Delhi HC Restrains Hoteliers Association From Boycotting OYO Rooms [Read Order]

The Delhi High Court on June 19, 2019, in the case of Oravel Stays Private Limited v. Hotelier Welfare Association and Ors., has restrained the hoteliers welfare association from issuing any notices or boycotting and banning hospitality company OYO Rooms.

The ex-parte interim injunction order was passed by a vacation Bench of JusticeJayant Nath on an application filed by the owner of OYO Rooms, Oravel Stays Private Limited (plaintiff) under Order 39 Rules 1 & 2 of Code of Civil Procedure, 1908, seeking an ex-parte injunction to restrain the association and its members from giving effect to any threats advance through its undated notice and/or as mentioned in news article and/or boycotting or banning the plaintiff in any manner whatsoever by lobbying and colluding with one another during pendency of the present suit.

OYO Rooms submitted before the court that it is a hospitality company and in the business of standardising unbranded budget hotels, bed and breakfast and guest houses as per its specifications through online and offline channels.

It said that it enters into business arrangements with service providers/hoteliers who agree to permit OYO Rooms to have full control over pricing and any booking brought in by the hotel, and give full authority to it to determine and publish room tariffs on its website and mobile application.

The suit alleged that the association has been "illegally conspiring and colluding with other similar associations... to come together and protest and coerce the plaintiff to submit to the unwarranted, illegal demands, thereby making its business halt and causing grave inconvenience/unrest to public at large.”

It also claimed that OYO Rooms has more than 1.35 lakh bookings across India in the present period and the conduct of the association may effect the travellers. It also said that the defendants were earlier the business partners of the plaintiff and now have formed an association and have been acting against it.

On perusal of one of the notices allegedly issued by the association, the court said that the association has given a call to all hotels to support nationwide protest against OYO Rooms by boycotting and blocking OYO Rooms from June 20, 2019.

In this regard, the court said that it appeared that the act of hotelier association was pushing other hoteliers and service providers to act in breach of contract between them and Oravel Stays Private Limited, which operates under the name of OYO Rooms.

The court noted that OYO Rooms has an appropriate agreement with other hoteliers and service providers and the association’s act of calling for boycotting the company prima facie would be illegal.

"The plaintiff (OYO) has made out a prima facie case. The defendants (Hotelier Welfare Associations) are restrained from issuing notices or calling to hoteliers/ service providers seeking boycott or ban of 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 said.

The court issued notice to the association and listed the matter for further hearing on August 5, 2019.

[Read Order]