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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Justice Sanjeev Narula
Acts
  • Section 91 of Cr.P.C.
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Justice Sanjeev Narula
Acts
  • Section 91 of Cr.P.C.
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Smart Summary

Summary of Opinion — HON'BLE MS. JUSTICE MUKTA GUPTA (ORAL)

Factual and Procedural Background

Summons in the suit were issued by order dated 21 August 2019. Defendant Nos. 1 to 3 were served but none appeared, and the defendants were proceeded with ex parte. The plaintiff, a company operating in the hospitality sector that standardizes and markets unbranded budget hotels, bed-and-breakfasts and guest houses through online and offline channels, seeks relief including a permanent injunction restraining Defendant No. 1, its officers and agents (including Defendant Nos. 2 and 3) from tortiously interfering with the plaintiff's business by boycotting and causing hotel partners to boycott OYO Rooms.

The plaintiff alleges it has presence in over 230 cities, over 9,000 hotels and over 2,20,000 rooms globally (including India) bookable via its online platform/mobile application. Under its contracts with hoteliers the plaintiff has authority over pricing (including dynamic pricing) and collects a share of revenue as per the agreements; hoteliers are required to meet agreed quality standards and to address disputes under the contract. Defendant No. 1 is described as a federation representing hoteliers based in Kota, Rajasthan; Defendant No. 2 is its President and Defendant No. 3 its General Secretary.

The plaintiff alleges that hotel owners who contracted with it colluded with Defendant No. 1 and refused to accept or honor bookings made through the plaintiff's platform, without terminating or modifying contracts. On 7 August 2019, the defendants filed a complaint at Vigyan Nagar Police Station, Kota, making allegations about the plaintiff's billing and deductions; a notice under Section 91 Cr.P.C. was issued to the plaintiff to produce documents. The plaintiff states the defendants' conduct has been publicised in newspapers and circulated on Twitter, and that customers and the public have been inconvenienced.

Legal Issues Presented

  1. Whether the plaintiff is entitled to a permanent injunction restraining Defendant No. 1, its officers and agents (including Defendant Nos. 2 and 3) from inducing or coercing hoteliers to boycott the plaintiff and from otherwise interfering with the plaintiff's contractual relations with hoteliers.
  2. Whether the plaintiff is entitled to the reliefs sought in prayers (a) and (c) of the plaint (as pleaded).
  3. Whether costs should be awarded to the plaintiff and, if so, in what amount.

Arguments of the Parties

Plaintiff's Arguments

  • Defendant No. 1 and its officers have deliberately, unlawfully and maliciously induced hotel owners to boycott the plaintiff and to refuse to honour bookings made through the plaintiff's online platform, thereby causing tortious interference with the plaintiff's business.
  • The hoteliers have neither terminated nor sought modification of the agreements, and thus are bound to honour bookings during the subsistence of the contracts.
  • The defendants filed a malicious police complaint (dated 7 August 2019) alleging wrongful billing and deductions by the plaintiff, with the apparent object of coercing the plaintiff to accede to the defendants' demands.
  • The defendants' actions have caused significant loss to the plaintiff's business, inconvenience to the public and prejudice to consumer perception; these circumstances justify injunctive relief in terms of the plaint's prayers (a) and (c).

The opinion does not contain a detailed account of any arguments advanced on behalf of the defendants (they did not appear after service and the suit proceeded ex parte).

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court noted the procedural posture: summons issued on 21 August 2019, defendants served but non-appearing and therefore proceeded ex parte. Assessing the plaint and the documents filed with it (including the necessary certificate), the court found that the plaintiff had made out a case for the grant of injunctions in terms of prayers (a) and (c). The court's reasoning, as stated in the opinion, rests on the following findings drawn from the pleadings and documents:

  • The defendants had allegedly induced and emboldened hotel owners to boycott the plaintiff and to dishonour bookings despite existing contracts; the hoteliers had not validly terminated or modified those contracts.
  • Such conduct has caused considerable loss to the plaintiff's business, has inconvenienced the public and has prejudiced consumer perception regarding the plaintiff's services.
  • The defendants' complaint to the police and the consequent notice under Section 91 Cr.P.C. were recorded in the pleadings, but the court relied on the overall material before it to conclude that injunctive relief was appropriate.

The court also noted that the plaintiff did not press prayer (b) of the plaint. Regarding costs, the court observed the plaintiff had not filed an affidavit detailing actual costs incurred, but recorded the court-fee paid by the plaintiff as 1,98,520.

Holding and Implications

Holding: The suit is decreed in terms of prayers (a) and (c) of the plaint in favour of the plaintiff and against the defendants. Costs of 1,98,520 are awarded in favour of the plaintiff and against the defendants jointly and severally.

Implications: The direct effect is that the plaintiff obtains the injunctions sought in prayers (a) and (c) and a costs award of 1,98,520. The opinion does not state or establish any broader legal precedent beyond the disposition in this suit.

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    ORAVEL STYAS PRIVATE LIMITED v. KOTA HOTELS FEDERATION , THROUGH PRESIDENT AND ORS.

    HON'BLE MS. JUSTICE MUKTA GUPTA MUKTA GUPTA, J. (ORAL)

    1. Summons in the present suit were issued vide order dated 21st August 2019. Defendant Nos 1 to 3 were served. However, none appeared on their behalf. Thus, defendants are proceeded ex-parte.

    2. By the present suit, the Plaintiff, inter alia, prays for a decree for permanent injunction restraining the Defendant No. 1, its officers and agents including Defendant Nos 2 and 3 for deliberately, unlawfully, wrongly, maliciously and otherwise causing tortious interference in plaintiffs business by boycotting and causing the hotel partners of the plaintiff to boycott OYO Rooms and cost.

    3. Plaintiff, a company incorporated under the Companies Act, is working in hospitality sector doing the business of standardizing unbranded budget hotels, bread and breakfasts and guest houses as per its specification through online and offline channel. Plaintiff has its presence over 230 cities in India consisting of over 9000 hotels and over 2,20,000 rooms globally CS(COMM) 425/2019 Page 2 of 5 including India which can be booked using Plaintiffs online platform/mobile. It collects the information about hotels through online network and connects with them by signing contracts on partnership basis to sell its services under its own brand, assuring uniform quality and price. Plaintiff also shares a certain percentage of the revenue for bookings made under the Plaintiffs brand name as per the contract agreed upon.

    4. Plaintiff by way of an agreement is permitted by the hotelier/service provider to have full control over pricing and any booking brought in by the hotel. The agreement also gives the Plaintiff full authority to determine and publish room tariffs on its website and/or mobile application as per dynamic pricing module. Through the agreement, the service provider/hotelier agrees to abide by the standard quality of rooms and promising services to its guests. The agreement also allows both the parties to address issues arising under the contract and to amicably resolve the same.

    5. Defendant No. 1 is a federation claiming to represent the interest of the hoteliers based in Kota, Rajasthan who are also associated with various online booking portals including the Plaintiff. Defendant No. 2 is the President whereas Defendant No. 3 is the general secretary of Defendant No.

    1. It is the case of the plaintiff in the present suit that the hotel owners who entered into the agreement with the plaintiff have connived with Defendant No. 1 and are not accepting bookings made through Plaintiffs online platform/mobile application, thereby failing to abide by the contract and amicably resolving the issues. The hoteliers have neither terminated the agreement nor they have sought any modification of the terms. Defendant No. 1 and its officers are emboldening and persuading the hoteliers to boycott Plaintiff and refuse to honor the bookings made through plaintiffs CS(COMM) 425/2019 Page 3 of 5 portal. Defendant No. 1 is also colluding with other associations and encouraging them to come forward to protest against the Plaintiff to fulfill their unwarranted, illegal demands thereby bringing Plaintiffs business to complete halt.

    6. The relation between the plaintiff and the associated hoteliers is purely contractual and the hoteliers are at their free will to decide if they wish to continue their contracts with the plaintiff. However, during the existence of the said contractneither the hotels associated are allowed to dishonor their bookings nor the Defendant No. 1 is allowed to coerce or induce the hotel owners to boycott the plaintiff.

    7. The plaintiff learnt that on 7th August 2019, the defendants filed a complaint with Vigyan Nagar Police Station, Kota whereby allegations were made against the plaintiff that it is charging amounts from the hoteliers for bookings that are cancelled by the customers, it is arbitrarily deducting amounts from the hoteliers on property label adjustments and it is also deducting commission and platform charges from the amounts being paid to the hoteliers. The aforesaid false and malafide allegations were made by the defendants in order to coerce the plaintiff into giving into the illegal and arbitrary demands of the defendants.

    8. The defendants by resorting to illegal and threatening methods have interfered in the business of plaintiff and have also induced its hoteliers to breach the terms of contract with plaintiff. The plaintiff has privity of contract solely with the hotel owners and the dispute between them are to be addressed as per the agreement between the parties. Therefore, the defendants have no basis for initiating any action against the plaintiff. CS(COMM) 425/2019 Page 4 of 5

    9. The hotel owners are now exploiting and harassing the customers by cancelling their bookings and in order to secure their bookings the customers shall be constrained to give in to the illegal and the inflated demands made by the hotel owners. The police officer of Vigyan Nagar Police Station, Kota issued a notice under Section 91 of Cr.P.C. upon the plaintiff to submit the documents with them with respect to complaints of the defendants.

    10. The actions taken by the defendants and the hotels associated with them have been widely publicized and has also been reported in various leading daily newspapers. The said news articles and the factum of boycott is also being circulated on Twitter by various hotel owners.

    11. From the pleadings of the plaintiff in the plaint as also the documents enclosed with the plaint along with the necessary certificate, the plaintiff has clearly made out a case for grant of injunction in terms of prayer (a) and (c) as the defendants have not only caused considerable loss to the plaintiffs business but has caused inconvenience to public at large and has also caused prejudice in the mind of the consumers.

    12. Plaintiff does not press the prayer (b). Hence no decree in terms of prayer (b) can be passed.

    13. As regards cost, the plaintiff has not filed an affidavit indicating the actual cost incurred by the plaintiff, however the court-fee paid by the plaintiff amounts to 1,98,520.

    14. Suit is accordingly decreed in terms of prayer (a) and (c) of the plaint in favour of the plaintiff and against the defendant. Cost of 1,98,520 is awarded in favour of the plaintiff and against the defendants jointly and severally. CS(COMM) 425/2019 Page 5 of 5

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    Comments

    ORAVEL STYAS PRIVATE LIMITED v. KOTA HOTELS FEDERATION , THROUGH PRESIDENT AND ORS.
    (Jan 23, 2020)