Case Note & Summary
The dispute originated in the corporate insolvency resolution process of Fort Gloster Industries Limited (corporate debtor), which was admitted into CIRP on 09.08.2018 following a Section 9 IBC application. A resolution professional was appointed, and the resolution plan submitted by Gloster Limited (successful resolution applicant) was approved by the CoC with a 72.31% vote share. Pending approval of the plan, Gloster Cables Limited (GCL) filed an application under Section 60(5) IBC on 28.05.2019 seeking exclusion of the trademark ‘Gloster’ from the assets of the corporate debtor, claiming exclusive ownership based on a series of agreements: a Technical Collaboration Agreement dated 02.05.1995, a Trademark Agreement dated 29.07.2004 (with first right to purchase and lumpsum consideration of Rs. 3 crores plus annual royalty), a loan of Rs. 10 crores in 2006 with a charge on the trademark, a Supplemental Trademark Agreement dated 15.07.2008 for assignment effective upon vacation of a BIFR restraint order dated 10.09.2001, and a Deed of Assignment dated 20.09.2017 confirming assignment effective 28.05.2017. GCL also relied on the registration of the trademark in its name on 17.09.2018, after CIRP commencement. The resolution professional, CoC, and SRA opposed, contending that all assignments were void ab initio for breach of the BIFR restraint order, that the 2017 assignment was an undervalued preferential transaction under Sections 43 and 46 IBC (executed within two years preceding insolvency), and that the 2018 registration was void under the moratorium of Section 14 IBC. The NCLT, by order dated 27.09.2019, dismissed GCL’s application, holding that the assignments during the BIFR restraint were void, the trademark was an asset of the corporate debtor, the 2017 assignment was a preferential and undervalued transaction, and the registration was hit by the moratorium. It concurrently approved the resolution plan. On appeal, the NCLAT, by judgment dated 25.01.2024, held that the NCLT had jurisdiction under Section 60(5)(c) IBC to decide the title dispute, but reversed the NCLT’s finding on the merits, concluding that the NCLT’s determination that the trademark was an asset of the corporate debtor was not in accordance with law, thus holding in favour of GCL. Aggrieved, the SRA and GCL preferred cross-appeals to the Supreme Court. The Supreme Court judgment extract is incomplete, ending before the Court’s reasoning and final decision. The extract records that the NCLAT’s first two findings addressed jurisdiction and the contingent nature of the Supplemental Agreement, but the remainder of the NCLAT’s reasoning and the Supreme Court’s own analysis, ratio, and operative directions are not available in the provided text.
Issue of Consideration
Whether NCLT had jurisdiction under Section 60(5) IBC to decide title of trademark in CIRP; whether the trademark 'Gloster' was an asset of the corporate debtor; whether assignment deeds were valid despite BIFR restraint order; whether registration of trademark during CIRP was valid under Section 14 IBC
Law Points
- Section 60(5) IBC jurisdiction
- preferential transactions under Sections 43 & 46 IBC
- moratorium under Section 14 IBC
- BIFR restraint effect on assignments
- trademark as asset under Companies Act
- Section 22A SICA
- validity of assignments during BIFR injunctions
Case Details
2026 LawText (SC) (01) 67
Civil Appeal Nos. 2996 and 4493 of 2024
Gloster Limited (in C.A. 2996/2024); Gloster Cables Limited (in C.A. 4493/2024)
Gloster Cables Limited & Others (in C.A. 2996/2024); Gloster Limited & Others (in C.A. 4493/2024)
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Nature of Litigation
Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 filed during the corporate insolvency resolution process of a corporate debtor, seeking exclusion of a trademark from the assets of the corporate debtor.
Remedy Sought
Gloster Cables Limited prayed that any resolution plan approved by the Adjudicating Authority exclude the rights in the trademark 'Gloster' from the assets of the corporate debtor, and that no presumption of authorization to use the trademark or tradename arise from the approval.
Filing Reason
The applicant claimed ownership and exclusive rights over the trademark through a series of agreements, licences, and assignment deeds with the corporate debtor, contending that the trademark was not an asset of the corporate debtor and that its inclusion in any resolution plan would contravene the Trade Marks Act, 1999.
Previous Decisions
The NCLT dismissed the application, holding the trademark was an asset of the corporate debtor and the assignments were void due to breach of a BIFR restraint order and preferential transaction provisions, and approved the resolution plan. The NCLAT partly reversed, holding the NCLT's finding on the trademark not being the corporate debtor's asset was not in accordance with law, but upheld the NCLT's jurisdiction under Section 60(5)(c) IBC.
Issues
Whether the NCLT had jurisdiction under Section 60(5) of the IBC to adjudicate title over the trademark 'Gloster' in the CIRP of the corporate debtor.
Whether the trademark 'Gloster' was an asset of the corporate debtor Fort Gloster Industries Limited, or belonged exclusively to Gloster Cables Limited by virtue of assignment deeds.
Whether the assignment deeds executed during the pendency of the BIFR restraint order were void and whether the restraint extended to the trademark.
Whether the Assignment Deed dated 20.09.2017 was hit by the preferential transaction provisions under Sections 43 and 46 of the IBC.
Whether registration of the trademark in the name of Gloster Cables Limited on 17.09.2018 during the CIRP was valid in view of the moratorium under Section 14 of the IBC.
Submissions/Arguments
Gloster Cables Limited contended that it was the proprietor of the trademark under successive agreements, particularly the Supplemental Trademark Agreement of 15.07.2008 and the Deed of Assignment of 20.09.2017, which became effective upon abatement of BIFR proceedings; that the 2017 assignment vested absolute ownership; and that the trademark was registered in its name post-assignment, thus forming no part of the corporate debtor's assets.
The Resolution Professional, Committee of Creditors, and the Successful Resolution Applicant argued that the assignments breached the BIFR restraint order of 10.09.2001 and were void ab initio; that the 2017 deed was executed within two years of insolvency commencement, making it a preferential and undervalued transaction under Sections 43 and 46 IBC; and that the 2018 registration was invalid due to the moratorium under Section 14 IBC.
Judgment Excerpts
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.
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.
the finding recorded by the Adjudicating Authority that the trademark 'Gloster' was the asset of the Corporate Debtor was not in accordance with law.
Procedural History
Corporate debtor Fort Gloster Industries Limited was admitted into CIRP on 09.08.2018 on an application under Section 9 of the IBC. A resolution professional was appointed and a resolution plan submitted by Gloster Limited was approved by the CoC with 72.31% vote share. Pending plan approval, Gloster Cables Limited filed I.A. No. 713/KB/2019 under Section 60(5) IBC on 28.05.2019 seeking exclusion of the trademark 'Gloster' from the corporate debtor's assets. The NCLT, Kolkata Bench, by order dated 27.09.2019, dismissed the application and approved the resolution plan. Aggrieved, Gloster Cables Limited appealed to NCLAT (Company Appeal (AT) (Ins.) No. 1343 of 2019). The NCLAT, by judgment dated 25.01.2024, upheld the NCLT's jurisdiction but reversed its finding on trademark ownership, holding in favour of Gloster Cables Limited. Civil Appeal No. 2996 of 2024 was filed by Gloster Limited (SRA) and Civil Appeal No. 4493 of 2024 by Gloster Cables Limited before the Supreme Court of India.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: 9, 14(1)(b), 43, 44, 45, 46, 60(5)
- Sick Industrial Companies (Special Provisions) Act, 1985: 22A
- Companies Act, 2013: 211
- Trade Marks Act, 1999:
