Delhi HC restrains Hotelier Association from calling for ban on Oyo Rooms

The Delhi High court has restrained the Hotelier Welfare Association from issuing any notices to hoteliers and service providers calling for a ban on or seeking to boycott the hotel services provided by Oyo Rooms. The ex-parte interim injunction order was passed by a vacation Bench of Justice Jayant Nath in a suit by the owner of Oyo Rooms, Oravel Stays Private Limited (plaintiff) against the Hotelier Welfare Association (defendant). The Court was informed that the plaintiff is in the business of standardizing unbranded budget hotels, bed and breakfast and guesthouses through online and offline channels. It was further explained that the plaintiff enters into business arrangements with the service providers or hotelier, in which the service provider or hotelier permits the plaintiff to have full control over pricing, booking brought in by the hotel, publishing room tariffs on its website and/or mobile application at any point in time etc. It was the plaintiff's grievance that the defendant had been illegally conspiring and colluding with other similar hotelier associations such as Budget Hotel Association of Mumbai to coerce the plaintiff into submitting to their unwarranted, illegal demands. Pursuant to the various statements, notices/letters issued by the defendant, several hoteliers had expressed their apprehension in continuing their business-relation with the plaintiff, the Court was further informed. The Court also perused one such notice allegedly by defendant association, calling upon all hotels to support a nationwide protest against OYO by boycotting and blocking OYO rooms from June 20. The conduct, the plaintiff argued, had halted its business and could also potentially impact more than 1,35,000 bookings across India. It was also pointed out that the defendant was earlier the business partners of the plaintiff but have now formed an association and have been acting against the plaintiff. After hearing the plaintiff, the Court concluded that a prima facie case had been made out against the defendant for an ex parte injunction order. "It appears that the said act of the defendants is essentially pushing other hoteliers/service providers to act in breach of contract between the plaintiff and its service providers/hoteliers with whom the plaintiff has an appropriate agreement. Such an act prima facie would be illegal." The Court thus restrained the defendant from issuing notices or calling other hoteliers/service providers to boycott the plaintiff in any manner whatsoever till further orders. The defendants will also not press any such notice that may have been already issued, the Court added. Oyo Rooms was represented by Senior Advocate Neeraj Malhotra, briefed by a team of Advocates from IndusLaw Sandeep Grover, Mohit Chadha, Pankhuri Bhardwaj, Tarang Aggarwal, and Kshitij Parashar.