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TMI Blog2023 (3) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... e and Andhra Bhoomi under its order dated 14th August, 2019, but at the same time, a further declaration was made in para 38 holding that trademarks 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 3rd June, 2019. The NCLAT, after taking into consideration the material available on record and Clause 11.12 of the Resolution Plan, in para 16 of the order of the adjudicating authority (NCLT) returned a finding that the ownership of the Corporate Debtor declared over the trademark after the approval of the Resolution Plan by the CoC, would amount to modification/alteration of the approved Resolution Plan by CoC which is impermissible in law and is not in terms of Section 60(5) of IBC. 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 trademarks/brands, Deccan Chronicle and Andhra B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (DCHL), whose Resolution Plan was approved by the CoC of the Corporate Debtor with 81.39% voting share which was conditionally approved by the adjudicating authority (NCLT) by order dated 3rd June, 2019. 3. It has come on record that the Corporate Debtor/DCHL was incorporated on 16th December, 2002 under Certificate of Incorporation issued by the Registrar of Companies, Hyderabad and has been into the business of printing, publication and sale of daily newspapers under the trade names, Deccan Chronicle (English) and Andhra Bhoomi (Telugu) (hereinafter referred to as the trademarks ). 4. The Corporate Insolvency Resolution Process (for short CIRP ) was initiated under the Insolvency and Bankruptcy Code, 2016 (for short IBC ) against DCHL by Canara Bank (Financial Creditor) before the adjudicating authority (NCLT). The petition filed by Canara Bank was admitted on 5th July, 2017 and the adjudicating authority imposed Moratorium under Section 14 of the IBC staying pending proceedings in all Courts against DCHL. 5. The Moratorium was extended for a further period of 90 days vide order of adjudicating authority dated 10th November, 2018. 6. The CIRP period of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor/DCHL under its order dated 14th August, 2019. 10. The order passed in I.A. No.155 of 2018 by the NCLT dated 14th August, 2019 became the subject matter of challenge at the instance of the first respondent by way of an appeal before the NCLAT. 11. The NCLAT, after hearing the parties, arrived to a conclusion that the declaration made by the NCLT holding the ownership rights of the Corporate Debtor over the trademarks Deccan Chronicle and Andhra Bhoomi amount to a modification/alteration of the approved Resolution Plan by CoC, which is impermissible in law and held that the order of the adjudicating authority, in fact, has transgressed its jurisdiction and accordingly set aside the order dated 14th August, 2019 passed in I.A. No.155 of 2018 under the order impugned dated 2nd September, 2022, that became the subject matter of challenge in appeal before this Court at the instance of the appellant/SRA. 12. Mr. K.V. Viswanathan, learned senior counsel appearing for the appellant submits that NCLAT has misinterpreted Clause 4.3 and Clause 11.12 of the Resolution Plan which categorically state that the appellant holds unfettered and exclusive rights to the trademarks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. We have heard learned counsel for the parties and with their assistance perused the material available on record. 16. Before we take note of the submissions made by counsel for the parties, it will be apposite to take note of the Resolution Plan of Corporate Debtor (Decan Chronicle Holdings Ltd. or DCHL) dated 11th December, 2018 and Clauses 4 (brands of the Corporate Debtor) and 11.12, in particular with which we are concerned in the instant proceedings, as extracted hereinbelow: 4. BRANDS OF THE CORPORATE DEBTOR 4.1 The Corporate Debtor as of now use the following brands/trademarks for running its business: a. DECCAN CHRONICLE b. ANDHRA BHOOMI c. THE ASIAN AGE d. FINANCIAL CHRONICLE e. DECCAN CHARGERS; AND f. ODYSSEY. 4.2 One or more of the above brands are charged in favour of one or more of Financial Creditors or any other creditors including without limitation the following Financial Creditors: a. AXIS BANK LIMITED b. CANARA BANK LIMITED c. ICICI BANK LIMITED d. IDBI BANK LIMITED e. IDFC BANK LIMITED; and f. KOTAK MAHINDRA BANK LIMITED 4.3 In order to keep the Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Adjudicating Authority approving the Resolution Plan shall constitute adequate approval for such cancellation of shares and accordingly, no further approval or consent shall be necessary from any other person/Government or Statutory Authority in relation to either or these actions under any agreement, the constitution documents of the Company or under any applicable law; . 11.12 Adjudicating Authority to pass necessary order/give appropriate directions to give effect that the corporate debtor has the perpetual exclusive right to use the brands namely (i) DECCAN CHRONICLES; (ii) ANDHRA BHOOMI; (iii) THE ASIAN AGE; (iv) FINANCIAL CHRONICLE; (v) DECCAN CHARGERS; AND (vi) ODYSSEY without any financial implications for the purposes of running its business; 17. It may be relevant to note that the Resolution Plan referred to above was approved with majority of 81.39% voting rights of CoC which is in compliance of Section 30(2) and 30(4) of the IBC. 18. When the matter travelled for seeking approval by the adjudicating authority (NCLT), it was conditionally approved by an order dated 3rd June, 2019, subject to the result of I.A. No.155 of 2018 pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhoomi of the Corporate Debtor, a further declaration was made that the trademarks ( Deccan Chronicle and Andhra Bhoomi ) belong to the Corporate Debtor/DCHL. Paras 37 and 38 of the order dated 14th August, 2019 passed by the NCLT disposing of I.A. No.155 of 2018, are reproduced hereinbelow: 37. Here, the question involved is who is using the Trademarks on the date when CIRP against Corporate Debtor started. The documents filed by Resolution Professional/Applicant herein coupled with subsequent conduct of Corporate Debtor would establish that it is the Corporate Debtor who has the right to use the Trademarks Deccan Chronicle and Andhra Bhoomi and they belong to Corporate Debtor. 38. The Application is allowed declaring Trademarks Deccan Chronicle and Andhra Bhoomi belong to Corporate Debtor/DCHL. 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 any financial implications for the purpose of running its business and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority while adjudicating application I.A. No.155 of 2018, apart from upholding the exclusive right to use the trademarks, Deccan Chronicle and Andhra Bhoomi , made a further declaration that trademarks belong to Corporate Debtor/DCHL under its order dated 14th August, 2019, which, in our view, was a modification/alteration in the approved Resolution Plan which indisputably is impermissible in law and this what the NCLAT in para 32 of its impugned order has observed as under: 32. In view of the law declared by Hon ble Apex Court, applying the same to the present appeal, we have no hesitation to conclude that right or ownership, if any, claimed after approval of Resolution Plan by CoC is extinguished and if ownership of Corporate Debtor is declared over the Trademarks, it would amount to modification or alteration of approved Resolution Plan by CoC which is impermissible. Hence, the order of Adjudicating Authority to the extent of declaring the ownership of Corporate Debtor over the Trademarks Deccan Chronicle and Andhra Bhoomi is illegal and the Adjudicating Authority transgressed the jurisdictional limits. Consequently, the order passed in I.A. No.155/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. [emphasis supplied] 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 trademarks 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 trademarks of the Corporate Debtor. 27. Consequently, the appeal is devoid of substance and accordingly dismissed. No costs. 28. Pending application(s), if any, shall stand disposed of. C. A. No.8323 of 2022 (Vision India Fund SREI Multiple Asset Investment Trust v. IDBI Bank and Others) 29. Mr. K.V. Viswanathan, learned senior counsel, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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