Tribunal Dismisses Application Challenging 'RATHI' Trademark Status

The Tribunal dismissed the application seeking a declaration that the registered trademark "RATHI" is not an asset of the Corporate Debtor and that its usage was illegal under the Insolvency & Bankruptcy Code. The Tribunal found no merit in the application as the trademark ownership issue was pending before the Hon'ble Delhi High Court and no direction was necessary regarding the trademark's status as an asset of the Corporate Debtor. The application was ultimately dismissed due to the lack of direction from the High Court and the ongoing nature of the matter before the court.

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Issues:
- Declaration that the registered trademark "RATHI" is not an asset of the Corporate Debtor
- Declaration that the usage of the trademark "RATHI" by the corporate debtor is illegal and beyond the authority under the Insolvency & Bankruptcy Code
- Objection to the maintainability of the application and forum shopping

Analysis:

Issue 1: Declaration of Trademark as Non-Asset
The Applicant, a trustee of the "Rathi Foundation," sought a declaration that the registered trademark "RATHI" is not an asset of the Corporate Debtor. The Applicant argued that due to the initiation of the Corporate Insolvency Resolution Process (CIR Process) and the appointment of the Resolution Professional (RP), the corporate debtor lost the right to use the trademark as per the Memorandum of Understanding (MoU). The Applicant emphasized that the trademark "RATHI" was not owned by the Corporate Debtor and was only allowed for use under specific conditions involving the Rathi family members. The Respondent, the former RP now liquidator, objected to the application's maintainability, claiming that the trademark was essential for the business and had been used without objection. The Tribunal noted that the Respondent never claimed ownership of the trademark on behalf of the corporate debtor, leading to a decision that no direction was necessary regarding the trademark's status as an asset of the Corporate Debtor.

Issue 2: Declaration of Illegal Usage
The Applicant also sought a declaration that the usage of the trademark "RATHI" by the corporate debtor through the RP was illegal and beyond the authority under the Insolvency & Bankruptcy Code. The Respondent argued that any private arrangement like a Trust Deed/MoU should not interfere with the RP's statutory duties to maintain the business operations of the Corporate Debtor during liquidation. The Respondent claimed that the application was filed belatedly to stall the liquidation process. The Tribunal observed that the Hon'ble Delhi High Court had not directed them to decide on the trademark ownership issue, and as the matter was pending before the High Court, they found no merit in the present application. Consequently, the application was dismissed.

Issue 3: Objection to Maintainability and Forum Shopping
The Respondent raised objections regarding the maintainability of the application, alleging forum shopping by the Applicant. The Respondent argued that the trademark "RATHI" was crucial for the business and had been used continuously. The Respondent emphasized that the RP had a duty to maintain the Corporate Debtor's operations and that any private arrangement should not impede the statutory duties. The Tribunal noted the Respondent's objections but ultimately dismissed the application due to the lack of direction from the Hon'ble Delhi High Court and the pending nature of the matter before the High Court.

In conclusion, the Tribunal dismissed the application, emphasizing that no direction was needed regarding the trademark's status as an asset of the Corporate Debtor and that the issue of trademark ownership was pending before the Hon'ble Delhi High Court.

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