IBC

SREI MULTIPLE ASSET INVESTMENT TRUST VISION INDIA FUND VS DECCAN MARKETEERS ( CASE ANALYSIS )

Supreme Court reiterates in SREI Multiple Asset Investment Trust Vision India Fund Vs. Deccan Marketeers  (Civil Appeal 1706/2023) that Resolution Plan after approval of NCLT can not be modified or altered. 

BRIEF FACTS

Deccan Chronicle Holdings Ltd. (Corporate Debtor) was admitted to CIRP vide order of NCLT dated 5th July, 2017 on an application made by Canara Bank (Financial Creditor).  SREI Multiple Asset Investment Trust Vision India was successful Resolution Applicant in the matter of Deccan Chronicle Holdings Ltd. Resolution Plan had been passed by Committee of Creditors by 81.39% of voting share and subsequently approved by the NCLT vide order dated 3rd June, 2019.

At the time of approval of the Resolution Plan one application IA No. 155/2018 was pending before NCLT seeking declaration that the Corporate Debtor is owner of the trademarks “Deccan Chronicle” and “Andhra Bhoomi”. NCLT after approval of Resolution Plan vide order dated 14th August, 2019 declared that the trademarks “Deccan Chronicle” and “Andhra Bhoomi” belong to the Corporate Debtor.

The order of the NCLT in IA 155/2018 was challenged before NCLAT, wherein NCLAT set aside the order of NCLT and held that declaration made by NCLT holding the ownership rights of the Corporate Debtor over the trademarks “Deccan Chronicle” and “Andhra Bhoomi” amount to modification/alternation of the approved Resolution Plan which is impermissible in law.  

The Successful Resolution Applicant filed an appeal before the Supreme Court.

SUBMISSION OF THE PARTIES

The Appellant submitted that if the it gets only the right to use the trade marks and not the ownership of the trademarks, the Resolution plan would be non-starter. it was submitted declaration by the NCLT does not amount to modification of the Resolution and finding regarding the same by the NCLAT is erroneous and misconceived.

The Respondents submitted that Resolution Plan was confined to perpetual use of trade marks. The declaration by the NCLT after approval of the Resolution Plan was tantamount to modification of the Resolution Plan which is impermissible under law. It was also submitted that determination of ownership rights was not within the jurisdiction of the NCLT.

FINDINGS OF THE SUPREME COURT

The Supreme Court noted that the Committee of Creditors had passed Resolution Plan to the effect that Corporate Debtor has perpetual rights to use trademarks “Deccan Chronicle” and “Andhra Bhoomi”. The Resolution Plan nowhere shows that the Corporate Debtor has ownership rights over trademarks “Deccan Chronicle” or “Andhra Bhoomi”. The NCLT after approval of Resolution Plan declared in IA 155/2018 that the Corporate Debtor has ownership rights in trademarkes “Deccan Chronicle” and “Andhra Bhoomi”. The same was modification/alteration of the Resolution Plan and hence impermissible in law.

The Supreme Court concurred with the view of the NCLAT. The Supreme Court relied on “ Ebix Singapore Private Ltd. Vs. Committee of Creditors of Educom Solutions Limited & Another” (2022) 2 SCC 401 which stated that enabling withdrawals or modification of the Resolution Plan, once it has been submitted to the Adjudicating Authority after complying with provisions of the Code will create another tier of negotiations which will totally unregulated by statute.

The Supreme Court held that right to perpetual use of the trademarks “Deccan Chronicle” and “Andhra Bhoomi” will be available to the Resolution Applicant but Resolution Applicant will not be owner of trademarks “Deccan Chronicle” and “Andhra Bhoomi”.

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Mukesh Kumar Suman is an advocate and legal author based at Delhi. He regularly appears before various Judicial Forums including NCLT, NCLAT, High Courts and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.

Mukesh Kumar Suman

Mukesh Kumar Suman

Mukesh Kumar Suman is an advocate based at Delhi. He has rich experience in civil, criminal, commercial, arbitration and corporate insolvency matters. He regularly appears before District Courts, NCLT, NCLAT, High Court and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.

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