A recent Supreme Court judgment dated 22nd January 2026, involving the trademark “GLOSTER” has brought crucial clarity on whether insolvency tribunals can decide trademark ownership disputes. The ruling draws a clear boundary between insolvency resolution under the IBC and independent civil rights under trademark law, making it an important decision for businesses, insolvency professionals, and IP practitioners alike.
The dispute arose from the long and complex relationship between Fort Gloster Industries Limited (FGIL) and Gloster Cables Limited (GCL). FGIL was the original registered owner of the trademark “GLOSTER”. Over time, FGIL allowed GCL to use the trademark under collaboration and licensing agreements. FGIL eventually stopped its manufacturing operations and later became financially distressed, leading to proceedings before the Board for Industrial and Financial Reconstruction. During this period, FGIL entered into multiple arrangements with GCL, including exclusive licensing, creation of charge over the trademark as security for a loan, and a future-oriented agreement contemplating assignment of the trademark once statutory restrictions were lifted.
After the BIFR regime ended, FGIL executed a deed assigning the trademark to GCL, and GCL was subsequently recorded as the registered proprietor in the Trademark Registry. Around the same time, insolvency proceedings under the Insolvency and Bankruptcy Code were initiated against FGIL. A resolution plan submitted by Gloster Limited was approved by the Committee of Creditors. However, the plan acknowledged that ownership of the trademark “GLOSTER” was disputed and subject to existing agreements in favour of GCL.
The conflict intensified when GCL approached the NCLT seeking exclusion of the trademark from the resolution plan, asserting that the trademark no longer belonged to FGIL. The NCLT rejected this claim and went further to declare that the trademark was an asset of FGIL, thereby vesting it in the Successful Resolution Applicant. This declaration was overturned by the NCLAT, which held that the insolvency tribunal had exceeded its jurisdiction. The matter ultimately reached the Supreme Court through cross appeals.
The Supreme Court ruled that the NCLT had no authority to conclusively decide trademark ownership under Section 60(5) of the IBC. The Court emphasised that insolvency tribunals are meant to resolve issues arising directly from insolvency, not to adjudicate complex civil disputes involving title, contractual interpretation, and intellectual property rights. Trademark ownership, the Court held, is a substantive civil right that exists independently of insolvency proceedings.
A key part of the Court’s reasoning was that the approved resolution plan itself did not clearly vest ownership of the trademark in FGIL or the Resolution Applicant. Instead, it recorded competing claims and merely expressed a belief that agreements in favour of GCL were invalid. The Court clarified that such beliefs cannot be converted into declarations of ownership by the NCLT. Once a resolution plan is approved by creditors, the adjudicating authority cannot rewrite or improve it by granting additional substantive rights.
The Court also noted that if the assignment of the trademark was alleged to be illegal, preferential, or undervalued, the Insolvency Code provides specific mechanisms for avoidance proceedings. No such proceedings were initiated by the Resolution Professional. In the absence of these statutory actions, the NCLT could not invalidate the assignment or decide title by default.
The Supreme Court clarified that the judgment made it clear that trademark ownership disputes must be decided by competent civil or commercial courts, or through statutory remedies available under the Trade Marks Act, 1999. Insolvency tribunals cannot be used as shortcuts to settle long-standing intellectual property disputes.
In conclusion, the Supreme Court’s ruling draws a firm jurisdictional line between insolvency law and intellectual property rights. While insolvency proceedings can determine how assets of a corporate debtor are resolved, they cannot be used to decide disputed ownership of trademarks or other independent civil rights.
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