Intersection of Trademark, Corporate Law, and Municipal Licensing
Introduction: The case of C. Ganesh Narayan & Ors. v. State of Karnataka & Ors. before the High Court of Karnataka concerned a challenge to two show cause notices issued by the Bruhat Bengaluru Mahanagara Palike (BBMP), East Zone, directing the petitioners to explain why their trade licence should not be cancelled. The dispute lay at the intersection of municipal licensing powers, corporate rivalries, and pending litigation before specialist forums such as the National Company Law Tribunal (NCLT), the National Company Law Appellate Tribunal (NCLAT), and the High Court. The petitioners alleged that the notices were the outcome of mala fide interference by a private rival, who was also a family member, and that the BBMP lacked the jurisdiction to adjudicate issues already sub judice before the competent judicial forums.
Factual Background: Petitioner No. 3, C. Krishniah Chetty & Company Private Limited, engaged in the jewellery business, operated from the ground and first floors of “B” Block premises in Bengaluru. Petitioner No. 1, in his personal and representative capacity, was the Director and shareholder of Petitioner No. 3, which was lawfully leased the premises by Petitioner Nos. 1 and 2. The business was duly licensed and registered under municipal laws, GST, VAT, and the Shops and Establishments Act. Respondent No. 4, a cousin of Petitioner No. 1, was a Director in a separate entity, C. Krishniah Chetty & Sons Private Limited, and was embroiled in multiple litigations with the petitioners over control, brand usage, and management of the family-run business. These disputes were pending before the NCLT and NCLAT.
Respondent No. 4 objected to the petitioners operating a competing jewellery showroom in the adjacent “B” Block premises, alleging that such operation violated orders passed by the NCLT. Having failed to secure injunctive relief from the company law forums, Respondent No. 4 lodged complaints with the BBMP authorities. Acting on a complaint dated 2 June 2025, Respondent No. 3, the Medical Officer of BBMP East Zone, issued two notices—dated 11 June 2025 and 18 June 2025—threatening cancellation of the trade licence. The first notice referred to an alleged National Consumer Forum order (which the petitioners stated was fictitious), while the second cited NCLT records as the basis for proposed action.
Procedural Background: The petitioners approached the High Court under Articles 226 and 227 of the Constitution seeking quashing of both notices, arguing that BBMP had no jurisdiction under the BBMP Act, 2020 to entertain disputes of this nature. They relied on Chapter XXII, particularly Sections 307, 308, and 314, which limit municipal authority to suspension or cancellation of trade licences for breaches of licence conditions, safety violations, or byelaw infractions. The petitioners stressed that the dispute was already being adjudicated by the NCLT and that BBMP officials could not act as enforcement agents for such orders.
Respondent No. 4 opposed, relying on NCLT’s orders in I.A. Nos. 5, 6, and 7 of 2020, which expressly restrained the petitioners from operating a competing jewellery store in “B” Block, from using similar domain names, and from engaging in competitive business against the CKC Group. Respondent No. 4 argued that the BBMP had the power to cancel a trade licence for violation of “any law” under licence conditions and Section 307(4) of the BBMP Act.
Core Dispute:The central question before the Court was whether BBMP, through Respondent No. 3, could issue show cause notices for cancellation of a trade licence on the ground that the petitioners had allegedly violated interim injunctions issued by the NCLT, and whether such action was within the scope of the BBMP Act, 2020. This raised subsidiary issues of jurisdiction, procedural fairness, and alleged mala fides arising from the close personal and business rivalry between the parties.
Discussion on Judgments:The petitioners relied on Sri B.R. Srinivas Murthy v. The Commissioner & Ors., W.P. No. 41604/2019, where the Karnataka High Court held that only the Zonal Commissioner, not subordinate officials, could initiate proceedings for suspension or cancellation of trade licences under Section 307(3) of the BBMP Act. They invoked this precedent to argue that Respondent No. 3 had acted without authority.
They also cited a judgment of the Madras High Court under Sections 47 and 57 of the Trade Marks Act, 1999, concerning disputes over the “C. Krishniah Chetty” trademark. In that matter, the Court allowed continued use of the mark by the Narayan Group but directed inclusion of the word “Narayan” in parentheses to distinguish its identity, thereby recognising the right to carry on business under a modified name. The petitioners argued that such trademark and corporate identity issues were judicially settled and not for BBMP to revisit.
Respondent No. 4 relied on the composite NCLT order in I.A. Nos. 5, 6, and 7 of 2020, which granted extensive injunctive relief, including an explicit prohibition against operating any competing jewellery store in “B” Block. He argued that breach of these orders constituted violation of “law” and justified BBMP action under Clause 6 of the trade licence conditions and Section 307(4) of the BBMP Act.
Reasoning and Analysis of the Judge: The Court found that the dispute between the parties involved highly complex questions of corporate control, brand identity, and alleged breach of judicial orders, all of which were beyond the remit of municipal authorities under the BBMP Act. The statutory powers under Chapter XXII were confined to regulatory issues such as health, safety, and compliance with municipal byelaws. Enforcement or interpretation of NCLT orders could only be undertaken by the NCLT or other competent judicial bodies, not by BBMP officers.
The Court observed that Respondent No. 4’s remedy for alleged violations lay in moving the NCLT or NCLAT for appropriate enforcement orders. BBMP’s initiation of parallel proceedings was legally impermissible and constituted an excess of jurisdiction.
Procedurally, the Court noted that the first notice gave the petitioners only three days to respond, which was manifestly unreasonable and contrary to principles of natural justice. The issuance of successive notices within a week, both apparently prompted by an interested party engaged in parallel litigation, suggested mala fides. The Court also underscored that Respondent No. 3, being the Medical Officer, lacked statutory authority to initiate such proceedings, which lay within the domain of the Zonal Commissioner.
Final Decision: The High Court allowed the writ petition, quashing the show cause notices dated 11 June 2025 and 18 June 2025 as being without jurisdiction and violative of natural justice. It clarified that Respondent No. 4 remained free to seek enforcement of NCLT’s orders before that Tribunal or other competent forums. All substantive contentions on merits were kept open for adjudication in the appropriate jurisdiction.
Law Settled in This Case: The decision reinforces that municipal authorities under the BBMP Act, 2020 have no jurisdiction to interpret or enforce orders passed by judicial forums such as the NCLT. Their powers to cancel or suspend trade licences are limited to breaches of licence conditions, safety norms, or municipal byelaws. Disputes involving complex corporate, trademark, or contractual rights, particularly when sub judice before specialised tribunals, cannot be adjudicated through municipal licensing proceedings. Procedural fairness, including adequate notice and absence of mala fide influence, is integral to the validity of any administrative action.
Case Title: C. Ganesh Narayan & Ors. Vs. State of Karnataka & Ors.
Date of Order: 25 July 2025
Case Number: Writ Petition No. 17893 of 2025 (LB-BMP)
Neutral Citation: Not specified
Name of Court: High Court of Karnataka at Bengaluru
Name of Judge: Hon’ble Mr. Justice Sachin Shankar Magadum
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
