NCLT Cannot Decide Disputed Trademark Title Under Section 60(5) IBC When Plan Recognizes Rival Claims: Supreme Court Restores NCLAT View

Case Name: Gloster Limited v. Gloster Cables Limited & Ors.; with Gloster Cables Limited v. Gloster Limited
Citation: 2026 INSC 81

Date of Judgment/Order: 22 January 2026

Bench: Justice K.V. Viswanathan, and Justice J.B. Pardiwala

Held: The Supreme Court held that while Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 confers wide jurisdiction on the NCLT to decide questions arising out of or in relation to insolvency resolution proceedings, it does not empower the Adjudicating Authority to grant a declaration of title to a trademark when the approved resolution plan itself acknowledges rival claims and no avoidance application under Sections 43 to 46 IBC was filed. The Court ruled that the NCLT could not, in the course of adjudicating an intervention application under Section 60(5), conclusively declare that the trademark “Gloster” was an asset of the Corporate Debtor and consequently of the Successful Resolution Applicant, particularly when disputed assignment agreements and competing claims existed outside the core insolvency process.

Summary: The Corporate Debtor, Fort Gloster Industries Limited (FGIL), underwent CIRP, and Gloster Limited emerged as the Successful Resolution Applicant (SRA). During pendency of approval of the resolution plan, Gloster Cables Limited (GCL) filed an application under Section 60(5) IBC claiming ownership of the trademark “Gloster” based on earlier technical collaboration, license agreements, a supplemental trademark agreement of 2008, and a deed of assignment dated 20.09.2017. The NCLT rejected GCL’s application, held that the assignment was invalid, treated the transaction as preferential/undervalued despite no formal avoidance application by the Resolution Professional, and declared the trademark to be an asset of the Corporate Debtor. The NCLAT reversed this finding, holding that the NCLT exceeded its jurisdiction. Before the Supreme Court, the core issue was whether the NCLT could determine title under Section 60(5)(c). Relying on Embassy Property, Gujarat Urja, and Tata Consultancy Services, the Court reiterated that the residuary jurisdiction under Section 60(5) must have a direct nexus with insolvency resolution and cannot be invoked to adjudicate disputes dehors the CIRP. Since the resolution plan itself recorded rival claims and the RP had not initiated avoidance proceedings under Sections 43 to 46 IBC, the NCLT could not convert a Section 60(5) application into a conclusive declaration of trademark title.

Decision: The Supreme Court upheld the NCLAT’s conclusion that the NCLT exceeded its jurisdiction in declaring the trademark “Gloster” to be the asset of the Corporate Debtor and the SRA, set aside the contrary findings of the Adjudicating Authority on title, and clarified that such disputes must be adjudicated in appropriate proceedings outside the limited ambit of Section 60(5) IBC. The appeals were disposed of accordingly.