C Ganesh Narayan vs. State Of Karnataka

The facts leading to the case are as under:

The petitioners further submit that their business is a legitimate commercial enterprise, duly licensed under applicable municipal and statutory enactments, including registration under the Goods and Services Tax (GST) regime, the Shops and Establishments Act, VAT laws, and a valid trade licence.

The petitioners contend that Respondent No.4, who is a cousin of Petitioner No.1, is a Director of a separate and distinct legal entity, C. Krishniah Chetty & Sons Private Limited. Respondent No.4 is a business rival and is engaged in multiple litigations against the petitioners. The disputes revolve around issues of ownership, control, and management of C. Krishniah Chetty & Sons Private Limited, and are currently sub judice before the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).

According to the petitioners, Respondent No.4’s principal grievance is that Petitioner No.3 is conducting a competing jewellery business from an adjacent premises, Block 'B' which forms the subject matter of the present writ petition. Despite raising these issues before the NCLT and NCLAT, no injunctive relief has been granted in favour of Respondent No.

The petitioners submit that, having failed to obtain favourable orders from the company law forums, Respondent No.4 has now engaged in forum shopping and is misusing the process of law by invoking the juri iction of the municipal authorities, which lack juri iction to adjudicate private civil and corporate disputes.

Petitioners allege that based on a complaint dated 02.06.2025 filed before Respondent No.2, Respondent No.3 issued the impugned show cause notice directing petitioners to submit objections within a short span of three days, i.e., on or before 14.06.2025. The notice cryptically refers to an alleged order by the National Consumer Forum directing the closure of the petitioners’ business, a claim which

The learned Senior Counsel would further submit that complex corporate disputes pending before the NCLT and NCLAT cannot be summarily decided by municipal officers acting under the BBMP Act. He argues that issuance of successive notices within a span of one week reflects non- application of mind and arbitrariness. According to him, the impugned notices are tainted with mala fides and constitute an abuse of power, being based on extraneous considerations, thereby violating the petitioners’ fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India.

It is further submitted that the power to take any coercive action, including issuance of show cause notice for cancellation of a trade licence, is statutorily conferred only on

Sri Jayakumar S. Patil, learned Senior Counsel appearing for private Respondent No.4, has opposed the petition and refuted the contentions of the petitioners. He submits that the petitioners were not engaged in jewellery business in the premises in question prior to the orders passed by the NCLT on I.A.Nos.5 to 7. Relying on the order passed in I.A.No.5, he submits that the NCLT has restrained the petitioners from carrying on jewellery business from 'B' Block.

While acknowledging that the first impugned notice erroneously referred to a Consumer Forum order, learned Senior Counsel submits that this mistake was rectified in the subsequent notice dated 18.06.2025, which correctly refers to the NCLT proceedings. He submits that the trade licence is subject to the conditions stipulated under relevant bye-laws

Learned Senior Counsel, supporting the juri iction of Respondent No.3, submits that under delegated authority, Respondent No.3 is empowered to issue notices, while the Zonal Commissioner undertakes final adjudication. He also invokes Section 307(4) of the BBMP Act to argue that the municipal authority can examine violations of other applicable laws, including those arising under orders passed by the NCLT.

Additionally, he relies on Section 166 of the Companies Act to contend that local authorities can, to a limited extent, examine whether there has been a violation of applicable laws which may justify cancellation of the licence under Condition No.6. 13. In reply, learned Senior Counsel for the petitioners reiterates that the Regional Director’s directive for change of name back to Deepali Private Limited Company has been

The petitioners rely on the decision of the Coordinate Bench in Sri B.R. Srinivas Murthy v. The Commissioner & Others (W.P.No.41604/2019), to contend that Respondent No.3 has no authority to issue such notices. Particular reliance is placed on paragraphs 7 and 8 of the said judgment. Citing Section 307(3) of the BBMP Act, it is reiterated that only the Zonal Commissioner is empowered to conduct enquiries and initiate action under the statute.

Learned Senior Counsel further clarifies that the interlocutory applications before the NCLT primarily sought orders to restrain the petitioners from starting a new business. He submits that the business activity of Petitioner No.3

The notices issued are based on mere opinion, unsupported by statutory basis, and hence, deserve to be quashed.

Upon careful examination of the records and pleadings, it is evident that Petitioner No.1 and Private Respondent No.4 are members of the same family, now estranged due to disputes over control, ownership, and management of their respective business interests. The materials placed on record disclose that the parties are divided into two distinct and adversarial groups. These disputes have resulted in multiple litigations, both civil and corporate, and are currently pending adjudication before competent fora including the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).

The core issue appears to stem from a purported family settlement agreement, the terms and validity of which are themselves under dispute. The said agreement, according

The records further reveal that Private Respondent No.4 has instituted interlocutory proceedings before the NCLT in the form of I.A.Nos. 5, 6, and 7 of 2020 in the Company Petition pending between the parties. These applications were filed with the intent of restraining Petitioner No.3/company and its representatives from establishing and operating a

The National Company Law Tribunal (NCLT), upon hearing the parties on these interlocutory applications, passed a composite order. The relevant operative portion of the said order, which is central to the controversy at hand, is extracted hereinbelow for ready reference:

Accordingly, IA Nos.05, 06 and 07 of 2020 stand allowed and disposed of.

The Petitioners vide Diary No. 3226 dated 20.06.2023 have filed common written submissions in IA Nos.05, 06, 07 of 2020, CA No.62 of 2021 and CA No.21 of 2023. They have further stated that this Tribunal has ample powers u/s 425 of Companies Act, 2013 r/w Rule 11 of NCLT Rules, 2016 and seeks a direction that prayers of IA Nos. 05, 06 & 07 of 2020 be modified due to the developments from January 2020 till today, as below and accordingly, the revised prayers be read as under, which is taken on record:

Upon perusal of the operative portion of the NCLT's order, as extracted hereinabove, it becomes evident that the petitioners, particularly Petitioner No.3/company have been expressly restrained by the Tribunal from operating a competing jewellery store or business from ‘B’ Block, which is the very premises forming the subject matter of the present

Similarly, in I.A.No.6/2020, the NCLT has passed orders prohibiting the petitioners from using domain names that are identical or deceptively similar to those employed by the respondent group of companies. The restraint extends to usage across digital platforms, including websites and online portals. The prohibition under I.A.No.7/2020 goes a step further and restrains the petitioners from directly or indirectly engaging in any commercial activity, at any location, that may compete with the business interests of the respondent group.

These directions, read holistically, amount to an effective embargo on the petitioners from pursuing the line of business in question, at least insofar as it affects or overlaps with the respondent’s established operations. The NCLT has

In support of their contention that the petitioners are entitled to use the name C. Krishniah Chetty & Company, learned Senior Counsel for the petitioners has placed reliance on a judgment rendered by the Hon’ble Madras High Court in proceedings initiated under Sections 47 and 57 of the Trade Marks Act, 1999. The said judgment was rendered in the context of a dispute concerning rectification of the Register of Trade Marks and challenges to use of certain trade names and trademarks that bore similarities to existing and registered marks.

The petitioners have cited this judgment to fortify their argument that their use of the impugned name is not violative of any intellectual property rights, and that their claim to the trade name is independently sustainable. The relevant operative portion of the judgment, as relied upon by the petitioners, is extracted below for ready reference:

Therefore, all these petitions are disposed of on the following terms:

The judgment rendered by the Hon’ble Madras High Court, which arose from proceedings under Sections 47 and 57 of the Trade Marks Act, 1999, assumes considerable relevance in the context of the present dispute. After an extensive evaluation of rival claims involving the trademark “C. Krishniah Chetty,” the Court, while recognising the complexities surrounding shared legacy and brand identity, proceeded to issue specific directions to protect the interests of both groups. In particular, the Court directed that the petitioner company therein representing the Narayan Group shall, while continuing to use the trademarks, make appropriate modifications by including the term “Narayan” in parentheses as part of each mark to distinguish its lineage and business identity.

The petitioners herein rely on this judgment to assert that their corporate identity and use of trade name is traceable to a family arrangement and is subject to directions issued by a constitutional court. It is therefore contended that such trade mark-related directions, being judicial in nature and forming part of a civil and commercial adjudicatory process, cannot be the subject of scrutiny by administrative authorities like the BBMP.

In light of these crucial developments, and having regard to the multiple proceedings pending before judicial forums such as the National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT), and the Madras High Court, this Court is of the considered opinion that officials of the BBMP particularly Respondent No.3 ought to have exercised restraint and declined to entertain complaints involving such intricate legal and factual disputes. The dispute, as is evident, traverses multiple juri ictions and involves contentious questions pertaining to corporate control, brand identity, alleged breach of judicial orders, and trademark

The BBMP’s juri iction under Chapter XXII of the BBMP Act, 2020 is administrative and regulatory in nature. It

Although Respondent No.4 has attempted to demonstrate that the petitioners are in violation of certain directions issued by the NCLT in I.A.Nos.5 to 7, this Court is of the view that the appropriate remedy available to Respondent No.4 is to approach the NCLT or the NCLAT seeking enforcement or modification of those very orders. Once the matter is seized of by a judicial forum that has both juri iction and competence to adjudicate such disputes, parallel proceedings before an administrative authority like the

This Court also finds procedural impropriety in the manner in which Respondent No.3 issued the impugned show cause notices. The first notice, dated 11.06.2025, granted the petitioners a mere three days' time to file objections, a period manifestly inadequate to compile records, consult legal counsel, and respond meaningfully to the serious allegations raised. Issuing a show cause notice with such an unreasonably short deadline undermines the very object of natural justice and raises a presumption that the notice may have been issued to serve extraneous interests, particularly in light of the ongoing dispute with Respondent No.4. 25

Issuing such notices without providing sufficient time also creates an atmosphere of undue pressure on the affected parties, thereby compromising fairness and transparency. State instrumentalities, including municipal bodies, are expected to adhere to the principles of equity, reasonableness, and due process. The pattern of issuing back- to-back notices within a short span, both of which appear to be predicated on the complaints of an interested party engaged in parallel litigation, gives rise to a reasonable inference of mala fides.

The BBMP authorities, particularly Respondent No.3, ought to have recognised that the matter was sub judice before multiple forums and should have exercised institutional restraint. Even assuming there existed a prima facie basis to initiate an enquiry, the matter should have been placed before Respondent No.2/Zonal Commissioner for appropriate consideration under law, and only after affording adequate and reasonable time to the petitioners to respond. The failure to

For the foregoing reasons, this Court proceeds to pass the following: ORDER (i) The writ petition is hereby allowed; (ii) The impugned show cause notices dated 11.06.2025 and 18.06.2025, issued by Respondent No.3, and produced at Annexures–A and A1 respectively, are hereby quashed and set aside as being without juri iction and in violation of the principles of natural justice; (iii) Notwithstanding this order, it is made clear that Respondent No.4 shall be at liberty to seek appropriate relief for any alleged violation of the interim orders passed by the National Company Law Tribunal (NCLT) by approaching the said Tribunal or such other competent forum in accordance with law;