The Supreme Court opined that the modifications in Resolution Plan after approval are not open for judicial review unless they are violative of IBC. Further, once the resolution plan is approved, it cannot be modified/altered.
In the present case, the Resolution Plan only talked about the perpetual exclusive right to use the trademarks by the Corporate Debtor. The additional declaration by the NCLT that the trademarks belonged to the Corporate Debtor could not be reconciled with the Resolution Plan approved by the Committee of Creditors (CoC) and hence, was set aside.
Brief Facts:
The present appeal has been preferred by the Successful Resolution Applicant (SRA) of the Corporate Debtor. The Resolution Plan was approved by 81.39% voted by the CoC and conditionally by the NCLT, subject to the outcome of an Interim Application.
The said Interim Application became a subject matter in the NCLAT at the instance of Respondent No.1. The subject matter was about the exclusive right to use the trademarks. The decision of the NCLAT became the subject matter of the present appeal.
Contentions of the Appellant:
It was argued that the exclusive right to use the trademarks was with the Appellant. The NCLT had only approved the resolution plan and in no manner altered/modified the resolution plan. Hence, the decision of NCLAT was erroneous in law.
Contentions of the Respondents:
It was contended that the NCLT had altered/modified the resolution plan while adjudicating on the interim application and the same is impermissible.
Observations of the Court:
It was observed that the NCLT had upheld the exclusive right to use the trademarks of the Corporate Debtor and further declared that the trademarks belonged to the Corporate Debtor. However, the resolution plan only talked about the perpetual exclusive right to use the trademarks by the Corporate Debtor. The additional declaration by the NCLT that the trademarks belonged to the Corporate Debtor could not be reconciled with the Resolution Plan approved by the CoC.
The Top Court opined that the modifications in Resolution Plan after approval are not open for judicial review unless they are violative of IBC.
It was ruled that as per the approved Resolution Plan, the perpetual exclusive right to use vests with the Appellant but the ownership rights do not vest with the Corporate Debtor.
The decision of the Court:
Based on the aforementioned reasons, the appeal was dismissed.
Case Title: SREI Multiple Asset Investment Trust Vision India Fund v. Deccan Chronicle Marketeers & Others.
Citation: 2023 Latest Caselaw 229 SC
Case No.: Civil Appeal No. 1706 of 2023 with other cases
Coram: Hon’ble Justice Ajay Rastogi, Hon’ble Justice Bela M. Trivedi
Advocate for Appellant: Adv. Pratiksha Mishra
Advocates for Respondent: Advs. T. V. S. Raghavendra Sreyas, Arup Banerjee, Krishnayan Sen, Amit K. Nain
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