TMI Blog2022 (9) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ofessional 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 approval - The role of Resolution professional is only a facilitator, cannot act either as Creditors or Corporate Debtor or Adjudicating Authority but the Resolution Professional has filed the I.A. No. 155/2018, may be to protect the interest of CoC for maximization of value of assets of Corporate Debtor. Right to use is distinct from right and title to incorporeal property, right to use is only licence but title creates ownership, which is superior right. Hence creation of superior right in incorporeal property i.e., Trademarks tantamount to alteration or modification of approved Plan by CoC in its commercial wisdom, though conditional and such conditional approval by Adjudicating Authority is contrary to law. There are no hesitation to conclude that right or ownership, if any, claimed after appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bearing Application No. 729889. 3. Subsequently, in the year 2002, the business of the firm and the Trademarks Deccan Chronicle and Andhra Bhoomi (hereafter referred to as Trademarks) had grown exponentially, 1st Appellant decided that in order to exploit the market value of the Trademarks and build the Trademarks, it would be better to entrust the task to an entity who has sufficient experience and expertise in building and marketing Trademarks, particularly, in the print media namely Deccan Chronicle Marketeers Private Limited (hereinafter referred to as DCMPL ) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 rights in the newspaper of 1st Respondent-DCHL. In the meanwhile, registration of the trade mark Deccan Chronicle was granted to the Firm on 29.03.2008 w.e.f. 10.10.1996. Thus, the certificate of Registration of Trademarks clearly evidencing that the firm and Appellant Nos. 3 4 were the owners of the Trademarks. Again on 02.04.2008, another agreement was entered into by the 1st Appellant and 1st Respondent to record their revised understanding regarding purchase of the advertising space in the newspaper of DCHL by the firm 1st Appellant. In both the aforemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BC 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 04.08.2018 and 2nd Respondent being a formal party also filed its reply. Subsequently, SREI Multiple Assets Investment Trust-Vision India Fund, Resolution Applicant, submitted a Resolution Plan to the Committee of Creditors (hereinafter CoC ). CoC approved the Resolution Plan on 10.12.2018. Thereafter, the Resolution Applicant submitted the Resolution Plan, approved by CoC, on 11.12.2018, to the Adjudicating Authority and CIRP in respect of 1st Respondent under IBC was concluded, wherein the Adjudicating Authority passed an order on 03.06.2019 approving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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 the basis of information contained in the Information Memorandum, duly prepared by Resolution Professional on the basis of audited balance sheet of Corporate Debtor and on the basis of the discussion with the Members constituting the CoC at the meeting of the CoC that the Trademarks being Deccan Chronicles and Andhra Bhoomi belongs to the Corporate Debtor and that the SRA has obtained exclusive unconditional right to use the said Trademarks of the Corporate Debtor pursuant to the approval of Resolution Plan by the Adjudicating Authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 method prescribed under the Trademarks Act alone is to be followed to assign and transfer a registered Trademarks. In the absence of any legal transfer or assignment of Trademarks in favour of the Corporate Debtor, DCHL Respondent No. 1 herein, it cannot be held that Trademarks belonging to Respondent No. 1- DCHL He also further submitted that a declaration that the Respondent No. 1 is the owner of the Trademarks cannot be granted by the Adjudicating Authority under IBC and such declaration can be granted by a competent Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 claim ownership over the Trademarks Deccan Chronicle and Andhra Bhoomi but claim is confined to only the right to use, vide clause 11.12 of Resolution Plan which runs as follows: 11.12 Adjudicating Authority to pass necessary orders/give appropriate directions to give effect that the Corporate Debtor has the perpetual exclusive right to use the brands namely (i) DECCAN CHRONICLE; (ii) ANDHRA BHOOMI; (iii) THE ASIAN AGE; (iv) FINANCIAL CHRONICLE; and (v) DECCAN CHARGERS; and (vi) ODYSSEY without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 approval. Instead of following the procedure, the Adjudicating Authority allowed I.A. No. 155/2018 without approval of CoC in its meeting. In the judgment Jaypee Kensington Boulevard Apartments Welfare Association and Others v. NBCC (India) Limited and others Civil Appeal No. 3395 of 2020, (2022) 1 SCC 401 when a decision was taken by CoC in its commercial wisdom, the same cannot be interfered by Adjudicating Authority exercising power under Section 60(5) of IBC. 26. The role of Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id 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 withdrawn. 31. If the principle laid down in Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited Anr. referred supra is applied to the present fact of the case, allowing the Application filed under Section 60(5) declaring that the Corporate Debtor as the owner of the Trademarks would amount to alteration of the Resolution Plan since the plan submitted by SRA is only for use of brand name of Trademarks but whereas the Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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