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TMI Blog2022 (3) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... der requiring the Respondent No. 1 (Potential Coaching Institute Private Limited) to account for the benefits received by it by use of the trade mark "CONCEPT Educations" till date and pay such sum to the account of the Corporate Debtor in terms of Section 48(c) of the Code; c) To pass an order appointing an independent expert to assess evidence relating to the value of the trade mark "CONCEPT Educations" and direct the Respondent No.1 to make payment in accordance with the consideration amount as may be determined by the independent expert in accordance with Section 48(d) of the Code; d) To pass any further order(s) as this Hon'ble Bench deem fit and proper" 2. It is stated that: 2.1 The order for initiation of CIRP of the Corporate Debtor was passed by this Hon'ble Bench on 26.02.2020 and vide that order Mr. Amit Pareek, having registration No. IBBI/IPA-002/IP-N00413/2017-18/11205 was appointed as an IRP from the list of the empanelled IRPs. 2.2 The First Meeting of the Committee of Creditors of the Corporate Debtor was held on 06.05.2020 comprising of only the Operational Creditors and it was resolved vide agenda item No.6 that the IRP Mr. Amit Pareek should be appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preparation of his report. 3.3 The Resolution Professional seeks liberty from this Hon'ble Court to allow the filing of the avoidance applications as and when the applicant is ready with all the necessary evidences to ensure claw back of the funds diverted / misappropriated by the Suspended Directors. 3.4 In view of the above, the RP has filed the present application under Section 45 of the Code as in his opinion, there is an undervalued transaction undertaken by the Corporate Debtor during the relevant period through its Suspended Directors and all the ingredients necessary under Section 46 for passing of the order under Section 48 of the Code are complete. 4. The rationale for the present application is that: 4.1 The Corporate Debtor is the owner of a Trade Mark "CONCEPT Education" duly registered vide Trade Mark No. 3065344 dated 28.09.2015 and has earned name and fame by spending crores in advertising and brand building. Copy of the certificate registration of Trade Mark issued by the Trade Mark Registry has been attached and marked as Annexure B at pages 28-29 of the Application. 4.2 The "right to use" of the above Trade Mark "CONCEPT Education" for 15 years was sold for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate debtor referred to in sub-section (2) [***] determines that certain transactions were made during the relevant period under section 46, which were undervalued, he shall make an application to the Adjudicating Authority to declare such transactions as void and reverse the effect of such transaction in accordance with this Chapter. (2) A transaction shall be considered undervalued where the corporate debtor- (a) makes a gift to a person; or (b) enters into a transaction with a person which involves the transfer of one or more assets by the corporate debtor for a consideration the value of which is significantly less than the value of the consideration provided by the corporate debtor, and such transaction has not taken place in the ordinary course of business of the corporate debtor. Relevant period for avoidable transactions. 46. (1) In an application for avoiding a transaction at undervalue, the liquidator or the resolution professional, as the case may be, shall demonstrate that- (i) such transaction was made with any person within the period of one year preceding the insolvency commencement date; or (ii) such transaction was made with a related party w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructions of a director, partner or manager of the corporate debtor; (g) any limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor; (h) any person on whose advice, directions or instructions, a director, partner or manager of the corporate debtor is accustomed to act; (i) a body corporate which is a holding, subsidiary or an associate company of the corporate debtor, or a subsidiary of a holding company to which the corporate debtor is a subsidiary; (j) any person who controls more than twenty per cent. of voting rights in the corporate debtor on account of ownership or a voting agreement; (k) any person in whom the corporate debtor controls more than twenty per cent. of voting rights on account of ownership or a voting agreement; (l) any person who can control the composition of the board of directors or corresponding governing body of the corporate debtor; (m) any person who is associated with the corporate debtor on account of- (i) participation in policy making processes of the corporate de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .4 (a) and (b) in respect of consideration/payment which is clear that only right has been granted to use the Trade Mark against payment of Rs. 10 lacs and adequate education to the students of the CD without charging and the cost borne by the Respondent 1 shall be considered as payment for usage of rights of the Trade Mark. 7.3 Further, clause No. 3 (c) clears the doubt that the ownership of the copyright of the trade name "Concept Education" shall always be with the CD. Only right to use has been granted for 15 years against the aforesaid payment, as such no prudent man can have valued the right to use the trade name more than which the CD received. Hence, this application is devoid of merit. 7.4 The said right to use was not mere Rs. 10 lacs, but on the contrary more than 300 students were given education for more than a year by the Respondent No.2. Further, it was not exclusive transfer of Trade Mark but only right to use was granted for fifteen years. Meaning thereby that the Resolution Applicant has full right to use and having ownership of trade mark even after the aforesaid Deed of Agreement. As such, question of undervalue sale of trade mark does not arise, more particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted to the Respondent No. 1. 7.10 The Hon'ble Supreme Court in N. Subramanian Iyer Vs. Off. Receiver held that it is not necessary for upholding a transaction that the transferor who has been subsequently adjudged as an insolvent should have been honest and straight forward in the matter of impugned transaction. It was observed that both transferor and transferee must have share a common intention to defraud the creditors and unless the conduct of the transferee is also blameworthy, the transaction cannot be annulled. 8. The Respondent No. 1 - Potential Coaching Institute Pvt. Ltd. has also filed their written submission, wherein in addition to reiteration of the submissions made by the Respondent No. 3, it has been submitted that: 8.1 The RP has not provided the exact value of the Trade Mark and if valued, failed to submit the Valuation Report before the Hon'ble Tribunal. 8.2 Is "right to use" of Trade Mark for consideration of some payment is same as "Transfer" for consideration of money which means sale of the Trade Mark. 8.3 Is entering into the partnership means having any ulterior motive. 8.4 RP has made false allegation and thus failed to provide any proof or cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntellectual property i.e. the Trade Mark "CONCEPT Educations" was not transferred in "ordinary course of business" and satisfies the criteria set out in clause (b) of sub-section (2) of Section 45. 9.6 The Case laws cited by the Respondent No. 1 in context to the Section 329 of the Companies Act, 2013 fails to support the Respondents herein and the sequence of events conclusively prove beyond doubt that "the conduct of the transferee is also blameworthy" as was the test laid by the Hon'ble Supreme Court in the matter of N. Subramanian Iyer Vs. Off Receiver. ORDER 10. Heard both the parties at length. On perusal of the materials available on record, it is observed that: 10.1 There was a partnership agreement dated 01/02/2019 between the CD and the Respondent no 1 whereby they agreed to carry on a business in the name of Potential and Concept Educations. Subsequently, there is a deed of Agreement dated 08/02/2019, a week after, in which the "right to use" of the above Trade Mark "CONCEPT Education" for 15 years is transferred in favour of the R1 for a mere Rs. 10 Lakhs (Rupees Ten Lakhs only) Furniture, fixtures and Electronics were also transferred in favour of R1. 10.2 Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst payment of Rs. 10.00 lacs and imparting education for 300 students of the CD for a year. Respondents have further submitted that it was not exclusive transfer of Trade Mark but only right to use was granted for fifteen years meaning thereby that the Resolution Applicant has full right to use and having ownership of trade mark even after the aforesaid Deed of Agreement. 15. In the meantime, the RP has submitted a Resolution Plan duly approved by CoC with 100% voting share before this Bench for approval. 16. Return of trademark to CD is the part of the Resolution Plan. Hence the "right to use" of the trade mark "CONCEPT Educations" is required to be cancelled. 17. In order to ensure the successful implementation of the Resolution Plan, We are of the considered view, taking into account the points no 10 to 16 mentioned above, the Prayer made by the Resolution Professional- the Applicant is hereby accepted. Hence, the agreements entered into between the CD and the Potential Coaching Institute Pvt. Ltd. dated 01.02.2019, 08.02.2019 and thereafter, if any, within the look back period stand terminated, consequently the Right to use" of the trade mark "CONCEPT Educations" is withdra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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