A resolution plan said 'use' the trademark. The court said 'own' it. Who wins?

A newspaper company's rescue plan gave it the right to 'use' its own brand names forever. Then a court said it actually 'owns' them. The Supreme Court just stepped in.

The difference between two words — 'use' and 'own' — cost a corporate rescue plan its clearest asset. The Supreme Court ruled that no tribunal can rewrite a rescue plan after creditors have approved it. If the plan says 'use,' a court cannot later declare 'own.'

When the rescue plan arrived

Deccan Chronicle Holdings Ltd. (DCHL) owned two newspaper brands: 'Deccan Chronicle' and 'Andhra Bhoomi.' By 2017, the company was drowning in debt. Canara Bank, a lender, filed an application to start the Corporate Insolvency Resolution Process (CIRP — the formal process under the Insolvency and Bankruptcy Code where creditors try to revive or liquidate a company). The National Company Law Tribunal (NCLT — the tribunal that handles insolvency cases) admitted the application on July 5, 2017. The file, stamped and numbered, began its slow journey through the insolvency machinery.

A resolution professional ran the process for a year. SREI Multiple Asset Investment Trust submitted a rescue plan. The Committee of Creditors (CoC — the group of lenders who vote on a rescue plan) approved it with 81.39% of the vote on December 10, 2018. The NCLT gave conditional approval on June 3, 2019. The order was signed, the seal pressed into the paper, and the plan became binding — or so everyone thought.

Inside that approved plan was one clause that would become a battlefield.

The clause that started the fight

Clause 11.12 of the resolution plan said DCHL would have "perpetual exclusive rights to use" the trademarks 'Deccan Chronicle' and 'Andhra Bhoomi.' No financial charge for this use. The plan did not say the company would own the trademarks. It said 'use.' The words were deliberate, the drafters careful.

But a separate application — IA 155/2018 — was still pending before the NCLT. This application asked the tribunal to decide who actually owned the trademarks. On August 14, 2019, the NCLT passed an order that went far beyond what the resolution plan had said. It not only confirmed the right to use the trademarks but also declared that DCHL owned them outright. The courtroom fell silent as the order was read out — the silence of a room where everyone understands that a line has been crossed. The tribunal had crossed a line that the approved plan had drawn.

The party affected by this ownership declaration challenged it. The argument was simple: the resolution plan, approved by 81.39% of creditors, had only granted a right to 'use.' The tribunal could not turn that into a declaration of 'ownership' through a separate order. That would be changing the plan after it was already approved.

What the appellate tribunal said

The National Company Law Appellate Tribunal (NCLAT — the appeals body for insolvency cases) agreed. On September 2, 2022, it set aside the ownership declaration. The NCLAT held that declaring ownership rights over the trademarks was an impermissible modification of the CoC-approved resolution plan. Under Section 60(5) of the Insolvency and Bankruptcy Code (IBC — the law that governs insolvency proceedings), the adjudicating authority cannot expand the scope of an approved plan through subsequent orders. The smell of old paper and ink filled the appellate courtroom as the judgment was handed down.

The successful resolution applicant — SREI — appealed to the Supreme Court.

Why the Supreme Court said no

The Supreme Court bench, comprising Justice Ajay Rastogi and Justice Bela M. Trivedi, heard the appeal. The court's reasoning was rooted in a fundamental principle of the IBC: once a resolution plan is approved by the Committee of Creditors based on their commercial wisdom, no alterations or modifications are permissible by the adjudicating authority. The Supreme Court held that "the adjudicating authority cannot expand the scope of an approved plan through subsequent orders." The words, direct from the judgment, left no room for ambiguity.

The court held that the NCLT, when approving a resolution plan, has only two options: approve it or disapprove it. It cannot rewrite the plan. It cannot add terms that were not in the plan. It certainly cannot turn a 'use' right into an 'ownership' declaration through a separate application. The judgment, delivered on March 17, 2023, was crisp and final.

The Supreme Court upheld the NCLAT's finding. The ownership declaration, the court said, was an impermissible modification of the approved resolution plan. The tribunal had overstepped its jurisdiction under Section 60(5) of the IBC.

The procedural journey in full

The case, SREI Multiple Asset Investment Trust Vision India Fund v. Deccan Chronicle Marketeers & Others, travelled through four stages. First, the CIRP was initiated by the NCLT, Hyderabad Bench on July 5, 2017, when it admitted Canara Bank's application. Second, the Committee of Creditors approved the resolution plan with 81.39% voting on December 10, 2018. Third, the NCLT gave conditional approval on June 3, 2019, but kept IA 155/2018 pending. Fourth, on August 14, 2019, the NCLT allowed IA 155/2018 and declared the trademarks belonged to DCHL — the order that sparked the entire dispute.

The NCLAT set aside that declaration on September 2, 2022. The Supreme Court dismissed the appeal on March 17, 2023, in Civil Appeal No. 1706 of 2023, along with two connected appeals — Civil Appeal No. 8323 of 2022 and Civil Appeal No. 8132 of 2022 — which were dismissed as infructuous. No costs were awarded.

The legal framework that governed the dispute

The court engaged several provisions of the IBC. Section 31(1) — the approval of a resolution plan by the adjudicating authority — was the primary interpretation target. The court held that this section does not give the tribunal power to modify an approved plan. Section 60(5), which defines the jurisdiction of the adjudicating authority, was also interpreted strictly: the tribunal cannot use its general jurisdiction to expand the scope of a plan. Section 14, which imposes a moratorium during CIRP, was applied as a procedural vehicle. Section 12(3), which sets the timeline for CIRP, was a cross-reference. Section 30(2) and Section 30(4), which lay down the requirements for a resolution plan and its submission to the NCLT, were supporting definitions. Section 238, which gives the IBC overriding effect, was left open. Section 12A, dealing with withdrawal of applications, was applied. The court also referred to Section 134 of the Trade Marks Act, 1999, which deals with suits for infringement and passing off, but only in passing. Regulation 39 of the IBBI (CIRP for Corporate Persons) Regulations, 2016, was applied as a procedural vehicle.

The precedents that guided the court

The Supreme Court relied on two key precedents. In Embassy Property Developments Private Limited v. State of Karnataka and Others (2020) 13 SCC 308, the court had held that the adjudicating authority cannot sit in appeal over the commercial wisdom of the CoC. In Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited & Another (2022) 2 SCC 401, the court had reiterated that judicial review of a resolution plan is limited to checking whether it conforms with the mandates of the IBC.

Both cases stood for the same principle: the CoC's commercial decision is final. The tribunal can only ensure the plan meets the legal requirements of the IBC. It cannot add to the plan or change its terms.

The ratio decidendi

Two principles emerge from this judgment. First, once a resolution plan is approved by the CoC based on its commercial wisdom, no alterations or modifications are permissible by the adjudicating authority. The adjudicating authority may only approve or disapprove the plan; it cannot expand the scope of an approved plan through subsequent orders. Judicial review is limited to checking conformity with IBC mandates.

Second, where a resolution plan specifically grants perpetual exclusive right to 'use' trademarks, the adjudicating authority cannot expand this to a declaration of 'ownership' of such trademarks, as this constitutes an impermissible modification or alteration of the approved resolution plan.

What this means for resolution plans

For resolution professionals, lenders, and successful resolution applicants, this judgment is a clear warning: every word in a resolution plan matters. If the plan says 'use,' it cannot later be interpreted as 'own.' If the plan is silent on ownership, the tribunal cannot fill that silence.

For trademark owners and licensees, the distinction is critical. A perpetual right to use a trademark is not the same as owning it. Ownership brings the right to sell, license, or sue for infringement. Use alone does not. The physical trademark registration certificates, with their seals and signatures, remain with the true owner — not the user.

Consider a hypothetical: a resolution plan grants a company the right to use a trademark for 99 years. The company builds a business around it. Later, a competitor claims ownership. Without an ownership declaration in the plan, the company has only a contractual right to use — not the legal standing to sue for infringement. The judgment closes that loophole: the plan is the final word.

THE PLAY: Draft every clause in a resolution plan as if a court will read it literally — because it will. If you want ownership, say 'own.' If you want use, say 'use.' The tribunal cannot bridge the gap for you.

The Supreme Court dismissed the appeal. The ownership declaration was gone. The plan stood as originally approved: a right to use, not a right to own.