Establishing competing business that affects profitability is not legal wrong.

Establishing competing business that affects profitability is not legal wrong.

Establishment of a competing business which may have an adverse impact on profitability of original business owner, cannot give rise to a legal wrong. Such actions are clearly barred on the principle of “damnum sine injuria” which essentially holds that the law does not recognize any remedy unless it is established that the person had suffered a legal wrong or to put it differently a wrong which is recognised or is recognizable in law. Harm or loss cause due to competitive business is not wrongful in the eye of law, because it does not result in injury to a legal right or a legally protected, interest, the business competition causing it being a lawful activity.


Hindustan Petroleum Corporation Ltd. issued an advertisement inviting online applications for allotment of regular and rural retail outlet dealership through draw of lots for various Districts in the State of U.P. Two persons were allotted a retail outlet dealership at the same time for same area and one of the bidders was aggrieved.

According to that dealer, retail outlet dealership is in rural area where sales are not good and if new retail outlet dealership is allotted, it will affect his business. This is mere rivalry in trade. The establishment of a competing business which may have an adverse impact on profitability of one party cannot give rise to a legal wrong. When a person wants that a competitor should not carry on any similar business near his business place, such type of disputes between the parties can be adjudicated by Civil Court provided any appropriate suit for injunction is filed