Gloster Limited 2026: NCLT Cannot Decide Trademark Ownership Disputes Under IBC Section 60(5)

A significant question in Indian insolvency law has been how far the jurisdiction of the National Company Law Tribunal (NCLT) extends under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. Can the NCLT determine, in the course of a Corporate Insolvency Resolution Process, who owns a trademark that was disputed before the insolvency began? In Gloster Limited v. Gloster Cables Limited and Others, decided on 22 January 2026 and reported as 2026 INSC 81, the Supreme Court answered no. The NCLT cannot use Section 60(5) to adjudicate contested questions of intellectual property ownership that pre-date and are not intrinsically part of the insolvency proceedings.

Background: The Trademark Dispute Within Insolvency

Fort Gloster Industries Limited (FGIL) was the Corporate Debtor against which a CIRP was initiated. Gloster Cables Limited (GCL), a company related to FGIL, claimed ownership of the trademark "Gloster" based on a Technical Collaboration Agreement, a Trademark Agreement, and a Deed of Assignment executed between the two entities. GCL argued that the trademark had been assigned to it and was therefore not an asset of the Corporate Debtor that could be included in the resolution plan. The Successful Resolution Applicant (SRA) contended the opposite: that the trademark belonged to FGIL and vested in the SRA upon approval of the resolution plan. The NCLT had held in favour of the SRA, declaring the trademark an asset of the Corporate Debtor. The NCLAT reversed that finding. The SRA appealed to the Supreme Court.

The Scope of Section 60(5) of the IBC

Section 60(5) of the IBC grants the NCLT jurisdiction to entertain and dispose of any application or proceeding by or against the Corporate Debtor or its Resolution Professional. Section 60(5)(c) further extends this to any question of law or fact arising out of or in relation to the insolvency resolution or liquidation proceedings. This is a broadly worded provision, and the NCLT has in various decisions treated it as conferring wide subject matter jurisdiction. The question in Gloster was whether this breadth extends to adjudicating title over an asset where the title itself is the subject of a pre-existing, contested dispute between the Corporate Debtor and a third party.

The Supreme Court's Ruling

The Supreme Court, constituted by a bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan, upheld the NCLAT's decision and dismissed the SRA's appeal. The Court held that the NCLT's jurisdiction under Section 60(5)(c) is not unlimited. The phrase "arising out of or in relation to" the insolvency proceedings does not extend to disputes over title where the title is contested on grounds that exist independently of the insolvency. A trademark ownership dispute rooted in contractual documents executed years before the CIRP was initiated is not a question that "arises out of" the insolvency: it is a pre-existing controversy that simply has insolvency implications. The Court further noted that the approved resolution plan in this case itself acknowledged rival claims to the trademark. The NCLT therefore could not go behind the plan's own acknowledgment and determine title in favour of one party without proper adversarial proceedings on the trademark dispute.

Broader Implications: NCLT Jurisdiction Over Disputed Assets

The Gloster ruling has implications beyond trademark disputes. It establishes a principle: the NCLT cannot use Section 60(5) as a shortcut to resolve contested ownership questions that properly belong before a civil court, the Intellectual Property Appellate Board, or another specialist forum. Where a Corporate Debtor's asset schedule includes property whose title is disputed by a third party, the NCLT may note the dispute in the resolution plan, leave the title question open for adjudication in the appropriate forum, and ensure that the resolution plan addresses the contingency. What it cannot do is summarily determine title in favour of the SRA as part of the plan approval process. This has practical implications for resolution plans that include brands, trademarks, patent licences, real property under title disputes, and other contested assets.

Practical Takeaways

Successful Resolution Applicants bidding for businesses with valuable intellectual property assets should conduct thorough due diligence on trademark and IP ownership before submitting resolution plans. If competing claims to IP exist, the plan should expressly address how those claims are to be resolved post-completion, rather than assuming that NCLT approval of the plan settles the title question. Third parties with competing claims to assets of a Corporate Debtor should file their claims formally before the Resolution Professional and, if necessary, before the NCLT, rather than waiting for the plan to be approved and then challenging it. The Gloster ruling confirms that the IBC process, while powerful, does not extinguish bona fide third-party ownership claims over assets, and the appropriate forum to resolve such claims remains the civil courts or specialist tribunals rather than the NCLT.