Reliance Capital administrator defends use of ’Reliance’ brand amid legal dispute

The administrator of insolvent Reliance Capital clarified before the National Company Law Tribunal (NCLT) on Tuesday that no harm has been caused to Anil Dhirubhai Ambani Ventures Ltd (ADAVL) in the ongoing legal battle over the usage rights of the “Reliance” brand. This clarification was issued in response to ADAVL’s challenge concerning the use of the “Reliance” brand.

ADAVL had filed a plea to overturn part of the NCLT’s 27 February order, which approved IndusInd International Holdings Ltd (IIHL) taking over Reliance Capital for ₹9,861 crore. The order also allowed IIHL to use the “Reliance” brand, logo, name, and trademark for three years, as long as they paid the required fees and followed the terms of the existing agreements.

The contested portion of the order pertains specifically to the usage of the “Reliance” brand by Reliance Capital, which ADAVL claims is no longer valid following the expiration of their brand licensing agreement.

Rohan Kadam, counsel for the administrator, argued that, “There is no prejudice or legal injury since the resolution professional and ADAVL have mutually agreed that the branding agreement will be available for the purposes of CIRP and plan implementation. The licence agreement itself says it can be renewed subject to mutual agreement (here for CIRP and plan implementation). Hence no prejudice has been caused to the company.”

Kadam emphasized that the NCLT’s order was clear in stating that the trademark’s use was solely for implementing the resolution plan. He also cited a previous National Company Law Appellate Tribunal (NCLAT) judgment in the case of Vikram Iyer, arguing that while the trademark is owned by ADAVL, Reliance Capital has the right to use it under the licence agreement. 

“The right to use itself is an asset of the corporate debtor,” Kadam pointed out, drawing a parallel to a case where the licence to use spectrum, though owned by the government, was considered an asset of the corporate debtor.

Read this | Reliance Capital lenders accuse IIHL of non-compliance, company denies claims

ADAVL, however, maintains that the brand licensing agreement, originally signed in April 2014, expired by efflux of time on 1 April 2024. The company contends that following the expiration, Reliance Capital no longer has the right to use the “Reliance” brand. 

“There is no provision in law, whether under the IBC or otherwise, by which NCLT can revive an agreement which has expired by efflux of time or amend the terms in the course of approving a resolution plan,” argued ADAVL’s counsel.

Furthermore, ADAVL claimed that the approval of IIHL’s resolution plan was granted without giving the company a hearing, which they argue is a violation of the principles of natural justice. The company’s petition warned of “grave and irreparable harm, loss, and injury” if the NCLT does not grant the relief sought, while asserting that no prejudice would be caused to IIHL or Reliance Capital.

On Monday, ADAVL filed a fresh interlocutory application in the NCLT, seeking the court’s intervention to prevent IIHL from using the “Reliance” brand once the resolution plan is implemented.

Also read | Mint Explainer: Why bankruptcy reforms should be the new govt’s top priority

A bench led by justices Virendrasingh G Bisht and Prabhat Kumar has agreed to hear the matter in detail on 27 August.