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Anil Dhirubhai Ventures moves NCLT in Reliance Capital case
- ADAVL has sought the court’s intervention to direct Hinduja Group-owned IndusInd International Holdings to stop using the brand ‘Reliance’ once the resolution plan is implemented.
Mumbai: Anil Dhirubhai Ambani Ventures Pvt. Ltd (ADAVL) has filed a fresh interlocutory application in the National Company Law Tribunal (NCLT) seeking the court’s intervention to direct Hinduja Group-owned IndusInd International Holdings Ltd (IIHL) to stop using the brand ‘Reliance’ once the resolution plan is implemented.
In February, the NCLT had approved IIHL’s takeover of the insolvent Reliance Capital (RCap). As per the order, while approving the resolution plan the NCLT had allowed IIHL, the successful resolution applicant, to use the brand, logo, name and trademark owned, licensed or sub-licensed by RCap , subject to the payment of fees under the existing agreements, and subject to the terms and conditions set in those agreements for three years for the purpose of the implementation of the resolution plan.
Also read | Reliance Capital lenders accuse IIHL of non-compliance, company denies claims
In its petition, ADAVL prayed for the recall of this part of the tribunal’s order, a copy of which was seen by Mint. The Mumbai bench of the NCLT will hear the matter on Tuesday.
“Grave and irreparable harm, loss and injury will be caused to the applicant (ADAVL) if the reliefs sought in the application are not granted by NCLT. However, no prejudice will be caused to IIHL or Reliance Capital. The balance of convenience weighs in favour of the applicant,” the 18-page petition showed.
Brand licensing pact
In 2014, ADAVL and RCap had entered into a brand licensing agreement under which the former had granted RCap a non-exclusive, royalty-free licence to use the brand ‘Reliance’ for 10 years. In June 2021, ADAVL ended the agreement between the parties, restricting the brand's use.
Also read | Reliance Capital administrator seeks implementation of IIHL's resolution plan
In its application, ADAVPL has petitioned that the brand agreement does not create any interest in the brand in favour of RCap, but only allows permissive use thereof. Given this position, the brand is not an "asset" of RCap within the meaning of the term as used in Section 18 of the Insolvency and Bankruptcy Code, and ADAVL has requested the cessation of brand usage by IIHL immediately after implementation of the resolution plan.
Not party to plan
Moreover, the application states the company was not heard while allowing IIHL to use the brand for three years, as it was not a party to the resolution plan.
Also read | RCap resolution: NCLT asks Hindujas to deposit ₹2,750 cr in designated account
Currently, IIHL and the lenders to bankrupt RCap are at loggerheads over the implementation of the resolution plan. At its last hearing, IIHL informed the tribunal it has deposited the equity component of ₹2,750 crore in the committee of creditors designated escrow account. The NCLT has directed the Reserve Bank of India and the Department for Promotion of Industry and Internal Trade to expedite the approval for the applications made by IIHL for implementation of the resolution plan.
Key Takeaways
- NCLT allowed IIHL to use the brand, logo, name, trademark owned licensed, sub-licensed by Reliance Capital, on payment of fees.
- It is subject to the terms and conditions set in those agreements for three years for implementation of the resolution plan.
- The Mumbai bench of the NCLT will hear the matter on 20 August.
- ADAVL has requested the cessation of brand usage by IIHL immediately after implementation of the resolution plan.
- ADAVL’s application states that the company was not heard while allowing IIHL to use the brand for 3 years.
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Business NewsCompaniesAnil Dhirubhai Ventures moves NCLT in Reliance Capital case
First Published:19 Aug 2024, 10:39 PM IST
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