TMI Blog2018 (7) TMI 2165X X X X Extracts X X X X X X X X Extracts X X X X ..... down and quashed. As a consequence, any demand made by the respondents or any of them or those claiming there under to obtain permission fees for any fresh deed of rectification to change the name of the sub-lessee in the deed of sublease or rectification deed of 2005 or 2012 to the changed name of the writ petitioner or as processing fees for mutation of the said changed name, must be held to be equally without jurisdiction and impermissible on the part of the respondents or any of them. The respondents and each of them, including the respondents No. 1, 2, 3, 4 and 5 and each of them, are commanded to record the change of name of BNKe Solutions Private Limited to the changed name of the writ petitioner, Gopi Vallabh Solutions Private Limited (the petitioner No. 1) without payment of any permission fee, as demanded - Petition allowed. - W.P. No. 26288 (W) of 2016 - - - Dated:- 2-7-2018 - Protik Prakash Banerjee, J. For the Appellant : P.C. Sen, Raj Ratna Sen, Ritabrata Mitra, A.P. Gomes, Akriti Jain and Debolina Dey For the Respondent : Sushovan Sengupta and Srilekha Bhattacharyya JUDGMENT Protik Prakash Banerjee, J. 1. This petition under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2(vii) allowed such sub-lease. The writ petitioner-while still operating under its former name - took possession of its sub-leasehold, paid the full consideration/salami, and duly obtained mutation of its name in the records of the respondent No. 1 in the department concerned, and paid all fees and did all things which the law and the contract between the parties, where one of the parties was State within the meaning of Article 12 of the Constitution of India, required it to do. 4. Thereafter, the writ petitioner duly changed its name under the provisions of Section 21 of the then Companies Act, 1956 from BNKe Solutions Private Limited to its present name. Afresh certificate of incorporation was issued by the Registrar of Companies West Bengal, on March 12, 2012 which is conclusive proof of all the statutory requirements having been duly performed by the writ petitioner, including the accordance by the Central Government of approval. 5. Two provisions of the Companies Act, 1956 are required to be considered to appreciate the effect of the said duly effected change of the name of a company incorporated under the Companies Act, 1956. These are Sections 21 and 23. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their own IT/ITES business, However, the sub-lessee may sub-let/sub-lease the surplus built up space of the building of the premises for using other IT/ITES and Electronics unit only on pervious written consent of the Sub-Lessor but the space shall not be used for other purposes. 8. Of more moment, for the purpose of the present litigation, is the clause which was inserted for payment of permission fees. It reads as follows:- The Sub-lessee hereby agreed to pay required permission fees to the Sub-lessor for letting out the surplus built up space for setting up IT/ITES and Electronics industries only. The Sub-Lessee also agreed to pay other fees payable to Urban Development Department and the Sub-Lessor for transfer/assignment of leasehold right partly or fully of the lease hold premises as mentioned in the Schedule. 9. Thereafter, documents annexed to the writ petition show that the petitioner sought permission to transfer/assign/sub-let part of the building constructed by it to different entities, and the writ petitioner duly paid permission and other fees. The respondent No. 6 also accepted that the writ petitioner under its changed name had the right to do so, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to my mind this is more bathetic than pathetic. I will content myself with only one observation - I would have thought that the law is well settled that by a change of name of a company under the provisions of the Companies Act, 1956, which is contemporaneously considered to be a change and not a transfer of one company to another, there is no change of legal personality and therefore there is no requirement to rectify any deed to effect mutation of the changed name in the records of rights or land records. 12. Pursuant hereto correspondence continued between the respondent No. 5 and the writ petitioner. The writ petitioner continued to stress that the change of name was duly made and certificate was duly issued by the Registrar of Companies while reiterating its prayer that mutation of the name of the writ petition as it stood after March 12, 2012 be effected in the records of the respondent No. 1 in the Urban Land Department. The writ petitioner, on oral request from the respondent No. 5, appears to have supplied its certificate of incorporation once again, showing the change of name and the memorandum and articles both in its original name and the new name. These are all an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been known under its former name and its subsequently changed name, were identical or not. Such certificate was issued by the chartered accountant which is also annexed to the writ petition. Thereafter, by a letter dated May 16, 2016, the respondent No. 2 alleged that on scrutiny of the Memorandum and Articles of Association of the writ petitioner as it was known prior to the change in its name and the present name, it transpires that the Articles of Association of the two companies are not the same. Structural changes between the companies have also been noticed after the name change. Evidently, this is not an issue of mere change of name of the company; but the formation of a separate company in place of the existing one. . On such a finding in the letter dated May 16, 2016 as in Annexure P/27 , the respondent No. 2 requested - in effect demanded - that the requisite permission fee according to the letter of the respondents' letter dated July 7, 2015 be deposited for transfer of sub-leasehold right in respect of the plot in question to the writ petitioner in its present name from the writ petitioner under its former name. 16. It was not specified in the letter date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted the contentions of the writ petitioner. 20. I could have decided the writ petition on the basis of this admission alone, had it not been my duty to decide the matter on merits, so that such people in such high positions of power with unmatched ignorance of the law, are not allowed to oppress citizens and businesses in West Bengal-which I say with much regret are few and far between in this land forsaken by industrialists and perhaps will continue to be so unless such bureaucrats are weeded out and put to pasture and thus I now consider what the respondent No. 4 has alleged about the merits of the matter, such as they are. 21. At paragraph 32 of the Affidavit-in-Opposition affirmed by the respondent No. 4, the differences in the Articles of Association between BNKe Solutions Pvt. Ltd. and Gopi Vallabh Solutions Private Limited, - though it is the same company before and after due change of name - which are alleged to exist, have been summarized. I will let the respondent No. 4's own words try and supply in an ex post facto affidavit, the fatal deficiencies in the memoranda impugned:- I also say there are many differences between Articles of Association of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents have argued - that by reason of the change in the Articles and Memorandum of Association of the writ petitioner, now a company having its registered office in Gurgaon controls the writ petitioner and has changed its name. However, it is not denied that the same business is being carried on by the writ petitioner under the same corporate facade. To enable the Court - even a writ Court - to lift the corporate veil, certain allegations of fact are required to be made, and are required to be made not recklessly, but with sufficient materials. 25. What the law requires to be alleged in order to allow a Court to lift the corporate veil, or even pierce it, is laid down in authoritative precedents cited on behalf of the respondents by Mr. Sengupta. (i) New Horizons Limited and Another v. Union of India and Others, reported in (1995) 1 SCC 478. This was a case involving a joint venture which the Hon'ble Supreme Court was ultimately pleased to hold that the foreign company which had a substantial holding in the company was a mere shareholder. Their Lordships were pleased at paragraph 27 of the report, to hold expressly as follows:- The conclusion would not be differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied upon by the Learned advocates in the facts of this case, who advised the respondents including the respondent No. 1 and the respondent No. 6, I can only rue the wrong advice on. which the respondents have acted. (ii) The second case relied upon by Mr. Sengupta is the State of Uttar Pradesh and Others v. Renusagar Power Co. and Others reported in (1988) 4 SCC 59. This was a case where the Hon'ble Supreme Court was concerned with a case where Hindalco had brought into existence the agency of the Respondent power company for the express purpose of avoiding takeover of the power station by the appellant State's Electricity Board and where the said power company was trying to avoid the liability to pay electricity, duty by alleging that both the persons generating and consuming the energy were one and the same. and therefore a different and lower liability to pay duty was involved. In that case, the Hon'ble Supreme Court was pleased to hold that the generation of power by the power company ought to be held to have been done by Hindalco from its own source of generation and affirmed the findings that the corporate veil would be lifted. So, in effect, the veil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the company by its former name be continued by or against the company by its new name. This makes it abundantly clear that as the alteration is only in the name and not the identity and the statute itself grants the right to continue an existing proceeding by the old company in its new name. (emphasis supplied). (ii) The second was another Bench decision, in the case of Pioneer Protective Glass Fibre P. Ltd. v. Fibre Glass Pilkington Ltd. reported in (1986) 60 Company Cases 707 (Cal). There, the Hon'ble Division Bench, after distinguishing the judgment in Malhati Tea Syndicate Ltd. v. Revenue Officer, Jalpaiguri, reported in (1973) 43 Company Cases 337 (Cal) on the ground that it did not consider an earlier judgment of the Hon'ble Supreme Court in Garikapati Veerrayya v. N. Subbiah Choudhury, reported in AIR 1957 SC 540, was pleased to hold, inter alia, as follows:- Section 23 of the Act appears mainly to be a ministerial Section and lays down the procedure for recording of the change of name. A fresh certificate of incorporation is no doubt issued, but the same is only for the purpose of recording the alteration in the name. The effect of the issue of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant herein (emphasis supplied). 28. In such view of the matter, I am gratified to find that what I thought at paragraph 11 of this judgment was the settled law, is in fact the settled law, in the facts of this case. This is in view of the decisions of both the Hon'ble Supreme Court and the Bench decisions of this Hon'ble Court, applicable to the facts of this case, which I must follow. 29. Accordingly, both Annexures P/20 and P/27 which treat a due change in the name of a company incorporated under the Companies Act, 1956 to be a creation of a new entity or at the very least, a reason for lifting the corporate identity to see the manner in which the shareholders have changed, are bad in law and arbitrary and illegal and contrary to the law of the land and thus public policy and show non-application of mind to the matters of record, and they are so unreasonable that no reasonable man on the face of the same facts could have come to the same conclusion. Thus, they are also perverse within the meaning of law. They are therefore quashed. Furthermore, any attempt to treat the writ petitioner under its old name and the changed name as two different entities ..... 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