Facts: Gloster Cables Limited (GCL) and Fort Gloster Industries Limited (FGIL), the Corporate Debtor, were involved in a dispute over the trademark "Gloster". GCL claimed ownership based on a Technical Collaboration Agreement, a Trademark Agreement, and a Deed of Assignment. FGIL was subjected to CIRP, and Gloster Limited, the Successful Resolution Applicant (SRA), sought to include the trademark as an asset of the Corporate Debtor in the resolution plan. GCL filed an application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) to exclude the trademark from the Corporate Debtor's assets. The National Company Law Tribunal (NCLT) initially ruled against GCL, but the National Company Law Appellate Tribunal (NCLAT) reversed this decision, leading to appeals before the Supreme Court.
Procedural Posture: Two civil appeals were filed before the Supreme Court. Civil Appeal No. 2996 of 2024 was filed by Gloster Limited (SRA), challenging the NCLAT's judgment. Civil Appeal No. 4493 of 2024 was filed by GCL, challenging the Adjudicating Authority's jurisdiction to declare on the aspect of title to the trademark "Gloster".
Issue: Did the Adjudicating Authority (NCLT) have the jurisdiction under Section 60(5) of the IBC to determine the title of the trademark "Gloster" and declare it as an asset of the Corporate Debtor, especially when the approved resolution plan recognized rival claims to the trademark?
Holding: The Supreme Court held that the Adjudicating Authority (NCLT) did not have the jurisdiction under Section 60(5) of the IBC to declare the title of the trademark "Gloster" in favor of the SRA, as the issue was not directly related to the insolvency resolution proceedings and the approved resolution plan acknowledged rival claims to the trademark.
Reasoning: The Court reasoned that Section 60(5)(c) of the IBC grants jurisdiction to the NCLT to entertain questions of law or fact "arising out of or in relation to the insolvency resolution or liquidation proceedings". However, this jurisdiction is not unlimited. Citing Embassy Property Developments Pvt. Ltd. v. State of Karnataka & Ors., the Court reiterated that matters falling outside the purview of the IBC, especially those in the realm of public law, cannot be brought under Section 60(5)(c). The Court also relied on Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta and others and Tata Consultancy Services Ltd. v. SK Wheels (P) Ltd. to emphasize that the nexus with the insolvency of the Corporate Debtor must exist for the NCLT to exercise its jurisdiction. The Court found that the issue of trademark title was a contentious matter beyond the scope of the insolvency proceedings, and the resolution plan itself recognized rival claims. Therefore, the NCLT overstepped its jurisdiction by declaring the SRA as the owner of the trademark. The Court also noted that the NCLT's actions amounted to a modification of the approved resolution plan, which is impermissible, citing SREI Multiple Asset Investment Trust Vision India Fund v. Deccan Chronicle Marketeers and others and Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC).