{"id":322343,"date":"2024-05-17T11:00:09","date_gmt":"2024-05-17T05:30:09","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=322343"},"modified":"2024-05-22T18:02:43","modified_gmt":"2024-05-22T12:32:43","slug":"dhc-restrains-franchisor-to-sell-poor-quality-food-items-under-name-burger-singh-after-termination-franchise-agreement-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/05\/17\/dhc-restrains-franchisor-to-sell-poor-quality-food-items-under-name-burger-singh-after-termination-franchise-agreement-legal-news\/","title":{"rendered":"Delhi High Court restrains franchisor to sell poor quality food items under the name of BURGER SINGH after termination of Franchise Agreement"},"content":{"rendered":"
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Delhi High Court-<\/span> In a suit filed by Tipping Mr. Pink Private Limited (petitioner) seeking injunction to restrain the Savera Eats (respondents) from using the infringing mark “BURGER SINGH” and violating the petitioner’s trademark rights. A Single Judge Bench of Sanjeev Narula, J., *<\/span> restrained respondents from using the petitioner’s registered trademark “BURGER SINGH” or any other mark which is identical or deceptively similar to the petitioner’s mark and appointed a Local Commissioner with a power to preserve any infringing material which can be destroyed by the respondent.<\/p>\n

Background-<\/p>\n

The Petitioner was engaged in the business of operating fast casual dining outlets under the brand name “BURGER SINGH”, and on account of their long and continuous use, the petitioner had accumulated significant goodwill, which was later registered under Trade Marks Act, 1999<\/a>.<\/p>\n

On 07-01-2022, with the execution of Franchise Agreement between Petitioner and Respondent, petitioner granted permission for setting up and operating a franchise outlet of “BURGER SINGH” at Saharsa, Bihar for a term of ten years from the date of execution.<\/p>\n

The Franchise Agreement stated the ground and procedure on which agreement termination can take place and gave power to terminate agreement exclusively to petitioner with prior written notice of 10 days.<\/p>\n

A show cause notice was issued by the petitioner dated 07-11-2023 seeking an explanation regarding breaches and calling upon the Respondent to rectify the same. The Respondent replied to the aforesaid notice on 15-12-2023, refuting the allegations made by the Petitioner and showing no intention to fulfil their obligation under the Agreement. The petitioner terminated the Agreement vide notice 18-12-2023. In terms of Article 13.3(i) of the Agreement, the termination notice applied with effect from 28-12-2023, i.e., after the expiry of the 10-day notice period. The said termination notice was not challenged by the respondent. Despite the termination, respondent continued to operate the franchise outlet under the petitioner’s registered trademark.<\/p>\n

Analysis-<\/p>\n

The Court, after considering the factual backdrop, was of the view that Petitioner had established their statutory rights over the trademark “BURGER SINGH”, as well as variation thereof. The agreement formed was the only way respondent could use petitioner’s registered trademark. The termination of the said agreement eventually led to revocation of respondent rights to operate franchise outlet under the Petitioner’s mark and obligating the respondent to cease using petitioner’s trademark.<\/p>\n

The Court finds that petitioner had made a prima facie case in their favour and in case no ex-parte ad-interim injunction is granted, the petitioner will suffer an irreparable loss.<\/p>\n

Accordingly, the Court restrained respondent from using Petitioner’s registered trademark “BURGER SINGH”, or any other mark which is identical or deceptively similar to the Petitioner’s mark till next date of hearing.<\/p>\n

The Court appointed a Local Commissioner to preserve the evidence involved in infringement which might be removed if not taken proper care of and gave several powers as follows-<\/p>\n