Gloster Ltd vs Gloster Cables Ltd

2026 INSC 81 REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2996 OF 2024

GLOSTER LIMITED …Appellant(s)

VERSUS

GLOSTER CABLES LIMITED & ORS. …Respondent(s)

WITH

CIVIL APPEAL NO. 4493 OF 2024

JUDGMENT

K.V. Viswanathan, J.

1. These two appeals arise from the judgment of the

National Company Law Appellate Tribunal [for short

“NCLAT”], Principal Bench, New Delhi dated 25.01.2024 in

Company Appeal (AT) (Ins.) No. 1343 of 2019. While Civil

Appeal No. 2996 of 2024 is filed by Gloster Limited – the Signature Not Verified Digitally signed by VISHAL ANAND Date: 2026.01.22 13:36:33 IST

Successful Resolution Applicant (hereinafter called the Reason:

Page 1 of 69

“SRA”), Civil Appeal No. 4493 of 2024 is filed by Respondent

No.1-Gloster Cables Limited (hereinafter called “GCL”),

challenging the findings in the impugned judgment insofar

as it held that the Adjudicating Authority had the jurisdiction

to declare on the aspect of title to the trademark “Gloster”.

2. It must be pointed out that the National Company Law

Tribunal [for short “NCLT”], Kolkata Bench, Kolkata while

dealing with C.A. (IB) No. 713/KB/2019, incidentally filed by

GCL, recorded the conclusion that though the application

filed by GCL is liable to be dismissed, the trademark

“Gloster” was the asset of the Corporate Debtor. The

consequence of the holding was that the appellant-herein

who was the SRA having taken over the Corporate Debtor

became entitled to the said trademark “Gloster”.

3. On an appeal filed by GCL to NCLAT, the NCLAT, after

ruling on the jurisdiction of the NCLT/Adjudicating Authority

to go into title ultimately held in favour of GCL and against

the SRA. It was held that the finding recorded by NCLT about

the trademark “Gloster” being the asset of the Corporate Page 2 of 69 Debtor was not in accordance with law. It is in this scenario

that both the parties are before us. While the SRA is

aggrieved by the negation of the findings recorded by the

NCLT to the effect that the trademark was the property of the

Corporate Debtor and, in turn, of the SRA, the GCL is

aggrieved by the pronouncement on the issue of jurisdiction.

There was no necessity to issue separate notice in the cross-

appeal as both parties have advanced comprehensive

arguments covering all aspects in both the appeals.

FACTS OF THE CASE:-

4. Respondent No.2 herein-Fort Gloster Industries Limited,

the Corporate Debtor (hereinafter called “FGIL”), was

hauled up before the Adjudicating Authority by a former

employee, one Shri Jayant Panja, in CP (IB) 61/KB/2018 filed

under Section 9 of the Insolvency and Bankruptcy Code, 2016

(for short the “IBC”). The application was admitted on

09.08.2018 and a Resolution Professional (RP) was

appointed. After complying with the procedure prescribed

under the IBC for invitation and consideration of resolution Page 3 of 69 plans, the RP filed an application for approval of the

resolution plan of the Corporate Debtor submitted by the

appellant-SRA herein which was duly approved by the

Committee of Creditors [COC] by a vote share of 72.31%.

Today, there is no dispute that the plan is approved and has

attained finality.

4.1 However, when the approval application was pending,

GCL (R-1)-herein filed an application under Section 60(5) of

the IBC seeking the following reliefs:-

“a) To pass an order thereby allowing the present Applicant to intervene in the present proceeding;

b) To pass an order thereby directing that any Resolution Plan if approved by this Hon'ble Adjudicating Authority shall exclude the rights in the Trade Mark “Gloster" from the assets of the Corporate Debtor, including, exclusion of the Trade Mark "Gloster" from the Corporate name of the Corporate Debtor since the said Trade Mark ‘Gloster’ is not a property/asset of the Corporate Debtor;

c) To pass an order clarifying that, in approving the CIRP, no presumption may be drawn as to any authorization or right emerging from the aforesaid approval that gives the right to the Corporate Debtor, or the successful H1 to continue to use the Trade Mark “Gloster” or the term "GLOSTER" as part of the Corporate Debtor’s corporate name;

Page 4 of 69

d) To pass an ex-parte interim order in terms of prayer

(a), (b) and (c);

e) Any other relief or reliefs may be granted as this Hon’ble Tribunal deem fits.”

It will be noticed that the prayer of GCL was that in any

Resolution Plan that the Adjudicating Authority may approve,

it may exclude the rights of the SRA in the trademark

“Gloster”. This was on the premise that the trademark

“Gloster” was not an asset of the Corporate Debtor-FGIL.

4.2 This application was filed on 28.05.2019. In this

application, it was averred as under:-

i) That the application was filed by GCL, being the

proprietor/owner/holder of registrations for the

trademark “Gloster” and its variants bearing No.

690772, 1980867, 3022764 and 3022775 in Class 9. Of

this, the present case is concerned with No. 690772.

ii) That GCL entered into a Technical Collaboration

Agreement with FGIL, on 02.05.1995, wherein it was

mutually agreed that GCL would use the trademark

Page 5 of 69 “Gloster” for manufacturing and marketing of electric

cable wires for an agreed royalty of 2% of ex-works

prices of the product sold or leased.

iii) That since 1995, GCL has used the trademark “Gloster”

and it has expanded its business and is solely

responsible for building the brand image and the

brand value of the trademark “Gloster”. That since

2003, FGIL was non-functional and, as such, FGIL did

not make any contribution towards building the brand

name.

iv) That FGIL was referred to the Board for Industrial and

Financial Reconstruction [BIFR] under the Sick

Industrial Companies (Special Provisions) Act, 1985

[SICA].

v) That since 2003, there has been no production of

cables by FGIL and no use of the trademark “Gloster”

by them.

vi) On 29.07.2004, GCL entered into a Trademark

Agreement with FGIL for use of the trademark Page 6 of 69 “Gloster” bearing No. 690772. Under the License

Agreement, a first right to purchase the said trademark

was also given. As consideration, a lumpsum amount

of Rs. 3 Crores was paid by GCL to FGIL along with an

annual royalty of Rs. 2 Lakhs.

vii) In 2006, GCL to help FGIL, extended a loan of Rs. 10

Crores under the Memorandum of Hypothecation

wherein the first and exclusive charge on the

trademark “Gloster” bearing No. 690772 was created

in favour of GCL. Pursuant to the obligation under the

2004 License Agreement and on the offer for sale of the

trademark “Gloster” by FGIL-Corporate Debtor, a

Supplemental Trademark Agreement dated 15.07.2008

for assignment of the trademark “Gloster” bearing No.

690772 was entered into. Since there was a restraint

order passed by the BIFR on 10.08.2001, the

assignment was to become effective only on the

vacation or discharge of the order of restraint.

Page 7 of 69

viii) That from 01.12.2016, the reference before BIFR under

SICA stood abated and there was no reference to the

NCLT within the prescribed period. In view of the

same, all restraint orders ceased to exist.

ix) On 20.09.2017, a Deed of Assignment was entered into

to confirm the assignment of its trademark “Gloster”

bearing No. 690772 which became effective from

28.05.2017. The Assignment Deed recorded that the

assignment was absolute and the assignee-GCL

acquired all the rights of ownership including goodwill

in relation to the said trademark “Gloster” without any

further action on the part of the assignor.

x) That on 17.09.2018, (The CIRP commenced on

09.08.2018) the GCL was recorded as the registered

proprietor of the trademark “Gloster” bearing No.

690772 in Class 9 by the trademark registry.

xi) That GCL enjoys the statutory and proprietary rights to

the said trademark. That the trademark “Gloster” does

not form part of the assets of the Corporate Debtor and, Page 8 of 69 as such, GCL has exclusive rights. That if the

Resolution Plan assumes ownership of the trademark

“Gloster” by FGIL, the same would contravene the

provisions of the Trade Marks Act, 1999.

4.3 This application was objected to by the Resolution

Professional, the Committee of Creditors and the SRA by

contending that: -

i) FGIL was referred to BIFR in the year 2001 and vide

order dated 10.09.2001, the BIFR admitted the

reference, and directed FGIL (Corporate Debtor) not to

dispose of any fixed or current assets of FGIL without

the consent of its co-creditors and the BIFR. Hence,

Supplemental Agreement dated 15.07.2008 had no legal

effect. It was submitted that any transfer made in

violation of the order of injunction passed by the BIFR is

void ab initio and therefore, on the strength of the

license granted by FGIL, GCL cannot claim any

exclusive rights, ownership or usage of the trademark.

Page 9 of 69

ii) That the claim on the strength of the Assignment Deed

dated 20.09.2017 was in violation of Sections 43 and 46

of the IBC; that the assignment came under the purview

of preferential transaction under Section 43(2)(a); that

the transaction is within the period of one year

preceding the insolvency commencement date as

provided under Section 46(1)(i) and that the Deed of

Assignment dated 20.09.2017 is undervalued and

insufficiently stamped and it is a sham document which

cannot be acted upon. Hence, based on the Assignment

Deed also, no claim over the trademark in dispute could

be made by GCL.

iii) The registration of the trademark in the name of GCL is

invalid because it was registered in violation of Section

14 of the IBC. It was submitted that the CIRP

commenced on 09.08.2018 and the registration of the

trademark in the name of GCL was on 27.09.2018.

Page 10 of 69

Hence, based on the said document also, no ownership

could be claimed over the trademark.

iv) Reference was made to Section 22A of the SICA to

contend that the assignment was in violation of the

injunction and, as such, it would not confer any right

over the trademark. That the trademark was one of the

assets of the Corporate Debtor and this was within the

knowledge of GCL and hence the contention that the

direction of restraint by BIFR did not extend to the

trademark is absolutely untenable.

DECISION OF THE NCLT:-

4.4 The Adjudicating Authority, vide its judgment of

27.09.2019, disposed of both the application filed by GCL as

well as the application for approval of the plan filed by the RP

(R-3 herein).

4.5 Dealing with the application filed by GCL, which is the

subject-matter of these proceedings, the Adjudicating

Authority held: -

Page 11 of 69

i) The Assignment Deeds executed between 10.09.2001

and 01.12.2016 did not confer any title as they were in

breach of the order of restraint that was passed by the

BIFR. Reliance was placed on Jehal Tanti and Others

vs. Nageshwar Singh (D) through LRs.1;

ii) That the order of prohibition did extend to the

trademark in question as the fixed current assets of the

company as per Schedule-VI read with Section 211 of

the Companies Act, 2013 made it clear that they were a

part of the assets of the Company;

iii) Notwithstanding the repeal of SICA and the abatement

of proceedings any violation in breach of the restraint

order when in force, would not render the injunction

infructuous and the violation of the injunction would

render the assignment invalid. That the only deed

executed before passing the order of injunction was

the Technical Collaboration Agreement of 02.05.1995.

However, the period under the said agreement had

1 (2013) 14 SCC 689

Page 12 of 69 expired within eight years of the execution and the

renewals happened when the prohibitory order of

restraint was imposed.

iv) That in view of Section 43 (2)(a) read with Section 46

(1)(2), the Assignment Deed dated 20.09.2017, being

within the period of two years preceding the

insolvency commencement, would be hit by Section 43

and GCL cannot claim absolute title over the

trademark. That the transaction is an undervalued

transaction and is hit by Section 45(2)(b) of the IBC.

v) Even in the absence of an application by the Resolution

Professional under Sections 43, 44, 45 and 46 of the

IBC, the Adjudicating Authority, on the peculiar facts,

cannot shut its eyes and ignore the material on record

to legitimize the transaction of assignment. The

Adjudicating Authority is empowered to look into the

material brought to its notice to decide whether there

was any preferential transaction benefiting the GCL

depriving the rights of the Corporate Debtor. Page 13 of 69

vi) The registration of the trademark on 17.09.2018 was hit

by Section 14(1)(b) of the IBC since by the said date the

CIRP had commenced w.e.f. 09.08.2018.

4.6 The Adjudicating Authority, after disposing of the

application of GCL, in the above terms in para 96 of its order

approved the Resolution Plan of FGIL (Corporate Debtor) as

submitted by the appellant herein-Gloster Limited.

4.7 Aggrieved, GCL carried the matter in appeal insofar as

rejection of its application No. CA(IB) No. 713 of 2019 was

concerned.

FINDINGS OF THE NCLAT:-

4.8 The NCLAT, by virtue of the impugned judgment,

recorded the following findings: -

i) That the Adjudicating Authority had jurisdiction to

decide the lis of the nature that arose before it, in the

present case, between the parties and the power is

traceable to Section 60(5)(c) of the IBC.

Page 14 of 69

ii) That under the Supplemental Agreement of 15.07.2008,

the assignment was to come into effect only after the

order dated 10.09.2001 passed by the BIFR is vacated

and/or discharged or in the event of FGIL being wound

up. Since the assignment under the Supplemental

Agreement of 15.07.2008 was contingent, the finding

recorded by the Adjudicating Authority that the

assignment was during the operation of the restraint

order and, as such, is null and void, is not in accordance

with law. That the title and the trademark vested with

the appellant by the execution of the Supplemental

Trademark Agreement dated 15.07.2008 subject to the

condition that it became effective after the restraint

order passed by the BIFR was vacated or discharged.

iii) In the case of Anuj Jain, IRP for Jaypee Infratech Ltd.

vs. Axis Bank Ltd.2, the Supreme Court has held that

specific material was required to be pleaded if a

transaction is sought to be brought under the mischief

2 (2020) 8 SCC 401

Page 15 of 69 sought to be remedied under Sections 45, 46 and 47 or

Section 66 of the IBC. Action could not have been taken

in the absence of an application moved by the

Resolution Professional since it is expected of any

Resolution Professional to keep the requirements of

Sections 45, 46, 47 and 66 while making a motion before

the Adjudicating Authority.

iv) The 5th Meeting of the Committee of Creditors was

apprised of the forensic audit report, and the forensic

auditor did not find any preferential, undervalued,

fraudulent or any wrongful trading transaction. Further,

the report did not reveal any related party preferential

or fraudulent transactions whatsoever.

v) Only on the basis that the trademark was hypothecated

for a bigger amount and has been assigned for a lesser

amount, it could not be decided that the transaction was

undervalued without there being any sufficient material

before the Adjudicating Authority.

Page 16 of 69

5. The NCLAT allowed the appeal of GCL (R-1) and set

aside the order of the Adjudicating Authority insofar as the

dismissal of application No. 71 CA(IB) No. 713 of 2019 is

concerned. It is in that scenario that appeal and cross-appeal

have been filed before us as pointed out hereinabove.

CONTENTIONS OF THE PARTIES: -

6. We have heard Mr. Shyam Divan, learned Senior

Advocate for the appellant-SRA, Mr. Ranjit Kumar, learned

Senior Advocate and Mr. Chander M. Lall, learned Senior

Advocate, for the R-1 (GCL). We have also heard Mr. Anand

Varma, learned Advocate for R-3 the Resolution Professional.

SUBMISSIONS OF THE APPELLANT: -

7. Mr. Shyam Divan, learned Senior Advocate, for the

appellant submitted that the respondent No.1-GCL was

estopped from questioning the jurisdiction since they

themselves invoked the jurisdiction of the

NCLAT/Adjudicating Authority by filing the application out of

Page 17 of 69 which the present proceedings arise. Permitting GCL to

question the jurisdiction would be an abuse of process.

7.1 Learned Senior Advocate submits that the questions

raised in the application of GCL cannot be said to be “de

hors” the CIRP of FGIL and, as such, the proceedings were

covered within the scope of Section 60(5) of the IBC.

7.2 Learned Senior Advocate submits that the registration of

the trademark “Gloster” in the name of GCIL was in the teeth

of Section 14(1)(b) of the IBC since the CIRP had commenced

on 09.08.2018. Section 14(1)(b) provides a legal embargo

against transferring, encumbering or alienating or disposing

of by the Corporate Debtor of any of its assets or any legal

right or beneficial interest therein.

7.3 Learned Senior Counsel submits that there was

inconsistency with regard to the claim of GCL (R-1) about the

date on which it acquired title to the trademark. While in the

counter affidavit filed before this Court, GCL pleaded that

the title of the trademark stood assigned in its favour with

effect from 01.12.2016 (the date on which SICA was Page 18 of 69 repealed), pursuant to the Supplemental Agreement dated

15.07.2008, in the Deed of Assignment it is stated as

28.05.2017. Further, Clause 8 of the Assignment Deed of

20.09.2017 states that the assignment would take effect as

and when the name of GCL is entered as the subsequent

proprietor and that the License Agreement of 2004 would

stand terminated from such date. Attention was drawn to

Clause 8 of the Assignment Deed, which read as under:-

“The parties hereby agree that as and when the Assignment with goodwill is recorded with the Trade Mark office and the name of the assignee is entered as a subsequent proprietor/owner of the Trade Mark, the existing license agreement dated 29th July, 2004 shall stand terminated.”

7.4 Learned Senior Counsel contended that the conduct of

GCL (R-1) indicates that it acted in accordance with Clause 8

since it paid license fee to FGIL for the financial year ending

31.03.2018 under the License Agreement dated 29.07.2004.

7.5 According to the learned Senior Counsel, if a party

genuinely understood that the assignment took effect from

01.01.2016, there would be no reason for GCL to pay the Page 19 of 69 License Fee to FGIL, which was an associate, for the Financial

Year ending 31.03.2018. According to the learned Senior

Counsel, the contention that trademark stood vested

irrespective of the subsequent registration was an

afterthought, contrary to Clause 8 of the Assignment Deed of

20.09.2017 and contrary to its own conduct during the

contemporaneous period.

7.6 Learned Senior Counsel contends that GCL(R-1) waived

its right under Section 45 of the Trade Marks Act to contend

that the trademark should vest on the date of assignment.

Learned Senior Counsel contended that the unregistered

Assignment Deed could not have been admitted in evidence

as proof of title to the trademark.

7.7 Learned Senior Counsel defended the order of the

Adjudicating Authority on the issue of exercise of power

under Sections 43, 44 and 45 of IBC even in the absence of an

application by the Resolution Professional.

7.8 Learned senor counsel contends that the Supplemental

Agreement dated 15.07.2008 is in the teeth of prohibitory Page 20 of 69 order of the BIFR dated 10.09.2001 and, hence, is a void

document being opposed to Section 23 of Indian Contract

Act, 1872.

CONTENTIONS OF THE RESOLUTION PROFESSIONAL (RP): -

8. Mr. Anand Varma, learned counsel for Respondent

No.3-Resolution Professional, submitted as under: -

8.1 That the consistent position of the Corporate Debtor

both before and after the execution of the purported

agreement of 15.07.2008 has been that there had not been

any assignment of the trademark; in fact, there are written

letters of FGIL to Allahabad Bank claiming that there is no

exclusive right granted to GCL; that even before the BIFR,

the stand has been that GCL has been permitted to use the

trademark and there has not been any sale or transfer or

assignment; that FGIL has stated before the BIFR that FGIL

was receiving a royalty of Rs. 2 Lakhs annually initially and,

thereafter, took a stand that the trademark has been licensed

and there has not been any violation of Section 22A of SICA.

Page 21 of 69 8.2 Learned counsel for the RP submitted that there was no

contemporaneous disclosure by FGIL of the existence or

execution of the purported Supplemental Trademark

Agreement dated 15.07.2008. Though FGIL and GCL

claimed that the agreement of 15.07.2008 came into force on

01.12.2016, there is no mention or disclosure of the same in

the audited balance sheets for the financial year 2016-17.

According to learned counsel for the RP, the audited balance

sheet, to the contrary, disclosed that FGIL treated the

trademark as its own asset albeit hypothecated in favour of

GCL to secure a loan and that the annual audited balance

sheets further disclosed that FGIL was receiving annual

license fee of Rs. 2 lakhs.

8.3 Learned counsel for the RP contends that during the

CIRP the information memorandum included audited balance

sheets for the financial year 2016-17 and 2017-18 which

treated the trademark as an asset of FGIL. The information

memorandum was prepared on 22.09.2018 as per Regulation

36 of the IBBI (Insolvency Resolution Process for Corporate Page 22 of 69 Persons) Regulations, 2016. As per the statutory mandate,

the audited balance sheets for the two financial years

mentioned above were included. Hence, during the process

of the CIRP, the trademark was understood to be FGIL’s own

asset in terms of Section 18(f)(iv) of IBC.

8.4 Learned counsel for the RP further contended that the

erstwhile management of FGIL as also GCL never disclosed

the existence of the purported agreement dated 15.07.2008

as well as other agreements and the same were deliberately

concealed and suppressed by the aforesaid parties until the

very last stage of the CIRP. According to the learned

counsel, this was done to avoid scrutiny by the Forensic

Auditors.

8.5 Learned counsel submits that the agreement was

disclosed and shared with the RP only in April, 2019 by way

of reply dated 01.04.2009 to the email of RP dated 20.03.2009.

Further, the copies were made available to the RP only on

03rd/04th April, 2019. This disclosure to the RP was two days

before the resolution plans were due for submission, i.e., Page 23 of 69 06.04.2019. The RP did disclose the purported agreements

and provided the copies of the same to the prospective

applicants however, it was too late to be included in the

Forensic Audit Report which was submitted by the auditors

on 10.04.2019. It was for this reason that Forensic Auditor did

not have occasion to examine, analyse, consider and include

the said documents in the Forensic Audit Report.

8.6 Learned counsel for the RP suspected the genuineness

of the documents and contended that FGIL’s trademark was

assigned for a mere consideration of Rs. 10 lakhs under the

15.07.2008 agreement whereas the trademark was

hypothecated against the loan of Rs. 10 crores on 10.11.2006.

According to the RP, the 15.07.2008 agreement was an

undervalued transaction designed to defraud the creditors of

FGIL.

8.7 Dealing with the aspect of filing of application under

Section 43 and 45 of IBC, learned counsel submitted that the

said exercise involves rigorous scrutiny of documents,

identification of related and unrelated persons and Page 24 of 69 threadbare examination of transactions and that exercise

cannot be carried out superficially. Learned counsel for the

RP submitted that the concealment which he characterized as

fraudulent, prevented the RP from discharging his statutory

obligations and identifying preferential or undervalued

transaction through a Forensic Audit and filing appropriate

application before the Adjudicating Authority.

8.8 Learned counsel further submitted that GCL by filing an

application itself let the Adjudicating Authority to examine

the purported agreements between FGIL and GCL and as

such no prejudice was caused to GCL.

8.9 Learned counsel submitted that the Adjudicating

Authority is duly vested with the jurisdiction to consider and

adjudicate issues of fraud arising from concealment and

suppression of documents even in summary proceedings. So

contending, the learned counsel prayed for allowing the

appeal and supported the stand of SRA.

Page 25 of 69 CONTENTIONS OF GCL (R1): -

9. Mr. Ranjit Kumar, learned Senior Counsel for GCL

submitted that though GCL filed the application out of which

the present proceedings arise, GCL never conceded that the

Adjudicating Authority had jurisdiction to decide on the title

to the trademark. According to the learned senior counsel,

the application was only to ensure that the trademark

“Gloster” was excluded while approving the plan and not so

much as to invite a verdict on the issue of title. Learned

senior counsel contended that under Section 60(5)(c) of the

IBC, only questions “in relation to the insolvency resolution

or liquidation proceedings of the corporate debtor or

corporate person” could be gone into by the NCLT. Learned

senior counsel relied on a number of judgments to contend

that the entitlement to the trademark was not “in relation to

insolvency of FGIL” and submitted that the Adjudicating

Authority ought not to have passed an order purportedly

vesting title in the SRA with regard to the trademark

“Gloster”.

Page 26 of 69 9.1 Learned senior counsel invited our attention to the

statement in the plan to contend that the SRA cannot get more

than what is in the approved plan and under the guise of

adjudicating the application of GCL a plan approved by COC

recognizing existence of rival claimants cannot be modified.

9.2 Learned senior counsel submitted that the BIFR

proceedings particularly, the proceedings dated 26.05.2008

indicate that the aspect of GCL using the trademark

“Gloster” on account of the Technical Collaboration

Agreement with FGIL and the trademark agreement as well

as the loan agreement were in the public domain as reflected

in the BIFR proceedings.

9.3 Learned senior counsel contended that the FGIL’s

manufacturing unit being shut down was reflected in the

information memorandum and it is undisputed that FGIL

never used the trademark “Gloster” ever since 2003.

9.4 Learned senior counsel further drew our attention to

para 6.1 of the information memorandum where GCL was

shown as a financial creditor to the tune of 15.45 crores; it is Page 27 of 69 further contended that FGIL was the entity referred to BIFR

and they were fully conscious of various agreements entered

into with GCL and referred to the auditor’s report of 2016-17

and 2017-18 to establish the point.

9.5 Learned senior counsel took the Court through the

sequence of events starting with the Technical Collaboration

Agreement dated 02.05.1995; the Trademark Agreement

dated 29.07.2004; the loan transaction of 2006; the

Supplemental Trademark Agreement dated 15.07.2008

which was contingent upon the vacation/discharge of the

order of BIFR; the repeal of SICA and the abatement of the

reference; the deed of assignment dated 20.09.2017 and the

registration of trademark on 17.09.2018 to contend that GCL

is the owner of the trademark “Gloster” and to that extent

NCLAT was right in setting aside the finding of the

Adjudicating Authority.

9.6 Mr. Chander M. Lall, learned senior advocate, who

supplemented the arguments of Mr. Ranjit Kumar, learned

senior advocate, submitted that under the trademark law Page 28 of 69 assignment operates forthwith and registration is only a

recording of the said event. It was further submitted that the

title stood transferred with the assignment. In any event,

learned senior counsel submitted that GCL had long user of

the trademark “Gloster” when FGIL had admittedly not used

the said mark since 2003. According to the learned senior

counsel, public perceives GCL as proprietor. Learned

senior counsel submitted that a trademark title cannot be

summarily decided. Learned senior counsel submitted that

unlike immovable property of the value of more than one

hundred where title gets transferred on registration, with

regard to trademark there is no such mandate in law.

9.7 No right is created by mere registration whereas the

right is created by the assignment. Learned senior counsel

referred to the plan and reiterated the submission that SRA

cannot get more than what is granted in the plan. It is

submitted that since with the assignment the title to the

trademark has been transferred, registration pending CIRP,

makes no difference and will not be hit by the moratorium. Page 29 of 69 Learned senior counsel submitted that on the date of CIRP

the trademark “Gloster” was not an asset of FGIL. Learned

senior counsel submitted that the only way registration can

be got back is by resort to proceedings under Section 47 and

submitted that the appellant has in fact filed an application

under the said provision.

PENDENCY OF CIVIL SUIT: -

9.8 The SRA has drawn attention to the fact that GCL has

filed a suit against the Corporate Debtor being CS No. 43 of

2019 before Commercial Court, Secunderabad inter alia with

respect to trademark “Gloster” belonging to the Corporate

Debtor. GCL also filed an application for interim injunction

vide IA No. 754 and 755 of 2019, seeking an injunction

against Respondent No. 3 and the Appellant from using the

trademark “Gloster”. The application for injunction was

dismissed by the Commercial Court on 27.12.2019, which

was upheld by the High Court of Telangana vide order dated

14.02.2022. The Special Leave Petition against the High Court

Page 30 of 69 order dated 14.02.2022 was also dismissed by this Court on

12.05.2022.

QUESTION FOR CONSIDERATION: -

10. Primarily, the question that arises for consideration is,

whether the Adjudicating Authority could have, on the facts

of the present case, in the process of adjudicating the

application of GCL, recorded a finding that the trademark

“Gloster” was an asset of the Corporate Debtor (FGIL) and

consequently of the SRA (the appellant)?

ANALYSIS AND CONCLUSION: -

11. It will be useful to first extract the relevant part of the

plan, as approved by the Committee of Creditors, dealing

with the issue of the trademark in question: -

“

6. Trademark viz. Trademark Illegally “Gloster” in the Registration no. assigned to name of the CD valid 690772 in class 9 Gloster till 14.12.2022. registered with Cables Ltd.

Trade Marks vide a deed Registry, Govt. of of India. Agreement dated 20th September 2017.

Page 31 of 69 Trade Mark

The trademark viz. "GLOSTER" bearing Trade mark registration no. 690772 in class 9 was registered in the name of FGIL with Trade Marks Registry, Govt. of India.

FGIL was referred to the Board for Industrial & Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Regulations) Act, 1985 and had been declared as a sick company in the year 2001.

FGIL had granted license right to Gloster Cables Ltd. (GCL) under Agreement dated 29th July 2004. FGIL had granted an exclusive, non-transferrable, long term license to GCL to use the Trademark for an Initial period of 33 years with effect from the date of execution of the said agreement for a fee of Rs. 3,00,00,000 (Three crore only) apart from annual royalty of Rs. 2,00,000 (Two lakhs only) during the existence of the said agreement. FGIL had also created first and exclusive charge over the Trademark in favour of GCL as security against a loan of Rs. 10 crore granted by GCL to FGIL pursuant to the loan agreement dated 10th November 2006.

FGIL had entered into Supplemental Trade Mark Agreement on 15th July 2008 with GCL wherein FGIL inter alia agreed to assign the Trademark in favour of GCL for an aggregate consideration of Rs, 10,00,000 (ten lakhs only) and the said assignment was to become effective without any further act or deed if the order dated 10th September, 2001 passed by BIFR declaring FGIL as sick undertaking stood vacated and / or discharged or FGIL is wound up under the provisions of the Companies Act,1956 Finally, GCL & FGIL entered into deed of assignment dated 20th September 2017 wherein the above mentioned Trade Mark "GLOSTER" has been assigned and/or transferred to and vested to GCL with effect from the end of the statutory period from 1st December 2016 under the Sick Industrial Companies (Special Provisions) Repeal Act, 2003. Further the said agreement inter alia includes as below.

Page 32 of 69 A. The consideration for the assignment being a sum of Rs. 10,00,000/- (Ten lakhs) has already been paid by the Assignee to the Assignor under the Supplemental Trade Mark Agreement on 15th July 2008 executed between GCL & FGIL.

B. The Assignee shall be responsible and liable to take appropriate steps with the Trade Mark authorities for recording the change of the ownership of the Trade Mark in the statutory records at its own cost and expenses. However, the Assignor agrees to assist and execute at the cost of the Assignee, with furnishing such information, papers, declarations and documents as may be required under the law to be filed with Trade Mark Authorities for recording such change of ownership of the Trade Mark.

C. The Assignor its successors and/or assigns or any person claiming under them or in trust or in their behalf shall henceforth have no right, title, interest in the said Trade Mark or any part thereof and the Assignee shall be the legal and beneficial owner of the Trademark vested with exclusive right to deal with the same in the manner it deems fit and proper at its sole discretion.

The RA believes that the said Agreement/s have been entered into by FGIL with its related party GCL with the intention of transferring the said Trademark to GCL with malafide intention although, the said transfer was barred by the law under SICA and is also barred under IBBI during the moratorium period; the CD entered into the Agreement during the intervening period between the admission under IBBI and repealing of SICA.

The RA therefore, believes that the Trademark 'Gloster’ has been assigned and/or transferred to GCL is bad in law. The RA understands that the said Trademark is the lawful property of the CD and that the said Trademark shall remain the absolute property of CD post its acquisition by the RA.” (Emphasis supplied)

Page 33 of 69

12. A careful perusal of the plan as approved indicates that

the sequence of events from the original registration in

favour of FGIL, the reference of FGIL to BIFR, the license

agreement of 29.07.2004, the charge created in favour of

GCL towards the loan of 10 crore on 10.11.2006, the

Supplemental Trademark Agreement of 15.07.2008 along

with contingent right recognized therein and the deed of

assignment of 20.09.2017 have all been recorded. The repeal

of SICA with effect from 01.12.2016 is also noticed. The

payment of consideration by the assignor to the assignee is

noticed and the contents of the assignment deed of

20.09.2017 are also set out briefly. Thereafter, it is recorded

that the appellant “believes” that the agreements have been

entered into by FGIL with GCL - the related party with a mala

fide intention, although the said transfer was barred by law.

It is further recorded that the Resolution Applicant

(appellant) believes that the assignment to GCL is bad in law.

Thereafter, it is recorded that the appellant “understands”

that the said Trademark is the lawful property of the Page 34 of 69 Corporate Debtor and the said Trademark shall remain the

absolute property of the Corporate Debtor post its

acquisition by the Resolution Applicant.

13. On a reading of the above extract, what is clear is that at

the very least even in the approved plan it was the

understanding of the appellant that there were rival claims

over the title of the trademark “Gloster”. From the record, it

is not discernible that the appellant took any steps to move

the RP for taking appropriate measures under the relevant

provisions of IBC to set at naught the agreements in question.

It is also not in dispute that the RP did not move any

application for avoidance of any preferential transaction or

undervalued transaction or transactions allegedly defrauding

creditors.

14. No doubt, the RP has an explanation which has been set

out hereinabove, namely, that the RP became aware of the

agreements only in April 2019 by which time it was too late to

subject the agreements to a forensic audit. According to the

RP, the net result was that the agreements could not be Page 35 of 69 forensically audited. The RP further submitted that rigorous

scrutiny of documents and other exercises are involved for

filing appropriate applications under Sections 43 and 45 and

because of the delayed disclosure, he was prevented from

doing the same.

15. Be that as it may, the factual situation is no application

was filed and respondent no. 1 was not put on notice about

the alleged suspicion shrouding the agreements.

16. The question is with the plan approved by the COC

couched in such terms as to recognize rival claimants to the

trademark “Gloster”, could the fortuitous circumstance of

GCL moving an application, result in a declaration of title

enuring to the benefit of the appellant on the facts of the

present case? What if the application had not been moved at

all by GCL? What would be the scenario then? In any event,

does the scope of Section 60(5) on the facts of the case justify

the declaration of title by the Adjudicating Authority is the

question before us.

Page 36 of 69

17. At this stage, a brief survey of the relevant provisions of

the IBC to explain how ultimately a successful resolution plan

comes into operation needs to be discussed. As the

statement of objects and reasons indicate, the objective of

IBC is to consolidate and amend the laws relating to

reorganization and insolvency resolution of corporate

persons, partnership firms and individuals in a time bound

manner. The idea is maximization of value of assets of such

persons, to promote entrepreneurship, availability of credit

and balance the interests of all the stakeholders. The first

segment deals with insolvency resolution. The initial attempt

is to see if the entity brought under CIRP could be resolved

as a going concern.

18. Unlike the failed experiment under the SICA where the

promoters called the shots, the new model under the IBC is

creditor driven. After the commencement of the corporate

insolvency resolution process, Resolution Professionals are

appointed.

Page 37 of 69

19. The resolution plans are invited from willing and

eligible entities. The resolution plan has to be approved by

the Committee of Creditors and then placed before the

Adjudicating Authority for its approval under Section 31 of

the IBC. Section 31(1) of the IBC, which is significant, reads

as follows: -

31. Approval of resolution plan.— (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-

section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan:

Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.

(Emphasis supplied)

It will be noticed that once the resolution plan is approved by

the Committee of Creditors and thereafter by the

Adjudicating Authority, the plan is binding on the Corporate

Page 38 of 69 Debtor and its employees, members, creditors, including the

Central Government, any State Government or any local

authority, guarantors and other stakeholders involved in the

resolution plan.

20. The plan, as approved, is a binding document which

would govern the relationship between the stakeholders and

on which terms the new management takes over the

Corporate Debtor.

21. If in this background, the plan, as approved in the

present case, is appreciated it will be clear that the appellant

who was a Successful Resolution Applicant (SRA) was fully

conscious on the date of submission of the plan about the

agreements between FGIL and GCL. The plan records its

“belief” and “understanding” that though there was a

purported transfer the transfer is mala fide and barred by

law. Further, it is their “understanding” that the Trademark

is a lawful property of FGIL.

Page 39 of 69

22. There is no definite assertion about any undisputed

claim to the title of trademark “Gloster” and in fact to the

contrary as pointed out earlier, it recognizes rival claims.

The appellant took FGIL under its fold with this

understanding as set out in the plan.

23. It is in this background that GCL came forward with the

application expressing its grievance that any approval of the

plan should exclude the rights in the trademark “Gloster”.

We find that the Adjudicating Authority could not have, while

approving the plan in the present form, (on which the

Committee of Creditors had voted) gone ahead and granted

a declaration in favour of the appellant about its entitlement

to the Trademark “Gloster”. We say so for the following

reasons.

24. The application of GCL was under Section 60(5) of the

IBC. Section 60(5) reads as under: -

60. Adjudicating Authority for corporate persons.— (5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of—

Page 40 of 69

(a) any application or proceeding by or against the corporate debtor or corporate person;

(b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and

(c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code.

25. Primarily, we are concerned with the interpretation of

the phrase “arising out of or in relation to the insolvency

resolution or liquidation proceedings of the corporate debtor

or corporate person under this Code”. What is the scope,

sweep and ambit of Section 60(5)(c) has come up for

consideration in several cases before this Court. The issue is

no longer res integra. From the very nature of things, it is

clear that interpretation of the phrase will have to be

contextualized with the facts arising in a given CIRP. Hence,

the examination in each case will depend on the facts as they

present themselves in a given CIRP.

Page 41 of 69

26. In Embassy Property Developments Pvt. Ltd. v. State of

Karnataka & Ors.3 the Resolution Professional in a pending

CIRP moved a miscellaneous application seeking a

declaration against the Government of Karnataka that a

mining lease is deemed valid and sought the execution of a

supplemental lease deed by the said Government. The

Adjudicating Authority allowed the application, however, the

High Court had entertained a writ petition and granted an

interim stay of the order of the Adjudicating Authority. The

interim order was challenged by the successful resolution

applicant in this Court. This Court held that a decision taken

by the Government or a Statutory Authority in a matter

relating to the realm of public law cannot be brought under

the phrase “arising out of or in relation to the insolvency

resolution” occurring in Section 60(5)(c). It was also held that

the residuary clause of Section 60(5) cannot be taken

advantage of, to short circuit judicial or quasi-judicial

proceedings. It was further clarified that wherever corporate

3 (2020) 13 SCC 308

Page 42 of 69 debtor has to exercise a right that falls outside the purview of

IBC, especially in the realm of public law, they cannot,

through the Resolution Professional, take a shortcut and go

before the Adjudicating Authority for enforcement of such a

right. Further, this Court drew attention to Section 25(2)(b)

which dealt with the duties of resolution professional

including the duty to represent and act on behalf of the

Corporate Debtor with third parties and exercise rights for

the benefit of the Corporate Debtor in judicial, quasi-judicial

or arbitration proceedings. Highlighting the limited nature of

jurisdiction of the Adjudicating Authority, the Court held: -

“37. …… The only provision which can probably throw light on this question would be sub-section (5) of Section 60, as it speaks about the jurisdiction of the NCLT. Clause

(c) of sub-section (5) of Section 60 is very broad in its sweep, in that it speaks about any question of law or fact, arising out of or in relation to insolvency resolution. But a decision taken by the Government or a statutory authority in relation to a matter which is in the realm of public law, cannot, by any stretch of imagination, be brought within the fold of the phrase “arising out of or in relation to the insolvency resolution” appearing in clause (c) of sub-section (5). Let us take for instance a case where a corporate debtor had suffered an order at the hands of the Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5)(c) of the IBC Page 43 of 69 is interpreted to include all questions of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260-A of the Income Tax Act, 1961. Therefore the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring absurd results. It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression “operational debt” under Section 5(21), making the Government an “operational creditor” in terms of Section 5(20). The moment the dues to the Government are crystallised and what remains is only payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the resolution plan as approved by the adjudicating authority, namely, the NCLT.

40. If NCLT has been conferred with jurisdiction to decide all types of claims to property, of the corporate debtor, Section 18(1)(f)(vi) would not have made the task of the interim resolution professional in taking control and custody of an asset over which the corporate debtor has ownership rights, subject to the determination of ownership by a court or other authority. In fact an asset owned by a third party, but which is in the possession of the corporate debtor under contractual arrangements, is specifically kept out of the definition of the term “assets” under the Explanation to Section 18. This assumes significance in view of the language used in Sections 18 and 25 in contrast to the language employed in Section 20. Section 18 speaks about the duties of the interim resolution professional and Section 25 speaks about the duties of resolution professional. These two provisions use the word Page 44 of 69 “assets”, while Section 20(1) uses the word “property” together with the word “value”. Sections 18 and 25 do not use the expression “property”. Another important aspect is that under Section 25(2)(b) of the IBC, 2016, the resolution professional is obliged to represent and act on behalf of the corporate debtor with third parties and exercise rights for the benefit of the corporate debtor in judicial, quasi- judicial and arbitration proceedings. Sections 25(1) and 25(2)(b) reads as follows:

“25. Duties of resolution professional.—(1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor. (2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions:

(a) ***

(b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings;” This shows that wherever the corporate debtor has to exercise rights in judicial, quasi-judicial proceedings, the resolution professional cannot short-circuit the same and bring a claim before NCLT taking advantage of Section 60(5).

41. Therefore in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the corporate debtor has to exercise a right that falls outside the purview of the IBC, 2016 especially in the realm of the public law, they cannot, through the resolution professional, take a bypass and go before NCLT for the enforcement of such a right.

46. Therefore, in fine, our answer to the first question would be that NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a Page 45 of 69 direction to execute supplemental lease deeds for the extension of the mining lease. Since NCLT chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice.” (Emphasis supplied)

27. Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta and

others4 presented a contrasting scenario. In that case, the

Adjudicating Authority on an application under Section 60(5)

moved by the RP of the Corporate Debtor and Exim Bank

stayed the termination of a Power Purchase Agreement

effected by the appellant – Gujarat Urja Vikas Nigam Limited

with Astonfield Solar (Gujarat) Pvt. Ltd. – the Corporate

Debtor. The Appellate Authority upheld the order of the

Adjudicating Authority. In the appeal before this Court, it

was argued that under the IBC, contractual disputes could

not be adjudicated and alternatively that the termination was

valid.

28. This Court examined the scope of Section 60(5). This

Court held that under 60(5)(c) the Adjudicating Authority had

4 (2021) 7 SCC 209

Page 46 of 69 jurisdiction to adjudicate disputes, which arise solely from or

which relate to the insolvency of the Corporate Debtors.

Administrating a note of caution, this Court observed that in

doing so the authorities under IBC should ensure that they do

not usurp the legitimate jurisdiction of other Courts,

Tribunals and fora when the dispute is one which does not

arise solely from or relate to the insolvency of the Corporate

Debtor. This Court reiterated that nexus must remain with the

insolvency of the Corporate Debtor for adjudication of an

issue and grant of relief under Section 60(5)(c). On facts,

while applying the law, as set out above, this Court in that

case found that the Power Purchase Agreement was

terminated solely on the ground of insolvency and that in the

absence of insolvency of the Corporate Debtor, there would

be no ground to terminate the PPA. It was held that the

termination was not on a ground independent of the

insolvency and that the dispute solely arose out of and

related to the insolvency of the Corporate Debtor. Page 47 of 69

29. This Court clarified that the validity of the exercise of

the residuary power was being adjudged in the case, on the

facts obtaining thereon and that they were not laying down a

general principle on the contours of the exercise of residuary

power by the Adjudicating Authority. It was further

reiterated emphatically that the Adjudicating Authority

cannot exercise its jurisdiction over matters dehors the

insolvency proceedings since such matters fall outside the

realm of IBC.

30. In the said context, this Court observed thus:-

“55. A textual comparison of the provisions of Section 60(5) of IBC with Section 446(2) of the Companies Act, 1956 would reveal some similarities of expression, with textual variations. For the purposes of the present proceedings, it suffices to note that clause (c) of Section 60(5) confers jurisdiction on NCLT to entertain or dispose of “any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under the Code”. Section 446(2)(d) of the Companies Act, 1956 and Section 280(d) of the Companies Act, 2013 use the expression any question of priorities or any other question whatsoever whether of law or fact. These words bear a striking resemblance to the provisions of Section 60(5)(c) of IBC. But textually similar language in different enactments has to be construed in the context and scheme of the statute in

Page 48 of 69 which the words appear. The meaning and content attributed to statutory language in one enactment cannot in all circumstances be transplanted into a distinct, if not, alien soil. For, it is trite law that the words of a statute have to be construed in a manner which would give them a sensible meaning which accords with the overall scheme of the statute, the context in which the words are used and the purpose of the underlying provision. Therefore, while construing of Section 60(5), a starting point for the analysis must be to decipher parliamentary intent based on the object underlying the enactment of IBC…….

69. The institutional framework under IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora. In the absence of a court exercising exclusive jurisdiction over matters relating to insolvency, the corporate debtor would have to file and/or defend multiple proceedings in different fora.

These proceedings may cause undue delay in the insolvency resolution process due to multiple proceedings in trial courts and courts of appeal. A delay in completion of the insolvency proceedings would diminish the value of the debtor's assets and hamper the prospects of a successful reorganisation or liquidation. For the success of an insolvency regime, it is necessary that insolvency proceedings are dealt with in a timely, effective and efficient manner. Pursuing this theme in Innoventive [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407] this Court observed that : (SCC p. 422, para 13)

“13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process.”

Page 49 of 69 The principle was reiterated in ArcelorMittal [ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1] where this Court held that : (SCC p. 88, para 84)

“84. … The non obstante clause in Section 60(5) is designed for a different purpose : to ensure that NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings.”

Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the corporate debtor. However, in doing so, we issue a note of caution to NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the corporate debtor. The nexus with the insolvency of the corporate debtor must exist.

71. In the present case, PPA was terminated solely on the ground of insolvency, since the event of default contemplated under Article 9.2.1(e) was the commencement of insolvency proceedings against the corporate debtor. In the absence of the insolvency of the corporate debtor, there would be no ground to terminate PPA. The termination is not on a ground independent of the insolvency. The present dispute solely arises out of and relates to the insolvency of the corporate debtor.

91. The residuary jurisdiction of NCLT under Section 60(5)(c) of IBC provides it a wide discretion to adjudicate

Page 50 of 69 questions of law or fact arising from or in relation to the insolvency resolution proceedings. If the jurisdiction of NCLT were to be confined to actions prohibited by Section 14 of IBC, there would have been no requirement for the legislature to enact Section 60(5)(c) of IBC. Section 60(5)(c) would be rendered otiose if Section 14 is held to be exhaustive of the grounds of judicial intervention contemplated under IBC in matters of preserving the value of the corporate debtor and its status as a “going concern”. We hasten to add that our finding on the validity of the exercise of residuary power by NCLT is premised on the facts of this case. We are not laying down a general principle on the contours of the exercise of residuary power by NCLT. However, it is pertinent to mention that NCLT cannot exercise its jurisdiction over matters dehors the insolvency proceedings since such matters would fall outside the realm of IBC. Any other interpretation of Section 60(5)(c) would be in contradiction of the holding of this Court in Satish Kumar Gupta [Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 : (2021) 2 SCC (Civ) 443] .

173. Although various provisions of IBC indicate that the objective of the statute is to ensure that the corporate debtor remains a “going concern”, there must be a specific textual hook for NCLT to exercise its jurisdiction. NCLT cannot derive its powers from the “spirit” or “object” of IBC. Section 60(5)(c) of IBC vests NCLT with wide powers since it can entertain and dispose of any question of fact or law arising out or in relation to the insolvency resolution process. We hasten to add, however, that NCLT's residuary jurisdiction, though wide, is nonetheless defined by the text of IBC. Specifically, NCLT cannot do what IBC consciously did not provide it the power to do.

Page 51 of 69

174. In this case, PPA has been terminated solely on the ground of insolvency, which gives NCLT jurisdiction under Section 60(5)(c) to adjudicate this matter and invalidate the termination of PPA as it is the forum vested with the responsibility of ensuring the continuation of the insolvency resolution process, which requires preservation of the corporate debtor as a going concern. In view of the centrality of PPA to CIRP in the unique factual matrix of this case, this Court must adopt an interpretation of NCLT's residuary jurisdiction which comports with the broader goals of IBC.”

(Emphasis supplied)

31. In Tata Consultancy Services Ltd. v. SK Wheels (P)

Ltd.5, the appellant terminated a facilities agreement with the

Corporate Debtor-SK Wheels Private Limited the respondent

therein. The Corporate Debtor filed a Section 60(5)(c)

application before the Adjudicating Authority for quashing of

the termination notice. The NCLT and NCLAT respectively,

granted interim stay of the termination notice in favour of the

respondent therein. On appeal by Tata Consultancy Services

Limited, this Court examined the question whether the

residuary jurisdiction under Section 60(5)(c) was correctly

exercised. This Court distinguished Gujarat Urja (supra) and

5 (2022) 2 SCC 583

Page 52 of 69 held that there was nothing to indicate that the termination of

the facilities agreement was motivated by the insolvency of

the Corporate Debtor. This Court held that the termination

was not a smokescreen and allowed the appeal of Tata

Consultancy and set aside the order of the fora below. This

Court held as under: -

“28. In Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209], the contract in question was terminated by a third party based on an ipso facto clause i.e. the fact of insolvency itself constituted an event of default. It was in that context, this Court held that the contractual dispute between the parties arose in relation to the insolvency of corporate debtor and it was amenable to the jurisdiction of NCLT under Section 60(5)(c). This Court observed that : (SCC pp. 262-63, para 69)

“69. … NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of corporate debtor… The nexus with the insolvency of corporate debtor must exist.”

Thus, the residuary jurisdiction of NCLT cannot be invoked if the termination of a contract is based on grounds unrelated to the insolvency of corporate debtor.

29. It is evident that the appellant had time and again informed corporate debtor that its services were deficient, and it was falling foul of its contractual obligations. There is nothing to indicate that the termination of the facilities agreement was motivated by the insolvency of corporate debtor. The trajectory of events makes it Page 53 of 69 clear that the alleged breaches noted in the termination notice dated 10-6-2019 were not a smokescreen to terminate the agreement because of the insolvency of corporate debtor. Thus, we are of the view that NCLT does not have any residuary jurisdiction to entertain the present contractual dispute which has arisen dehors the insolvency of corporate debtor. In the absence of jurisdiction over the dispute, NCLT could not have imposed an ad interim stay on the termination notice. Nclat has incorrectly upheld [Tata Consultancy Services Ltd. v. Vishal Ghisulal Jain, 2020 SCC OnLine NCLAT 484] the interim order [BMW Financial Services (P) Ltd. v. S.K. Wheels (P) Ltd., 2019 SCC OnLine NCLT 28273] of NCLT.

31. The narrow exception crafted by this Court in Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209 must be borne in mind by NCLT and NCLAT even while examining prayers for interim relief. The order of NCLT dated 18-12-2019 [BMW Financial Services (P) Ltd. v. S.K. Wheels (P) Ltd., 2019 SCC OnLine NCLT 28273] does not indicate that NCLT has applied its mind to the centrality of the facilities agreement to the success of CIRP and corporate debtor's survival as a going concern. NCLT has merely relied upon the procedural infirmity on the part of the appellant in the issuance of the termination notice i.e. it did not give thirty days' notice period to corporate debtor to cure the deficiency in service. Nclat, in its impugned judgment [Tata Consultancy Services Ltd. v. Vishal Ghisulal Jain, 2020 SCC OnLine NCLAT 484] , has averred that the decision of NCLT preserves the “going concern” status of corporate debtor but there is no factual analysis on how the termination of the facilities agreement would put the survival of corporate debtor in jeopardy.”

(Emphasis supplied) Page 54 of 69

32. SREI Multiple Asset Investment Trust Vision India

Fund v. Deccan Chronicle Marketeers and others6, is a

case closer to our facts. There the Adjudicating Authority

contrary to what the plan had provided for to the SRA therein,

granted the SRA the exclusive right to use the Trademarks

“Deccan Chronicle” and “Andhra Bhoomi” and also made a

declaration that Trademarks belonged to Corporate Debtor.

33. This Court, after examining the plan, found that what

was granted in the plan was perpetual exclusive right to use

the Trademarks “Deccan Chronicle” and “Andhra Bhoomi”

without any financial implications. This Court found that

nowhere the plan indicated regarding the right of ownership

over the Trademarks “Deccan Chronicle” and “Andhra

Bhoomi”.

34. This Court found that the Adjudicating Authority while

ordering an application apart from upholding the exclusive

right to use the Trademarks made a further declaration that

the Trademarks belongs to the Corporate Debtor which the

6 (2023) 7 SCC 295

Page 55 of 69 Court said was a modification/alteration in the approved

resolution plan is just impermissible.

35. This Court in that case affirmed the finding of the NCLAT

thereon which had applying the judgment of this Court in

Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC)7,

found that by an order in the application the plan approved

by the Committee of Creditors had been modified. It is trite

to extract the holdings in SREI Multiple Asset (supra).

“9. After the resolution plan stood approved by the adjudicating authority under order dated 3-6-2019 subject to condition in reference to the rights over the brand name/trade marks of the corporate debtor, the adjudicating authority later decided the application IA No. 155 of 2018 with a direction that the Resolution Professional has established that it is the corporate debtor/DCHL who has an exclusive right to use the trade marks “Deccan Chronicle” and “Andhra Bhoomi” and also made a declaration that the trade marks (“Deccan Chronicle” and “Andhra Bhoomi”) belong to the corporate debtor/DCHL under its order dated 14-8-2019 .

20. It may be relevant to note that if we look into the resolution plan and particularly Clause 11.12 which has been referred to hereinabove, it is confined to the perpetual exclusive right to use the brands i.e. “Deccan Chronicle” and “Andhra Bhoomi”, etc. by the corporate debtor without 7 (2022) 2 SCC 401

Page 56 of 69 any financial implications for the purpose of running its business and it was approved by the adjudicating authority under its order dated 3-6-2019, but since it was made subject to the result of pending IA No. 155 of 2018, the adjudicating authority had approved so far as the exclusive rights of the corporate debtor to use trade marks, namely, “Deccan Chronicle” and “Andhra Bhoomi” under its order dated 14-8-2019, but at the same time, a further declaration was made in para 38 holding that trade marks “Deccan Chronicle” and “Andhra Bhoomi” belong to the corporate debtor, which indeed does not reconcile with the resolution plan approved by the CoC and later by the adjudicating authority under its order dated 3-6-2019.

24. It clearly indicates that what was approved by the CoC with 81.39% of its voting is to the effect that the corporate debtor has a perpetual exclusive right to use the brands, namely, “Deccan Chronicle” and “Andhra Bhoomi” and it nowhere indicates regarding the right of ownership over the trade marks/brands, “Deccan Chronicle” and “Andhra Bhoomi” of the corporate debtor. But the adjudicating authority while adjudicating application IA No. 155 of 2018, apart from upholding the exclusive right to use the trade marks, “Deccan Chronicle” and “Andhra Bhoomi”, made a further declaration that trade marks belong to corporate debtor DCHL under its order dated 14-8-2019, which, in our view, was a modification/alteration in the approved resolution plan which indisputably is impermissible in law and this is what NCLAT in para 32 of its impugned order has observed as under : (Deccan Chronicle Marketeers case, SCC OnLine NCLAT)

“32. In view of the law declared by the Hon'ble Supreme 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

Page 57 of 69 extinguished and if ownership of corporate debtor is declared over the trade marks, 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 trade marks “Deccan Chronicle” and “Andhra Bhoomi” is illegal and the adjudicating authority transgressed the jurisdictional limits. Consequently, the order passed in IA No. 155 of 2018 dated 14-8-2019 is liable to be set aside.”

25. This Court in Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC), had held as under : (SCC pp. 541-42, paras 221-22)

221. The residual powers of the adjudicating authority under IBC cannot be exercised to create procedural remedies which have substantive outcomes on the process of insolvency. The framework, as it stands, only enables withdrawals from the CIRP process by following the procedure detailed in Section 12-A IBC and Regulation 30-A of the CIRP Regulations and in the situations recognised in those provisions. Enabling withdrawals or modifications of the resolution plan at the behest of the successful resolution applicant, once it has been submitted to the adjudicating authority after due compliance with the procedural requirements and timelines, would create another tier of negotiations which will be wholly unregulated by the statute. Since the 330 days' outer limit of the CIRP under Section 12(3) IBC, including judicial proceedings, can be extended only in exceptional circumstances, this open-ended process for further negotiations or a withdrawal, would have a deleterious impact on the corporate debtor, its creditors, and the economy at large as the liquidation value depletes with the passage of time. A failed negotiation for modification after submission, or a withdrawal after

Page 58 of 69 approval by the CoC and submission to the adjudicating authority, irrespective of the content of the terms envisaged by the resolution plan, when unregulated by statutory timelines could occur after a lapse of time, as is the case in the present three appeals before us. Permitting such a course of action would either result in a downgraded resolution amount of the corporate debtor and/or a delayed liquidation with depreciated assets which frustrates the core aim of IBC.

222. If the legislature in its wisdom, were to recognise the concept of withdrawals or modifications to a resolution plan after it has been submitted to the adjudicating authority, it must specifically provide for a tether under IBC and/or the Regulations. This tether must be coupled with directions on narrowly defined grounds on which such actions are permissible and procedural directions, which may include the timelines in which they can be proposed, voting requirements and threshold for approval by the CoC (as the case may be). They must also contemplate at which stage the corporate debtor may be sent into liquidation by the adjudicating authority or otherwise, in the event of a failed negotiation for modification and/or withdrawal. These are matters for legislative policy.”

26. In other words, in terms of the approved resolution plan, it was the perpetual exclusive right to use the brands, namely, “Deccan Chronicle” and “Andhra Bhoomi”, by the corporate debtor which were available to SRA i.e. the appellant herein and once it has been approved by the adjudicating authority, certainly the right to exclusive use of the trade marks belonging to the corporate debtor, on being approved by the adjudicating authority, is always available to the SRA i.e. the appellant, but not the ownership rights of the trade marks of the corporate debtor.”

(Emphasis supplied)

Page 59 of 69

36. It is also apposite to recall what this Court held in

Kalyani Transco v. Bhushan Power & Steel Ltd. and others8,

about the sanctity attached to the finality of the resolution

plan duly approved. This Court held as follows: -

“187. As such, the very purpose for which the IBC was enacted—namely, to ensure that the corporate debtor continues as a going concern—has not only been achieved, but the corporate debtor has been transformed from a loss- making to a profit-making entity. If, after the implementation of the resolution plan, the SRA-JSW has converted a loss-making entity into the one making profits, can it be penalised for that ? Suppose if instead of the corporate debtor being converted into a profit-making entity, the losses would have increased, can the corporate debtor claim refund of the amount paid ? If we permit the claim not to be part of the resolution plan which has been approved by the CoC and the NCLT to be raised at such a belated stage, it could open a pandora's box and the very purpose of the IBC providing sanctity to the finality of the resolution plan duly approved would stand vitiated.” (Emphasis supplied)

37. In view of the above, we have no doubt in our mind that

in exercise of power under Section 60(5)(c) of IBC and while

adjudicating the application of GCL on the facts of the

present case, the Adjudicating Authority could not have 8 2025 SCC OnLine SC 2093

Page 60 of 69 declared title in the trademark “Gloster” in favour of the

appellant SRA. The issue of the title of the Trademark was

not “in relation to the insolvency proceedings”, on the facts

of the present case. As is clear from the statement in the plan

filed by the SRA and approved by the COC, after setting out

the series of transactions between FGIL and GCL, all that the

SRA does is to assert that the transfer is mala fide and was

barred by law. It also records its belief and understanding

that the trademark is the lawful property of the Corporate

Debtor. It is further alleged that the agreement is between

related parties, though the steps available under the IBC to

have it neutralized, have not been resorted to.

38. Under the insolvency regime, a plan approved by the

COC and ultimately by the Adjudicating Authority is the

charter by which stakeholders are governed. As rightly held

in SREI Multiple Asset (supra), the ultimate order of the

NCLT recognizing the title in the trademark “Gloster” with

the SRA does not reconcile with the resolution plan as

approved by the COC and later by the Adjudicating Page 61 of 69 Authority. Further, any grant of further rights over and

above what is recognized in the plan would amount to

modification or alteration of the approved plan. It should be

remembered that the plan as it exists is the one duly

approved by the COC and while adjudicating an application

of GCL, no directions could be made by the NCLT conferring

better rights. In a case like the present where the SRA has

perceived clouds hovering over its title, it is for the SRA to

resort to remedies and protect its rights. On the facts of the

present case, while adjudicating an application under

Section 60(5) of GCL, NCLT could not have passed the

direction it ultimately passed.

39. The contents of the application filed by GCL, the

response of the appellant, the stand of the RP and the

contentions orally advanced before us as well as the

averments in the written submissions have been elaborately

discussed hereinabove to show the raging dispute that

obtains between the SRA and GCL on the issue of title to the

Trademark “Gloster” bearing No.690772. While the SRA Page 62 of 69 questions the veracity of the various agreements and alleges

that they were mala fide, contrary to judicial orders and even

have gone to the extent of calling it back dated, GCL has its

own story to narrate.

40. According to GCL, from time immemorial they have

been using the Trademark “Gloster” under various

agreements; that there was no breach of injunction since the

Supplemental Agreement of 15.07.2008 was contingent on

the prohibitory orders being vacated; that after the reference

to BIFR abated and before CIRP commenced on 09.08.2018

complete assignment had happened; that assignment itself is

transfer of title under law; that registration of assignment is

not mandatory for transfer of both like in the case of

immovable property above the value of Rs. 100 and that

since the Trademark “Gloster” was not the property of

Corporate Debtor the commencement of CIRP on 09.08.2018

will not vitiate the registration on 17.09.2018. These are

highly contentious issues which are far beyond the ken of the

Page 63 of 69 Adjudicating Authority as observed by us hereinabove. This

we say so, on the facts of the present case.

41. Considerable arguments have been advanced as to how

GCL cannot raise the issue on the scope of Section 60(5),

when they themselves have filed the application. The said

issue need not detain this Court. We are concerned with

whether in exercise of power under Section 60(5),

Adjudicating Authority could have granted a declaration

contrary to the terms of a plan approved by COC and also

approved by it in those very terms. We have found against

the appellant on that issue.

42. Equally, we do not approve of the approach of the NCLT

in falling back on Section 43(2)(a) and 45(2)(b) of the IBC to

hold that the Assignment Deed dated 20.09.2017 would fall

foul of those provisions. We also do not approve of the

finding of the NCLT that while adjudicating the application of

GCL and in the process of approving the plan, they could

have resorted to an enquiry under Sections 43 and 45 of the

IBC.

Page 64 of 69

43. As the learned counsel for the Resolution Professional

rightly contended, to make out a case under Sections 43 and

45 of the IBC, rigorous scrutiny of documents and threadbare

examination of the transactions needed to be undertaken and

it could not have been carried out superficially. No doubt, if

the Resolution Professional, in a given CIRP does not move

an application, resort to Section 47 of the IBC could be had

vis-à-vis undervalued transactions by a creditor, member or

a partner of a corporate debtor as the case may be and they

may move an application to the Adjudicating Authority to

declare such transactions void and reverse their effect in

accordance with the provisions of the IBC. That is not the

scenario here.

44. The NCLT was hearing an application filed by GCL

alongside the application of the Resolution Professional to

approve the plan. The entire enquiry was focused on the

approval of the plan and the contention of GCL that it had

certain rights in the trademark “Gloster”. On facts, GCL

Page 65 of 69 could not have been rendered worse off in their own

application.

45. If any transaction is sought to be set side as preferential

or undervalued, the party moving the application should

cogently set out the basis on which the claim is made and the

party against whom the application is filed should be clearly

put on notice as to the basis for claiming that the transaction

is preferential or undervalued. Otherwise serious breach of

principles of natural justice would ensue.

46. In this case, while adjudicating the application of GCL

alongside the application of the Resolution Professional for

approval of the plan, by a sidewind as it were, the NCLT had

recorded a finding that on the peculiar facts it was not able to

shut its eyes or ignore the material on record to legitimize

the transaction of assignment. Thereafter, the NCLT found

that the Assignment Deed dated 20.09.2017 being within the

period of two years preceding the commencement of

insolvency, was hit by Section 43 and being undervalued, it

would be hit by Section 45(2)(b).

Page 66 of 69

47. The findings of the NCLT are perverse and in gross

violation of the principles of natural justice and beyond the

scope of the enquiry as far as the present case is concerned.

The enquiry was primarily on the approval of the plan and on

the application of GCL.

48. The NCLAT has set aside the finding by holding that

specific material was required to be pleaded if a transaction

is sought to be brought under the mischief of Sections 43, 45,

46, 47 or 66. The NCLAT has recorded a further finding that it

would be expected of any Resolution Professional to keep

such requirements in view while making a motion to the

Adjudicating Authority and, in any case, action could not

have been taken without an application moved by the

Resolution Professional.

49. Equally, as we find from Section 47 of the IBC, the

parties mentioned therein while moving an application under

Section 47, ought to set out sufficient materials and the party

against whom the relief is sought ought to be put on notice of

the averments and the relief prayed. Admittedly, that is not Page 67 of 69 the scenario in the present case. In that view of the matter,

the finding of the NCLT that the assignment could be

neutralized in the present matter by resorting to Sections 43

and 45 of the IBC is completely untenable.

50. We make it clear that the observations made

hereinabove are only for the purpose of setting aside the

finding of the Adjudicating Authority holding that the

trademark “Gloster” is the asset of the Corporate Debtor as

recorded in para 52 of its order dated 27.09.2019. These

observations would not come in the way of any other Court

or authority deciding the issue of title to the trademark

“Gloster”, if the parties herein litigate upon and those

proceedings will be decided on their own merits

uninfluenced by these observations.

51. We also clarify that the observations of the NCLAT in

Para 26 to the following effect:-

“26. In view of the aforesaid decisions, it is well-nigh proved that the title in the trademark vested with the Appellant with the execution of the supplemental trademark agreement dated 15.07.2008 by which the registered trade mark was assigned by the Corporate Page 68 of 69 Debtor to the Appellant as an assignee subject of course to the condition that it will become effective until after the order dated 10.09.2001 passed by the BIFR is vacated or discharged.”

cannot be sustained since that is also a matter over which the

fora below could not have enquired into in the facts and

circumstances.

52. In view of the findings recorded hereinabove, the

appeal and cross appeal are disposed of in the above terms.

No order as to costs.

……….........................J. [J.B. PARDIWALA]

……….........................J. [K. V. VISWANATHAN]

New Delhi;

22nd January, 2026

Page 69 of 69