Court’s decision
The Delhi High Court’s Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla stayed the operation of an order by a Single Judge that had directed the transfer of the domain names bimasugam.com and bimasugam.in to the respondent, holding that such a transfer amounted to granting final relief at the interim stage.
The Bench observed that while an interim mandatory injunction may be granted in exceptional cases, allowing the respondent to commercially exploit the appellant’s registered domain names during the pendency of the suit “travels beyond the permissible limits of interim jurisdiction.”
The Court clarified that its order shall remain in force till the final disposal of the appeal fixed for 12 January 2026, thereby restraining the respondent from launching its proposed e-marketplace under the disputed domain names.
“The respondent cannot be permitted to exploit the domain names registered in the appellant’s favour for commercial profit, at an interim stage, even when the suit is pending.”
Facts
The dispute arose from an order of a Single Judge dated 16 October 2025, which made permanent the interim injunction originally granted in May 2025, and further directed that the domain names www.bimasugam.com and www.bimasugam.in be transferred from the appellant (the registered owner) to the respondent.
The transfer was made conditional upon the respondent’s undertaking that, should the appellant succeed in the main suit, the domains would be returned and monetary compensation paid.
The appellant, however, challenged this direction before the Division Bench, arguing that the Single Judge’s order effectively effaced its ownership rights at an interim stage, even though the respondent’s claim was only based on unregistered common law rights.
Issues
- Whether a mandatory injunction directing the transfer of domain names at the interim stage is legally permissible.
- Whether the respondent had established goodwill and prior use necessary to claim proprietorship over the mark BIMA SUGAM.
- Whether the Single Judge’s order went beyond the principles of balance of convenience and irreparable loss.
Petitioner’s arguments
The appellant contended that it was the undisputed registered owner of the domain names bimasugam.com and bimasugam.in since October 2022, and had been continuously using them since registration.
It argued that the respondent had no registered trademark rights and its claim was based solely on an alleged announcement made in August 2022 by the Insurance Regulatory and Development Authority of India (IRDAI) regarding an initiative called “Bima Sugam.”
The appellant submitted that the respondent’s user was at best for three months before the domain registration and could not establish goodwill under the test laid down by the Supreme Court in Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. (2018) 2 SCC 1.
It was argued that the Single Judge’s direction to transfer the domains was akin to granting final relief at the interim stage, as it allowed the respondent to commercially exploit the website despite the ownership being disputed. The appellant further submitted that such relief went beyond the principles in Dorab Cawasji Warden v. Coomi Sorab Warden (1990) 2 SCC 117*, which limit mandatory injunctions at the interim stage to rare circumstances.
Respondent’s arguments
The respondent, a not-for-profit federation associated with the insurance sector, claimed that the phrase BIMA SUGAM had gained public recognition and goodwill after the IRDAI’s public announcement on 25 August 2022. It contended that this announcement, followed by its continued public association with the project, made it the prior user of the mark.
It further submitted that the appellant’s registration of the domain names was dishonest, intending to hold them hostage for monetary gain, and pointed out that the appellant had allegedly demanded ₹50 crores for transfer of the domains. The respondent relied on Dorab Cawasji Warden to argue that interim mandatory injunctions are permissible in appropriate cases to prevent misuse and irreparable harm.
However, the respondent candidly admitted that it intended to use the transferred domain names for launching an e-marketplace, which the Court noted would amount to commercial exploitation.
Analysis of the law
The Court analyzed the principles governing passing off and the grant of interim mandatory injunctions, emphasizing that the respondent’s claim was based solely on unregistered rights and was thus subject to the classical trinity of goodwill, misrepresentation, and damage.
Citing Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. (2018) 2 SCC 1, the Bench reiterated that a plaintiff must show accrued goodwill prior to the defendant’s use. It noted that the respondent’s alleged use from August to October 2022—a period of only three months—was insufficient to establish goodwill capable of supporting a passing-off claim.
The Court also underscored that goodwill is a condition precedent to any relief in passing off and that no such finding had been recorded by the Single Judge. Consequently, the interim transfer of domain names could not be sustained.
On the issue of injunctions, the Bench referred to Dorab Cawasji Warden v. Coomi Sorab Warden (1990) 2 SCC 117 and clarified that while mandatory injunctions at interim stages are permissible, they must not grant the plaintiff an advantage amounting to final relief. In this case, transferring the domains to the respondent would allow it to commercially profit from the disputed property, which was impermissible.
Precedent analysis
- Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. (2018) 2 SCC 1 – Reaffirmed that passing off requires proof of pre-existing goodwill before the defendant’s use. Applied to show the respondent’s short period of use (three months) was insufficient.
- Dorab Cawasji Warden v. Coomi Sorab Warden (1990) 2 SCC 117 – Cited for the principle that mandatory injunctions at interim stages should be granted only in exceptional cases where the injury cannot be remedied otherwise.
- Wander Ltd. v. Antox India Pvt. Ltd. (1990 Supp SCC 727) – Reiterated that appellate courts should not ordinarily interfere with discretionary injunction orders unless the lower court acted perversely. The present case was held to be an exception, as the Single Judge’s order conferred undue commercial advantage.
Court’s reasoning
The Division Bench found that the respondent had failed to demonstrate prior goodwill, a sine qua non for maintaining a passing-off action. The alleged period of use between August and October 2022 could not establish any substantial public association or market reputation.
The Bench observed that the Single Judge’s order effectively allowed the respondent to operate an e-marketplace under the disputed domains and thereby monetize an asset legally registered in the appellant’s name. Such an order, it held, “travels beyond even the boundaries of a mandatory injunction” and prematurely grants the plaintiff what it seeks in the main suit.
Further, the Court found that balance of convenience and irreparable loss favoured the appellant. If the domains were transferred, the appeal would become infructuous, and any reversal at a later stage could not undo the commercial exploitation already undertaken.
Accordingly, the Bench stayed the transfer of the domain names until the final hearing.
“Absent a specific finding of goodwill by the learned Single Judge, the interim transfer of domain names cannot be justified, for it permits commercial exploitation of property still in dispute.”
Conclusion
The Delhi High Court granted an ad interim stay on the transfer of bimasugam.com and bimasugam.in to the respondent, holding that the Single Judge’s order amounted to granting substantive relief before trial. The Bench emphasized that mandatory injunctions should not confer a commercial advantage during litigation and that goodwill must be conclusively proven before restraining a registered proprietor.
The matter was listed for final hearing on 12 January 2026. The stay shall remain in effect until further orders.
Implications
This ruling strengthens the jurisprudence on domain name disputes and passing off, clarifying that ownership and prior goodwill are critical determinants of interim relief. It underscores that courts must exercise caution in granting mandatory injunctions, especially when they alter the status quo or enable one party to commercially exploit disputed assets.
The decision also signals that short-term use or mere public announcements cannot confer proprietary rights in trademarks or domain names without demonstrable market recognition.