[pranavshet]

Respected Members,
The Karnataka HC in its order has given the verdict in favor of the liquidator of ideal Jawawherein the rights of the brand Jawa vest with Ideal Jawa & not with Irani ie one of the investors of classic legends.

This is a huge blow. Though the company has said it would be appealing the order but it would be a time-consuming tussle.
SR Krishna ideal jawa order.pdf

I'm hereby attaching the HC order. It has basically restrained classic legends from using brand yezdi.

Lets see how this transpires. Guys, Would love to know your take on this.
Till then take care & ride safe.

[TusharK]

The Karnataka High Court has restrained Classic Legends Pvt. Ltd. and its co-founder from using the 'Yezdi' trademark or any other brand name containing the word 'Yezdi’'



The High Court ruled that the 'Yezdi' trademark is owned by Ideal Jawa (India) Ltd., which is under liquidation and therefore the trademarks of the company remain in custodia legis of the court.

The court also stated that all trademark registration certificates issued by the Registrar of Trademarks, Mumbai, Delhi and Ahmedabad in favour of Classic Legends and co-founder Boman Irani will be null and void. The court also imposed a fine of Rs 10 lakh each on both parties. Further, the Trademark Registration Authority has been directed to transfer all such registration to Ideal Jawa.

Ideal Jawa used to build and sell Yezdi motorcycles in India until it went into liquidation in 1996. The brand was re-launched by Classic Legends, a subsidiary of Mahindra & Mahindra.

The company has released the following statement in response to the recent Karnataka High Court order:

The order is held in abeyance and the company is seeking legal advice on the matter. The company will be filing an appeal against the order shortly and is optimistic of securing favourable relief. In the interim, manufacturing and sale of motorcycles will continue, subject to orders of the Appellate Court.

Source: The Hindu

Link to Team-BHP News

[Amrik Singh]

"What's in a name..." as Shakespeare said. This type of court case news generally makes public aware of the brand and the curiosity helps in promoting sale.
They can think on the lines of Padmavati / Padmavat case.

[shankar.balan]

Plainly this is one of those biased judgements of the KA Courts.

[anjan_c2007]

It appears that the ex-employees bodies and liquidators have a stake in the brand name "Yezdi" which is expected to fetch more valuation for the assets now in dispute.

Boman Irani representing the erstwhile owner's viz. the founders' heirs from Irani family, it is clear has sold the brand name to M/s Classic Legends, despite the fact that the government had appointed a liquidator whose process of liquidation was still pending. And it is most likely that the ex- employees are still stakeholders of Ideal Jawa assets, due to whatever monetary reasons.

The sad part is that the legal eagles who cleared the Classic Legends - Boman Irani deal for the "Yezdi" brand name and brand equity, transfer of ownership for a consideration did not go much deep into the legalities, pending disputes and the pending and ongoing liquidation process.

Classic Legends has stated that it would appeal against the court judgment, but if the liquidator and ex-employees associations prove that the rights for the brand name vests with Ideal Jawa, the fate of Classic Legends could be sealed.

[Ajay_the_Don]

This will soon be a part of MBA case studies. Everything from the start is on a back-foot for the brand Jawa.

The brand is ancient for current younger riders, the fans of the brand prefer the real deal to an imitation, poor availability, and poor workmanship. I can still recall the count of Yezdi's I have seen on road to date ~40 in a metro city.

[Jhinchak]

I wonder what the current verdict results to as the news is not very detailed. Will this result in immediately ceasing sale of all "Yezdi" branded vehicles?
If they are asked to rename the brand, I am not sure the brand will do well as it relies on the goodwill of the brand "Yezdi".

[RedTerrano]

Originally Posted by shankar.balan

Plainly this is one of those biased judgements of the KA Courts.

Huh?

I am no legal eagle, but from what I understand of this

Originally Posted by TusharK

The High Court ruled that the 'Yezdi' trademark is owned by Ideal Jawa (India) Ltd., which is under liquidation and therefore the trademarks of the company remain in custodia legis of the court.

is that the courts are the current custodians and since the matter is sub judice, the trademarks are not available to anyone for use.

Kind of like I can't use your car since you are the current owner?

[shankar.balan]

Originally Posted by RedTerrano

Huh?

I am no legal eagle, but from what I understand of this
Kind of like I can't use your car since you are the current owner?

Youre right there. If the trademark ownership is under dispute then it cannot be sold.

[wbd8779]

Originally Posted by anjan_c2007

It appears that the ex-employees bodies and liquidators have a stake in the brand name "Yezdi" which is expected to fetch more valuation for the assets now in dispute.

The very fact that a company that was liquidated in 1996 still has disputes on assets and valuation and expects the "brand name "to fetch more valuation is sad. I don't know what were they waiting for these 26 years .

[SulemanP]

I am no legal expert - But IMO to avoid legal issues in cases like property dealings, trademarks etc. the government should prescribe a set procedure/doctrine to be followed by both the parties. In absences of such a set procedure people are sometimes not fully aware of what they should do, so that the deal goes through without any legal hassles.

This way there will be lesser legal disputes, is what I feel.

Anyone in the forum with an insight in this area may please enlighten us further.

[Hayek]

Can see two wrongs here.

1. If Ideal Jawa went bankrupt 2+ decades ago, why has it not yet been liquidated. Clearly not unusual - look at the Jet Airways planes gathering rust at Mumbai Airport unlike planes of any other bankrupt airline in the world.

2. The mistaken belief of Indian companies, media and promoters that promoters own companies - they don’t. Mukesh Ambani happens to control companies which control a majority shareholding of Reliance Industries. But in that capacity, he is like any other shareholder - just with more voting rights. He is also an employee of Reliance Industries and owes duties in that capacity to the company and all its stakeholders - creditors and shareholders. But in that capacity, he can’t privilege his own interests as a shareholder over any other. But the media and even the government mistakenly thinks of him (and needless to say, I am using him as an example) as the owner of Reliance Industries. Similarly, Mr Irani and family are not owners of Ideal Jawa - they may have been shareholders but shareholders lose all rights once a company goes bankrupt except if creditors are paid back in full (including overdue interest). He had no right to sell a brand which was either owned or used by the Company - that is an asset of the Company which must be used to pay back creditors. The sensible thing for Mahindra to do would be to cease endless litigation and pay the liquidators a mutually agreed sum for the brand.

[Mustang_Boss]

Originally Posted by Hayek

Can see two wrongs here.

1. If Ideal Jawa went bankrupt 2+ decades ago, why has it not yet been liquidated.

2. .... Similarly, Mr Irani and family are not owners of Ideal Jawa - they may have been shareholders but shareholders lose all rights once a company goes bankrupt except if creditors are paid back in full (including overdue interest). He had no right to sell a brand which was either owned or used by the Company - that is an asset of the Company which must be used to pay back creditors. The sensible thing for Mahindra to do would be to cease endless litigation and pay the liquidators a mutually agreed sum for the brand.

Thanks for a perfect Explanation! You definitely are someone who is close to LAW
I have few questions. Would you (others associated/who practice law) please clarify the following?
(P.S. i am not a lawyer. Just curious. So, please read with a common man mindset.)

Mr Irani's company has filed for unofficial bankruptcy. We never had a law for Bankruptcy earlier. They had access to the name "Yezdi" in India. In this case, the Name belongs to the company, which is not operational anymore and was licensed/borrowed from another foreign entity for domestic use. How could they even have any rights after 2 decades on something which they just licensed? We are talking of a borrowed name. No capital has been expended to create/manufacture/invent it.

As Irani's have just licensed the name, and are not operating the company anymore. They are not paying any royalities or regular payments to the parent. In such case, the parent can and always has rights to hand over the mantle to a willing investor. How come this could be challenged.

In this case, i believe Mahindra bought the foreign entity.
- Could they not seek the pending dues from Irani's first?
- The new Owner is Mahindra. Which means, Irani's are suing the parent for using their own registered name,
- Not paying dues and filing bankruptcy 2 decades ago and still suing the (new) owner. Is it not a punishable offence? Are they suing just because the court cannot jail a bankrupt company? Are they not trying to misuse the law & CCI rules? (CCI/MCA might not apply in this case as the company predates these entities)

I got your perspective and it is reasonable. But how does the law see the following:
- Why should Mahindra pay them when they sued the new owner. Is it not Extortion?
- Bankruptcy means in-operational and the old yezdi india had been the same for decades. And in this process, they might have skimped many payments to its suppliers, including the parent. Could they not reverse sue them for hindering their current progress based on agreements signed by a delinquent company couple of decades ago. Will it not be seen as a fraud? With real estate it is seen as a fraud. Hence trying to understand how it is different in this case. The only difference i see is, it is between companies and not individuals.

How will mahindra see it?
- Will mahindra Encourage this nonsense? Why should they? this is more important because, they operate more than a couple of dozen companies and encouraging such suits will be bad on their corporate behalf.
- Even if If mahindra intends to settle, will it not be seen as a mistake from their end by the educated and the general public?

[Hayek]

Ideal Jawa did not file for unofficial bankruptcy - creditors filed a winding up petition which was approved in 2001 - and the official liquidator has the task of selling all assets and using proceeds to repay creditors including the employee association. The brand belonged to the company - not to Mr Irani. So he had no right to receive any consideration for it. From a quick perusal of the order (and there be nuances I missed), Mr Irani’s conduct seems to have been fraudulent - and at the very least M&M seems to have failed to exercise due diligence. Of course, good lawyers could find reasons for a ruling against this - but this seems as open and shut a case as can be.

[shortbread]

Essentially Mahindra cannot use the 'Yezdi' brand for the time being. Why not simply sell the 3 bikes under the 'Jawa' brand for the time being?! I don't think such a stopgap measure will cause a big dent to their sales.