Legal Review and Analysis of Gloster Limited vs Gloster Cables Limited & Ors 2026 INSC 81
Synopsis
This judgment of the Supreme Court of India, delivered in January 2026, revolves around the jurisdictional limits of the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC) in deciding title disputes over assets, specifically a trademark, during corporate insolvency resolution proceedings. The Court examined whether the NCLT could, while adjudicating an interlocutory application, declare title to a trademark in favor of the Successful Resolution Applicant, thereby effectively modifying the approved resolution plan.
1. Basic Information of the Judgment
Case Title: Gloster Limited v. Gloster Cables Limited & Ors.
Citation: 2026 INSC 81
Court: Supreme Court of India
Bench: Justice K.V. Viswanathan and Justice J.B. Pardiwala
Nature of Bench: Division Bench
Civil Appeal Nos.: 2996 of 2024 & 4493 of 2024
Date of Judgment: 22nd January 2026
2. Legal Framework
The judgment primarily interprets and applies provisions of the following laws:
Insolvency and Bankruptcy Code, 2016 (IBC):
Section 60(5)(c) – Jurisdiction of NCLT over questions arising out of insolvency proceedings.
Section 31 – Approval of resolution plan.
Sections 43, 45, 46, 47 – Avoidance of preferential, undervalued, and fraudulent transactions.
Section 14 – Moratorium during CIRP.Trade Marks Act, 1999: Assignment and registration of trademarks.
Sick Industrial Companies (Special Provisions) Act, 1985 (SICA): Restraint orders on asset disposal.
Indian Contract Act, 1872: Section 23 – Lawful consideration and object.
Relevant Precedents:
Embassy Property Developments Pvt. Ltd. v. State of Karnataka & Ors.
Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta & Ors.
Tata Consultancy Services Ltd. v. SK Wheels (P) Ltd.
SREI Multiple Asset Investment Trust Vision India Fund v. Deccan Chronicle Marketeers & Ors.
Kalyani Transco v. Bhushan Power & Steel Ltd.
Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd.
3. Facts of the Case
The corporate debtor, Fort Gloster Industries Limited (FGIL), underwent Corporate Insolvency Resolution Process (CIRP) initiated under Section 9 of IBC.
Gloster Limited (Appellant) emerged as the Successful Resolution Applicant (SRA).
Respondent No. 1, Gloster Cables Limited (GCL), claimed ownership of the trademark “Gloster” through a series of agreements dating from 1995, including a Supplemental Trademark Agreement (2008) and a Deed of Assignment (2017).
GCL filed an application under Section 60(5) of IBC before the NCLT, seeking exclusion of the trademark from FGIL’s assets in the resolution plan.
The NCLT dismissed GCL’s application and declared the trademark as an asset of FGIL (and thus of the SRA), while also approving the resolution plan.
The NCLAT set aside the NCLT’s findings regarding trademark ownership, leading to cross-appeals before the Supreme Court.
4. Issues Before the Court
Whether the NCLT, in exercise of its jurisdiction under Section 60(5)(c) of IBC, could adjudicate and declare title to the trademark “Gloster” while hearing GCL’s application?
Whether the NCLT could, in the absence of a formal application by the Resolution Professional, invoke provisions relating to avoidance transactions (Sections 43, 45 of IBC) to invalidate the assignment deed?
Whether the resolution plan, as approved by the Committee of Creditors (CoC) and the NCLT, could be modified by a subsequent declaration of title by the NCLT?
5. Ratio Decidendi
The Supreme Court held as follows:
Jurisdiction under Section 60(5)(c): The NCLT’s residuary jurisdiction under Section 60(5)(c) is limited to questions that “arise out of or relate to” the insolvency resolution process. Disputes over title to assets, where the nexus with insolvency is remote or tenuous, fall outside this scope.
Sanctity of the Approved Resolution Plan: Once a resolution plan is approved by the CoC and the NCLT under Section 31, it becomes binding. The NCLT cannot, through an interlocutory application, modify or alter the plan by granting rights not contemplated therein.
Avoidance of Transactions: The NCLT cannot suo motu invoke Sections 43 or 45 of IBC to set aside a transaction without a formal application by the Resolution Professional or other entitled parties, and without affording the affected party adequate opportunity to defend.
Title Disputes Extraneous to CIRP: Complex questions of trademark ownership, involving disputed agreements, allegations of fraud, and compliance with SICA, are not amenable to summary adjudication in insolvency proceedings and must be resolved in appropriate forums.
6. Legal Framework Established by the Supreme Court
Clarification on Section 60(5)(c): The Court reinforced the principle that NCLT’s jurisdiction is not unlimited. It must have a direct and proximate nexus with the insolvency process. Title disputes between third parties and the corporate debtor, especially where the resolution plan itself acknowledges competing claims, are not “in relation to” insolvency.
Finality of Resolution Plans: The judgment underscores the finality and binding nature of a CoC-approved resolution plan. Any attempt to alter the plan’s terms through a side application is impermissible.
Natural Justice in Avoidance Proceedings: The Court emphasized that allegations of preferential or undervalued transactions must be pleaded specifically, with proper notice to the affected party, and cannot be adjudicated in a summary manner without due process.
7. Court’s Analysis and Reasoning
The Court reviewed the resolution plan and noted that it only expressed a “belief” or “understanding” that the trademark was FGIL’s asset, while acknowledging rival claims. Thus, the plan did not confer undisputed title on the SRA.
Referencing precedents like SREI Multiple Asset and Ebix Singapore, the Court held that granting ownership rights beyond what was in the plan would amount to an impermissible modification.
The Court distinguished Gujarat Urja (where termination was due to insolvency) from the present case, where the trademark dispute existed independent of the CIRP.
It also noted that the RP’s failure to file avoidance applications—due to alleged late disclosure of documents—did not justify the NCLT’s suo motu findings on undervalued transactions.
8. Critical Analysis and Outcome
Critical Analysis:
The judgment rightly balances the efficiency of insolvency proceedings with the need for procedural fairness and jurisdictional propriety. It prevents the NCLT from overreaching into complex title disputes that require detailed evidence and legal analysis. However, it leaves the trademark ownership unresolved, potentially leading to prolonged litigation elsewhere.
Core Outcome:
The Supreme Court set aside the NCLT’s declaration that the trademark “Gloster” was an asset of FGIL.
It upheld the NCLAT’s ruling that the NCLT could not decide title in the context of the application under Section 60(5).
The Court clarified that observations in the judgment would not affect future proceedings on trademark title in appropriate forums.
Both appeals were disposed of accordingly, with no order as to costs.
9. (MCQs)
1. Under Section 60(5)(c) of IBC, NCLT has jurisdiction to entertain questions?
a) Only related to financial creditors.
b) Arising out of or in relation to insolvency resolution proceedings.
c) Pertaining to any civil dispute involving the corporate debtor.
d) Only concerning operational creditors.
2. Once a resolution plan is approved by the CoC and NCLT under Section 31?
a) It can be modified by NCLT in subsequent applications.
b) It is binding and cannot be altered through side applications.
c) It requires fresh approval from the CoC for any change.
d) Only the Supreme Court can modify it.
3. Which of the following is required for initiating avoidance proceedings under Sections 43/45 of IBC?
a) A suo motu order by NCLT.
b) A formal application by the Resolution Professional or other entitled parties.
c) A directive from the CoC.
d) An oral submission during the hearing.
4. In Gloster Limited v. Gloster Cables, the Supreme Court held that disputes over trademark ownership?
a) Must always be decided by NCLT.
b) Are central to the insolvency process.
c) Are not “in relation to” insolvency if they exist independently.
d) Can only be resolved by the Trademark Registry.