Legal Updates (June 22 – June 27, 2026)
CASE UPDATES
If the bank has already rejected the OTS proposal, such rejection has been taken note of by the NCLAT, and the insolvency appeal is to proceed on its own merits, pendency of that appeal does not bar the bank from proceeding with transfer of loan exposure through the Swiss Challenge Method
The Madras High Court in the case of Reji Abraham vs Punjab National Bank [W.P. No.22088 of 2026] dated June 22, 2026, has held that where the bank has already rejected the OTS proposal, such rejection has been taken note of by the NCLAT, and the insolvency appeal is to proceed on its own merits, pendency of that appeal does not bar the bank from proceeding with transfer of loan exposure through the Swiss Challenge Method. The Court further held that a borrower or erstwhile management cannot insist on being permitted to match the highest bid in such a process, especially in view of the disqualification under Section 29A of the Insolvency and Bankruptcy Code, 2016.
The Court also reinforced that adoption of the Swiss Challenge Method by a bank for auction of secured asset is legally permissible and is not, by itself, violative of Article 14 of the Constitution of India. Interference under Article 226 is limited, and the High Court will not sit in appeal over commercial decisions of banks and financial institutions unless arbitrariness or illegality is clearly established. A vague allegation of non-compliance with internal or RBI policy, without a concrete challenge to the rejection decision itself, is insufficient to stop the transfer process.
The Court noted that the NCLAT had already taken cognizance of the bank’s rejection of the OTS proposal and specifically recorded that there was no possibility of settlement between the parties and that the controversy regarding acceptance or rejection of the proposal no longer survived. The Court also noted that the NCLAT had made it clear that the appeal could proceed on merits in relation to the order admitting CIRP. In that background, the Court held that pendency of the appeal before the NCLAT was not a bar on the bank proceeding with the impugned transfer process.
The Court further observed that the corporate debtor had ample opportunities to repay or submit a viable settlement proposal, but had merely prolonged the matter. It held that the submission that the corporate debtor should be permitted to match the highest bid could not be sustained, because Section 29A of the Insolvency and Bankruptcy Code specifically disqualifies certain persons, including erstwhile management, from participating in the resolution process. On the challenge to the Swiss Challenge Method itself, the Court reiterated that adoption of the Swiss Challenge Method is not violative of Article 14 and that writ courts do not interfere with commercial decisions of financial institutions unless they are arbitrary or illegal.
In real estate insolvencies, although the IBC is generally entity-centric, a project-oriented approach is warranted where the debt, security and loan documentation are confined to a specific project
The Mumbai Bench of the National Company Law Tribunal (NCLT) in the case of Union Bank of India vs Rashmi Realty Builders Pvt Ltd [IA (I.B.C) 514/MB/2026] dated June 19, 2026, has held that where entries in a duly signed balance sheet acknowledge borrowings within the subsisting period of limitation, a fresh period of limitation commences under Section 18 of the Limitation Act, 1963, and such acknowledgment, read with subsequent written communications and settlement proposals, can sustain a Section 7 petition within limitation. It further held that, at the stage of admission of a petition under Section 7 of the IBC, the enquiry is confined to the existence of financial debt and occurrence of default, and technical objections concerning strict evidentiary compliance do not defeat admission where certified bank records and an authenticated Information Utility record establish debt and default.
The NCLT clarified that, in real estate insolvencies, although the IBC is generally entity-centric, a project-oriented approach is warranted where the debt, security and loan documentation are confined to a specific project. Since the sanction letter and mortgage documentation unmistakably established that the financial facilities were intrinsically linked to the project “Rashmi Starcity Phase II & III” alone, the CIRP was required to remain confined to that project and could not extend to unrelated projects of the Corporate Debtor.
The Tribunal observed that the sanction letter, loan agreements, security documents, mortgage deeds, statements of account, Bankers’ Books Certificate and the Record of Default issued by NeSL collectively established that substantial financial facilities were extended by the Financial Creditor to the Corporate Debtor and that the liabilities remained unpaid. It observed that the principal defence of the Corporate Debtor was confined to technical objections.
The Tribunal also observed that proceedings under Section 7 of the IBC are summary in nature and that, at the admission stage, the Adjudicating Authority is confined to determining the existence of financial debt and the occurrence of default. It held that the certified statements of account, Bankers’ Books Certificate and the authenticated Record of Default issued by the Information Utility were sufficient, and that hyper-technical objections regarding evidentiary formalities did not detract from the material establishing debt and default.
Where the complainant fails to prove, through a witness with direct knowledge, the transaction that led to execution of the cheque and the passing of consideration, the initial burden necessary to invoke the presumptions under Sections 118 and 139 of the NI Act remains undischarged
The Kerala High Court in the case of Shijosh vs State of Kerala [CRL.A NO. 1403 of 2008] dated June 09, 2026, has held that where the complainant fails to prove, through a witness with direct knowledge, the transaction that led to execution of the cheque and the passing of consideration, the initial burden necessary to invoke the presumptions under Sections 118 and 139 of the NI Act remains undischarged. In such a situation, the complainant is disentitled to the benefit of those presumptions, and a finding that the offence under Section 138 has not been proved beyond reasonable doubt cannot be faulted.
The Court underscored that the statutory presumptions under Sections 118 and 139 of the NI Act do not operate in the abstract. The complainant must first lay a credible factual foundation regarding the underlying transaction and the execution of the cheque. Where the person who actually advanced the money and maintained contemporaneous records is not examined, and the complainant lacks direct knowledge of the transaction, the prosecution may fail at the threshold itself.
The Court observed that in a prosecution under Section 138 of the NI Act, the complainant may avail the twin presumptions under Sections 118 and 139, but only after proving the transaction and execution of the cheque in a convincing manner. The Court specifically noted that this would necessarily include proof of the passing of consideration covered by the cheque. The Court further held that such proof must come from a person having direct knowledge of the transaction and execution of the cheque, and that the evidence of a person without such direct knowledge would be insufficient for that purpose.
If third-party sellers exploit an e-commerce platform’s “latching on” feature to attach themselves to a brand owner’s existing listings and, through such listings, display the brand owner’s trade mark, copyrighted product photographs and listing content so as to present their own products under the same commercial presentation, a prima facie case of passing off is made out
The Delhi High Court in the case of Piyush Sapra vs Flipkart Internet Private Limited [CS(COMM) 643/2026] dated June 15, 2026, has held that where third-party sellers exploit an e-commerce platform’s “latching on” feature to attach themselves to a brand owner’s existing listings and, through such listings, display the brand owner’s trade mark, copyrighted product photographs and listing content so as to present their own products under the same commercial presentation, a prima facie case of passing off is made out. The Court accepted that such conduct is likely to deceive unwary consumers into believing that the defendants’ products originate from, are affiliated with, or are connected with the plaintiffs, and is therefore liable to be restrained at the ad-interim stage.
The Court observed that there existed a real likelihood that an unwary consumer of average intelligence and imperfect recollection may be led to believe that the Defendants’ products originate from, are affiliated with, or are otherwise connected with the Plaintiffs’ products. The acts of Defendant Nos. 2 to 13 were therefore held, prima facie, to be calculated to ride upon the goodwill associated with the Subject Marks and likely to cause confusion as to the origin of the products.
Accordingly, the Court restrained Defendant Nos. 2 to 13 and all persons acting on their behalf from using the Subject Marks ‘SHAPERMEN’ / ‘SHAPER MEN’ or any deceptively or confusingly similar mark, from using the Plaintiffs’ copyrighted product photographs and listing content, and from manufacturing, marketing, selling, distributing, offering for sale, advertising, exporting, importing or otherwise dealing in products bearing the Subject Marks or any deceptively similar mark, or from passing off the Defendants’ products as those of the Plaintiffs or as associated with the Plaintiffs.
In the absence of prima facie material disclosing fraud, misconduct, mala fides, violation of statutory duties or professional misconduct, no direction could be issued to the IBBI for initiation of enquiry or disciplinary proceedings against the Liquidator
The Kochi Bench of the National Company Law Tribunal (NCLT) in the case of Meenachil East Urban Co-operative Bank vs CA Mahalingam Suresh Kumar [IA(IBC)/1/KOB/2025] dated June 10, 2026, has held that the Explanation inserted to Section 53(1)(b) of the Insolvency and Bankruptcy Code, 2016 is clarificatory in nature and applies to pending proceedings, and that the statutory scheme contemplates distribution to a secured creditor who has relinquished its security interest under Section 52 with reference to the value of the security interest relinquished, and not merely on the basis of the quantum of debt admitted.
The Tribunal further held that in the absence of prima facie material disclosing fraud, misconduct, mala fides, violation of statutory duties or professional misconduct, no direction could be issued to the IBBI for initiation of enquiry or disciplinary proceedings against the Liquidator, and in the absence of cogent evidence demonstrating illegality, fraud, misappropriation or improper claim, no interference was warranted with liquidation expenses or liquidator’s fees.
The Tribunal identified the principal issue as the manner in which liquidation proceeds are to be distributed amongst secured creditors who had relinquished their security interests under Section 52 of the Code. The Applicant argued that once such relinquishment took place, the realised value ought to have been distributed amongst secured creditors on a pro rata basis having regard to their admitted claims under Section 53(1)(b), whereas the Liquidator and Respondent No. 2 defended the distribution on the basis of the value of the respective security interests relinquished.
The Tribunal examined Section 53 as amended in 2026 and noted that the Explanation inserted to Section 53(1)(b) clarifies that where the value of the security interest relinquished by the secured creditor is less than the total debt owed, such creditor shall be a secured creditor only to the extent of the value of such security interest, and for the remaining debt shall be treated as an unsecured creditor. The Tribunal further observed that though the liquidation sale had taken place on August 22, 2024 and the amendment came into force only on May 26, 2026, the amendment was clarificatory in nature and, following the reasoning on retrospective applicability of clarificatory amendments, would apply to pending proceedings.
Prepayment charges, commitment charges and processing fees constitute recoverable liabilities arising from the lending transaction and fall within the ambit of “debt” under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993
The Calcutta High Court in the case of Maan Steel and Power Limited vs Indian Bank [WPO 2585 of 2022] dated June 10, 2026, has held that prepayment charges, commitment charges and processing fees constitute recoverable liabilities arising from the lending transaction and fall within the ambit of “debt” under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993. Where such liabilities remain unpaid, the debt cannot be treated as fully discharged merely because the principal outstanding and accrued interest have been paid.
Consequently, where the sanction letter and facility agreement contemplate such charges and the FDR is pledged as security for repayment of the entire debt, the bank is entitled to retain the pledged FDRs and refuse release of securities and issuance of a “No Due Certificate” until the outstanding contractual liabilities are satisfied. Accordingly, such action cannot be characterized as arbitrary, illegal or unreasonable in writ jurisdiction.
The Court held that the expression “debt” under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993 is of wide amplitude and includes prepayment charges, commitment charges and processing fees, these being contractual incidents of the lending arrangement itself. It also observed that omission to specifically quantify such charges in the closure computation did not extinguish the underlying contractual entitlement in the absence of waiver, accord and satisfaction, or novation.
The Court further observed that the FDRs had stood pledged as security for repayment of the “entire debt” and could not be said to become automatically releasable merely because the principal and interest components had been paid. It held that security follows the debt and continues until the secured obligations are fully discharged, and that mere communication of closure figures or acceptance of repayment of the principal exposure did not amount to abandonment of contractual claims expressly preserved under the governing documents.
In assessing deceptive similarity, rival marks must be compared as a whole on the basis of their overall structural, phonetic and visual impression, and in the case of pharmaceutical products a stricter standard applies because even a possibility of confusion must be avoided
The Bombay High Court in the case of Laboratoires Griffon Pvt Ltd vs Psychotropics India Limited [Interim Application No. 4006 of 2022] dated June 15, 2026, has held that deceptive similarity had to be assessed by comparing the rival marks as a whole and from the perspective of a person of average intelligence and imperfect recollection, considering the overall structural, phonetic and visual impression created by the marks. The Court further observed that in cases involving medicinal and pharmaceutical products, a stricter approach must be adopted since confusion between medicinal products may have serious or disastrous consequences.
The Court observed that even assuming “LINCTUS” was descriptive, deception and confusion were nevertheless likely to arise, and the Defendant, having itself sought registration of “PIL-LINCTUS”, could not now be permitted to contend that “LINCTUS” was merely descriptive or common to trade. It rejected the Defendant’s contention that the Plaintiffs were seeking to monopolise “LINCTUS”, holding that the Plaintiffs were protecting their registered composite mark as a whole. The Court also found that the Defendant’s conduct weighed against it at the interlocutory stage, noting its knowledge or deemed knowledge of the Plaintiffs’ mark, its abandoned applications for “PIL-LINCTUS” and “BRILINCTUS”, inconsistent pleas on user, and failure to produce material evidencing substantial use.
The Court clarified that in assessing deceptive similarity, rival marks must be compared as a whole on the basis of their overall structural, phonetic and visual impression, and in the case of pharmaceutical products a stricter standard applies because even a possibility of confusion must be avoided. On that standard, the Court held that “GRILINCTUS” and “PIL-LINCTUS” are deceptively similar, the hyphen does not remove the likelihood of confusion, and the fact that the common element may be descriptive does not, in the facts of this case, negate infringement or passing off where the overall impression remains confusingly similar. The Plaintiffs, having shown prior registration, long-standing use, goodwill, and absence of acquiescence, made out a strong prima facie case for interim relief.
In matters concerning medicinal and pharmaceutical products, stricter standards apply because even the slightest possibility of confusion is required to be restrained in public interest
The Bombay High Court in the case of Integrace Private Limited vs Mas Pharmachem [Commercial IP Suit No. 238 of 2015] dated June 15, 2026, has held that in matters concerning medicinal and pharmaceutical products, stricter standards apply because even the slightest possibility of confusion is required to be restrained in public interest. Where the Plaintiff proves subsisting proprietary rights in a registered mark, prior adoption and use, goodwill and reputation, and the impugned mark entirely subsumes the Plaintiff’s registered mark as its essential and leading feature in relation to identical medicinal and pharmaceutical goods, the Court may hold that the rival marks are deceptively similar and that the Defendants’ adoption is dishonest, mala fide, and likely to cause confusion, deception, and misrepresentation.
The Court observed that the Plaintiff had sufficiently proved its subsisting rights in the trade mark “BON K2” through the registration documents, legal proceedings certificates, the Deed of Assignment, and the evidence of the Plaintiff’s witness. It also found that the Plaintiff had established use of the mark since 2010, as well as goodwill and reputation, through annual turnover and publicity expenditure material. On comparison of the rival marks, the Court observed that they were “virtually identical” and that the Defendants’ impugned mark “BON K2 FORTE” had “entirely subsumed” the Plaintiff’s registered trade mark “BON-K2”. It further observed that the Defendants had used the exact same mark as the leading and essential feature of the impugned mark, and that the adoption was “plainly dishonest, malafide and with a clear intent to deceive.”
Since the rival goods were medicinal products, the Court noted that the Defendants’ use was more than likely to cause confusion, deception, and misrepresentation amongst consumers and members of the trade, and that a stricter approach applied because confusion in medicinal products may threaten public interest.
The liability of the guarantor is co-extensive with that of the Principal Borrower, and that an acknowledgment of liability by the Principal Borrower extends the limitation period for initiating proceedings against the Personal Guarantor as well
The Kolkata Special Bench of the National Company Law Tribunal (NCLT) in the case of Indian Bank vs Santosh Jhawar, Personal Guarantor of Burgundy Life Style Pvt Ltd [I.A. (IB) No. 1690/KB/2024] dated June 18, 2026, has held that where the guarantee is payable on demand, limitation against the personal guarantor begins to run when demand is made and the guarantor commits breach by not complying with the demand within the stipulated period. Further, where, before expiry of such limitation period, the Principal Borrower acknowledges the debt in writing, including through OTS proposals and audited balance sheets, a fresh period of limitation is computed under Section 18 of the Limitation Act, 1963, which also enures for proceedings against the Personal Guarantor because the guarantor’s liability is co-extensive with that of the Principal Borrower.
The Tribunal observed that the liability of the guarantor is co-extensive with that of the Principal Borrower, and that an acknowledgment of liability by the Principal Borrower extends the limitation period for initiating proceedings against the Personal Guarantor as well. It further held that, under the terms of the Deed of Guarantee, the demand notice dated May 04, 2016 issued under Section 13(2) of the SARFAESI Act served as invocation of the guarantee, and since the notice granted 60 days’ time, limitation commenced from July 04, 2016 upon expiry of that period without repayment.
The NCLT held that service of notice at the last known address is valid and effective service in law, and that a Financial Creditor may directly maintain proceedings under Section 95 of the IBC against the Personal Guarantor without first initiating or simultaneously pursuing CIRP against the Principal Borrower. The Tribunal also rejected the challenge to the demand notice on the ground of lack of authority for want of supporting material, held that service at the last known address constituted valid service in law, and held that maintainability of a Section 95 application is not conditioned upon prior or parallel CIRP against the Principal Borrower.
If the mark in the context of cosmetic and skincare products in Class 3, is descriptive of the nature, kind and intended purpose of the goods, is devoid of distinctive character, is not capable of distinguishing the goods of one person from those of another, and appears to be common to trade, it warrants rectification under Section 57(2) of the Trade Marks Act, 1999
The Delhi High Court in the case of Honasa Consumer Ltd vs Visage Beauty and Health Care Pvt Ltd [C.O. (COMM.IPD-TM) 215/2023] dated June 19, 2026, has held that the mark “D-TAN”, in the context of cosmetic and skincare products in Class 3, is descriptive of the nature, kind and intended purpose of the goods, is devoid of distinctive character, is not capable of distinguishing the goods of one person from those of another, and appears to be common to trade. Consequently, the mark could not have been validly registered and was wrongly remaining on the Register, warranting rectification under Section 57(2) of the Trade Marks Act, 1999.
The Court observed that the Trade Marks Registry had raised objections under Sections 9(1)(a) and 9(1)(b) of the Act on February 02, 2012, and that respondent no. 1’s reply dated September 30, 2014 did not satisfactorily answer the objection that the mark was devoid of distinctive character, nor did it provide any substantive explanation to overcome the objection that the mark consisted exclusively of indications designating kind, quality or intended purpose. The Court further observed that Section 12 operates as an exception permitting registration in cases of honest concurrent use or special circumstances, which itself implies the possibility of other users of identical or similar marks in respect of the same or similar goods or services.
The Court then examined the meanings of “de” and “tan” and held that, when combined in the context of skincare products in Class 3, “DETAN” or “D-TAN” clearly demonstrates removal or reversal of tanned skin and would undoubtedly imply a product which may bring about removal or reversal of tanning of the skin. On that basis, and also considering the screenshots of respondent no. 1’s own products and other manufacturers’ products, the Court held that “D-TAN” and “DETAN” are pure descriptors of the kind, quality and intended purpose of the products and fall strictly within Section 9(1)(b) of the Act.
The Court additionally found that the mark was not capable of distinguishing the goods of one person from those of another and appeared to be common to trade, and also observed that respondent no. 1 itself used “Professional O3+” prominently on its products and “D-TAN” in a small font, usually with prefixes such as “BLUEBERRY”, “CRANBERRY” and “OXY”, which impelled the Court to conclude that respondent no. 1 itself used “D-TAN” more in the nature of a description of the goods rather than as a trademark.
Where the requirements under Section 58 of the Indian Partnership Act, 1932 have been duly complied with, then the Registrar is under a statutory obligation under Section 59 to register the partnership firm, and cannot insist upon production and/or submission of a trade licence as an additional condition
The Calcutta High Court in the case of Dr. Arjun Chowdhury vs State of West Bengal [WPA/805/2026] dated June 18, 2026, has held that where the requirements under Section 58 of the Indian Partnership Act, 1932 have been duly complied with, then the Registrar is under a statutory obligation under Section 59 to register the partnership firm, and cannot insist upon production and/or submission of a trade licence as an additional condition, particularly in the case of a firm formed for carrying on the professional practice of law. The Court held that Section 58 does not require submission of a trade licence, and any guideline imposing such requirement cannot override or travel beyond the parent statute.
The Court identified the only issue for consideration as whether the Registrar was justified in refusing to register M/s Pinava Legal on the ground of non-production/non-submission of trade licence. Upon reproducing Section 58 of the Indian Partnership Act, 1932, the Court observed that the provision lays down the mode of making an application for registration of a partnership firm and requires a statement in the prescribed form, accompanied by the prescribed fee, containing the particulars set out in clauses (a) to (f).
The Court recorded that there was no dispute that the firm had complied with Section 58, and further observed that Section 58 does not provide for production/submission of a trade licence. It noted that Section 59 provides that where the Registrar is satisfied that Section 58 has been duly complied with, he shall record an entry in the Register of Firms and file the statement, thereby casting a duty upon the Registrar to register the firm. The Court also observed that no rule under the Bengal Partnership Rules, 1933 had been placed showing a mandatory requirement of submission of a trade licence for registration of a partnership firm formed for the purpose of carrying legal profession, and that even if guidelines provide for such a requirement, they must be in accord with the parent statute and cannot travel beyond it.
Under the insolvency process, only a security interest created over the assets of the Corporate Debtor can confer the status of secured financial debt
The Kochi Bench of the National Company Law Tribunal (NCLT) in the case of Dileep K.P vs YES Bank [IA(IBC)/138/KOB/2026] dated June 08, 2026, has held that under the insolvency process, only a security interest created over the assets of the Corporate Debtor can confer the status of secured financial debt. Where no such security interest exists in favour of the creditor over the assets of the Corporate Debtor, the debt cannot be treated as secured financial debt notwithstanding the existence of security over the personal assets of the promoters. Once it is evident that the Corporate Debtor never created a security interest in favour of the creditor, such creditor cannot claim to be a secured creditor qua the Corporate Debtor during CIRP.
The Tribunal observed that the documents relied upon by Yes Bank, namely the Memorandum of Deposit of Title Deeds, were not executed by the Corporate Debtor but by another entity, Phoenix Cars India Pvt Ltd., and certain individuals in their personal capacities. It noted that under the Insolvency and Bankruptcy Code, 2016, secured financial debt refers to a financial debt backed by a valid security interest over the assets of the Corporate Debtor, created through mortgage, charge, hypothecation, pledge, or any other form of security interest executed by an agreement between the Corporate Debtor and the charge holder, whereas unsecured financial debt is not supported by such security interest.
The Tribunal further observed that although the distinction between secured and unsecured financial debt has limited relevance during CIRP for voting share in the CoC, as voting share depends on the quantum of admitted debt, the distinction becomes significant in insolvency and liquidation because secured creditors enjoy statutory privileges and options in relation to enforcement and distribution. Therefore, an erroneous classification as secured financial debt may adversely affect the rights and entitlements of other secured creditors.
The Tribunal also observed that Yes Bank claimed security only over the personal assets of the promoters of the Corporate Debtor and that no security interest had been created over the assets of the Corporate Debtor itself. It noted that a secured financial creditor is a financial creditor whose debt is secured by a charge on the assets of the corporate debtor, and that a charge is a security interest created by a company on its assets in favour of a lender to secure a debt. The Tribunal therefore held that financial institutions already holding security over the assets of the Corporate Debtor cannot be compelled to share their security interest and the benefits arising therefrom with Yes Bank merely because Yes Bank held security over promoters’ personal assets.
A registered proprietor of a trademark is entitled to enforce rights under Section 28 read with Section 29 of the Trade Marks Act, 1999, notwithstanding alleged non-use, unless the mark is rectified or cancelled in accordance with law
The Delhi High Court in the case of Devans Modern Breweries vs Cartel Bros Pvt Ltd [CS(COMM) 346/2026] dated June 22, 2026, has held that a registered proprietor of a trademark is entitled to enforce rights under Section 28 read with Section 29 of the Trade Marks Act, 1999, notwithstanding alleged non-use, unless the mark is rectified or cancelled in accordance with law. It further held that, on the facts of this case, beer and whisky are prima facie allied and cognate goods, and where the essential and prominent feature of the defendant’s composite mark is identical or deceptively similar to the plaintiff’s registered word mark, the anti-dissection rule does not preclude a finding of infringement. The Court therefore held, prima facie, that the defendants’ use of “GODFATHER” for whisky infringed the plaintiff’s rights and was also likely to affect the distinctive character or repute of the plaintiff’s trademark within the meaning of Section 29(4).
The Court observed that registration under Section 18 confers exclusive rights under Section 28 of the Trade Marks Act, 1999, and that non-use of a registered trademark does not, by itself, disentitle the registered proprietor from suing for infringement. The Court held that, until the rectification petition filed by the defendant is allowed in accordance with law, the plaintiff’s registrations for “GODFATHER” in Classes 32 and 33 remain valid and enforceable, and mere filing of rectification does not create any presumption against validity.
On allied and cognate goods, the Court observed that beer and whisky are both alcoholic beverages, their trade channels and distribution outlets are common in India, and both are governed by the same excise regime. Although the Court acknowledged significant price variation, distinct shelves, and differences in consumer choice, it held prima facie that those aspects did not determine whether the goods were allied and cognate; rather, the decisive factors were the kind, nature and intended use of the goods. On that basis, the Court formed the prima facie opinion that beer and whisky are allied and cognate goods.
On the anti-dissection rule and deceptive similarity, the Court observed that even in the defendants’ revised composite mark, the word “GODFATHER’S” retained the essential characteristics of the plaintiff’s registered word mark “GODFATHER” and remained a prominent feature from the standpoint of a general consumer. The Court held that where the essential element, characteristics and feature of the plaintiff’s registered word mark are present in the composite mark, the anti-dissection rule would not assist the defendant. The Court also found that the defendant was aware of the plaintiff’s registrations, as reflected in the Trade Marks Registry objection and the defendant’s reply seeking to distinguish its mark by adding the prefix “THE”, which cast doubt on the bona fides of adoption.
The Court further observed that the plaintiff had established substantial goodwill and reputation in the mark “GODFATHER” through long use, substantial sales, promotional expenditure, and exclusive market association. It held that when a consumer with average intelligence and imperfect recollection encounters the defendants’ product, the consumer is likely to believe that the product is associated with or emanates from the plaintiff, and that the ingredients of Section 29(4) appeared to be met, including detriment to the distinctive character or repute of the plaintiff’s trademark and possible unfair advantage to the defendants.
Mere initiation or pendency of CIRP against a promoter, or a person claiming through the promoter, cannot be a ground for the Competent Authority to refuse to exercise jurisdiction under Section 11(3) and (4) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963
The Bombay High Court in the case of Darshan Mandir Co-operative Housing Society vs District Deputy Registrar [Writ Petition No. 16318 of 2025] dated June 22, 2026, has held that mere initiation or pendency of CIRP against a promoter, or a person claiming through the promoter, cannot be a ground for the Competent Authority to refuse to exercise jurisdiction under Section 11(3) and (4) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA). Grant of unilateral deemed conveyance is an exercise of statutory power to enforce performance of a statutory obligation in specie; it is not a suit, recovery proceeding, debt enforcement mechanism, or prohibited transfer of an asset of the corporate debtor under Section 14 IBC.
The Court also clarified that Section 238 IBC does not override Section 11 MOFA because there is no inconsistency between the two provisions in this context. Accordingly, the society need not approach NCLT under Section 60(5) IBC before seeking adjudication of its deemed conveyance application.
The Court observed that proceedings for deemed conveyance under Section 11(3) and (4) MOFA are not in the nature of debt recovery, claim enforcement, or transfer of a corporate debtor’s asset in the ordinary sense. The Competent Authority performs a statutory function to perfect title in favour of flat purchasers, and this statutory function cannot be stalled merely because CIRP is pending against the promoter or a subsequent purchaser. The Court reiterated that statutory rights of third parties and statutory duties of authorities continue despite insolvency or moratorium, and that Section 14 IBC does not bar discharge of such statutory functions.
The Court also emphasized the legislative object behind the 2008 amendment introducing deemed conveyance under Section 11(2) to (5) MOFA. It said the amendment was brought in because developers were routinely delaying conveyance in order to exploit future development potential, additional FSI and TDR. If Section 14 IBC were interpreted to suspend deemed conveyance proceedings, errant developers could misuse moratorium to indefinitely postpone transfer of title, frustrating the welfare object of MOFA and even jeopardising redevelopment of ageing buildings in cities like Mumbai.
