Anil Dhirubhai Ambani Ventures Pvt Ltd (ADAVPL), an Anil Ambani-owned company, has moved the National Company Law Tribunal (NCLT), Mumbai, requesting the court to direct Hinduja-owned Indusind International Holdings Ltd (IIHL) to stop using the "Reliance" brand name as soon as the resolution plan for bankrupt Reliance Capital, a financial services firm, is implemented.
The NCLT will hear the matter on Tuesday.
The NCLT, while approving IIHL's resolution plan in February this year, had allowed the Hinduja company to use the Reliance brand for a period of three years from the date of approval of the plan for the purpose of implementing the resolution plan. IIHL recently paid the entire Rs 9,641 crore to the lenders to acquire Reliance Capital, which was sent for debt resolution in December 2021 after the company defaulted on loans worth Rs 25,000 crore. IIHL won the auction to acquire Reliance Capital, and lenders approved the IIHL bid in June 2023.
As per the Ambani family agreement, the "Reliance" brand is owned equally between billionaire Mukesh Ambani, chairman of Reliance Industries, and his younger sibling, Anil Ambani. Interestingly, Mukesh Ambani-owned Jio Financial Services is launching the financial services business in a big way in India. The brand "Reliance" cannot be allowed to be used by any other company or individual other than the Ambani brothers, the petition said.
In its application, ADAVPL said the brand agreement does not create any interest in the brand in favour of Reliance Capital but only allows use of the brand. Given this position, the brand is not an "asset" of Reliance Capital within the meaning of the term as used in Section 18 of the Insolvency and Bankruptcy Code, and hence ADAVPL has requested the cessation of brand usage by IIHL immediately after the implementation of the resolution plan.
ADAVPL, in its application, has also argued that the company was not heard while allowing IIHL to use the brand for three years, as it was not a party to the resolution plan.
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ADAVPL said Reliance Capital (RCAP), which is currently under the Insolvency Resolution Process, entered into a brand licensing agreement in April 2014 with it. Under the agreement, ADAVPL granted RCAP a non-exclusive, royalty-free licence to use the brand for a period of 10 years, which has also expired.
In February this year, the NCLT had granted Reliance Capital permission to use the “Reliance” brand for three years, hence this petition, the petition said.