Delhi HC Upholds Fortis Trademark Auction Amid Valuation Dispute

Case Details: Daiichi Sankyo Company Ltd. vs. Malvinder Mohan Singh - [2025] 174 taxmann.com 132 (Delhi)

Judiciary and Counsel Details

• Manoj Kumar Ohri, J.
• Arvind K. Nigam, Sr. Adv., Giriraj Subramanium, Nabik Syam, Ms Samridhi Hota, Shivam Chanana, Ms Anindita Barman, Ms Astha Ahuja, Ms Shyra Hoon, Tanmay Arora, Kunal Chatterji & Aman Acharya, Advs. for the Petitioner.
• Rajiv Nayar, Abhinav Vasistha, Sr. Advs., Sanjeev Sharma, Vaibhav Kakkar, Ms Saumya Sud, Ms Akshita Sachdeva, Varun Garg, Ms Devina Sehgal, Yatharth Kansal & Vaibhav Mahal, Advs. for the Respondent.

Facts of the Case

The petitioner, a foreign company, won an international arbitral award against some Indian respondents (referred to as judgment debtors) who failed to pay. To recover the amount, the petitioner asked the Delhi High Court to enforce the award. The judgment debtors, in an effort to avoid contempt charges, decided to sell assets, including the Fortis trademark, to settle the debt. The Fortis trademark had been licensed to a hospital company, but the licensing agreement had expired.

Additionally, the hospital company had loaned money to the trademark owner’s parent company, using the trademark as security. Disputes arose over unpaid royalties and loan repayment, and while these issues were still being decided in court, the hospital company (former licensee) showed interest in purchasing the trademark through a public auction. A valuation report by the petitioner estimated the trademark at Rs. 200 Crores, but the respondents disagreed, arguing that earlier valuations had been much higher (Rs. 650-1205 Crores). They objected to the sale, claiming the price was too low and the auction wasn’t advertised enough.

High Court Held

The Hon’ble High Court confirmed that the auction process was fair and transparent. The price of Rs. 200 Crores was considered a reasonable market value, given the legal troubles and financial issues surrounding the trademark. The objections raised about undervaluation and insufficient publicity were rejected. The court also clarified that the auctioneer was not responsible for GST compliance, as the trademark wasn’t under the custody of a court-appointed receiver. The court ultimately approved the sale, and the hospital company was recognized as the rightful owner of the trademark.

List of Cases Reviewed

• Ram Kishun v. State of Uttar Pradesh (2012) 11 SCC 511 – (para 39) distinguished
• Rajiv Kumar Jindal v. BCI Staff Colony Residential Welfare Assn. 2023 SCC Online SC 507 – (para 40) distinguished
• Lakshmanasami Gounder v. C.I.T., Selvamani (1992) 1 SCC 91 – (para 41) distinguished
• Kayjay Industries v. Asnew Drums (1974) 2 SCC 213 – (para 42 ) followed
• Allahabad Bank v. Bengal Paper Mills Co. Ltd. (1999) 4 SCC 383 – (para 44) distinguished
• Desh Bandhu Gupta v. N.L. Anand (1994) 1 SCC 131 – (para 45) distinguished
• Navalkha & Sons v. Ramanya Das (1969) 3 SCC 537 – (para 46) distinguished

List of Cases Referred to

• In Ram Kishun v. State of Uttar Pradesh (2012) 11 SCC 511 (para 38)
• In Varghese v. Jewel Rock Hire Purchase Kuries (P) Limited 2018 SCCOnLine Ker 1728 (para 39)
• In Rajiv Kumar Jindal v. BCI Staff Colony Residential Welfare Assn. 2023 SCC OnLine SC 507 (para 40)
• In Lakshmanasami Gounder v. C.I.T., Selvamani (1992) 1 SCC 91 (para 41)
• Kayjay Industries v. Asnew Drums (1974) 2 SCC 213 (para 42)
• LICA (P) Ltd. (No. 1) v. Official Liquidator (2000) 6 SCC 79 (para 43)
• In Allahabad Bank v. Bengal Paper Mills Co. Ltd. (1999) 4 SCC 383 (para 44)
• In Desh Bandhu Gupta v. N.L. Anand (1994) 1 SCC 131 (para 45)
• In Navalkha & Sons v. Ramanya Das, (1969) 3 SCC 537 (para 46)
• Commr v. Hindustan Urban Infrastructure Ltd. (2015) 3 SCC 745 (para 50)
• and Bai Mamubai Trust v. Suchitra 2019 SCC OnLine Bom 1854 (para 50).