TaxTMI 
TaxTMI 
2022 (3) TMI 1172
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....ection 48(a) of the Code; b) To pass an order requiring the Respondent No. 1 (Potential Coaching Institute Private Limited) to account for the benefits received by it by use of the trade mark "CONCEPT Educations" till date and pay such sum to the account of the Corporate Debtor in terms of Section 48(c) of the Code; c) To pass an order appointing an independent expert to assess evidence relating to the value of the trade mark "CONCEPT Educations" and direct the Respondent No.1 to make payment in accordance with the consideration amount as may be determined by the independent expert in accordance with Section 48(d) of the Code; d) To pass any further order(s) as this Hon'ble Bench deem fit and proper" 2. It is stated that: 2.1 The order for initiation of CIRP of the Corporate Debtor was passed by this Hon'ble Bench on 26.02.2020 and vide that order Mr. Amit Pareek, having registration No. IBBI/IPA-002/IP-N00413/2017-18/11205 was appointed as an IRP from the list of the empanelled IRPs. 2.2 The First Meeting of the Committee of Creditors of the Corporate Debtor was held on 06.05.2020 comprising of only the Operational Creditors and it was resolved ....
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....08.02.2021 without taking into account all the relevant information necessary for preparation of his report. 3.3 The Resolution Professional seeks liberty from this Hon'ble Court to allow the filing of the avoidance applications as and when the applicant is ready with all the necessary evidences to ensure claw back of the funds diverted / misappropriated by the Suspended Directors. 3.4 In view of the above, the RP has filed the present application under Section 45 of the Code as in his opinion, there is an undervalued transaction undertaken by the Corporate Debtor during the relevant period through its Suspended Directors and all the ingredients necessary under Section 46 for passing of the order under Section 48 of the Code are complete. 4. The rationale for the present application is that: 4.1 The Corporate Debtor is the owner of a Trade Mark "CONCEPT Education" duly registered vide Trade Mark No. 3065344 dated 28.09.2015 and has earned name and fame by spending crores in advertising and brand building. Copy of the certificate registration of Trade Mark issued by the Trade Mark Registry has been attached and marked as Annexure B at pages 28-29 of the Application. 4....
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....45. (1) If the liquidator or the resolution professional, as the case may be, on an examination of the transactions of the corporate debtor referred to in sub-section (2) [***] determines that certain transactions were made during the relevant period under section 46, which were undervalued, he shall make an application to the Adjudicating Authority to declare such transactions as void and reverse the effect of such transaction in accordance with this Chapter. (2) A transaction shall be considered undervalued where the corporate debtor- (a) makes a gift to a person; or (b) enters into a transaction with a person which involves the transfer of one or more assets by the corporate debtor for a consideration the value of which is significantly less than the value of the consideration provided by the corporate debtor, and such transaction has not taken place in the ordinary course of business of the corporate debtor. Relevant period for avoidable transactions. 46. (1) In an application for avoiding a transaction at undervalue, the liquidator or the resolution professional, as the case may be, shall demonstrate that- (i) such....
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....or is a director and holds along with relatives, more than two per cent. of its paid-up share capital; (f) anybody corporate whose board of directors, managing director or manager, in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor; (g) any limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor; (h) any person on whose advice, directions or instructions, a director, partner or manager of the corporate debtor is accustomed to act; (i) a body corporate which is a holding, subsidiary or an associate company of the corporate debtor, or a subsidiary of a holding company to which the corporate debtor is a subsidiary; (j) any person who controls more than twenty per cent. of voting rights in the corporate debtor on account of ownership or a voting agreement; (k) any person in whom the corporate debtor controls more than twenty per cent. of voting rights on account of ownership or a vo....
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....ency commencement date. In the present case, it is clear that the RP has not followed the provision of the Code as well as Regulations and even after bared by limitation the application has been filed without supporting any condonation application in this respect. 7.2 The RP has misread and misinterpreted the Deed of Agreement dated 08.02.2019, clause No.4 (a) and (b) in respect of consideration/payment which is clear that only right has been granted to use the Trade Mark against payment of Rs. 10 lacs and adequate education to the students of the CD without charging and the cost borne by the Respondent 1 shall be considered as payment for usage of rights of the Trade Mark. 7.3 Further, clause No. 3 (c) clears the doubt that the ownership of the copyright of the trade name "Concept Education" shall always be with the CD. Only right to use has been granted for 15 years against the aforesaid payment, as such no prudent man can have valued the right to use the trade name more than which the CD received. Hence, this application is devoid of merit. 7.4 The said right to use was not mere Rs. 10 lacs, but on the contrary more than 300 students were given education for mo....
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.... such his question where is Rs. 4.00 crore, has no relevance and it is very much shown in the accounts. 7.9 The transaction has been done only to save corporate debtors during relevant time as students who have already taken admission imparted with education may lead to worse situation. As such during ordinary course of business only right to use Trade Mark "CONCEPT EDUCATION" granted to the Respondent No. 1. 7.10 The Hon'ble Supreme Court in N. Subramanian Iyer Vs. Off. Receiver held that it is not necessary for upholding a transaction that the transferor who has been subsequently adjudged as an insolvent should have been honest and straight forward in the matter of impugned transaction. It was observed that both transferor and transferee must have share a common intention to defraud the creditors and unless the conduct of the transferee is also blameworthy, the transaction cannot be annulled. 8. The Respondent No. 1 - Potential Coaching Institute Pvt. Ltd. has also filed their written submission, wherein in addition to reiteration of the submissions made by the Respondent No. 3, it has been submitted that: 8.1 The RP has not provided the exact value of the Trade Mark ....
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....d out by the Respondents for valuing the intellectual property i.e. the Trade Mark "CONCEPT Educations" meaning thereby there is no actual transfer of the assets of the corporate debtor. It is an arrangement wherein the corporate debtor is replaced by the R2 and R3 (Suspended Board of Directors herein). 9.5 It is established beyond doubt that the above transaction of transfer of "right to use" of the intellectual property i.e. the Trade Mark "CONCEPT Educations" was not transferred in "ordinary course of business" and satisfies the criteria set out in clause (b) of sub-section (2) of Section 45. 9.6 The Case laws cited by the Respondent No. 1 in context to the Section 329 of the Companies Act, 2013 fails to support the Respondents herein and the sequence of events conclusively prove beyond doubt that "the conduct of the transferee is also blameworthy" as was the test laid by the Hon'ble Supreme Court in the matter of N. Subramanian Iyer Vs. Off Receiver. ORDER 10. Heard both the parties at length. On perusal of the materials available on record, it is observed that: 10.1 There was a partnership agreement dated 01/02/2019 between the CD and the Respondent no 1 whereby....
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....e Corporate Debtor in accordance with Section 48(a) of the Code 14. On the other hand, both the R1 and R3 have agreed and given in writing that the RP has given wrong impression that Trade Mark has been sold to the Respondent No. 1. In fact, both the Respondents have confirmed that the CD has still ownership right over the Trade Mark "CONCEPT EDUCATION" and only right to use the Trade Mark is given for 15 years to R1 against payment of Rs. 10.00 lacs and imparting education for 300 students of the CD for a year. Respondents have further submitted that it was not exclusive transfer of Trade Mark but only right to use was granted for fifteen years meaning thereby that the Resolution Applicant has full right to use and having ownership of trade mark even after the aforesaid Deed of Agreement. 15. In the meantime, the RP has submitted a Resolution Plan duly approved by CoC with 100% voting share before this Bench for approval. 16. Return of trademark to CD is the part of the Resolution Plan. Hence the "right to use" of the trade mark "CONCEPT Educations" is required to be cancelled. 17. In order to ensure the successful implementation of the Resolution Plan, We are of the c....