Introduction
The recent case of Adyar Gate Hotels Ltd. v. ITC Ltd.[1] reignited debate over the use of ex parte injunctions in intellectual property disputes. At the heart of the matter lies the iconic restaurant brand Dakshin, originally launched in 1989 as part of a collaboration between the two parties. In 2025, ITC secured an ex parte interim injunction from the Delhi High Court, restraining Adyar Gate Hotels from using the mark. However, the Division Bench later set aside the injunction, questioning the procedural fairness. This blog critiques the increasing judicial tendency to grant such reliefs without notice, arguing that trademark protection must not come at the cost of due process and commercial continuity.
| Plaintiff’s use of the mark | Defendant’s use of the mark |
Factual Matrix
The dispute between Adyar Gate Hotels Ltd. (AGHL) and ITC Ltd. traces back to a 1985 agreement under which ITC managed AGHL’s hotel property in Chennai, branded as “Welcomgroup Park Sheraton.” In 1989, the restaurant Dakshin, which is a fine-dining South Indian concept, was launched at the property. While ITC exited the property management arrangement in 2015, AGHL continued to operate the restaurant under the Dakshin name. The hotel was subsequently rebranded under the InterContinental Hotels Group, but the restaurant retained its original identity.
In 2024, due to redevelopment of the property, AGHL temporarily shifted the Dakshin restaurant to another premises on the same street, with the intention of returning once reconstruction was complete. This move triggered a legal response from ITC, which claimed exclusive trademark rights over Dakshin, asserting that AGHL was merely a licensee.
Without prior cease-and-desist notice, ITC approached the Delhi High Court and obtained an ex parte interim injunction, restraining AGHL from using the Dakshin mark, effectively halting the restaurant’s operations.
Legal Issues & Court’s Reasoning
The central legal issue was whether ITC, the registered proprietor of the trademark Dakshin since 2000 (with a claimed user date of 1989), could restrain AGHL from continuing its use of the mark, especially when AGHL had been independently using it since 2015. ITC contended that AGHL was a mere licensee during the period of ITC’s management of the hotel and had no right to continue using the mark, let alone from a different premises.
AGHL raised a significant procedural objection, challenging the territorial jurisdiction of the Delhi High Court, as no part of the cause of action arose in Delhi and neither party was headquartered there. Moreover, AGHL argued that the injunction was granted ex parte without adequate notice, violating the spirit of Order XXXIX Rule 3 CPC, which permits such relief only when delay would defeat the purpose of the injunction.
The Division Bench agreed with AGHL, noting that its independent use since 2015 was undisputed and there was no urgency that justified skipping due process. Consequently, the ex parte injunction was set aside.
The Overuse of Ex Parte Injunctions in IP Disputes
The Dakshin case is a good example of how courts, in trying to protect intellectual property, sometimes forget the importance of fairness. Ex parte injunctions, orders passed without even hearing the other side, are meant to be used only in urgent situations. But nowadays, they’re being used far too often in trademark cases, even when there’s no real emergency. This raises a serious question: should trademark rights be protected in a way that completely shuts down someone’s business without giving them a chance to respond?
Here, Adyar Gate Hotels had been using the Dakshin name since 2015, and ITC never objected during all those years. There was no accusation of fraud or copying. Still, an order was passed without notice, forcing the restaurant to stop operations immediately. What sudden “harm” was ITC facing in 2025 that didn’t exist in the past ten years?
Trademark law is supposed to stop confusion and protect brand reputation, not be used to catch someone off guard. Thankfully, the Delhi High Court’s Division Bench pointed out that courts must explain why giving notice would hurt the case, as required under Order 39 Rule 3 of the Civil Procedure Code. In this case, that rule was ignored.
India now needs better guidelines so that such one-sided orders are not handed out so easily, especially in commercial cases where the brand has been in open use for years. Courts should consider the history of how a trademark has been used, not just who owns the registration.
The Trademark Use Question: Licensee or Owner?
At the heart of this dispute is who really owns the Dakshin mark. AGHL says it came up with the idea for the restaurant and created the brand back in 1989, claiming Dakshin was its original concept. On the other hand, ITC points to its trademark registration from 2000 and says it has been using the mark since 1989. ITC argues that AGHL was just a licensee, using the mark under ITC’s control while managing the hotel.
From a legal standpoint, courts typically prioritize trademark registration over origin of concept. But that raises a deeper concern: does registration always reflect actual commercial authorship or goodwill ownership? In sectors like hospitality, brand identities often evolve through collaborative efforts between operators and owners. In such cases, goodwill may be shared, even if legally held by one entity.
The Delhi High Court didn’t really get into the complex question of whether both parties share the goodwill attached to the mark, but that’s something the future hearings should explore. When one party has been using the mark openly for years without any challenge, simply having a registration shouldn’t automatically outweigh the reality on the ground.
Conclusion
The Division Bench’s decision to set aside the ex parte injunction restores a much-needed balance in IP litigation. It rightly reasserts that parties should not be restrained without a fair opportunity to present their case, especially when the alleged infringement involves a mark that has been used openly for years. This case is a stark reminder to both brand owners and licensees to document trademark ownership and usage rights with clarity. Courts, too, must be cautious in granting ex parte reliefs in disputes that involve a long history of co-use or business collaboration. Intellectual property law must evolve not just to protect legal entitlements, but also to honour the commercial realities of how brands are built.
[1] Adyar Gate Hotels Ltd. v. ITC Ltd., 2025 SCC OnLine Del 1209.
Authored by: Aeshita Marwah
Blogger, The IP Press
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