TMI Blog2023 (9) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... n there is any change in the name of the company under sub-Section 3, the Registrar shall enter the new name in the Register of the Company and issue fresh certificate of registration with new name. Section 13(2) made it crystal clear that no new company was ever created as a result of the change of its name and it is the case of mere addition of word private to its name. Relying upon aforesaid instructions/clarification dated 16.2.2012 issued by the respondent- State, this Court held that respondents erroneously concluded that there is transfer of assets and property by the Company. Undisputedly, in the case at hand, change in the name with the approval of Registrar of Companies came to be effected by Department of Industries, as such, respondents Nos. 1 and 2 had no option but to change the name of petitioner No.1 in the revenue records. Approval for change of name by Registrar of Companies under Ss. 21 and 23 of the 1956 Act corresponding to S.13 of the 2013 Act does not mean transaction or sale as such no stamp duty is chargeable. In the instant case, respondents Nos. 1 and 2 have failed to appreciate that change in name with approval of Registrar of Companies and issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries Limited to Maharaja Whitline Industries Private Limited and thereafter to Groupe SEB India Private Limited , as required under law. 2. Precisely, the facts of the case as emerge from the record are that a public limited company namely Maharaja Whiteline Industries Limited (hereinafter, MWIL ) was incorporated on 13.9.2005 under the provisions of Companies Act, 1956. Name of aforesaid company was changed to Maharaja Whitline Industries Private Limited (hereinafter, MWIPL ) on 20.9.2011. On 28.10.2014, name of MWIPL came to be changed to Groupe SEB India Private Limited (hereinafter, GSIPL ), which is petitioner No.1 herein (Annexure P-3). MWIL, with a view to set up its business, purchased land measuring 58-02 Bigha in Khewat Khatauni No. 317/386, situate in Mohal Malkumajra, Tehsil Baddi, District Solan, Himachal Pradesh, from the previous land owners, after having obtained necessary approval of the Government i.e. respondents Nos. 1 and 2, under S.118 of the Himachal Pradesh Land Reforms and Tenancy Act, vide letter No. Rev-B-F(10)-296/2007, dated 31.8.2007 (Annexure P-4). Aforesaid permission was granted on the basis of Essentiality Certificate issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was intimated vide said letter that name of MWIPL has been changed to GSIPL provisionally by the Department of Industries. However, it was also stated in the said letter that change of name shall be entered in EM-II only after necessary approval under S.118 of the Act is accorded in favour of petitioner NO.1 and when said unit changes its name and constitution in the record of Revenue Department. 8. On 11.10.2018, Director of Industries issued a fresh Essentiality Certificate No. 3598 bearing reference No. Ind.Dev.F(14)EC- 865/2004, wherein it was stated that pending stamp duty and registration fee in lieu of changes previously in the constitution of the company shall be charged from petitioner No.1, if any, found due by the Revenue Department. Petitioner No.1, approached respondent Nos. 2 and 3 for approval of change of name of petitioner No.1 in the revenue records to Groupe SEB India Private Limited under S.118 off the Act. Respondents Nos. 1 and 2 vide letter No. Rev.B.F.(10)- 87/2019 dated 28.3.2019 (Annexure P-2), granted approval for change of name of Company in revenue record subject to following conditions: a. Stamp duty and registration fee shall be chargeable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion upon change in name of a company issued by Registrar of Companies under the Companies Act, 2013 (or the Companies Act, 1956) and under Rule 29 of the Companies (Incorporation) Rules, 2014 or under S.31(1) of Companies Act, 1956 is not an instrument within the meaning of S.2(14) of Stamp Act or the Registration Act, attracting charging or imposition of stamp duty or registration fee. Lastly, Mr. Sood, argued that respondents Nos. 1 and 2, while imposing condition No.1, in the impugned order, failed to take note of the fact that change in the name of MWIPL to GSIPL was an act of passing of special resolution under S.13 of the Companies Act, 2013 (pari-materia to Ss. 21 and 23 of Companies Act, 1956) and on the basis of such resolution, name of petitioner No.1 was changed by Registrar of Companies in the register of companies, as such, at no point of time, properties, if any, of the company ever came to be transferred rather there was only change of name. While making this Court peruse documents annexed with the petition, Mr. Sood further argued that despite change in the name of petitioner No.1 and change in shareholders, Corporate Identification Number of petitioner No.1 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirety, clearly suggests that the facts as have been noted herein above, are not in dispute, rather, stand admitted. Precisely, the case of the petitioners, as has been highlighted in the petition and further canvassed by learned senior counsel for the petitioner is that condition of stamp duty and registration fee is ultra vires of the prescribed powers and responsibilities of respondent No.2 under the provisions of the Act and the Rules. It has been further claimed by the petitioners that upon acquiring entire shareholding of petitioner No.1, erstwhile MWIPL by GSIPL, there was no actual transfer of land, within the meaning of S.118 of the Act, 15. Having carefully perused the judgment rendered by this Court in JSTI Transformers (supra), this Court find that the Division Bench has held that mere acquiring of equity share capital of Company does not amount to transfer, assignment or parting with the possession or any other rights of the allottee Company, neither with the plot in question nor structure in existence thereon. Acquiring of equity share capital of the allottee Company by the petitioner also does not contravene the conditions contained in Clause 2(xi) of the convey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll required registration after obtaining permission under the provisions of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 5. In cases, where the name change as per example given in para 4 above is approve by the Registrar of Companies and the change in name has also been given effect to by the Director, Industries, The District Collector concerned will order to effect change in name in revenue record as per procedure laid down in Chapter 8.52(ii) of The Himachal Pradesh Land Records Manual and an entry in remarks column of revenue record i.e. Jamabandi, shall be made with red ink giving therein the old name of Company and reference of order in compliance to which the name is changed. 8. This Court in M/s Fresenius Kabi Oncology Limited (supra) was dealing with a case, where consequent upon request made by the petitioner to incorporate by way of change of its name in the record, respondent-State Authorities demanded a sum of Rs.1,04,21,508/- towards unearned increase /transfer charges on account of alleged violation of Clause 2(xi) of conveyance deed, where Pharma business of the Company, Dabur India Limited by way of merger, merged into the new e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and another v. The State of West Bengal and another, held as under: 8. Main case of the petitioners, however, is that change of the name of a company does not constitute transfer of leasehold right or any assets of the company. In this regard, Mr. Basu has relied on a judgment of the Supreme Court in the case of Bacha F. Guzdar Vs. Commissioner of Income Tax, Bombay (AIR 1955 SC 74), Kalipada Sinha Vs. Mahalaxmi Bank Ltd. (AIR 1966 Cal 585), W.H. Targett (India) Limited Vs. S. Ashraf reported in [2008(3) Cal LT 362] and an unreported judgment of this Court in W.P. No. 18668(W) of 2012 M/S. Din Chemicals and Coatings Pvt. Ltd Anr. Vs. The State of West Bengal and Ors delivered on 5th October, 2012. 9. Mr. Susobhan Sengupta, learned counsel appeared on behalf of the State in this matter. His submission is that on change of equity shareholding pattern, bringing a new set of shareholders in the controlling position of the company in substance has resulted in transfer of ownership and control of the company, and such change should be treated to have resulted in transfer of assets of the company. According to him, the leasehold right was shifting from one entity to another, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le sum but in its ordinary sense it means the sum paid and received as the quotient forming the share of the divisible sum payable to the recipient. This statement does not justify the contention that shareholders are owners of a divisible sum or that they are owners of the property of the company 11. The same principle was followed in the case of Din Chemicals Coatings Pvt. Ltd. (supra), and it has been held in this decisions:- Let me now consider as to how far the principle laid down in the said decision of the Hon ble Supreme Court is applicable to the facts of the instant case. I have already indicated above that the case which was before the Hon ble Supreme Court was a case of amalgamation of the two companies which is not the case before this Court. In case of amalgamation of two companies the transferor company losses its existence and all the property, rights, powers of every description including all leases and tenancy right, industrial, import and all other licences, of the transferor company without any further act or deed are transferred and vested or deemed to be transferred or vested in favour of the transferee company. Thus, in case of amalgamation no doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as such, that part of such demand, which was made by the concerned authority in the impugned order and/or letter as aforesaid, stands quashed. 15. So far as these two petitions are concerned, Dabur Pharma Limited became lessee of the land in question through arrangement approved by this Court. Leasehold right of Dabur Pharma Limited has been recognized by the State authorities. On 11th August, 2008 the majority holding of Dabur Pharma Limited was transferred to the parent company of the petitioner. Whatever transfer had taken place was at that point of time between the two entities. The consequential act of change of corporate name of the company is sought to be treated as transfer of leasehold right of the company, and transfer fee is sought to be charged on that incident or event. This, in my opinion is not permissible. To borrow the terminology from the fiscal jurisprudence, what is being subjected to transfer fee is the incidence of change of name of the company. Such a situation cannot come within the ambit of the expression transfer of leasehold right , as stipulated in the notification of 18th December, 2007. The ratio of the judgment of this Court in the case of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was made with the approval of the Registrar of the Companies though even such approval was also not required as per the proviso to Section 13(2) of the Act, where the only change in the name of the company is either deletion therefrom or addition thereto the word private , consequent upon conversion of any one class of Companies to another class in accordance with the provisions contained under the Act. Section 13(3) provides that as and when there is any change in the name of the company under sub-Section 3, the Registrar shall enter the new name in the Register of the Company and issue fresh certificate of registration with new name. Section 13(2) made it crystal clear that no new company was ever created as a result of the change of its name and it is the case of mere addition of word private to its name. Relying upon aforesaid instructions/clarification dated 16.2.2012 issued by the respondent- State, this Court held that respondents erroneously concluded that there is transfer of assets and property by the Company. 11. Bombay High Court in Commissioner of Income-Tax vs. Texspin Engg. Mfg., (2003) 180 CTR Bom. 497, while dealing with a case where partnership firm was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 45(1) is required to be read with Section 48, which provides for mode of computation .. 12. Similar issue came up before Andhra Pradesh High Court in Vali Pattabhirama Rao and another Versus Sri Ramanuja Ginning and Rice Factory (P.) Ltd. and others, AIR 1984 AP 176, wherein the Court was considering a situation where a previous firm was converted into company under the provisions of Companies Act. The Court held that there was statutory vesting of title of all the property of the previous firm in the newly incorporated company, therefore, there was no need for any separate conveyance. It was held that a partnership which was treated as a company for the purposes of the Companies Act can be registered under Part 8 of the previous Act (Part 9 of the present Act) and the vesting is provided by Section 263 of the 1913 Act (Section 575 of the present Act). The provision is mandatory and there will be statutory vesting in the corporation so incorporated under the provisions of the Companies Act. The Registrar is bound to give a certificate of registration under Section 262 (present Section 574) which is a conclusive proof of incorporation, vide Section 35 of the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of the company therein. It is manifest that all properties, movable and immovable (including actionable claims) belonging to or vested in a company at the date of its registration would vest in the company as incorporated under the Act. In other words, the property acquired by a promoter can be claimed by the company after its incorporation without any need for conveyance on account of statutory vesting. On such statutory vesting, all the properties of the firm, in law, vest in the company and the firm is succeeded by the company. The firm ceases to exist and assumes the status of a company after its registration as a company. 15. In M/s Sozin Flora Pharma LLP (supra), similar dispute arose in context of conversion of petitioner from Partnership Firm to Limited Liability Partnership . Petitioner approached the respondents for effecting the change of its name in the revenue record with regard to certain land but the respondents, while granting permission to reflect such change, directed the petitioner to deposit the stamp duty and registration fee. This court relying upon the aforesaid instructions dated 16.2.2012, in para-5 held as under: 5. Conclusion:- From t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om annual returns of company with Registrar of Companies for the years 2012, 2013 and 2014 (Annexure P-17), total number of shareholders in 2012 and 2014 were eight and there was no immediate change in shareholding pattern of petitioner No.1 in the year 2014 when balance shareholding of MWIPL was acquired by SEB Internationale SAS. Despite change in name of petitioner No.1 now known as GSIPL, change in shareholders of Corporate Identification No. U31909DL2005PTC140652 of petitioner No.1 (now known as GSIPL) remained the same. 17. Needless to say, transfer of shares of shareholders of company to third party, does not mean transfer of properties of the company to third party nor shareholders have any right, title or interest in the property belonging to the company, meaning thereby second transfer of shares of erstwhile MWIPL to GSIPL, subject property remained the same. GSIPL, which is an independent corporate identity always remained owner of subject property. 18. Careful perusal of letter No. Rev.B.F10-154-2009, dated 16.2.2012 clearly provides that where merely the name of the Company is changed with the approval of Registrar of Companies in terms of Ss. 21 and 23 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not amount to transfer of assets from one company to another company. Payment of stamp duty and payment of registration charges are only levied upon an instrument of transfer (within the meaning of S.29 of Stamp Act and Registration Fee Act). 24. In the case at hand, change in the name of company from MWIL to MWIPL is mere change by addition of word private . Moreover, number of shareholding in MWIL and MWIPL remained the same and that cannot be said to attract stamp duty and registration fee. 25. In the case at hand, respondents Nos.1 and 2, while imposing conditions Nos. 1 and 2 in the impugned letter have failed to appreciate that change in the name of MWIPL.1 as GSIPL was an act of passing of a special resolution under S.13 of Companies Act,2013. Certificate of Incorporation upon change in the name issued by Registrar of Companies under Companies Act 2013 and under Rule 29 of Companies (Incorporation) Rules, 2014, is not an instrument within the meaning of S.2(14) of the Stamp Act or under the provisions of Registration Act, attracting imposition of stamp duty and registration fee. 26. Leaving everything aside, this Court finds that change in the name of MWIPL ..... X X X X Extracts X X X X X X X X Extracts X X X X
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