Deccan Chronicle Marketeers & Ors vs Deccan Chronicle Holdings & Anr

[Arising out of an order dated 14th August, 2019 passed in I.A. No. 155 of 2018 in C.P.(IB) No. 41/7/HDB/2017 by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench, Hyderabad)]

IN THE MATTER OF:

1. Deccan Chronicle Marketeers, a Partnership Firm, (earlier known as Deccan Chronicle), 147, S.P. Secunderabad -500 003 and is represented by its Partner Deccan Chronicle Marketeers Pvt. Ltd. Represented by its Director E Venkatram Reddy .. Appellant No. 1

2. Deccan Chronicle Marketeers Private Limited a private Limited Company, 147, S.P. Secunderabad -500 003 represented by its Director E Venkatram Reddy .. Appellant No. 2

3. Mr. T Venkattram Reddy, S/o Late Mr. T Chandrasekhar Reddy, Plot No. 54, House No. 8-2-703/A-6-C, Road No. 12, Banjara Hills, Hyderabad-560 034 .,. Appellant No. 3

4. Mr. T Vinayak Ravi Reddy, S/o Late Mr. T Chandrasekhar Reddy, Plot No. 53, House No. 8-2-703/A-6-C, Road No. 12, Banjara Hills, Hyderabad-560 034 .,. Appellant No. 4

Versus

1. Deccan Chronicle Holdings Limited, 36, Sarojini Devi Road, Secunderabad, 2

Company Appeal(AT)(Insolvency) No. 982 of 2019

Represented by SREI Multiple Assets Investment Trust - Vision India Fund .. Respondent No. 1 /Resolution Applicant

2. Canara Bank Corporate Branch, TSR Complex, 2nd Floor, 1-7-1, S.P. Road, Secunderabad - 500 003 .. Respondent No. 2/ /Financial Creditor

3. SREI Multiple Assets Investment Trust Vision India Fund 'Vishwakarma', Topsia Road (South), Kolkata - 740 0046 Through its authorised signatory, Mr. Avash Jain .. Respondent No. 3/ Resolution Applicant

4. IDBI Bank Through its authorized signatory Cuffe Parade, Mumbai- 400 005 .. Respondent No. 4

Present:

For Appellants: Mr. P. Chidambaram, Sr. Advocate with Ms. Krutika Raghavan, Mr. Bhairav Kuttaiah, Ms. Sameeksha Patil, Ms. Roshni Jacob Advocates.

For Respondents: Mr. Rishav Banerjee, Mr. Saptarshi Mandal, Advocates for R-1 Mr. Abhijeet Sinha, Mr. Arjun Asthana, Mr. Sidharth Sharma, Ms. Mamta Binani, Mr. Saikat Sarkar, Advocates for RP Mr. Dhruv Mehta, Sr. Advocate with Mr. PBA Srinivasan, Mr. Keith Varghese, Ms. Prerana Sabharwal, Mr. Parth Tandon, Advocates for R- 2 3

Company Appeal(AT)(Insolvency) No. 982 of 2019

Mr. Abhinav Vasisht, Sr. Advocate with Mr. Sidhartha Barua, Ms. Priya Singh, Mr. Praful Jindal, Advocates for R-4

JUDGMENT

[2nd September, 2022]

(Per Hon'ble Mr. Justice M. Satyanarayana Murthy)

Aggrieved by the order of National Company Law Tribunal,

Hyderabad Bench, Hyderabad (hereinafter will be referred as Adjudicating

Authority) in I.A. No. 155 of 2018 in C.P.(IB) No. 41/7/HDB/2017 dated

14.08.2019 declaring that the Corporate Debtor Deccan Chronicle

Holdings is the owner of Trademarks 'Deccan Chronicle and 'Andhra

Bhoomi', allowed the application filed by Resolution Professional Ms.

Mamta Binanni.

2. The first Appellant is a partnership firm (hereinafter referred to as

'firm') was formed on 15.09.1993 with the Appellants Nos. 3 & 4 in the

name and style 'Deccan Chronicle' to carry on the business of printing,

editing and publication of newspaper by the names of a) Deccan Chronicle,

b) Andhra Bhoomi, c) Andhra Bhoomi monthly and d) Andhra Bhoomi

weekly. To ensure adequate protection of the Trademarks and goodwill, all

these leading publications of Deccan Chronicle, the 1st Appellant firm 4

Company Appeal(AT)(Insolvency) No. 982 of 2019

applied for registration of the Trademarks Deccan Chronicle on

07.10.1996 bearing Application No. 729889.

3. Subsequently, in the year 2002, the business of the firm and the

Trademarks 'Deccan Chronicle' and 'Andhra Bhoomi' (hereafter referred to

as Trademarks) had grown exponentially, 1st Appellant decided that in

order to exploit the market value of the Trademarks and build the

Trademarks, it would be better to entrust the task to an entity who has

sufficient experience and expertise in building and marketing Trademarks,

particularly, in the print media namely Deccan Chronicle Marketeers

Private Limited (hereinafter referred to as 'DCMPL') i.e., Appellant No. 2

herein. 1st Appellant firm also believed that it would be commercially

prudent to have business transferred to a Public Co. Ltd. Therefore, 1st

Appellant firm decided to ensure two separate transactions. Firstly to

entrust the task of building value and image of the Trademarks to an

existing expert in the field i.e., to DCMPL- Appellant No. 2 herein and

secondly to transfer its business of editing, printing and publishing to a

new Public Limited Company.

4. In furtherance to its decision to build the value and image of its

Trademarks, the firm entered into an agreement with DCMPL- Appellant

No. 2 on 16.12.2002 (Memorandum of Agreement) and transferred its

right, title and interest in the Trademarks to DCMPL- Appellant No. 2 as a 5

Company Appeal(AT)(Insolvency) No. 982 of 2019

sole and exclusive owner thereof from the date of execution of the

agreement dated 16.12.2002 for consideration of Rs. 98/- (Rupees Ninety

Eight only). Further, a Public Limited Company, in the name and style

'Deccan Chronicle Holding Limited' (hereinafter referred to as 'DCHL') was

incorporated on 16.12.2002. It is pertinent to note that as on the date of

its incorporation, the business of the firm was not transferred to DCHL,

which was merely incorporated.

5. While the matters stood thus, on 27.12.2002, the firm transferred

its business and all its rights, assets and liabilities as on that date to

DCHL- 1st Respondent, under an agreement (business transfer agreement)

and the transfer would take effect from 01.01.2003. Therefore, the firm did

not possess any right, title or interest in the Trademarks either as on the

date of transfer i.e., 27.12.2002 or the effective date of transfer. A bare

perusal of the balance sheet of the firm as on 31.12.2002 and the balance

sheet of Respondent No. 1 as on 01.01.2003 and Annual Report as on

31.03.2003 would indicate that the Trademarks did not stand transferred

by Business Transfer Agreement. The balance sheet of 1st Appellant and

1st Respondent, as on the relevant date do not indicate transfer of any

intangible asset from Appellant No. 1 to Respondent No. 1.

6. On 01.04.2004, the 1st Appellant firm was reconstituted by

inducting a new partner, namely, Deccan Chronicle Marketeers Private 6

Company Appeal(AT)(Insolvency) No. 982 of 2019

Limited (DCMPL)- 2nd Appellant under 'Deed of Addendum' to partnership

firm executed between the 1st Appellant and 2nd Appellant was renamed

'Deccan Chronicle Marketeers'. Under the Deed of Addendum, the

Respondent No. 2, contribution to the partnership firm for transport of

Trademarks for consideration was Rs. 98/- and on reconstitution, the

partners were entitled to ownership in the trade marks in proportion to

their respective contribution i.e. 2nd Appellant was entitled to 98% in the

Trademarks, the existing partners i.e., Appellant Nos. 3 & 4 each entitled

to 1% ownership.

7. In and around 2004, an agreement was entered into by the 1st

Appellant and 1st Respondent wherein it was agreed that the Firm

(Appellant No. 1) would license the Trade Marks to DCHL in exchange for

obtaining advertising rights in the newspaper of 1st Respondent-DCHL. In

the meanwhile, registration of the trade mark 'Deccan Chronicle' was

granted to the Firm on 29.03.2008 w.e.f. 10.10.1996. Thus, the certificate

of Registration of Trademarks clearly evidencing that the firm and

Appellant Nos. 3 & 4 were the owners of the Trademarks. Again on

02.04.2008, another agreement was entered into by the 1st Appellant and

1st Respondent to record their revised understanding regarding purchase

of the advertising space in the newspaper of DCHL by the firm 1st

Appellant. In both the aforementioned agreements (hereinafter referred to

as Article of Agreement), DCHL-1st Respondent acknowledged that the 7

Company Appeal(AT)(Insolvency) No. 982 of 2019

Trade Marks are owned by the Firm- 1st Appellant herein. Thereafter, due

to some financial constraints, Appellant No. 1 was unable to pay the

amount due to the 1st Respondent towards the advertising space, it

obtained from 1st Respondent and therefore, 1st Appellant and 1st

Respondent decided to enter into a Deed of Settlement on 28.09.2012,

whereby, the Appellant No. 1 firm agreed to transfer its ownership in the

Trademarks to the 1st Respondent in lieu of the amount due to the 1st

Respondent-DCHL under a separate agreement. However, the transfer as

contemplated was not materialized and therefore the ownership in the

Trademarks remained with the 1st Appellant firm. Even as early as 2016,

the 1st Appellant firm which applied for renewal of registration of the

Trademarks - 'Deccan Chronicle', based on the application filed by the 1st

Appellant firm, registration was renewed for a further period of 10 years

i.e., upto 2026. Thus, it is apparent that since inception of the Firm, it

held exclusive and absolute ownership in the Trademarks and at no point

of time, there was any assignment made to DCHL- 1st Respondent or any

other entity. DCHL- 1st Respondent merely remained as a licensee of the

firm, who is owner of the Trademarks even as on today. Even prior to

license agreement of the year 2004, the 1st Appellant firm only granted an

implied license to DCHL to carry on business, transferred to it but nothing

in right, title or interest was transferred in any manner whatsoever. The

purpose of license agreement in the year 2004 was to reduce to writing, 8

Company Appeal(AT)(Insolvency) No. 982 of 2019

the implied license to use Trademarks for the purpose of carrying on

business transferred to the 1st Respondent- DCHL. Thus, DCHL at no

point of time owned the Trademarks or had any interest in it but was an

exclusive licensee under the Appellant No. 1, firm, which owned the

Trademarks.

8. The Corporate Insolvency Resolution Process (hereinafter referred as

'CIRP') was initiated under the Insolvency and Bankruptcy Code, 2016

(hereinafter referred as 'IBC') against DCHL by Canara Bank in C.P.(IB)

No. 41/2017 before the Adjudicating Authority, National Company Law

Tribunal. The petition filed by Canara Bank was admitted and on

05.07.2017, the Adjudicating Authority imposed Moratorium under

Section 14 of IBC staying all pending proceeding in all Courts against

DCHL. The Moratorium was extended for a further period of 90 days vide

order of Adjudicating Authority dated 10.11.2018 in C.A. No. 5/2018 in

C.P.(IB) No. 41/2017. On 11.05.2018, the Resolution Professional on

behalf of DCHL filed I.A. No. 155/2018 seeking a declaration that DCHL-

1st Respondent is the owner of the Trademarks and the Trademarks form

part of assets of the 1st Respondent-DCHL.

9. First Appellant filed its objection to I.A. No. 155 of 2018 on

04.06.2018 and the same was adopted by Appellant Nos. 2 to 4.

Respondent No. 1 also filed its reply to the same on 04.08.2018 and 2nd 9

Company Appeal(AT)(Insolvency) No. 982 of 2019

Respondent being a formal party also filed its reply. Subsequently, SREI

Multiple Assets Investment Trust-Vision India Fund, Resolution Applicant,

submitted a Resolution Plan to the Committee of Creditors (hereinafter

'CoC'). CoC approved the Resolution Plan on 10.12.2018. Thereafter, the

Resolution Applicant submitted the Resolution Plan, approved by CoC, on

11.12.2018, to the Adjudicating Authority and CIRP in respect of 1st

Respondent under IBC was concluded, wherein the Adjudicating Authority

passed an order on 03.06.2019 approving the Resolution Plan submitted

by Resolution Applicant under Section 30(6) and Section 31 of IBC read

with Regulation 36(4) of the Insolvency and Bankruptcy Board of India

(insolvency Resolution Process of Corporate Persons) Regulations, 2016.

10. The Adjudicating Authority passed an order on 14.08.2019 in I.A.

No. 155 of 2018 allowed the Application filed by 1st Respondent only on

erroneous grounds. Therefore, the same is challenged before this Tribunal

on the ground that the Adjudicating Authority had no jurisdiction to decide

the right, title and interest in the Trademarks under IBC, in the absence

of any provision under IBC contemplating a detailed trial and leading

evidence by the parties, the Adjudicating Authority cannot decide the

validity and authenticity of documents in CIRP and lacks no jurisdiction.

But the Adjudicating Authority without conducting any detailed inquiry or

trial, like the Civil Court, declared the right, title and interest in the 10

Company Appeal(AT)(Insolvency) No. 982 of 2019

Trademarks that the 1st Respondent- DCHL, which is erroneous on the

face of it.

11. Specific contention of the Appellant is that when Resolution Plan is

submitted to Resolution Professional claiming right to use brands and

Trademarks, approved by CoC and Adjudicating Authority, declaration

that the Corporate Debtor is the owner of Trademarks is nothing but

alteration or modification of Resolution Plan approved by CoC, such

modification is impermissible as per law.

12. It is the contention of the Appellants that the Adjudicating Authority

has no jurisdiction when such power is conferred on Jurisdictional District

Court, to decide the ownership, right, title and interest in Trademarks.

Therefore, usurping such power of District Court, the Adjudicating

Authority, recording a finding thereon is illegal and such finding cannot

be sustained.

13. It is further contended that the findings and observations of the

Adjudicating Authority are unsustainable. In different paragraphs the plea

of acquiescence is discussed which is unfounded as no such plea was

raised by 1st Respondent-Applicant before the Adjudicating Authority. In

the absence of any such plea, the findings recorded by the Adjudicating

Authority are erroneous. Finally, it is contended that when separate

machinery is provided under a separate statute to decide the right, title 11

Company Appeal(AT)(Insolvency) No. 982 of 2019

and interest in a Trademarks, the Adjudicating Authority ought not to have

recorded its finding declaring that the 1st Respondent is the owner of the

Trademarks. Therefore, the findings recorded by the Adjudicating

Authority are without inherent jurisdiction and liable to be set aside.

14. Finally, the Appellants prayed to set aside the order dated

14.08.2019 passed in I.A. No. 155/2018 in C.P.(IB) No. 41/7/HDB/2017.

15. Successful Resolution Applicant (henceforth referred as 'SRA') in the

CIRP filed reply denying the material allegations, inter alia, contending

that the Resolution Plan of SRA has been approved by the Adjudicating

Authority at Hyderabad and the Resolution Plan has been filed by the SRA

on the basis of information contained in the Information Memorandum,

duly prepared by Resolution Professional on the basis of audited balance

sheet of Corporate Debtor and on the basis of the discussion with the

Members constituting the CoC at the meeting of the CoC that the

Trademarks being "Deccan Chronicles" and "Andhra Bhoomi" belongs to

the Corporate Debtor and that the SRA has obtained exclusive

unconditional right to use the said Trademarks of the Corporate Debtor

pursuant to the approval of Resolution Plan by the Adjudicating Authority.

16. During the CIRP, the Resolution Professional had filed an

Application being I.A. No. 155 of 2018 seeking declaration by the

Adjudicating Authority, brands being "Deccan Chronicles" and "Andhra 12

Company Appeal(AT)(Insolvency) No. 982 of 2019

Bhoomi" belong to the Corporate Debtor. While passing the orders dated

03.6.2019 and 02.07.2019 by the Adjudicating Authority, approved

Resolution Plan regarding usage of the Trademarks subject to the outcome

of the said I.A. No. 155 of 2018 but the orders were never challenged by

the Appellants herein when certain observations were made in the order

dated 03.06.2019, while, approving the Resolution Plan and no

clarification was sought on the orders passed by the Adjudicating

Authority. Therefore, the present appeal is barred by principles of waiver,

estoppel and acquiescence.

17. It is further contended that the Trademarks in question are the

assets of the Corporate Debtor and the same was shown as the assets of

the Corporate Debtor in its audited balance sheet. The Appellants never

challenged the balance sheet of the Corporate Debtor. As such, the Appeal

is liable to be dismissed on the grounds of acquiescence, estoppel and

waiver. Moreover, the IBC has a non-obstante clause which overrides the

provisions of the Trademarks Act, 1999. Hence the Adjudicating Authority

is vested with power to decide such issue.

18. SRA further contended that the Corporate Debtor is one of the

reputed print media Company in India and is actively engaged in print as

well as digital media under the following brands:

13

Company Appeal(AT)(Insolvency) No. 982 of 2019

i) "Deccan Chronicle, an English Daily from Hyderabad, Karimnagar, Vijayawada, Rajahmundry, Visakhapatnam, Ananthapur, Nellor, Chennai, Coimbatore, Bengaluru, Kochi, Thiruvananthapuram and Kozhikode.

ii) Financial Chronicle, an English financial daily from Delhi, Mumbai, Hyderabad, Bengaluru and Chennai iii) The Asian Age, an English daily from Mumbai, Delhi and Kolkata iv) Andhra Bhoomi, a vernacular (Telugu) daily from

Hyderabad, Karimnagar, Vijayawada, Rajahmundry, Vishakhapatnam, Ananthapur, Nellor; and

v) Andhra Bhoomi, a vernacular (Telugu) weekly and monthly from Hyderabad.

"Deccan Chronicle", the flagship brand of the Corporate Debtor was launched in 1938 and is the largest circulated English newspaper in South India. I say that the Trademarks in question are inseparable from the business of the Corporate Debtor because it is eventually the business activities of the Corporate Debtor which have added value and goodwill to the Trademarks in question."

19. The first and foremost contention of the Senior Counsel for the

Appellants, Mr. P. Chidambaram is that the order of Adjudicating

Authority amounts to altering or modification of the resolution plan

already approved. Learned Senior Counsel for the Appellants, Shri

P. Chidambaram, also contended that the provision of 14

Company Appeal(AT)(Insolvency) No. 982 of 2019

IBC will have no over-riding effect on the provision of Trademarks Act,

which is a complete code by itself to deal with the Trademarks registration,

assignment and transfer of Trademarks, renewal etc. Therefore, the

method prescribed under the Trademarks Act alone is to be followed to

assign and transfer a registered Trademarks. In the absence of any legal

transfer or assignment of Trademarks in favour of the Corporate Debtor,

DCHL- Respondent No. 1 herein, it cannot be held that Trademarks

belonging to Respondent No. 1- DCHL He also further submitted that a

declaration that the Respondent No. 1 is the owner of the Trademarks

cannot be granted by the Adjudicating Authority under IBC and such

declaration can be granted by a competent Civil Court. That apart, the

jurisdiction of the Adjudicating Authority under IBC, is limited, either

Section 60(5) or Section 238 of IBC, do not permit the Adjudicating

Authority to decide such issue of ownership of Trademarks. Therefore, the

finding recorded by the Adjudicating Authority declaring that the

Respondent No. 1 - DCHL is the owner of the Trademarks, is without

jurisdiction and the Adjudicating Authority transgressed its limit of

jurisdiction, passed the impugned order and the order is liable to be set

aside. However, he reported no objection for the use of the Trademarks by

Respondent No. 1 and such finding recorded by the Adjudicating Authority

is not challenged during the arguments by the learned Senior Counsel. At

the end, he requested to set aside the order dt. 14.08.2019 passed by the 15

Company Appeal(AT)(Insolvency) No. 982 of 2019

Adjudicating Authority in I.A. No. 155 of 2018 in C.P.(IB) No.

41/7/HDB/2017 whereunder that the Respondent No. 2 is declared as

the owner of Trademarks. Learned Senior Counsel for the Appellant has

filed brief Written Submission relying on certain judgments of the Hon'ble

Supreme Court which will be referred at an appropriate stage while

deciding the issue. The Counsel for the Respondents supported the order

under challenge in all respects.

20. Considering rival contentions, perusing material available on record

including impugned order under challenge, passed in I.A. No. 155 of 2018

in C.P.(IB) No. 41/7/HDB/2017, the points need be answered by this

Tribunal are as follows:

a) Whether declaration of ownership over Trademarks after

approval of Resolution Plan by CoC, which is not a part of

Resolution Plan amount to modification or alteration of

approved resolution Plan by CoC, if so, the order is liable

to be set aside?

b) Whether the Adjudicating Authority under IBC is vested with

jurisdiction to decide title or right or ownership over

Trademarks, when jurisdiction is conferred on District Judge as

per the provisions of Trademarks Act, if not the order passed in

I.A. No. 155/2018 dated 14th August, 2019 is liable to be set

aside?

16 Company Appeal(AT)(Insolvency) No. 982 of 2019

POINT NO. 1:

21. One of the major contentions of the Appellants is that granting relief

in I.A. No. 155 of 2018 amounts to modification of approved Resolution

Plan submitted by Resolution Applicant which is impermissible under law

whereas the learned Counsel for the Respondents contended that based

on the Information Memorandum issued by Resolution Professional, the

Resolution Applicant submitted its Resolution Plan. The Information

Memorandum was issued by the Resolution Professional on the basis of

entries in the balance sheet of the Corporate Debtor where the Trademarks

were shown as assets of the Corporate Debtor. Therefore, it does not

amount modification or alteration of the approved Resolution Plan

submitted by the Resolution Applicant approved by CoC and Adjudicating

Authority.

22. It is not in quarrel that based on Information Memorandum, the

Resolution Applicant submitted its Resolution Plan but as per the Plan

submitted by the Resolution Applicant, Resolution Applicant did not claim

ownership over the Trademarks 'Deccan Chronicle' and 'Andhra Bhoomi'

but claim is confined to only the right to use, vide clause 11.12 of

Resolution Plan which runs as follows:

"11.12 Adjudicating Authority to pass necessary orders/give appropriate directions to give effect that the Corporate Debtor has the perpetual exclusive right to use the brands namely 17

Company Appeal(AT)(Insolvency) No. 982 of 2019

(i) DECCAN CHRONICLE; (ii) ANDHRA BHOOMI; (iii) THE ASIAN AGE; (iv) FINANCIAL CHRONICLE; and (v) DECCAN CHARGERS; and (vi) ODYSSEY without any financial implications for the purpose of running its business."

23. It is also an admitted fact that the Resolution Plan after several,

modification, submitted by SRA was approved in the 20th CoC meeting

after the due deliberations. Thereafter the Resolution Professional filed an

Interlocutory Application under Section 31 of the IBC for approval vide

order in I.A. No. 66/2019 dated 03.6.2019, the Resolution Plan was

approved by CoC with 81.89% voting, since the Plan complied the

requirement under Section 30(2), 30(4) of IBC, the Adjudicating Authority

passed an order entitling the Corporate Debtor to use the brand name of

'Deccan Chronicle' and 'Andhra Bhoomi', subject to order in IA No. 155 of

2018, which was pending as on that date. The order of Adjudicating

Authority relating to use of Trademarks is as follows:

"16. The Resolution Applicant has to obtain necessary approval if any required within one year as per Section 31(4) of the Code. The Resolution Applicant further prayed for order/direction to use brand name of the Corporate Debtor. However, an Application was filed claiming exclusive right over the brand name/Trademarks of the Corporate Debtor. Subject to the result of the said Application, the Resolution 18

Company Appeal(AT)(Insolvency) No. 982 of 2019

Applicant is entitled to use brand name/Trademarks of the Corporate Debtor as stated in Clause 11.12 of the Resolution Plan."

24. A bare look at Resolution Plan submitted by the SRA and the

approval of the same by the CoC clearly establishes that the SRA sought

only a direction to use the brand names of 'Deccan Chronicle' and 'Andhra

Bhoomi' by Corporate Debtor as claimed in paragraph 11.12 of the

Resolution Plan approved by CoC. The decision of CoC is based on the

commercial wisdom, which cannot be interfered by Adjudicating Authority

or this Tribunal while exercising power either under Section 60(5) or any

other provision of IBC. The commercial wisdom of CoC is supreme,

safeguards are provided to such commercial decision vide "Vallal RCK Vs.

Siva Industries Ltd"1 dated 03.06.2002. Earlier, Hon'ble Apex Court in

K. Sashidhar Vs. Indian Overseas Bank, held that commercial wisdom

of CoC is supreme; added to that "Committee of Creditors of ESSAR

Steel India Limited (through authorised signatory) Vs. Satish Kumar

Gupta and Ors."2, the Hon'ble Apex Court succinctly held that CoC's

commercial decision will prevail, if the Resolution Plan satisfied the legal

requirements under Section 30(2) and 30(4) IBC.

25. Since the Resolution Plan satisfied the legal requirements, it was

approved by CoC in its commercial wisdom and also approved by

1 CIVIL APPEAL NOS. 18111812 OF 2022 2 (2020) 8 SCC 531 19

Company Appeal(AT)(Insolvency) No. 982 of 2019

Adjudicating Authority subject to rider. The Resolution Professional filed

IA No. 155/2018 claiming ownership on the brands "Deccan Chronicle"

and "Andhra Bhoomi" during pendency of petition under Section 31 of IBC,

but the IA No. 155/2018 was allowed by Adjudicating Authority. If for any

reason the CoC decision i.e. approval is against any law, the course open

to the Adjudicating Authority is to return the Plan for fresh consideration

and approval. Instead of following the procedure, the Adjudicating

Authority allowed I.A. No. 155/2018 without approval of CoC in its

meeting. In the judgment "Jaypee Kensington Boulevard Apartments

Welfare Association and Others v. NBCC (India) Limited and others"3

when a decision was taken by CoC in its commercial wisdom, the same

cannot be interfered by Adjudicating Authority exercising power under

Section 60(5) of IBC.

26. The role of Resolution professional is only a facilitator, cannot act

either as Creditors or Corporate Debtor or Adjudicating Authority but the

Resolution Professional has filed the I.A. No. 155/2018, may be to protect

the interest of CoC for maximization of value of assets of Corporate Debtor.

27. In the Resolution Plan, vide clause 11.12, the SRA claimed right to

use the brand names of 'Deccan Chronicle' and "Andhra Bhoomi" but in

latter application in I.A No. 155/2018, the Resolution Professional on her

own claimed Right and Title to registered Trademarks "Deccan Chronicle"

3 Civil Appeal No. 3395 of 2020, (2022) 1 SCC 401 20 Company Appeal(AT)(Insolvency) No. 982 of 2019

and "Andhra Bhoomi". Right to use is distinct from right and title to

incorporeal property, right to use is only licence but title creates

ownership, which is superior right. Hence creation of superior right in

incorporeal property i.e., Trademarks tantamount to alteration or

modification of approved Plan by CoC in its commercial wisdom, though

conditional and such conditional approval by Adjudicating Authority is

contrary to law.

28. In "Ghanshyam Mishra and Sons Vs. Edelweiss Asset

Reconstruction Co. Ltd.4" the full bench of Hon'ble Apex Court held in

para 130 of the judgment as follows:

"... that 2019 amendment to Section 31 of I&B Code is clarificatory and declaratory in nature and therefore will have a retrospective operation. As such, when the resolution plan is approved by NCLT, the claims, which are not part of the resolution plan, shall stand extinguished and the proceedings related thereto shall stand terminated. Since the subject matter of the petition are the proceedings, which relate to the claims of the respondents prior to the approval of the plan, in the light of the view taken by us, the same cannot be continued. Equally the claims, which are not part of the resolution plan, shall stand extinguished.

4 CIVIL APPEAL NO.8129 OF 2019 21 Company Appeal(AT)(Insolvency) No. 982 of 2019

29. If the above principle is applied to the present appeal, the claim of

ownership over the Trademarks is claimed for the first time during

pendency of petition under Section 31 of IBC, filed after approval of

Resolution Plan by CoC in its commercial wisdom. In the Plan, SRA did

not claim such right over the Trademarks but only claimed right to use.

As such the claim of ownership over Trademarks after approval of

Resolution Plan by CoC is deemed to be extinguished in view of law

declared by Hon'ble Apex Court. But the Adjudicating Authority did not

examine the facts with reference to law.

30. In addition to the law declared by Hon'ble Apex Court in

"Ghanshyam Mishra and Sons Vs. Edelweiss Asset Reconstruction

Co. Ltd, the Hon'ble Supreme Court in "Ebix Singapore Private Limited

v. Committee of Creditors of Educomp Solutions Limited & Anr."5 the

Hon'ble Supreme Court held:

"Resolution Plan is binding and irrecoverable between the CoC and the SRA in terms of the provisions of the IBC and the Insolvency and Bankruptcy Board of India. In the instant case, in view of the principle laid down in the above case, once the plan is approved either with condition or without condition, the same cannot be modified or altered or withdrawn."

5 Civil Appeal No. 3224 of 2020 22 Company Appeal(AT)(Insolvency) No. 982 of 2019

31. If the principle laid down in "Ebix Singapore Private Limited v.

Committee of Creditors of Educomp Solutions Limited & Anr."

referred supra is applied to the present fact of the case, allowing the

Application filed under Section 60(5) declaring that the Corporate Debtor

as the owner of the Trademarks would amount to alteration of the

Resolution Plan since the plan submitted by SRA is only for use of brand

name of Trademarks but whereas the Adjudicating Authority granted relief

beyond the claim of SRA annexing a rider to the relief in I.A. No. 155/2018. Therefore, such modification of Resolution Plan is contrary to the law laid

down by the Hon'ble Apex Court in "Ebix Singapore Private Limited v.

Committee of Creditors of Educomp Solutions Limited & Anr."

referred Supra. Hence the relief granted by Adjudicating Authority to the

Resolution Applicant- 1st Respondent is contrary to the law laid down by

the Hon'ble Apex Court in "Ebix Singapore Private Limited v.

Committee of Creditors of Educomp Solutions Limited & Anr." since

the relief claimed and granted in I.A. No. 155/2018 in C.P.(IB) No.

41/7/HDB/2017 is beyond the clause 11.12 of approved Resolution Plan.

SRA is contending that the Resolution Plan was submitted based on

Information Memorandum, it is for the Applicant to place on record the

Information Memorandum to claim a relief of declaration of ownership or

right to the brand name of 'Deccan Chronicle' and 'Andhra Bhoomi', for

the reasons best known to them, none of the parties placed on record the 23

Company Appeal(AT)(Insolvency) No. 982 of 2019

Information Memorandum. Therefore, relief granted by the Adjudicating

Authority in I.A. No. 155/2018 in C.P.(IB) No. 41/7/HDB/2017 is contrary

to the law laid down in "Ebix Singapore Private Limited v. Committee

of Creditors of Educomp Solutions Limited & Anr.". On this ground,

the order is liable to be set aside.

32. In view of the law declared by Hon'ble Apex Court, applying the same

to the present appeal, we have no hesitation to conclude that right or

ownership, if any, claimed after approval of Resolution Plan by CoC is

extinguished and if ownership of Corporate Debtor is declared over the

Trademarks, it would amount to modification or alteration of approved

Resolution Plan by CoC which is impermissible. Hence the order of

Adjudicating Authority to the extent of declaring the ownership of

Corporate Debtor over the Trademarks "Deccan Chronicle" and "Andhra

Bhoomi" is illegal and the Adjudicating Authority transgressed the

jurisdictional limits. Consequently, the order passed in I.A. No. 153/2018

dated 14th August, 2019 is liable to be set aside.

33. In view of our findings, the order in I.A. No. 155/2018 dated 14th

August, 2019 is hereby set aside holding this point in favour the Appellant

and against the Respondents.

POINT NO. 2:

34. Since this point relates to jurisdiction of Adjudicating Authority to

decide the ownership of Trademarks, no finding need be recorded in view 24

Company Appeal(AT)(Insolvency) No. 982 of 2019

of findings on Point No. 1, while leaving it open to the parties to approach

appropriate authority or Tribunal at appropriate time, whenever need

arises.

35. In the result the Appeal is allowed setting aside the order in I.A. No.

155/2018 in C.P.(IB) No. 41/7/HDB/2017 dated 14th August, 2019 passed

by Adjudicating Authority while leaving it open to parties to approach the

competent Court or authority or Tribunal at appropriate stage.

[Justice Ashok Bhushan] Chairperson

[Justice M. Satyanarayana Murthy] Member (Judicial)

[Barun Mitra] Member (Technical)

NEW DELHI

Akc