1992 (2) TMI 309 - HC - Companies Law

Summary

Issues Involved:

1. Change of name of the petitioner company.
2. Rectification of the register of members.
3. Applicability of Clause 37 of the Articles of Association.
4. Allegations of circumvention and fraud.
5. Discretionary remedy under Section 155 of the Companies Act, 1956.
6. Request for stay of the order.

Detailed Analysis:

1. Change of name of the petitioner company:

The petitioner, Sulphur Dyes Limited, formerly known as Hickson and Welch Limited, sought an order under Section 155 of the Companies Act, 1956, to rectify the register of members of Hickson and Dadajee Ltd. to reflect its new name. The petitioner provided evidence of the name change through a special resolution passed on June 23, 1989, and a certificate of incorporation dated July 3, 1989, issued by the Companies Registration Office, Cardiff, U.K.

2. Rectification of the register of members:

The petitioner requested the rectification of the register of members of the respondent company to show its changed name as a shareholder. The respondent company refused to effect this change, prompting the petitioner to file the petition under Section 155 of the Companies Act, 1956.

3. Applicability of Clause 37 of the Articles of Association:

Clause 37 of the Articles of Association of Hickson and Dadajee Ltd. requires a shareholder proposing to transfer shares to give notice and follow a specified procedure. The petitioner argued that this case involved a mere change of name and not a transfer of shares. The court agreed, stating that the change of name did not trigger the requirements of Clause 37 since it did not constitute a transfer of shares to another party.

4. Allegations of circumvention and fraud:

The respondent's counsel, Mr. Bharucha, argued that the name change was a device to circumvent Clause 37 and indirectly transfer shares. The court rejected this argument, noting that the agreement dated December 22, 1987, to transfer assets, including shares, was never acted upon and was abandoned. The court found no evidence of fraud or circumvention, emphasizing that the case was simply about a change of name supported by a fresh certificate of incorporation.

5. Discretionary remedy under Section 155 of the Companies Act, 1956:

The respondent's counsel contended that the court should not exercise its discretion under Section 155 in favor of the petitioner and suggested that the petitioner should pursue a civil suit. The court disagreed, stating that the facts were clear, and the certificate of incorporation was conclusive. The court saw no sufficient cause for the respondent to refuse rectification and found no reason to reject the petition.

6. Request for stay of the order:

The respondent's counsel requested a stay of the court's order to allow time to file a civil suit. The court denied this request, emphasizing the need to resolve disputes and prevent multiplicity of litigation. The court directed the respondent to rectify the register of members within four weeks and awarded costs of Rs. 1,000 to the petitioner.

Conclusion:

The court allowed the petition in terms of prayers (a), (b), and (c), directing the respondent to rectify the register of members to reflect the petitioner's new name and implement the order within four weeks. The court also expedited the issue of a certified copy of the judgment.