1984 (9) TMI 220 - HC - Companies Law

Issues Involved:
1. Legality of the registration of the fourth respondent company with the name "Methodist Church of India."
2. Requirement of a "no objection" certificate from existing companies.
3. Jurisdiction of the Bombay High Court to entertain the petition.

Detailed Analysis:

1. Legality of the Registration of the Fourth Respondent Company with the Name "Methodist Church of India":
The Methodist Church in India is a well-established religious organization with significant properties and activities. The central conference of the Methodist Church in Southern Asia reorganized in 1981 to form the Methodist Church in India. The executive board of the Methodist Church in Southern Asia, renamed as the executive board of the Methodist Church in India, holds properties in trust for the church.

The petitioners sought to register a company named "Methodist Church in India Trust Association" to manage these properties. However, the Registrar of Companies, Tamil Nadu, denied this request, citing the existence of a similarly named company, "Methodist Church of India," registered by seven individuals in Hyderabad. This company was granted a license under section 25 of the Companies Act, allowing it to omit "Limited" or "Private Limited" from its name.

The court found that the name "Methodist Church of India" was misleading and likely to cause confusion. It noted that the fourth respondent's objective was to take over the properties and administration of the Methodist Church in Southern Asia, which could lead to a misrepresentation of ownership and potential misuse of church properties. The court referenced legal principles from Halsbury's Laws of England and previous cases, emphasizing that a company should not carry on business in a way that misleads the public or represents another entity's business.

The court concluded that respondents Nos. 1 to 3 (Registrar of Companies) failed to discharge their obligations under section 20 of the Companies Act by allowing the registration of the fourth respondent company without proper inquiry into its connection with the Methodist Church.

2. Requirement of a "No Objection" Certificate from Existing Companies:
The Registrar of Companies required the petitioners to obtain a "no objection" certificate from the fourth respondent company and another similarly named company in Northern India. The court found this requirement unreasonable, especially since the fourth respondent had no legitimate claim to the name "Methodist Church of India."

The court noted that the Methodist Church in Northern India Trust Association had not functioned since 1970, with no annual reports or minutes submitted since then. Therefore, obtaining a "no objection" certificate from this defunct entity was unnecessary. The court directed that the name "Methodist Church in India Trust Association P. Ltd." be made available to the petitioners without requiring any "no objection" certificate.

3. Jurisdiction of the Bombay High Court to Entertain the Petition:
The petitioners argued that the Bombay High Court had jurisdiction because their registered office was in Bombay, and the effect of the Registrar's decision was felt there. The court relied on previous decisions, including Damomal Kausomal Raisinghani v. Union of India and Joshi v. State of Bombay, which held that the place where the effect of an order is felt can constitute part of the cause of action.

The court agreed that the effect of the registration of the fourth respondent impacted the petitioners' properties in Bombay, creating potential misunderstandings about property titles. Therefore, the court concluded that it had jurisdiction to entertain the petition.

Conclusion:
The court allowed the petition, directing respondents Nos. 1 to 3 to remove the name of the fourth respondent from the register and restraining the fourth respondent from using the words "Methodist Church" in its name. The court also directed that the name "Methodist Church in India Trust Association P. Ltd." be made available to the petitioners without requiring any "no objection" certificate. The rule was made absolute, and the respondents were ordered to pay the petitioners' costs.

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