Introduction
The Insolvency and Bankruptcy Code, 2016 (IBC), was enacted to consolidate and reform laws on reorganization and resolution of insolvency in a time-limited manner. To do so, the National Company Law Tribunal (NCLT) was endowed with immense powers under Section 60(5) to hear disputes that occurred or related to insolvency proceedings. However, a recurring jurisprudential question has been determining the outer limits of this jurisdiction. Does the non-obstante in Section 60(5) purport to empower the NCLT to determine independent civil disputes as to title to assets, in particular, intellectual property, simply because the Corporate Debtor is a party? The Supreme Court of India, in the landmark case of Gloster Limited vs. Gloster Cables Limited and Ors. (2026 INSC 81), gave a clear response to this question on January 22, 2026. The Division Bench, comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan, held that the NCLT cannot arrogate to itself the jurisdiction to adjudicate disputed questions of title to trademarks which are not intimately linked to the insolvency resolution process.

The Factual Matrix and the Controversy of Title
In order to interpret the legal subtleties of what the Court interpreted under Section 60(5)(c), one must put the controversy into perspective. The case was about the Corporate Debtor, Fort Gluster Industries Limited (FGIL), which was subjected to the Corporate Insolvency Resolution Process (CIRP). The appellant was Glogster Limited, which was the Successful Resolution Applicant (SRA). The dispute was over the ownership of the trademark “Gloster.” The respondent, Gloster Cables Limited (GCL), alleged that it had the trademark on the basis of a sequence of historical contracts, the final one being a Deed of Assignment dated September 20, 2017. The GCL argued that the trademark was transferred to them before the date on which the insolvency started, August 9, 2018.

The SRA and the Resolution Professional, on the other hand, claimed that the assignments were void because they were made when the Corporate Debtor was under a restraint order issued by the Board under the Industrial and Financial Reconstruction (BIFR). In the process of approving the resolution plan, GCL has filed an application under Section 60(5) of the IBC requesting a direction to exclude the assets of the Corporate Debtor, which are the trademark Gloster. The NCLT not only rejected the existing application of GCL but also decisively stated that the trademark was the property of the Corporate Debtor. The NCLT held the view that the assignment was a preference and an underestimated transaction under the IBC, Sections 43 and 45. The NCLAT upheld the jurisdiction of the NCLT, but overturned the merits finding, declaring the title vested in GCL. This prompted cross-appeals to the Supreme Court, squarely putting the limits of NCLT jurisdiction under Section 60(5)(c) into perspective.

Interpreting the Nexus Test under Section 60(5)(c)
The gist of the Supreme Court decision is that it interprets Section 60(5)(c) of the IBC that vests the NCLT with the authority to entertain any question of priorities or any question of law or fact arising out of or in connection with the insolvency resolution or liquidation process. The Court made it clear that this residuary jurisdiction is not a panacea for all litigation concerning a Corporate Debtor.

The Court extensively referred to the case of Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, where the Court adopted the rule that, to exercise jurisdiction over the insolvency of the Corporate Debtor, the dispute must emanate from or affect the Corporate Debtor’s insolvency. There must be a direct nexus. In the case under consideration, the controversy over the ownership of the trademark name “Gloster” was based on any commercial transactions signed several years before the insolvency, i.e., the Technical Collaboration Agreement of 1995 and the Supplemental Trademark Agreement of 2008.

The Court noted in Paragraph 37 that the question of the title of the trademark did not occur in the context of the insolvency proceedings on the facts of the current case. The case was actually a civil case on the validity of an assignment deed and the interpretation of the law of contract and the Sick Industrial Companies Act (SICA). It was not subject to insolvency. The Court cautioned that the authorities under the IBC should take care not to usurp the legitimate jurisdiction of other Courts and Tribunals in cases where the dispute is not entirely based on insolvency. The NCLT had strayed into a territory that was de hors (outside) the insolvency proceedings by ruling on the complex question of title, which is not allowed.

The Sanctity of the Approved Resolution Plan
A major part of the judgment was centered on the connection between the adjudicatory powers of the NCLT and the commercially approved Resolution Plan. The Court examined the Resolution Plan, which was submitted by the SRA and was approved by the Committee of Creditors (CoC). According to Paragraph 11 of the judgment, the plan clearly recognized the existence of the Deed of Assignment dated September 20, 2017. The plan documented a belief and an understanding by the SRA that the transfer was mala fide and the trademark was the lawful property of the Corporate Debtor.

The Supreme Court noted that even the plan itself accepted the existence of competing claims and did not claim an unchallenged title. The SRA had assumed the title of the Corporate Debtor, knowing of this cloud on the title. The Court determined that the NCLT could not make a declaration of title which, in effect, altered the terms of the approved plan in adjudicating an application under Section 60(5). In Paragraph 38, the Court noted that the final decision of the NCLT granting title to the trademark with the SRA was inconsistent with the resolution plan passed by the CoC.

The Court held that when the plan simply described an understanding of ownership, a judicial statement that absolute title belonged to the NCLT was tantamount to conferring upon the SRA superior rights than those it had been agreed to and accepted by the CoC. The sanctity of the resolution plan means the SRA is bound by its terms. Where the SRA felt that the title was faulty or that the assignment was void, the right remedy was to litigate that particular matter in any competent civil court or use other proper means, and not to claim a summary declaration by the NCLT on the pretext of an insolvency proceeding. The NCLT cannot avail its residuary powers to perfect a title that is contested and independent of the insolvency process itself.

Impropriety of Invoking Avoidance Provisions without Due Process
The Supreme Court also struck down the NCLT’s rationale for placing itself in a position to interpret the assignment of the trademark as a preferential (Section 43) or undervalued (Section 45) transaction. The NCLT had argued that it could not close its eyes to the material on record that indicated that the transaction was voidable.

This practice was described by the Supreme Court as perverse and a complete disregard of natural justice. The Court expressly criticized the NCLT in Paragraph 42 as they reverted to Section 43(2)(a) and Section 45(2)(b) of the IBC to determine the issue of title. The case made it clear that the case of an avoidance transaction is serious and should involve certain procedural compliance. To draw a case under Sections 43 and 45, a very strict examination of documents and a threadbare examination of the transactions will be required. This cannot be done lightly or by a sidewind when deciding on another application submitted by a third party.

More importantly, the Court emphasized that the Resolution Professional had not made any application under the provisions of 43, 44, or 45 of the IBC. The law states that the Resolution Professional or Liquidator should be able to form an opinion and submit an application to prevent such transactions. Even under Section 47, where on failure by the RP to do so a creditor may move an application, certain materials should be pleaded to and the party against whom relief is sought put on notice. Here, GCL did not receive a notice that the validity of its assignment was being put to the test on the anvil of preferential or undervalued transactions. Thus, the NCLT does not have the jurisdiction to sui motu prohibit the assignment and proclaim the trademark an asset of the Corporate Debtor without an appropriate statutory application.

Conclusion: Restoring the Balance of Jurisdiction
The Gloster Limited judgment of the Supreme Court serves as a necessary remedy that properly relocates the NCLT as a special insolvency court as opposed to a civil court. The Court, by disregarding the NCLT findings on the title of trademarks, affirmed that Section 60(5)(c) could not be invoked by expanding it to encompass intricate title issues that were not part of the insolvency process. Most importantly, the ruling makes it clear that the NCLT summary jurisdiction cannot be utilized by Resolution Applicants to purge titles or to circumvent the evidentiary rigor of a civil trial. In case a plan recognizes a disputed asset, it is acquired by the applicant as to that dispute. Moreover, the Court imposed strict compliance with procedures in cases of avoidance (Sections 43, 45, and 47), stating that claims of fraud or preference must be pleaded and proved and not presumed. In the end, this determination is a correction of a jurisdictional error without a determination of the merits of ownership. By sending the title dispute to the proper civil court, the Court avoids the desecration of civil litigation and still allows the NCLT to continue as an efficient and time-sensitive insolvency adjudication system.