In the case of Jamboree Resorts India vs Mehul Sharma & Ors [CS(COMM) 404/2024] vide the order dated May 16, 2024, the Delhi High Court sheds light on intricate dynamics of contractual obligations and trademark protection within the hospitality industry. The case unravels a tangled web of negotiations, misrepresentations, and trademark infringement and also highlights the pitfalls in today’s business alliances.
Background of the Case
In the present case, the plaintiff is Jamboree Resorts India, which carries a business of management and marketing of hotels, restaurants, holidays, resorts, etc. In 2013, they adopted the mark “JAMBOREE” and launched the ‘JAMBOREE CREEK YOGA’, an eco-farm homestay resort that hosts yoga retreats, yoga groups and yoga teacher training and has been using the marks diligently since then.
In November 2023, the Plaintiffs initiated contact with the Defendants and negotiated a Hotel Revenue Sharing Agreement with the Defendant, Signum Hospitality Pvt. Ltd. (SHPL). It was mutually agreed that SHPL would operate the JAMBOREE CREEK YOGA resort, located in Goa, under a revenue-sharing model. However, complications arose during the drafting phase when discrepancies emerged regarding the identity of the operating company.
In an alternative approach, the Defendants recommended that the agreement be signed with Signum Hospitality and Resorts Pvt. Ltd. (“SHRPL”), purportedly a new entity established and managed by SHPL, having its registered office in Haryana. Despite reservations, Jamboree Resorts acting in good faith, and acquiesced to the defendants’ recommendations, the agreement was executed in January 2024.
With the agreement in place, SHPL assumed control of resort operations, rebranding the establishment as “Signum Jamboree Creek Resort.” However, as time progressed, it became apparent that the operational standards fell short of Jamboree Resorts’ expectations. The concerns regarding mismanagement and discrepancies in SHRPL’s credentials prompted Jamboree Resorts to investigate further.
To their dismay, they discovered that SHRPL was non-existent, lacking any registration with the Ministry of Corporate Affairs or the Register of Companies in Delhi & Haryana. In such circumstances, given the non-existence of the second party, the agreement is rendered non-est and void ab initio. Consequently, the ‘lock-in’ clause of four years contained in the agreement is not enforceable by law.
After multiple unsuccessful attempts to rectify the situation through formal notices to the Defendants, the Plaintiffs were compelled to terminate the agreement via an email dated May 10, 2024. Following this termination, and although it was an unfortunate circumstance, the Plaintiffs, after providing due notice to the Defendants, regained possession of the resort with the assistance of local law enforcement.
Yet, SHPL retained control of online booking accounts, hindering Jamboree Resorts’ property utilisation. This unauthorised use of Jamboree trademarks further exacerbated the situation, leading to the present suit. This obstruction not only impeded business operations but also infringed upon Jamboree Resorts’ trademark rights, as the unauthorised use of their marks and brand persisted.
Court’s Decision
The Court granted an ex-parte injunction in favour of the plaintiffs, and till the next date of hearing, the Defendants and/or anybody acting on their behalf are restrained from using the trademark “SIGNUM JAMBOREE CREEK” and/or any other mark, device, logo or name which is identical or deceptively similar to Plaintiffs’ registered JAMBOREE Trademarks which amounts to infringement or passing off.
The Court also directed the Defendants to hand over the usernames, passwords, email addresses, and social media accounts on all third-party portals relating to the ‘SIGNUM JAMBOREE CREEK Resort’ that are currently in their control so that the Plaintiffs can access them.
Conclusion
In the vibrant realm of hospitality, the case of Jamboree Creek Resort stands as a testament to the complexities of business agreements and the ramifications of trademark misuse. The case highlights the importance of proper due diligence when entering such partnerships. The decision in the present case underscored the importance of upholding contractual integrity and safeguarding intellectual property rights in the dynamic landscape of the digital era.
Authors: Manisha Singh and Manya Jain
First Published by: Mondaq here