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TMI Blog2022 (9) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... arth Tandon, Advocates for R-Mr. Abhinav Vasisht, Sr. Advocate with Mr. Sidhartha Barua, Ms. Priya Singh, Mr. Praful Jindal, Advocates for R-4 JUDGMENT ( Per Hon'ble Mr. Justice M. Satyanarayana Murthy ) Aggrieved by the order of National Company Law Tribunal, Hyderabad Bench, Hyderabad (hereinafter will be referred as Adjudicating Authority) in I.A. No. 155 of 2018 in C.P.(IB) No. 41/7/HDB/2017 dated 14.08.2019 declaring that the Corporate Debtor Deccan Chronicle Holdings is the owner of Trademarks 'Deccan Chronicle and 'Andhra Bhoomi', allowed the application filed by Resolution Professional Ms. Mamta Binanni. 2. The first Appellant is a partnership firm (hereinafter referred to as 'firm') was formed on 15.09.1993 with the Appellants Nos. 3 & 4 in the name and style 'Deccan Chronicle' to carry on the business of printing, editing and publication of newspaper by the names of a) Deccan Chronicle, b) Andhra Bhoomi, c) Andhra Bhoomi monthly and d) Andhra Bhoomi weekly. To ensure adequate protection of the Trademarks and goodwill, all these leading publications of Deccan Chronicle, the 1st Appellant firm applied for registration of the Trademarks Deccan Chronicle on 07.10.1996 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d indicate that the Trademarks did not stand transferred by Business Transfer Agreement. The balance sheet of 1st Appellant and 1st Respondent, as on the relevant date do not indicate transfer of any intangible asset from Appellant No. 1 to Respondent No. 1. 6. On 01.04.2004, the 1st Appellant firm was reconstituted by inducting a new partner, namely, Deccan Chronicle Marketeers Private Limited (DCMPL)- 2nd Appellant under 'Deed of Addendum' to partnership firm executed between the 1st Appellant and 2nd Appellant was renamed 'Deccan Chronicle Marketeers'. Under the Deed of Addendum, the Respondent No. 2, contribution to the partnership firm for transport of Trademarks for consideration was Rs. 98/- and on reconstitution, the partners were entitled to ownership in the trade marks in proportion to their respective contribution i.e. 2nd Appellant was entitled to 98% in the Trademarks, the existing partners i.e., Appellant Nos. 3 & 4 each entitled to 1% ownership. 7. In and around 2004, an agreement was entered into by the 1st Appellant and 1st Respondent wherein it was agreed that the Firm (Appellant No. 1) would license the Trade Marks to DCHL in exchange for obtaining advertising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me owned the Trademarks or had any interest in it but was an exclusive licensee under the Appellant No. 1, firm, which owned the Trademarks. 8. The Corporate Insolvency Resolution Process (hereinafter referred as 'CIRP') was initiated under the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as 'IBC') against DCHL by Canara Bank in C.P.(IB) No. 41/2017 before the Adjudicating Authority, National Company Law Tribunal. The petition filed by Canara Bank was admitted and on 05.07.2017, the Adjudicating Authority imposed Moratorium under Section 14 of IBC staying all pending proceeding in all Courts against DCHL. The Moratorium was extended for a further period of 90 days vide order of Adjudicating Authority dated 10.11.2018 in C.A. No. 5/2018 in C.P.(IB) No. 41/2017. On 11.05.2018, the Resolution Professional on behalf of DCHL filed I.A. No. 155/2018 seeking a declaration that DCHL- 1st Respondent is the owner of the Trademarks and the Trademarks form part of assets of the 1st Respondent-DCHL. 9. First Appellant filed its objection to I.A. No. 155 of 2018 on 04.06.2018 and the same was adopted by Appellant Nos. 2 to 4. Respondent No. 1 also filed its reply to the same on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the findings and observations of the Adjudicating Authority are unsustainable. In different paragraphs the plea of acquiescence is discussed which is unfounded as no such plea was raised by 1st Respondent-Applicant before the Adjudicating Authority. In the absence of any such plea, the findings recorded by the Adjudicating Authority are erroneous. Finally, it is contended that when separate machinery is provided under a separate statute to decide the right, title and interest in a Trademarks, the Adjudicating Authority ought not to have recorded its finding declaring that the 1st Respondent is the owner of the Trademarks. Therefore, the findings recorded by the Adjudicating Authority are without inherent jurisdiction and liable to be set aside. 14. Finally, the Appellants prayed to set aside the order dated 14.08.2019 passed in I.A. No. 155/2018 in C.P.(IB) No. 41/7/HDB/2017. 15. Successful Resolution Applicant (henceforth referred as 'SRA') in the CIRP filed reply denying the material allegations, inter alia, contending that the Resolution Plan of SRA has been approved by the Adjudicating Authority at Hyderabad and the Resolution Plan has been filed by the SRA on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n English daily from Mumbai, Delhi and Kolkata iv) Andhra Bhoomi, a vernacular (Telugu) daily from Hyderabad, Karimnagar, Vijayawada, Rajahmundry, Vishakhapatnam, Ananthapur, Nellor; and v) Andhra Bhoomi, a vernacular (Telugu) weekly and monthly from Hyderabad. "Deccan Chronicle", the flagship brand of the Corporate Debtor was launched in 1938 and is the largest circulated English newspaper in South India. I say that the Trademarks in question are inseparable from the business of the Corporate Debtor because it is eventually the business activities of the Corporate Debtor which have added value and goodwill to the Trademarks in question." 19. The first and foremost contention of the Senior Counsel for the Appellants, Mr. P. Chidambaram is that the order of Adjudicating Authority amounts to altering or modification of the resolution plan already approved. Learned Senior Counsel for the Appellants, Shri P. Chidambaram, also contended that the provision of IBC will have no over-riding effect on the provision of Trademarks Act, which is a complete code by itself to deal with the Trademarks registration, assignment and transfer of Trademarks, renewal etc. Therefore, the metho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marks, when jurisdiction is conferred on District Judge as per the provisions of Trademarks Act, if not the order passed in I.A. No. 155/2018 dated 14th August, 2019 is liable to be set aside? POINT NO. 1: 21. One of the major contentions of the Appellants is that granting relief in I.A. No. 155 of 2018 amounts to modification of approved Resolution Plan submitted by Resolution Applicant which is impermissible under law whereas the learned Counsel for the Respondents contended that based on the Information Memorandum issued by Resolution Professional, the Resolution Applicant submitted its Resolution Plan. The Information Memorandum was issued by the Resolution Professional on the basis of entries in the balance sheet of the Corporate Debtor where the Trademarks were shown as assets of the Corporate Debtor. Therefore, it does not amount modification or alteration of the approved Resolution Plan submitted by the Resolution Applicant approved by CoC and Adjudicating Authority. 22. It is not in quarrel that based on Information Memorandum, the Resolution Applicant submitted its Resolution Plan but as per the Plan submitted by the Resolution Applicant, Resolution Applicant did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial wisdom of CoC is supreme, safeguards are provided to such commercial decision vide "Vallal RCK Vs. Siva Industries Ltd" CIVIL APPEAL NOS. 18111812 OF 2022 dated 03.06.2002. Earlier, Hon'ble Apex Court in K. Sashidhar Vs. Indian Overseas Bank, held that commercial wisdom of CoC is supreme; added to that "Committee of Creditors of ESSAR Steel India Limited (through authorised signatory) Vs. Satish Kumar Gupta and Ors." (2020) 8 SCC 531, the Hon'ble Apex Court succinctly held that CoC's commercial decision will prevail, if the Resolution Plan satisfied the legal requirements under Section 30(2) and 30(4) IBC. 25. Since the Resolution Plan satisfied the legal requirements, it was approved by CoC in its commercial wisdom and also approved by Adjudicating Authority subject to rider. The Resolution Professional filed IA No. 155/2018 claiming ownership on the brands "Deccan Chronicle" and "Andhra Bhoomi" during pendency of petition under Section 31 of IBC, but the IA No. 155/2018 was allowed by Adjudicating Authority. If for any reason the CoC decision i.e. approval is against any law, the course open to the Adjudicating Authority is to return the Plan for fresh consideration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ownership over the Trademarks is claimed for the first time during pendency of petition under Section 31 of IBC, filed after approval of Resolution Plan by CoC in its commercial wisdom. In the Plan, SRA did not claim such right over the Trademarks but only claimed right to use. As such the claim of ownership over Trademarks after approval of Resolution Plan by CoC is deemed to be extinguished in view of law declared by Hon'ble Apex Court. But the Adjudicating Authority did not examine the facts with reference to law. 30. In addition to the law declared by Hon'ble Apex Court in "Ghanshyam Mishra and Sons Vs. Edelweiss Asset Reconstruction Co. Ltd, the Hon'ble Supreme Court in "Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited & Anr." Civil Appeal No. 3224 of 2020 the Hon'ble Supreme Court held: "Resolution Plan is binding and irrecoverable between the CoC and the SRA in terms of the provisions of the IBC and the Insolvency and Bankruptcy Board of India. In the instant case, in view of the principle laid down in the above case, once the plan is approved either with condition or without condition, the same cannot be modified or altered or wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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