Gloster Limited v. Gloster Cables Limited & Ors., Civil Appeal Nos. 2996 & 4493 of 2024, 2026 INSC 81 (Supreme Court of India) Judgment Gloster
Introduction
In insolvency proceedings, speed and certainty are crucial. But what happens when a long-standing intellectual property dispute sneaks into the Corporate Insolvency Resolution Process (CIRP)?
The Supreme Court’s decision in Gloster Limited v. Gloster Cables Limited answers this question with clarity—and restraint.
This judgment is a strong reminder that insolvency courts are not universal courts for all disputes, especially complex questions of title and ownership.
The Story Behind the Dispute
The case arose from the insolvency of Fort Gloster Industries Limited (FGIL). During its CIRP under the Insolvency and Bankruptcy Code, 2016 (IBC), a major controversy surfaced over the ownership of the trademark “GLOSTER.”
- FGIL was the original registered owner of the trademark.
- Gloster Cables Limited (GCL) had been using the trademark for decades under various agreements—technical collaboration, licensing, and later an alleged assignment.
- In 2017, just before insolvency proceedings began, FGIL executed a Deed of Assignment in favour of GCL.
- After CIRP commenced, Gloster Limited emerged as the Successful Resolution Applicant (SRA) and claimed that the trademark formed part of FGIL’s assets.
To protect its rights, GCL approached the NCLT under Section 60(5) of the IBC, seeking a direction that the trademark “Gloster” should be excluded from the resolution plan.
Conflicting Views of the Tribunals
- NCLT (Kolkata) went a step further than expected. While dismissing GCL’s application, it declared that the trademark was an asset of the corporate debtor and therefore passed to the SRA.
- NCLAT partially reversed this, holding that the NCLT had jurisdiction but had wrongly decided the ownership issue.
- This led both parties to approach the Supreme Court—one challenging the finding on ownership, the other challenging the very jurisdiction of the insolvency tribunal.
What the Supreme Court Decided
The Supreme Court struck a careful balance.
- Limits of Section 60(5) IBC
The Court held that although Section 60(5) gives wide powers to the NCLT, it is not unlimited. The provision applies only to disputes that arise out of or are directly connected with insolvency resolution.
Deciding trademark ownership, involving competing contractual claims and historical transactions, goes beyond this scope. Judgment Gloster - Insolvency Forums Are Not Title Courts
The Court made it clear that questions of title over intellectual property cannot be conclusively decided in summary insolvency proceedings, especially when rival claims already exist and civil remedies are available. - Resolution Plan Matters
Importantly, the approved resolution plan itself acknowledged disputed ownership of the trademark. The SRA entered the process with open eyes.
Insolvency proceedings cannot be used to convert a disputed claim into a final declaration of ownership. - No Shortcuts Through IBC
The Court cautioned against using insolvency jurisdiction to bypass proper civil or commercial adjudication. Where a dispute exists independently of insolvency, it must be resolved before the appropriate forum.
Why This Judgment Is Important
This ruling has far-reaching implications:
- It protects third-party property rights from being absorbed into insolvency proceedings without due adjudication.
- It reinforces that the IBC is a resolution mechanism, not a substitute for civil courts.
- It gives clarity to resolution applicants: you only get what is clearly vested in the corporate debtor, not assets clouded by unresolved disputes.
Conclusion
The Supreme Court’s decision in the Gloster case restores balance to insolvency jurisprudence. Speed cannot come at the cost of legality, and efficiency cannot override jurisdiction.
In simple terms, the Court reminded everyone of a fundamental principle:
Insolvency law resolves financial distress—it does not rewrite ownership history.