2022 (2) TMI 837 - Tri - Insolvency and Bankruptcy

Tribunal Dismisses Application Challenging 'RATHI' Trademark Status

Shree Balaji Refractories Co. and Ors. Versus RGTL Industries Limited

The Tribunal dismissed the application seeking a declaration that the registered trademark 'RATHI' is not an asset of the Corporate Debtor and that its ... Seeking necessary declaration that the registered trademark 'RATHI' is not an asset of the Corporate Debtor - declaration also sought to the corporate debtor, through resolution professional that usage of the registered trademark 'RATHI' in any manner is illegal and beyond his authority under the provisions of the Insolvency & Bankruptcy Code - HELD THAT:- It is clear from the pleadings that the Respondent has never claimed that the corporate debtor is the owner of the trademark 'RATHI' and same was never made the part of the asset of corporate debtor, hence, we believe that there is no need to pass any direction with respect to registered trademark 'RATHI' is not an asset of the Corporate Debtor. The applicant further sought the direction that usage of the registered trademark 'RATHI' by the corporate debtor through resolution professional in any manner is illegal and beyond his authority under the provisions of the Insolvency & Bankruptcy Code, to which it is submitted by the respondent that usage of the trademark cannot be restricted by the applicant as the license was granted to the corporate debtor without any condition for usage and furthermore, similar relief is sought by the applicant in civil suit (Comm) No. 151 of 2020 and same is pending for adjudication before Hon'ble Delhi High Court. It is pertinent to mention that Hon'ble Delhi High Court only gave suggestion that while dealing with the matter concerning corporate debtor, the NCLT should take into account the submissions of the parties given before Hon'ble Delhi High Court. In fact, there is no direction/order of the Hon'ble Delhi High Court to this Tribunal to decide the ownership issue of the trademark 'RATHI' in its order dated 16.10.2020 passed in Civil Suit (Comm) 151 of 2020. There are no merits in the present application - application dismissed. 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 shoppingAnalysis:Issue 1: Declaration of Trademark as Non-AssetThe 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 UsageThe 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 ShoppingThe 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.