TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 1937
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....off or enable others to pass off the respondent's goods as and for the plaintiffs' goods. The plaintiffs claimed that the plaintiff No. 1 is the assignee of 'Kwality' trade from the original proprietor. 3. The petitioner contended that under a Strategic Alliance Agreement between Kwality Ice Creams (India) Limited and Brooke Bond Lipton India Limited, it was agreed that the use of the 'Kwality/sub-Zero' name in the corporate name shall be subject to the condition that Kwality Dairy India Limited, which was a subsidiary of Kwality Ice Creams (India) Limited and described in the Strategic Alliance Agreement as K (East), shall at all times hold 1/3rd of the voting capital in Kwality Ice Creams (India) Limited and Kwality Processed Foods Service & Equipment (Private) Limited and 1/6th of such capital in Kwality Dairy India Limited and Sub-Zero Ice Creams (Private) Limited which includes Kwality Dairy India Limited and since K (East) is no more holding 1/6th of share capital in Kwality Dairy India Limited since 2002-2003, the use of "Kwality/sub-Zero" name in the corporate name by the defendant is unauthorized. 4. The petitioner No. 2 claimed that due to contin....
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....said facts, it is to be seen whether a suit for passing off would embrace a suit under Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "IBC"). 8. Mr. S.N. Mookherjee, learned Senior Counsel appearing on behalf of the plaintiffs has submitted that the primary objective conceptualised under the IBC are time bound resolution of defaults and seamless implementation of liquidation/bankruptcy and maximizing asset value. The code encourages resolution as means of first resort for recovery. Mr. Mookherjee submits that the IBC addresses the method of recovery of claims by the creditors with a view to prevent scramble over the assets of the company. The moment a default occurs, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner prescribed under Chapter II of the IBC. 9. Mr. Mookherjee submits that Section 14(1)(a) contemplates suits or proceedings which are in the nature of recovery of debt. Mr. Mookherjee, in this regard, has referred to the definition of 'claim' and 'debt' in Sections 3(6) and 3(11) of th....
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.... said paragraphs, the Hon'ble Supreme Court has recognized that it is debt realization which is barred and also recovery of possession. Apart from these two kinds of claims, suits or proceedings for other claims are not barred. 11. Per contra, Mr. Jayanta Kumar Mitra, the learned Senior Counsel appearing on behalf of the respondent submits that under Section 14(1)(a), the present suit cannot proceed as a moratorium has already been declared in respect of corporate debtor company. Mr. Mitra submits that Section 14(1)(a) is not restricted to any particular kind of suit and the expression used is 'of suits or continuation of pending suits or proceedings against the corporate debtor' covers all kinds of suits. 12. Mr. Mitra submits that the respondent has been using the word 'Kwality' on the basis of the registration certificates issued by the Registrar of Trademark and this right is likely to be defeated, in the event, now the plaintiff is allowed to proceed with the hearing of this application notwithstanding the moratorium. Mr. Mitra submits that the Act is not merely addresses the issue of debt but other issues as well as would be evident from Section 14(1)(d)....
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....e-organisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons. Corporate Insolvency is triggered when a financial creditor, an operational creditor or a corporate applicant approaches the adjudicating authority with an application for initiation of Insolvency Resolution Process. The code contemplates a statutory moratorium of 180 days subject to a single extension of 90 days whereby no suits or proceedings, recovery or enforcement action may take place against the corporate debtors. However, the interim resolution professional appointed in terms of the procedure outlined in the Code is to take over the management and powers of Board of Directors of the corporate debtors and take custody of all assets of the company. 15. Section 14 of IBC refers to moratorium. The Notes on Clauses in the IBC, 2015 explained the reason for this Section. In short, it is stated that the purpose of moratorium is to keep the corporate debtor's assets together during the insolvency resolution process and ensure that the company may continue as a going concern while the creditors take a view o....
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....ebtor's assets together during the insolvency resolution process and facilitating orderly completion of the processes envisaged during the insolvency resolution process and ensuring that the company may continue as a going concern while the creditors take a view on resolution of default" and "the moratorium on initiation and continuation of legal proceedings, including debt enforcement action ensures a stand-still period during which creditors cannot resort to individual enforcement action which may frustrate the object of the corporate insolvency resolution process." Thus, the intent does not appear to be to debar only those suits or proceedings which affect the assets of the corporate debtor, as these appear to be only one of the components that is barred." 17. The report in Clause 5.4 on a purposive interpretation of Section 14 has stated that a moratorium on the mere determination of the amount (and not its enforcement) may not have been the intent of the Code. 18. The Committee further noted that a literal interpretation of Section 14 is prudent and a broader interpretation may not be necessary to include the guarantors of the company as the assets of the sureties are se....