TMI Blog2022 (11) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... hanges happened in the usual course of business. Thus, the justification of demanding an amount of Rs. 1.45 crores for such routine events in the usual course of business is contrary to the law laid down by the courts. Even if the petitioners are brought within the purview of the amended Rule 3 under the later Notification of 11th February, 2020, the petitioners would be protected by Rule 3(i)(d) where Change in Management in the case of a public limited company has been defined as any change in directorship other than appointment/cessation of independent directors within the meaning of The Companies Act, 2013 or any change of shareholding amongst shareholders beyond 10% of the existing shareholding pattern - There is admittedly no cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1.45 crores for effecting four alleged changes in management in the petitioner Company from 1.4.2017 to 31.3.2022 without notice to the Collector of Excise. The alleged obligation on the part of the petitioners arises out of the West Bengal Excise (Change in Management) Rules, 2009 notified on 11.2.2010. The Rules are applicable in cases of changes in management of all excise licensees granted under the Bengal Excise Act, 1909 and the rules framed under the said Act except for licenses which are settled by auction. 2. The petitioners say that the four events, termed as changes in management, from 1.4.2017 to 31.3.2022 consist of the appointment of an independent woman Director to the Company on 26.7.2019, resignation of a Joint Managi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f directors would amount to change in management under the West Bengal Excise (Change in Management) Rules, 2009. Under Rule 5, the Collector is under an obligation to allow a change in management of a licence after realizing 1.5 times the initial grant fee similar to the one applicable for grant of a new licence. The proviso to Rule 5 qualifies the aforesaid to the extent that no initial grant fee of licence shall be payable for change in management in case of Clauses (a) (e). Proviso (e) to Rule 5(1) specifies that initial grant fee of license shall not be payable for change in management in case of death or a change in the usual course of business of a public limited company incorporated under the Companies Act, 1956. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholders would determine the management of or essentially who controls the affairs of the company. 7. In the present case, appointments or resignation of a Director can, by no means, be equated with a change in the shareholding pattern of the first petitioner and hence a shift in the management of the first petitioner. A shift or change in the management means a substantial and significant movement of the shares of a Company leading to a shift in the management structure. 8. The objections taken on behalf of the State with regard to existence of an alternative remedy is not acceptable since Rules 3 and 5 of the Consolidated Rules under section 85 of the Act providing for an appellate forum to a person aggrieved by an order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the amended Rule 3 under the later Notification of 11th February, 2020, the petitioners would be protected by Rule 3(i)(d) where Change in Management in the case of a public limited company has been defined as any change in directorship other than appointment/cessation of independent directors within the meaning of The Companies Act, 2013 or any change of shareholding amongst shareholders beyond 10% of the existing shareholding pattern. There is admittedly no change in the shareholding pattern of the first petitioner in the period stated in the impugned letter of 24.6.2022. The petitioners agreeing to pay the composition fee in lieu of having their license suspended cannot be seen as waiver of the petitioners rights under the prevai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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