AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 897
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....ing authority while disposing of I.A. No.155 of 2018 under its order dated 14th August, 2019, will amount to a modification/alternation of the approved Resolution Plan by the CoC which is impermissible in law. 2. The brief facts culled out from the record are that the appellant is the successful resolution applicant (SRA) of the Corporate Debtor - Deccan Chronicle Holdings Ltd. (DCHL), whose Resolution Plan was approved by the CoC of the Corporate Debtor with 81.39% voting share which was conditionally approved by the adjudicating authority (NCLT) by order dated 3rd June, 2019. 3. It has come on record that the Corporate Debtor/DCHL was incorporated on 16th December, 2002 under Certificate of Incorporation issued by the Registrar of Companies, Hyderabad and has been into the business of printing, publication and sale of daily newspapers under the trade names, "Deccan Chronicle" (English) and "Andhra Bhoomi" (Telugu) (hereinafter referred to as the "trademarks"). 4. The Corporate Insolvency Resolution Process (for short "CIRP") was initiated under the Insolvency and Bankruptcy Code, 2016 (for short "IBC") against DCHL by Canara Bank (Financial Creditor) before the adjudicating au....
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.... authority later decided the application I.A. No.155 of 2018 with a direction that the Resolution Professional has established that it is the Corporate Debtor/DCHL who has an exclusive right to use the trademarks "Deccan Chronicle" and "Andhra Bhoomi" and also made a declaration that the trademarks ("Deccan Chronicle" and "Andhra Bhoomi") belong to the Corporate Debtor/DCHL under its order dated 14th August, 2019. 10. The order passed in I.A. No.155 of 2018 by the NCLT dated 14th August, 2019 became the subject matter of challenge at the instance of the first respondent by way of an appeal before the NCLAT. 11. The NCLAT, after hearing the parties, arrived to a conclusion that the declaration made by the NCLT holding the ownership rights of the Corporate Debtor over the trademarks "Deccan Chronicle" and "Andhra Bhoomi" amount to a modification/alteration of the approved Resolution Plan by CoC, which is impermissible in law and held that the order of the adjudicating authority, in fact, has transgressed its jurisdiction and accordingly set aside the order dated 14th August, 2019 passed in I.A. No.155 of 2018 under the order impugned dated 2nd September, 2022, that became the subje....
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....person aggrieved under Section 134 of the Trademarks Act, 1999. Placing reliance on the judgment of this Court in Embassy Property Developments Private Limited v. State of Karnataka and Others (2020) 13 SCC 308, learned counsel submits that the finding returned by the NCLAT under the order impugned is duly supported by law and needs no interference. 15. We have heard learned counsel for the parties and with their assistance perused the material available on record. 16. Before we take note of the submissions made by counsel for the parties, it will be apposite to take note of the Resolution Plan of Corporate Debtor (Decan Chronicle Holdings Ltd. or DCHL) dated 11th December, 2018 and Clauses 4 (brands of the Corporate Debtor) and 11.12, in particular with which we are concerned in the instant proceedings, as extracted hereinbelow: " 4. BRANDS OF THE CORPORATE DEBTOR 4.1 The Corporate Debtor as of now use the following brands/trademarks for running its business: a. DECCAN CHRONICLE b. ANDHRA BHOOMI c. THE ASIAN AGE d. FINANCIAL CHRONICLE e. DECCAN CHARGERS; AND f. ODYSSEY. 4.2 One or more of the above brands are charged in favour of one or more of Financia....
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....al creditors by the Adjudicating Authority under the Applicable Laws; 11.1.5 The cancellation of shares shall not require any other procedure as required under the Companies Act, including that under Section 66 of the Companies Act or regulations of the SEBI; 11.1.6 The Adjudicating Authority approving the Resolution Plan shall constitute adequate approval for such cancellation of shares and accordingly, no further approval or consent shall be necessary from any other person/Government or Statutory Authority in relation to either or these actions under any agreement, the constitution documents of the Company or under any applicable law; ....... 11.12 Adjudicating Authority to pass necessary order/give appropriate directions to give effect that the corporate debtor has the perpetual exclusive right to use the brands namely (i) DECCAN CHRONICLES; (ii) ANDHRA BHOOMI; (iii) THE ASIAN AGE; (iv) FINANCIAL CHRONICLE; (v) DECCAN CHARGERS; AND (vi) ODYSSEY without any financial implications for the purposes of running its business; ......" 17. It may be relevant to note that the Resolution Plan referred to above was approved with majority of 81.39% voting rights of CoC whic....
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....e NCLT under order dated 3rd June, 2019, I.A. No.155 of 2018 was later heard by the NCLT and that came to the decided by an order dated 14th August, 2019. While upholding the exclusive right to use the trademarks "Deccan Chronicle" and "Andhra Bhoomi" of the Corporate Debtor, a further declaration was made that the trademarks ("Deccan Chronicle" and "Andhra Bhoomi") belong to the Corporate Debtor/DCHL. Paras 37 and 38 of the order dated 14th August, 2019 passed by the NCLT disposing of I.A. No.155 of 2018, are reproduced hereinbelow: "37. Here, the question involved is who is using the Trademarks on the date when CIRP against Corporate Debtor started. The documents filed by Resolution Professional/Applicant herein coupled with subsequent conduct of Corporate Debtor would establish that it is the Corporate Debtor who has the right to use the Trademarks "Deccan Chronicle" and "Andhra Bhoomi" and they belong to Corporate Debtor. 38. The Application is allowed declaring Trademarks "Deccan Chronicle" and "Andhra Bhoomi" belong to Corporate Debtor/DCHL." 20. It may be relevant to note that if we look into the Resolution Plan and particularly Clause 11.12 which has been referred to....
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....ght to use the brands, namely, "Deccan Chronicle" and "Andhra Bhoomi" and it nowhere indicates regarding the right of ownership over the trademarks/brands, "Deccan Chronicle" and "Andhra Bhoomi" of the Corporate Debtor. But the adjudicating authority while adjudicating application I.A. No.155 of 2018, apart from upholding the exclusive right to use the trademarks, "Deccan Chronicle" and "Andhra Bhoomi", made a further declaration that trademarks belong to Corporate Debtor/DCHL under its order dated 14th August, 2019, which, in our view, was a modification/alteration in the approved Resolution Plan which indisputably is impermissible in law and this what the NCLAT in para 32 of its impugned order has observed as under: "32. In view of the law declared by Hon'ble Apex Court, applying the same to the present appeal, we have no hesitation to conclude that right or ownership, if any, claimed after approval of Resolution Plan by CoC is extinguished and if ownership of Corporate Debtor is declared over the Trademarks, it would amount to modification or alteration of approved Resolution Plan by CoC which is impermissible. Hence, the order of Adjudicating Authority to the extent of declar....
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....irections on narrowly defined grounds on which such actions are permissible and procedural directions, which may include the timelines in which they can be proposed, voting requirements and threshold for approval by the CoC (as the case may be). They must also contemplate at which stage the corporate debtor may be sent into liquidation by the adjudicating authority or otherwise, in the event of a failed negotiation for modification and/or withdrawal. These are matters for legislative policy." [emphasis supplied] 26. In other words, in terms of the approved Resolution Plan, it was the perpetual exclusive right to use the brands, namely, "Deccan Chronicle" and "Andhra Bhoomi", by the Corporate Debtor which were available to SRA i.e. the appellant herein and once it has been approved by the adjudicating authority, certainly the right to exclusive use of the trademarks belonging to the Corporate Debtor, on being approved by the adjudicating authority, is always available to the SRA i.e. the appellant, but not the ownership rights of the trademarks of the Corporate Debtor. 27. Consequently, the appeal is devoid of substance and accordingly dismissed. No costs. 28. Pending applica....