Today, the Delhi High Court overturned a single-judge order that had restrained Adyar Gate Hotels Limited from using the name and mark 'Dakshin' for its standalone restaurant in Chennai.

The Bench, comprising Justices Navin Chawla and Shailender Kaur, ruled in favor of Adyar Gate, noting that it had been using the 'Dakshin' mark since 2015 without objection. Consequently, the matter has been remanded for further consideration by the single judge.

While setting aside the interim injunction, the Division Bench clarified that Adyar Gate could continue using the 'Dakshin' mark only for its existing outlet and was prohibited from expanding its use. The court observed:

"Admittedly, the appellant (Adyar Gate) has used the mark since 2015. The respondents (ITC) do not contend that this was an unauthorized use. The appellant is a registered proprietor of the mark, which has not been contested. For the present, the appellant will only use the mark within the premises and will not expand to catering. The appellant will return to the original premises once construction is complete."

The matter has been scheduled for further consideration before the single judge on March 18, 2025.

Adyar Gate was a renowned five-star hotel in Chennai's Alwarpet neighborhood. Established in the 1970s by the TTK Group, the property underwent multiple rebrandings, including Park Sheraton and later Crowne Plaza. It was a landmark known for its luxury accommodation and dining.

ITC contended that it held multiple registrations for the 'Dakshin' mark dating back to 2000. The company had entered into an agreement with Adyar Gate in 1985 to manage a hotel in Chennai under the name WelcomGroup Park Sheraton. As part of this arrangement, Adyar Gate was granted a limited right to use the 'Dakshin' name.

Although Adyar Gate secured trademark registration for 'Dakshin' under Class 42 in 2004, ITC did not object at the time, given the existing licensing arrangement. This agreement continued until March 2015, after which Adyar Gate rebranded the hotel as Crowne Plaza Chennai Adyar Park. Despite the transition, ITC did not raise objections to the continued operation of 'Dakshin' within the hotel premises.

The hotel ceased operations in December 2023, and the building was demolished to make way for a residential project. ITC claimed it was shocked to discover that Adyar Gate had launched a standalone restaurant named 'Dakshin' in December 2024, using the same mark.

ITC argued that the opening of the standalone restaurant constituted an infringement of its well-established brand and goodwill associated with the 'Dakshin' name, particularly within the domain of South Indian cuisine.

On February 13, Justice Amit Bansal ruled that ITC had established a prima facie case warranting interim relief. Consequently, the single judge issued an injunction restraining Adyar Gate from using the 'Dakshin' mark.

Adyar Gate challenged this order before the Division Bench, contending that the injunction was granted without prior notice or an opportunity to respond. It argued that no cease-and-desist notice had been issued before litigation commenced.

Granting relief to Adyar Gate, the Division Bench quashed the single judge’s interim injunction order, allowing Adyar Gate to continue using the mark at its existing location until the final determination of the case.

Adyar Gate Hotels Limited: Represented by Senior Advocates Rajiv Nayar and Amit Sibal.
ITC Limited: Represented by Senior Advocates Mukul Rohatgi, Arvind Nigam, and Arvind Nayar.

The case now awaits further consideration before the single judge on March 18, 2025.