care v. Cadila Pharmaceuticals Ltd, (2001) 5 SCC 73, Brihan
Karan Sugar Syndicate
52
Refer Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd, (2018) 2 SCC 1, N.R. Dongre v.
Whirlpool Corporation, (1996) 5 SCC 714
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129. AGH’s stand, before us, is that the user of the
DAKSHIN/
mark by AGH commenced on 14 April 1989,
when the Dakshin restaurant in the Park Sheraton commenced
operations. Prior thereto, submits AGH, there is no user of the
DAKSHIN/
mark either by AGH or ITC. ITC has, therefore,
no goodwill in the DAKSHIN/
mark prior to commencement
of user of the mark by AGH. The very first requirement, for a case of
passing off to sustain is, therefore, not made out.
130. ITC contends, per contra , that AGH’s user of the mark
DAKSHIN/
can be said to commence only after the expiry of
the OSA in 2015. The entire user of the DAKSHIN/
mark,
during the currency of the OSA, contends ITC, as well as the goodwill
earned thereby, has to enure to the benefit of ITC.
131. Learned Counsel have, on both sides, placed extensive reliance
on the covenants of the OSA, with each lending his own
interpretation. The covenants of the OSA, therefore, assume pre-
eminent significance.
132. AGH has also sought to contend, in context, that there has been
no misrepresentation by it, and no damage to ITC as a consequence.
None of the ingredients of the passing off, therefore, are satisified,
according to AGH.
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133. With that prefatory recital, the various submissions of Mr.
Nigam for ITC, and Mr. Ramanujan for AGH, may be enumerated as
under.
V.C Rival submissions
134. Mr. Nigam submits thus:
(i) The opening recital in the OSA revealed that the OSA
was intended to reinvent the real estate owned by AGH under
the guidance of ITC and to unveil it as an ITC hotel.
(ii) Clause 1, read with Article II in the OSA, made it clear
that the OSA was only for the purpose of running the “hotel”.
The rights under the OSA, therefore, subsisted so long as the
hotel was in operation.
(iii) The opening recitals in the OSA made it clear that the
purpose of the OSA was to leverage ITC’s long standing
goodwill and reputation.
(iv) In Article IV of the OSA, AGH acknowledged that all
facilities, public spaces, etc., as well as any structural changes
thereto, could be made only as advised and approved by ITC.
Thus, opening of the new Dakshin restaurant would also be
advised and approved by ITC and the creation and operation of
the restaurant would also be attributable to ITC.
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(v) Article XIII of the OSA stipulated that all trade marks,
present or future, would be owned by ITC, and AGH would
only have a limited right of user thereof. Under the OSA, ITC
permitted AGH to use its trade marks and trade names. ITC’s
brands identified the quality and source of the services provided
at Dakshin. Article XIII, therefore, made it clear that AGH was
only a permissive user of the “Dakshin” trade mark.
(vi) The learned Single Judge has held, in this regard, that
DAKSHIN/
is not one of the trade marks mentioned in
the OSA. In fact, the only trade marks of ITC, to which the
OSA made reference, were “Welcomgroup” and “Namaste”. If
the interpretation of the learned Single Judge were to be
accepted, AGH would be able to lay claim to all trade marks
and trade names of ITC.
(vii) The expenses for running the Dakshin restaurant were, as
per the OSA, to be met from the account of the Hotel, and were
not met independently by AGH. Reliance was placed, for this
purpose, on
(i) Clauses 1 and 7 of Article VI,
(ii) sub-clauses 1 to 3 and 5 of Clause B in Appendix
VI,
(iii) sub-clauses 1 to 3 of Clause A (Preamble) in
Appendix II,
(iv) sub-clauses 1 to 5 and 21 of Clause B(I) in
Appendix II,
(v) sub-clauses 1 and 2 of Clause B(II) in Appendix II,
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(vi) Clause B(III) of Appendix II, and
(vii) sub-clause 7 of Clause B(IV) of Appendix II, of
the OSA.
(viii) AGH obtained registration of the DAKSHIN mark, in its
favour, in Class 42, on an admission that the mark belonged to
ITC. The registration was, therefore, granted subject to
association with ITC’s DAKSHIN trade mark. AGH could not,
therefore, claim user of the DAKSHIN trade mark independent
of its user by ITC.
(ix) The DAKSHIN/
trade mark was coined by ITC.
(x) The Conceptualization Note and other documents, on
which AGH sought to rely to support its stand that the
DAKSIN/
mark was devised by it, were unsigned,
undated and unstampted, and could not, therefore, be relied
upon. The said documents, too, in fact, emphasized the
expertise and role of ITC in conceptualizing the DAKSHIN
mark.
(xi) The reference, in the invoices raised in respect of the
Dakshin restaurant, to the GST and VAT details, and the
registered office address of AGH, were as per the requirements
of the OSA. Nonetheless, each invoice prominently carried the
“Welcomgroup” logo. The customer would, therefore, certainly
associate the restaurant with ITC.
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(xii) News articles, too, were cited, which indicated that the
“Dakshin” mark was associated with ITC.
(xiii) The reputation of ITC in the DAKSHIN/
mark
could not be disputed. Sales turnover figures, by use of the
mark, were provided for the period 2012 to 2024. The sales
turnover, during the said period, was to the tune of ₹ 84 crores.
Reference was also invited to sales invoices, promotional
material, awards and reviews, to vouchsafe ITC’s reputation in
the DAKSHIN/
mark.
(xiv) Reference was also made to the following photographs
filed with the suit which, according to ITC, demonstrated that
the evolution of the “Dakshin” mark was intrinsically linked
with ITC, and was also used in conjunction with “ITC”:
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(xv) The invoices, on which AGH placed reliance, also bore
the “Sheraton” watermark.
(xvi) These documents clearly indicated that “Dakshin” was an
ITC brand.
(xvii) In these circumstances, the entire goodwill earned by use
of the DAKSHIN/
mark, during the running of the
restaurant in the Park Sheraton, had to enure to the benefit of
ITC. Reliance was specifically placed, in this context, on
(a) Clause 1 in Part B in Article IV,
(b) Clause A (Preamble) and B(I)(1) to (4) in
Appendix II, and
(c) Article XIII
of the OSA.
(xviii) ITC was paid 3% of the Gross Operating Income and
10% of the Gross Operating Profit of the Hotel, under the OSA,
as consideration for ITC running the hotel and sourcing
customers using its goodwill and reputation. This payment did
not convert ITC into a service provider.
(xix) At the time when ITC obtained its Class 29 registration
of the mark DAKSHIN/
on 13 September 2000,
restaurant services were not included in Class 42. No
substantial consequence, therefore, arose out of the fact that
ITC did not seek any amendment in the date of user of 11 April
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1996 declared by ITC in respect of its Class 42 registration with
effect from 10 February 2004.
135. Mr. Ramanujan submits, per contra , as under:
(i) Under the OSA, ITC was merely a service provider, who
provided consultancy services. The OSA was in the nature of a
contract of personal service. Reliance was placed, in this
context, on
(a) Clause 4 in Part A in Article IV,
(b) Clause 1 in Article V, and
(c) Clause 1 in Article XVI,
of the OSA.
(ii) The services were provided by ITC in return for a
53
Service Fee (equal to 3% of the Gross Operating Income ) and
Incentive Fee (equal to 2 to 10% of the Gross Operating Profit)
as provide in Clause 1 in Article V of the OSA.
(iii) As per Article IV of the OSA, salaries to employees of
the Hotel, operation and maintenance costs and payments for
furniture purchase, repairs, etc., were all borne by AGH. The
Clause further clarified that ITC was only providing its personal
skill and expertise in consultancy and advisory capacity.
(iv) Articles IV (10), VII and VIII(1) of the OSA provided
that all licences, permits, etc., were to be obtained by AGH.
53
“GOI” hereinafter
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(v) Clause 2 in Article V of the OSA required any operating
loss to be exclusively borne by AGH.
(vi) Clause 1 in Article VI of the OSA specifically provided
that ITC was not a promoter, co-promoter or investor in the
Hotel in any way.
(vii) Clause 6 in Article VI of the OSA required AGH to
maintain sufficient funds in the Hotel Receipts Savings Account
for transfer to the Hotel Operating Current Account to meet
specified disbursements and outgoings. AGH, therefore,
financed the running of the Hotel.
(viii) Clause 7 in Article VI of the OSA further provided that
AGH authorized ITC to operate and maintain the accounts of
the Hotel.
(ix) Article XVI of the OSA provided that AGH assumed all
risks and indemnified ITC from all claims.
(x) Clause 11 in Article XIX of the OSA specifically
provided that
(a) the OSA did not constitute a partnership between
ITC and AGH,
(b) all debts and liabilities were of AGH, and
(c) ITC was acting on behalf of AGH.
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(xi) Clauses 3 and 4 of the Preamble to Appendix II of the
OSA provided for ITC’s goodwill in its marks being of benefit
to the Hotel against payment.
(xii) Article XIX of the OSA provided that ITC was to act for
the benefit and assistance of AGH, against which AGH
indemnified ITC and its staff from any and all claims.
(xiii) There was no splitting of profits between ITC and AGH.
(xiv) The marks to which Article XIII of the OSA referred
were the self-branding marks of ITC. The clause could not
cover all marks conceived by the parties during the currency of
the OSA, which were not even in existence at the time of its
execution. This was supplemented by Appendix II Part B of the
OSA which permitted use of the “Welcomgroup” and
“Namaste” logos of ITC for the purposes of the Hotel.
(xv) The Conceptualization Note relating to the Park Sheraton
clearly indicated that the DAKSHIN mark was conceptualized
and owned by AGH.
(xvi) Reliance was also placed on a later Business Transfer
54 55
Agreement executed between AGH and Devee Horizon LLP
with respect to the Vishakapatnam property of AGH after the
OSA with ITC in respect of the said property had come to an
54
“BTA” hereinafter
55
“Devee” hereinafter
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end. AGH thereafter sold the property to Devee under the BTA.
Clause 4.2(iv) of the BTA provided thus:
“(iv) Notwithstanding anything to the contrary contained
in this agreement, both the parties shall enter into a separate
agreement on mutually accepted terms and conditions for
permitting the Purchaser the usage of Trademark of
“Dakshin” owned by the Seller.”
ITC provided a no objection to the execution of the BTA, vide
its letter dated 4 July 2019, thereby indicating its concurrence
with the reference, in Clause 4.2(iv) of the BTA, to DAKSHIN
as a brand owned by AGH.
(xvii) As the expenses of the Hotel were entirely met by AGH,
and in view of the covenants of the OSA cited supra , the
goodwill that resulted out of such expenses had necessarily to
enure to AGH’s benefit.
(xviii)ITC had no pre-existing goodwill in the
DAKSHIN/
mark, prior to 1989 when AGH adopted the
mark. Sales Revenue figures had, moreover, been provided by
ITC only for the period after 2012-2013.
(xix) Four out of the five registrations obtained by ITC for the
DAKSHIN/
mark were on “proposed to be used” basis,
of which the user was later changed to April 1989. The fifth
registration, under Class 42, obtained with effect from 11 April
1996, was for hospitality and restaurants. 11 April 1996 was the
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date when ITC used the DAKSHIN/
mark outside
Chennai for the first time in the ITC Kakatiya Hotel in
Hyderabad.
(xx) AGH had never misrepresented to the public that the
DAKSHIN/
mark used by it belonged to ITC. AGH
was using the mark on its own, and operating without claiming
any association with ITC. After the OSA dated 12 February
1985 expired, AGH continued running the Dakshin restaurant
with a new service provider, in the Crowne Plaza. The Dakshin
restaurant continued to run, in the Crowne Plaza, from 2015 to
2024. It was never, at any point of time, associated with ITC.
(xxi) The invoices placed on record by AGH also indicated
that AGH was not claiming any association with, or seeking to
capitalize on the goodwill of, ITC.
(xxii) No damages were suffered by ITC as a result of use, by
AGH, of the DAKSHIN/
mark.
(xxiii)None of the three ingredients of passing off were,
therefore, satisfied.
V.D Issues that arise – Date of commencement of user of the
DAKSHIN/
mark by AGH and situs of goodwill under the
OSA
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136. The only issue to be considered is whether AGH has, or has not,
passed off its services as those of ITC, by using the
DAKSHIN/
mark.
137. For this, the first question to be addressed is whether ITC had
the requisite goodwill, in the DAKSHIN/
mark, prior to
commencement of user of the mark by AGH, which, in turn, requires a
determination of the date from which user of the DAKSHIN/
mark by AGH could be said to commence.
138. Alternatively, one would have to determine the date prior to
which ITC is required to demonstrate the existence of goodwill, in its
favour, in the DAKSHIN/
mark.
139. ITC’s case is predicated on the premise that the user of the
DAKSHIN/
mark, by AGH, can be said to commence only
from 2015, when the OSA expired. The entire goodwill, prior thereto,
has, according to ITC, to enure to ITC’s credit, as per the express
terms of the OSA. AGH was merely a beneficiary of the goodwill
inherently residing in ITC’s mark which, in turn, was a mere fall out
of ITC’s long standing and enviable reputation.
140. The argument, to our mind, begs the actual issue at hand.
141. To repeat, the issue to be addressed is the date from which AGH
commenced user of the DAKSHIN/
mark. If AGH’s user is to
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commence from 14 April 1989, when the Dakshin restaurant in the
Park Sheraton commenced operations, ITC’s plea of passing off has
necessarily to fail, as, admittedly, there is no user, by ITC, of the
DAKSHIN/
mark prior to 14 April 1989. What matters, here,
is not the reputation or goodwill that ITC commanded, but the
reputation or goodwill that the DAKSHIN/
mark commanded.
This is clear from, inter alia , the judgment of the Supreme Court in
Toyota, in which the Supreme Court negatived the plea of passing off,
by Toyota, of its PRIUS mark by the opposite party, on the ground
that the PRIUS mark, individually, had not acquired the necessary
goodwill and reputation, in India, as could sustain a claim for passing
off.
142. The issue of whether the goodwill attributable to the
DAKSHIN/
mark, which could have been earned only after
1989 , would lie to the credit of AGH or ITC would, therefore, actually
arise only if the date of commencement of user of the
DAKSHIN/
mark by AGH is to be regarded as 2015. In case
AGH is to be regarded as having commenced use of the
DAKSHIN/
mark in 1989, the goodwill earned by the mark
after 1989 , whether by AGH or by ITC, would obviously become
irrelvant.
143. The date of commencement of user of the DAKSHIN/
mark by AGH, therefore, assumes pre-eminent significance.
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V.E Date of commencement of user, by AGH, of the
DAKSHIN/
mark
144. The date of commencement of user, by AGH, of the
DAKSHIN/
mark would have to be determined from the
covenants of the OSA. On its plain reading, we find ourselves unable
to subscribe to the view that AGH should not be treated as having
used the mark till 2015.
145. The learned Single Judge has held that ITC was a service
provider for AGH as per the OSA, working for a pre-fixed fee, and we
are in agreement with him.
146. The position appears, prima facie , to be inescapable, from a
reading of the covenants of the OSA, that ITC was engaged by AGH
as a service provider. The opening recitals of the OSA clearly state
that AGH was the owner of the building in which the Park Sheraton
was to be run, and had entered into the OSA “to associate with a
competent Company having a chain of hotels under its operations”. It
goes on to state that ITC was chosen by AGH as AGH had
“confidence that ITC has sufficient specialised knowledge expertise
and experience to be able to offer expert consultancy services in the
field of hoteliering”, and that it could “(offer) its personal services in
a consultancy and advisory capacity for the Hotel”. The recitals
further go on to state that AGH, as the owner of the building,
contemplated “treating the personal services of ITC in a Consultancy
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and advisory capacity for such Operating Services”. Article II of the
OSA is clear and explicit:
“Subject to the terms and conditions herein contained the Owner
hereby agrees to engage ITC to render personal services as
Technical Operational Personnel Hotel Supplies including
Purchasing Marketing Advertising and Reservations services and
Technical Consultants and Advisors for operation of the hotel and
ITC agrees to render such personal services .”
Clause 4 in Part A in Article IV of the OSA required AGH, as the
owner, to provide all tools, plant and machinery, furniture and
equipment, operating supplies and other ancillary or necessary parts,
stores and equipment “to enable ITC to render services” under the
OSA. Clause 1 in Part B in Article IV enumerated the “services to be
rendered” by ITC under the OSA. Following this, Clause 1 stipulated
that “the performance and discharge of such services by ITC” would
be subject to AGH performing its obligations. Clause 2 referred to the
reciprocal obligations of AGH, which it was required to observe,
perform and discharge “as would enable ITC to initiate and render the
services therein specified”. Clause 1 in Article VI further clarified that
ITC would not be a promoter, a co-promoter or an investor in the
Hotel.
147. Article V of the OSA specifically provided for payment, by
AGH to ITC, of “Service Fee” and “Incentive Fee” “in consideration”.
Article XVI stipulated that ITC would be “deemed to be acting
entirely for the benefit of and the assistance to ” AGH. AGH was,
therefore, clearly the prime actor under the OSA. As if to make
matters clearer, Clause 8 in Article XIX of the OSA once again
provided:
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“8. It is expressly understood that this Agreement is a contract
of personal service to be rendered by ITC to the Owner and must
not be construed in any form and manner to be otherwise. ITC
shall not have any managerial powers other than such as are
expressly delegated to ITC and also such as are necessarily
required by ITC in rendering proper services in its capacity as
Marketing Operational and Technical Consultants and Advisors
and Operators of the Hotel in respect of the Hotel and in respect of
the services mentioned herein.”
Clause 11 under Article XIX once again clarified that nothing in the
OSA would “constitute a partnership or joint venture between the
Owner and ITC”.
148. The Appendices to the OSA further clarify the position. Under
the head “Pre-Opening Services” in Appendix I, it is provided that,
“prior to the opening of the Hotel, ITC shall have the following duties
and responsibilities hereby delegated by the Owner ”. In exercising
and performing the pre-opening services, therefore, ITC was acting as
AGH’s delegatee. Clause 2 in Appendix II again repeats that ITC
would render to the Hotel “the services herein stated in connection
with the Marketing Advertising and Publicity of the Hotel”. Clause B
in Appendix II details the nature of the services to be rendered by ITC,
and the opening words of the Clause are significant:
“B. SERVICES TO BE RENDERED BY ITC:
I. In consideration of the Service Fee as specified in
Article V of this Agreement payable by the owner to ITC
the following services shall be made available to the
Hotel:”
Significantly, the very first “service” which ITC was required to make
available to the Hotel, under the above head, was use of the
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WELCOMGROUP name as a prefix to the Hotel Brand Name… “in
order that the Hotel shall at all times benefit from the goodwill
attached to the Welcomgroup name with its positive association of
quality, standard and consumer confidence”. The permission to use
ITC’s brand names was also, therefore, one of the services which ITC
was to render, as a service provider under the OSA, against
consideration in the form of service fee paid by AGH to ITC. Sub-
clauses II and III under Clause B again referred to the services to be
provided by ITC to AGH, against consideration.
149. ITC was, therefore, merely a service provider under the OSA,
engaged by AGH of providing services against service fee. Mr.
Nigam’s contention that AGH was merely the owner of the real estate
in which the Park Sheraton was being run, and that ITC was the prime
mover under the OSA is, therefore, clearly unacceptable.
150. In conjunction, the debate with respect to the date of
commencement of user, by AGH, of the DAKSHIN/
mark
prima facie stands concluded by the covenants of the OSA
themselves. Article XIII of the OSA specifically deals with “trade
names, marks, signs, etc.” Clause 1 thereunder specifies that ITC
would “allow the utilisation and use by the Hotel of such of ITC’s
Trade Names Trade Marks and Signs and any other identifying marks,
sign, logos, emblems present and future as may be decided by ITC’s
Hotels Division at its sole discretion”. Clause 2 empowered ITC to
“determine and withdraw such permitted use by the Hotel” at its sole
discretion, and Clause 3 provided that “any use or the right to use by
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the Hotel of any such trade names, trademarks, signs, logos, emblems
and other identifying symbols” would cease on termination of the
OSA.
151. Clearly, therefore, the OSA envisaged use, by AGH, of the trade
marks of ITC, even if on a permissive basis. Though Mr. Nigam seeks
to distinguish between the “Hotel” and the “Owner”, relying, for the
said purpose, on the opening recital in Clause 1 of the OSA, this
distinction can make no difference in view of Clause 6 in Article XIII
of the OSA, which provides that “upon termination or earlier
determination or expiry” of the OSA, “ the Owner shall forthwith
cease to use or utilise the said above marks in connection with the
Hotel…” Use of the trade marks of ITC, therefore, even in terms of
the OSA, was by AGH, albeit for the benefit of the Hotel.
152. Use of ITC’s trade marks and tradenames, even under the OSA
was, therefore, by AGH. In that view of the matter, Mr. Nigam’s
attempt at postponing the date of user, by AGH, of the
DAKSHIN/
mark till 2015, prima facie cannot sustain.
153. The sequitur would be that the allegation of passing off, by ITC
against AGH, would prima facie be liable to fail even on the ground
that the use of the DAKSHIN/
mark by AGH commenced on
14 April 1989, prior to which date there is no user, by ITC, of the said
mark. No pre-existing goodwill in the mark, as would enure to the
benefit of ITC can, therefore, be said to have existed.
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V.F In whose favour did goodwill of the DAKSHIN/
mark, under the OSA, enure?
154. We have also independently applied ourselves to Mr. Nigam’s
contention that the goodwill earned by the DAKSHIN/
mark between 1989 and 2015 has entirely to be to the benefit of ITC,
and AGH can claim no part thereof. This argument is predicated on
the premise that ITC was always the owner of the
DAKSHIN/
mark and that AGH was, at the highest, a mere
permissive user of the mark.
155. Mr. Ramanujan submits, per contra , that, under the OSA, the
goodwill residing in the DAKSHIN/
mark, or in any other
trade mark of ITC stood transferred to AGH against consideration.
AGH was, therefore, entitled to seek the benefit of the said goodwill.
156. On a reading of the various covenants of the OSA, we are
inclined to agree with Mr. Ramanujan.
157. Even while providing that ITC’s trade marks, trade names and
logos would remain its exclusive property, the OSA, in Appendix II,
in Clause 1 under the head “Preamble”, provided that ITC’s goodwill
would “ be made available to the Owner specifically as relevant to the
sphere of Hotel Marketing”. We have already noted, earlier, that
Clause 1(1), under the heading “Services to be rendered by ITC” in
Appendix II, provided for permission to use its brand names and
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trademarks as one of the services which ITC was to provide to AGH
under the OSA, against payment of service fee. Clause 1(3) again
provided, with respect to “goodwill”, that the use of ITC’s
Welcomgroup logo was to be permitted as, developed by ITC, it
could, by association, be of benefit to the Hotel ”. Similarly, Clause 5
envisaged “use of the extensive and widespread ITC Marketing and
sales infrastructure/offices present and for the future benefit of the
Hotel”.
158. Thus, the OSA itself envisaged AGH as being a beneficiary,
during the currency of the OSA, of the goodwill associated with ITC’s
trade marks and trade names. ITC cannot seek, therefore, to arrogate,
to itself and to its own credit, the entire goodwill earned in the
DAKSHIN/
mark, between 1989 and 2015.
159. There is yet another, and more empirical, reason as to why Mr.
Nigam’s contention that the goodwill associated with the
DAKSHIN/
mark, during its use between 1989 and 2015,
had necessarily to enure to the benefit of ITC, cannot sustain. Under
the OSA, the expenses for running the Hotel were essentially met by
AGH, and not by ITC as Mr. Nigam would seek to contend. The
Service Fee and Incentive Fee payable to ITC was also AGH’s
responsibility, as per Clause 1 in Article V of the OSA. Clause 2
provided that, if there was any operating loss in any fiscal year, that
loss would be borne exclusively by AGH. Article VI provided, in
Clause 1, that ITC “ would not invest in the Hotel in any way ”. Clause
6, under the same Article VI, required AGH “to maintain, at all times,
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sufficient funds in the Hotel Receipts Saving Account”, for transfer to
the respective Accounts from which the Hotel was to be run. Clause 7
further provided that AGH authorised ITC to open, in the name of the
Hotel, the requisite Bank Accounts. The very opening of the Bank
Accounts by ITC was itself, therefore, as per authorisation granted by
AGH. Clause 5 under the head “Bank Accounts” in Appendix VI to
the OSA made matters clear by providing that, notwithstanding
anything contained elsewhere in the OSA, it would “be responsibility
of the owner to maintain at all times sufficient funds in the Hotel
Receipts Savings Account for transfer to the Hotel Operating Current
Account and the Renovation and Refurbishing Savings Account
sufficient in quantum to meet the disbursement and outgoings” as
specified in the OSA.
160. ITC cannot, therefore, seek to contend that expenses under the
OSA, for running the Hotel, were borne by it. The OSA specifically
obligated AGH to fund the requisite accounts and ensure that
sufficient funds were available, at all times, for running the Hotel. The
very opening of the Bank Accounts by ITC was as authorised by
AGH.
161. In the wake of such extensive financial input, by AGH, into the
funds using which the Hotel was run in terms of the OSA, AGH
cannot, quite obviously, be denied the benefit of the goodwill earned
using the DAKSHIN/
mark till the expiry of the OSA.
Apart from the fact that the covenants of the OSA do not contain
anything to the effect that the goodwill earned in the
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DAKSHIN/
mark would enure to the benefit of ITC, AGH,
being the prime financier under the OSA, would be entitled to claim
the benefit of the said goodwill.
162. It has to be remembered, in this context, that, unlike the
Welcomgroup and Namaste marks, which were pre-existing marks of
ITC commanding pre-existing goodwill, the DAKSHIN/
mark, with which we are concerned, came into existence four years
after the OSA had been executed. There was, therefore, no pre-
existing goodwill, of ITC, in the DAKSHIN/
mark.
Whatever goodwill the DAKSHIN/
mark came to earn, was
owing to use of the mark in terms of the OSA. Thus seen, AGH has
also to be regarded as a beneficiary of the said goodwill.
163. Even if, therefore, the aspect of goodwill is to be reckoned as in
2015, AGH had, to its credit, accumulated goodwill in the
DAKSHIN/
mark during the period 1989 to 2015.
164. Whether, therefore, one is to treat the date on which ITC is
required to satisfy the first condition, for a claim of passing off, of the
existence of requisite goodwill in the mark, as 1989 or as 2015, there
is no evidence to indicate that any such goodwill in the
DAKSHIN/
mark, to which ITC was solely and exclusively
entitled, existed.
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165. The very first ingredient of passing off, which is the existence
of goodwill is not, therefore, satisfied.
V.G Re. misrepresentation
166. The second ingredient of passing off is misrepresentation. Mr.
Ramanujan sought to contend that no misrepresentation can be laid at
the door of AGH, and we are inclined to agree.
167. The very essence of the tort of passing off, which is manifest
even from the simple etymological understanding of the expression
“passing off”, is representation of the goods or services of one person
as those of another. Confusion is not, therefore, the essence of the tort
of passing off, though it is one of the channels by which the tort is
committed. Classically, passing off is a tort of deceit, as it embodies
the intent of the tortfeasor to represent, to the consumer public, that its
goods or services are those of another. With the passage of time and
evolution of the law in that regard, the requirement of mala fides or
mens rea is no longer a sine qua non for a case of passing off to
sustain. Nonetheless, the misrepresentation by the tortfeasor remains
one of the essential ingredients of the tort and, to be satisfied, requires
material to indicate that the tortfeasor is misrepresenting his goods or
services to be those of another or, at the very least, that the consumer
public has been misled into believing the goods or services of the
tortfeasor to be those of the other.
168. In the present case, there is nothing to indicate that AGH, at any
point of time, represented, to the public, the existence of any
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association between its Dakshin retaurant at Chennai and the various
Dakshin outlets of ITC. On the basis of the material on record, we are
prima facie inclined to agree with Mr. Ramanujan that AGH was
running its Dakshin restraurant in Chennai independently, claiming no
association with ITC. Irrespective of whether AGH was, or was not
entitled to do so, it cannot be said prima facie that AGH was
misrepresenting the services rendered by it as those rendered by ITC.
169. AGH’s Dakshin restaurant has no existence outside Chennai.
ITC does not run any Dakshin restaurant in Chennai. At the very least,
therefore, the aspect of whether the consumer public is misled into
believing an association between the two restaurants is a matter of
trial.
V.H Re. Injury/damage
170. The third ground of passing off is resultant injury or damage to
the plaintiff as a consequence of the tortious act of the defenant.
Though Mr. Nigam has sought to contend that customers who visited
the ITC Dakshin outlet at Delhi would be confused and would
presume an association with the Chennai Dakshin outlet of AGH,
there is nothing to substantiate this contention. We have to bear in
mind, in the present case, that the fact that we are dealing with a
passing off suit and not a suit for breach of contract. In the absence of
any material to indicate that any damage to ITC, or to the reputation
of its Dakshin outlet in Delhi had resulted as a consequence of the use,
by AGH, of the mark
for its outlet at Chennai, the
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requirement of injury and damage also becomes, at the very least, a
triable issue.
171. Within the Wander parameters, it cannot be said that any case
for interference with the view expressed by the learned Single Judge
in this regard exists.
V.I The sequitur
172. As a result, primarily because the very first requirement of pre-
existing goodwill of ITC, in the
mark, prior to
commencement of the use of the mark by AGH is not satisfied, we are
in agreement with the learned Single Judge that no prima facie case of
passing off can be said to exist against AGH and in favour of ITC.
VI Acquiescence
173. We are also in agreement with the learned Single Judge in his
view that ITC’s claim for injunction against AGH has to fail on the
ground of acquiescence, in view of Section 33(1) of the Trade Marks
Act.
174. ITC applied for registration of the
mark in Class 42
on 10 February 2004, and the certificate of registration was issued on
17 December 2005. AGH applied for the grant of registration of the
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mark in Class 42 on 23 April 2004 and the certificate was
issued on 16 September 2005.
175. Section 33(1) prohibits the owner of an earlier trademark, who
has acquiesced to the use of a registered trademark by another, for a
period of five years or more, thereafter seeking to injunct such use.
The scope and ambit of the expression “acquiescence” stands well
delineated from the following passages of the Supreme Court in
56
Power Control Appliances v. Sumeet Machines thus:
“26 . Acquiescence is sitting by, when another is invading the
rights and spending money on it. It is a course of conduct
inconsistent with the claim for exclusive rights in a trade mark,
trade name etc. It implies positive acts; not merely silence or
57
inaction such as is involved in laches. In Harcourt v. White Sr.
John Romilly said: “It is important to distinguish mere negligence
and acquiescence.” Therefore, acquiescence is one facet of delay. If
the plaintiff stood by knowingly and let the defendants build up an
important trade until it had become necessary to crush it, then the
plaintiffs would be stopped by their acquiescence. If the
acquiescence in the infringement amounts to consent, it will be a
complete defence as was laid down in Mouson (J.G.) &
58
Co. v. Boehm . The acquiescence must be such as to lead to the
inference of a licence sufficient to create a new right in the
59
defendant as was laid down in Rodgers v. Nowill .
27 . The law of acquiescence is stated by Cotton, L.J.
60
in Proctor v. Bannis as under:
“It is necessary that the person who alleges this lying by
should have been acting in ignorance of the title of the other
man, and that the other man should have known that
ignorance and not mentioned his own title.”
In the same case Bowen, L.J. said:
56
(1994) 2 SCC 448
57
(1860) 28 Beav 303
58
(1884) 26 Ch D 406
59
(1847) 2 De GM&G 614
60
(1887) 36 Ch D 740
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“In order to make out such acquiescence it is necessary to
establish that the plaintiff stood by and knowingly allowed
the defendants to proceed and to expend money in
ignorance of the fact that he had rights and means to assert
such rights.”
61
28 . In Devidoss and Co at pages 33 and 34 the law is stated
thus:
“To support a plea of acquiescence in a trade mark case it
must be shown that the plaintiff has stood by for a
substantial period and thus encouraged the defendant to
expend money in building up a business associated with the
62
mark. In Rowland v. Michell Romer J. observed:
‘If the plaintiff really does stand by and allow a man
to carry on business in the manner complained of to
acquire a reputation and to expend money he cannot
then after a long lapse of time, turn round and say
that the business ought to be stopped.’”
In the same case, but on appeal Lord Russel, C.J. said
63
Rowland v. Michell at p. 43:
“Is the plaintiff disentitled to relief under that head by
injunction because of acquiescence? Of course it is
involved in the consideration of that that the plaintiff has a
right against the defendant and that the defendant has done
him a wrong and the question is whether the plaintiff has so
acted as to disentitle him from asserting his right and from
seeking redress from the wrong which has been done to
him. Cases may occasionally lay down principles and so
forth which are a guide to the court, but each case depends
upon its own circumstances.
Dealing with the question of standing by in Codes v. Addis and
64
Son at p. 142, Eve, J. said:
‘For the purpose of determining this issue I must assume
that the plaintiffs are traders who have started in this more
or less small way in this country, and have been
61
AIR 1941 Mad 31
62
(1896) 13 RPC 464
63
(1897) 14 RPC 37
64
(1923) 40 RPC 130
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continuously carrying on this business. But I must assume
also that they have not, during that period, been adopting a
sort of Rip Van Winkle policy of going to sleep and not
watching what their rivals and competitors in the same line
of business were doing. I accept the evidence of any
gentleman who comes into the box and gives his evidence
in a way which satisfies me that he is speaking the truth
when he says that he individually did not know of the
existence of a particular element or a particular factor in the
goods marketed by his opponents. But the question is a
wider question than that : ought not he to have known : is
he entitled to shut his eyes to everything that is going on
around him, and then when his rivals have perhaps built a
very important trade by the user of indicia which he might
have prevented their using had he moved in time, come to
the Court and say : “Now stop them from doing it further,
because a moment of time has arrived when I have
awakened to the fact that this is calculated to infringe my
rights.” Certainly not. He is bound, like everybody else who
wishes to stop that which he says is an invasion of his
rights, to adopt a position of aggression at once, and insist,
as soon as the matter is brought to Court, it ought to have
come to his attention, to take steps to prevent its
continuance; it would be an insufferable injustice were the
Court to allow a man to lie by while his competitors are
building up an important industry and then to come
forward, so soon as the importance of the industry has been
brought home to his mind, and endeavour to take from them
that of which they had legitimately made use; every day
when they used it satisfying them more and more that there
was no one who either could or would complain of their so
doing. The position might be altogether altered had the user
of the factor or the element in question been of a secretive
or surreptitious nature; but when a man is openly using, as
part of his business, names and phrases, or other elements,
which persons in the same trade would be entitled, if they
took steps, to stop him from using, he gets in time a right to
sue them which prevents those who could have stopped him
at one time from asserting at a later stage their right to an
injunction.’
65
In Mc. Caw Stevenson & Orr Ltd. v. Lee Bros . acquiescence for
four years was held to be sufficient to preclude the plaintiff from
succeeding. In 1897 the plaintiffs in that case registered the word
‘glacier’ as a trade mark in respect of transparent paper as a
substitute for stained glass. As the result of user the word had
become identified with the plaintiffs' goods. In 1900 the defendants
65
(1960) 23 RPC 1
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commenced to sell similar goods under the name ‘glazine.’ In 1905
the plaintiffs commenced an action for infringement. The
defendants denied that the use of the word ‘glazine’ was calculated
to deceive and also pleaded acquiescence. A director of the plaintiff
company admitted that he had known of the use of the word
‘glazine’ by the defendants for four years — he would not say it
was not five years. It was held that the plaintiffs failed on the
merits and by reason of their delay in bringing the action.
Delay simpliciter may be no defence to a suit for infringement of a
trade mark, but the decisions to which I have referred to clearly
indicate that where a trader allows a rival trader to expend money
over a considerable period in the building up of a business with the
aid of a mark similar to his own he will not be allowed to stop his
rival's business. If he were permitted to do so great loss would be
caused not only to the rival trader but to those who depend on his
business for their livelihood. A village may develop into a large
town as the result of the building up of a business and most of the
inhabitants may be dependent on the business. No hard and fast
rule can be laid down for deciding when a person has, as the result
of inaction, lost the right of stopping another using his mark. As
pointed out in Rowland each case must depend on its own
circumstances, but obviously a person cannot be allowed to stand
by indefinitely without suffering the consequence.”
29 . This is the legal position. Again in Halsbury's Laws of
England , Fourth Edn., Vol. 24 at paragraph 943 it is stated thus:
“943. Acquiescence .— An injunction may be refused on the
ground of the plaintiff's acquiescence in the defendant's
infringement of his right. The principles on which the court
will refuse interlocutory or final relief on this ground are
the same, but a stronger case is required to support a refusal
to grant final relief at the hearing.
66 67
[ Patching v. Dubbins ; Child v. Douglas ; Johnson v.
68 69 70
Wyatt ; Turner v. Mirfield ; Hogg v. Scott ; Price v. B
71
ala and Festiniog Rly. Co. ] The reason is that at the
hearing of the cause it is the court's duty to decide upon the
rights of the parties, and the dismissal of the action on the
ground of acquiescence amounts to a decision that a right
which once existed is absolutely and for ever
72
lost: Johnson v. Wyatt at 25; and
66
(1853) Kay 1 : 69 ER 1
67
(1854) 5 De GM&G 739
68
(1863) 2 De GJ&Sm 18
69
(1865) 34 Beav 390
70
(1874) LR 18 Eq 444
71
(1884) 50 LT 787
72
(1863) 2 De GJ&Sm 18
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see Gordon v. Cheltenham and Great Western Union Rly.
73
Co . per Lord Langdale MR.”
74
30 . In Aktiebolaget Manus v. R.J. Fullwood & Bland, LD . at
pp. 338-39 it was held thus:
75
“Apart from this point the case of Fullwood v. Fullwood
shows that the injunction in a passing-off case is an
injunction sought in aid of a legal right, and that the Court
is bound to grant it if the legal right be established unless
the delay be such that the Statute of Limitations would be a
bar. That case apparently concerned some predecessors of
the defendants. The delay was one of rather under two years
and the relief sought was an injunction to restrain the use by
the defendants of cards and wrappers calculated to induce
the belief that his business was connected with the plaintiff.
Fry, J., in the course of his judgment said this:
‘Now, assuming, as I will, for the purpose “of my
decision, that in the early part of 1875 the plaintiff
knew of all the material facts” which have been
brought before me today, he commenced his action
in November 1876. “In my opinion that delay, and it
is simply delay, is not sufficient to deprive the
plaintiff of” his rights. The right asserted by the
plaintiff in this action is a legal right. He is, in
“effect, asserting that the defendants are liable to an
action for deceit”. It is not suggested in the defence
that the delay here involves a question under or
analogous to the period under the Statute. The
defendants did suggest that there had been
something more than mere delay on the part of the
plaintiffs, and that the plaintiffs had lain by and
allowed the goodwill which the plaintiffs now
propose to acquire, but this point was not seriously
pressed. It was suggested that Mr Evans Bajker, the
plaintiffs’ solicitor, knew from 1941 onwards what
the defendants were doing, but it is impossible to
impute to a busy solicitor a knowledge which he
could only acquire by seeing advertisements in local
or farming papers advertising the defendants'
activities. No direct information was afforded to
him; on the contrary it will be remembered that
when in 1942 he made enquiries on behalf of his
clients information was studiously withheld from
73
(1842) 5 Beav 229, 233
74
(1948) 55 RPC 329
75
(1878) 9 Ch D 176
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him. I conclude therefore that there has been no
acquiescence to disentitle the plaintiff to relief.'””
176. Both sides cite Power Control Appliances . Mr. Nigam submits,
however, that, in a case of ex facie infringement, an injunction must
follow and relies, for this purpose, on the judgment of the Supreme
Court in Midas Hygiene .
177. This Bench has had an occasion to juxtapose and harmonize
Power Control Appliances and Midas Hygiene in its decision in
76
Saurabh Gupta v. Sheopals Pvt Ltd , from which we, with humility,
deem it appropriate to reproduce the following paragraphs:
“17.4 Even if, however, one were to presume that some time had
elapsed between the filing of opposition, by Saurabh, to SPL's
application dated 23 November 2018, and the institution of the
suit, Saurabh's claim for relief against infringement cannot be
rejected on that ground. This position of law stands settled by the
judgment of the Supreme Court in Midas Hygiene Industries (P)
Ltd. v. Sudhir Bhatia , thus:
“5. The law on the subject is well settled. In cases of
infringement either of trade mark or of copyright, normally
an injunction must follow. Mere delay in bringing action is
not sufficient to defeat grant of injunction in such cases.
The grant of injunction also becomes necessary if it prima
facie appears that the adoption of the mark was itself
dishonest.”
Thus, the Supreme Court has held that, where infringement is
found to exist, injunction must follow and that delay in bringing
the action is no ground to reject the prayer for injunction.
17.5 The learned Commercial Court has, in this context, relied
on the judgment of the Supreme Court in Power Control
77
Appliances and of this Court in Intex Technologies . These
decisions deal with the principles of acquiescence, and not merely
the principle of delay. Power Control Appliances holds that mere
76
(2026) 105 PTC 10443
77
Intex Technologies Ltd v. AZ Tech (India), 2017 SCC OnLine Del 7392
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inaction does not connote acquiescence but that, if the plaintiff has
sat back and consciously allowed the defendant to continue to use
the allegedly infringing mark for a long period of time, thereby
generating goodwill and reputation, he cannot, thereafter, seek to
injunct such use.
17.6 Thus, mere inaction does not amount to acquiescence.
Acquiescence implies positive conduct on the part of one party,
sitting back and allowing the other to continue the injurious act
and, thereby, build up a reputation. In the ultimate analysis, the
question of whether the plaintiff, in fact, sat back and allowed the
defendant to continue his business, using the infringing mark, over
an extended period of time and thereby build up his goodwill and
reputation, would be a question of fact, which might necessitate a
trial.
17.7 Harmonising the decisions in Midas Hygiene and Power
Control Appliances , the position that emerges is that, wherever
a prima facie case of infringement is made out, an injunction must
follow, and delay in bringing the action cannot be a ground to
disentitle the plaintiff to injunction. If, however, the defendant is
able to establish, through evidence which ordinarily would have to
be led in trial, that the plaintiff has sat back and knowingly
allowed the defendant to continue using the infirming mark for an
extended period of time, thereby building up the defendant's
reputation, the plaintiff might ultimately fail in obtaining an
injunction . To our mind, in a clear cut case of infringement, the
Court has ordinarily to grant an injunction, and denial of an
injunction on the ground of acquiescence can, if at all, only be a
conclusion which follows a trial.”
(Emphasis supplied)
178. Midas Hygiene dealt with infringement, not passing off. Even
if one were, arguendo , to extrapolate the ratio decidendi of Midas
Hygiene to a case of passing off, the position nonetheless remains
that, in a clear case of acquiescence, Section 33(1), which is in the
nature of a statutory interdict, cannot be overlooked. Where, however,
the plea of acquiescence requires, even for its prima facie satisfaction,
a trial, the Court would not refuse an injunction in a clear case of
infringement.
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179. ITC, in the present case, condescended to the continued use, by
AGH, of the
mark not only between 1989 and 2015, but also,
thereafter, from 2015 till 2023. Though ITC seeks to wish away its
acceptance of such use till 2015 on the ground that there was an
existing arrangement between ITC and AGH in the form of the OSA,
there is no explanation worth the name for ITC’s continued silence
between 2015 and 2023. In the process, AGH continued to
accumulate goodwill in the Dakshin mark, as has been correctly
observed by the learned Single Judge.
180. The silence on the ground of ITC amounts to tacitly allowing
AGH to continue to use the
mark till 2023 and, thereby, build
up a reputation therein. In such circumstances, Section 33(1)
specifically proscribes grant of any injunction against the continued
use of the mark, at the instance of such an indolent plaintiff, who has
sat back and allowed the mark to be used by the defendant for a
continued length of time, much above the statutorily envisaged period
of five years.
181. Significantly, even after the registration of the
mark in
favour of AGH, ITC has not chosen, till date, to file any application
seeking rectification of the register of trademarks by removal,
therefrom, of the registered mark of AGH. ITC has also, therefore,
allowed the registration to continue, unchallenged.
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182. We, therefore, agree with the learned Single Judge that ITC’s
prayer for injunction against AGH has also to fail on the ground of
acquiescence.
VII Re. Copyright Infringement
183. ITC also pleaded that, by use of the
logo, AGH had
infringed the registered copyright of ITC therein. Reliance was
placed, by ITC, in this context, on the certificate of registration dated
15 November 1989, issued under the Copyright Act.
184. The learned Single Judge has correctly dealt with this
submission, by noting that the certificate of registration identified the
author of the copyrighted artistic work as Indu Balachandran. Indu
Balachandran was an employee of HTA and, therefore, by operation
of clause (c) of the proviso to Section 17 of the Copyright Act, HTA
was the first owner of copyright in the
mark.
185. Though Mr. Nigam sought to contend that, in so holding, the
learned Single Judge failed to note that the mark had been assigned to
ITC by HTA, no written document of assignment is on record. Section
78
19(1) of the Copyright Act requires any document of assignment of
copyright to be in writing. Section 91 of the erstwhile Evidence Act,
1872, requires that, where the law requires any matter to be reduced to
the form of a document, no evidence shall be given of such matter
78
19. Mode of assignment .—
(1) No assignment of the copyright in any work shall be valid unless it is in writing signed by
the assignor or his duly authorised agent.
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except by way of the document itself. In the absence of any such
written document assigning copyright in the
mark, by HTA in
favour of ITC, we find no reason in exercise of our appellate
jurisdiction to interfere with the finding of the learned Single Judge
that ownership of copyright in the
mark cannot, prima facie ,
be said to vest in ITC.
186. The learned Single Judge has also correctly noted, in this
context, the distinction between Section 48 of the Copyright Act and
Section 31(1) of the Trade Marks Act. While Section 31(1) deems the
very fact of the registration of a trademark to operate as prima facie
evidence of the validity of such registration, no such presumption
arises under Section 48 of the Copyright Act. Section 48 of the
Copyright Act merely treats the register of copyright to be prima facie
evidence of the particulars entered in the register. The existence of the
certificate of registration cannot, therefore, amount to proof of
ownership, by ITC, of the copyright in the
mark.
187. We, therefore, agree with the learned Single Judge that ITC has
not made out a prima facie case for injunction even on the ground of
infringement of copyright.
D. Summarizing our findings
188. We may summarize our findings thus:
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(i) There is no infirmity in the learned Single Judge
proceeding to pronounce prima facie on the merits of the
dispute before him, even after having held, again prima facie ,
that he had no territorial jurisdiction.
(ii) On the aspect of territorial jurisdiction, while Section 134
of the Trade Marks Act would not apply, the suit would lie
within this Court under clause (a) and clause (c) of Section 20
of the CPC.
(iii) Under the OSA, ITC was merely a service provider,
providing service for a pre-determined service fee. Providing, to
AGH, the benefit of the goodwill in its trade marks and trade
names was, in fact, itself envisaged as among the services
which ITC would provide to AGH under the OSA.
(iv) No prima facie case of passing off is made out, as
(a) the user of the DAKSHIN/
mark, by AGH,
commenced on 14 April 1989, prior to which there was
no goodwill of ITC in the said mark,
(b) even otherwise, AGH is also entitled to the benefit
of the goodwill in the DAKSHIN/
mark, as
earned during the currency of the OSA, and
(c) the aspects of misrepresentation and injury and
damage are, at the very best, arguable and warrants a
trial.
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(v) Having chosen to maintain silence during the entire
currency of the OSA from 1989 to 2015 and even thereafter
from 2015 to 2023, when AGH was using the
DAKSHIN/
mark, in the full knowledge of ITC at the
Crowne Plaza Hotel, ITC was statutorily barred, by Section
33(1) of the Trade Marks Act, from seeking to injunct such use
at this stage.
(vi) The plea of copyright infringement was also, prima facie ,
not sustainable, as the Copyright Registration certificate was in
the name of Indu Balachandran, who was an employee of HTA.
HTA was, therefore, by operation of clause (c) of the proviso to
Section 17 of the Copyright Act, the first owner of copyright
therein. No written document by HTA assigning the copyright
to ITC being on record as required by Section 19(1) of the
Copyright Act.
(vii) No case for grant of interim injunction, as sought by ITC
against AGH is, therefore, made out.
E. Conclusion
189. For all the above reasons, while we are not in agreement with
the learned Single Judge with respect to his findings on the aspect of
territorial jurisdiction, we agree with the learned Single Judge that no
case for grant of interlocutory injunction against use of
mark
by AGH, pending disposal of the suit, exists on merits.
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190. We, therefore, do not find this to be a case deserving of
interference.
191. The appeal is accordingly dismissed.
C. HARI SHANKAR, J.
OM PRAKASH SHUKLA, J.
JULY 01, 2026
AR
dsn /
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