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2020 (10) TMI 1180 - HC - Companies LawRearrangement of Shareholding - Demand of sums towards transfer fee - non-utility penalty in respect of plots owned by the petitioner - whether by change of name from TAGROS Chemicals India Limited to TAGROS Chemicals India Private Limited would tantamount to change of name in the company and therefore invite levying of transfer charges? - HELD THAT:- What has been done is rearrangement of shareholding within the family without there being a change in the total shareholding of the company. No new separate legal entity has been created - keeping in mind the provisions of Section 23(3) of the Companies Act and Section 14 thereof, what has really happened is that the change in the name of the company is only by adding the word 'private'. As per Section 13(2) of the Companies Act, any change in the name of the company shall be subject to the provisions of sub sections (2) and (3) of section 4 of the Act and shall not come into effect except with the approval of the Central Government in writing. The proviso to the said section says that no such approval will be necessary when the only change in the name of the company is deletion therefrom or addition thereto of the word 'private' consequent on the conversion of any one class of the company to another class in accordance with the provisions of the Act. Thus, any change that is brought about in the name of a company by either deletion or addition of the word 'private' would not require written approval. What appears to be the legal position from reading the aforesaid sections is that mere change in the name of company from public to private would not tantamount to a change in the constitution of the company since this is brought out only with a view for the purpose of complying with the requirements viz-a-viz the government under the Companies Act. There is no change in the constitution thereof. Accordingly, the stand of the corporation for levying of transfer fees is bad. Non utility charges or penalty for non utilisation of plots - HELD THAT:- It is evident from reading the notification of the Ministry of Environment and Forests dated 25.08.2009 that the Government of India enforced a moratorium on construction due to the absence of environmental clearance. The moratorium was lifted only after 7 years by a memorandum dated 25.11.2016. No environmental clearance could be obtained and no permission for construction could be granted during this period and as a result of facts beyond the control of the petitioner, the plots remained unutilised. Therefore even the recovery of penalty and non utilisation charges are without authority of law. Merely because in one of the petitions, the petitioner has paid such charges which otherwise he was not obliged to pay in view of the moratorium, that itself would not result in ousting the petitioner from the merits of that petition. The action of the respondent Corporation in demanding transfer fee and non utility penalty in respect of the plots is held to be illegal and contrary to law - Petition allowed.
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