1999 (6) TMI 389 - HC - Companies Law

Issues Involved:
1. Validity of the order dated 7-7-1989 passed under section 22(1) of the Companies Act, 1956.
2. Legitimacy of the use of the name 'Kilburn' by the petitioners.
3. Jurisdiction of the first respondent in directing the change of names of the petitioner companies.
4. Compliance with the 12-month time limit under section 22(1)(b) of the Companies Act, 1956.

Issue-wise Detailed Analysis:

1. Validity of the order dated 7-7-1989 passed under section 22(1) of the Companies Act, 1956:
The petitioners challenged the order of the first respondent dated 7-7-1989, which directed the second and third petitioners to change their registered names, claiming that the order lacked jurisdiction and was arbitrary. The respondents contended that the order was justified as the names of the second and third petitioners closely resembled another company registered on 22-12-1981 in West Bengal, namely Kilburn Co. Ltd. The court found that the first respondent's order was based on thorough scrutiny and was within jurisdiction, thus upholding the validity of the order.

2. Legitimacy of the use of the name 'Kilburn' by the petitioners:
The petitioners argued that the names Kilburn Starters Ltd. and Kilburn Control Systems Ltd. were registered with due deliberation and consent, and thus there should be no objection to their use. However, the respondents highlighted that the consent given by Macneill & Magor Ltd. and Kilburn Co. Ltd. was only for the first petitioner (Kilburn Electricals Ltd.) and not for the second and third petitioners. The court noted that no specific consent was obtained for the second and third petitioners, and the registration of these names by the Registrar of Companies, Tamil Nadu, was due to inadvertence.

3. Jurisdiction of the first respondent in directing the change of names of the petitioner companies:
The petitioners contended that the first respondent lacked jurisdiction to direct the name change as the action was initiated beyond the 12-month period stipulated under section 22(1)(b) of the Companies Act, 1956. The respondents clarified that the 12-month period should be counted from the date of registration of the companies, not from the date the names were allowed. The court agreed with the respondents, noting that the directions issued on 7-7-1989 were within the 12-month period from the registration dates of the second and third petitioners (11-7-1988 and 23-8-1988, respectively).

4. Compliance with the 12-month time limit under section 22(1)(b) of the Companies Act, 1956:
The petitioners argued that the action was initiated after the expiry of the 12-month period, rendering the order without jurisdiction. The court found that the directions were issued within the stipulated time frame, thus complying with the requirements of section 22(1)(b). Consequently, the court concluded that the first respondent's order was within jurisdiction and not arbitrary or illegal.

Conclusion:
The court dismissed the writ petition, concluding that the petitioners failed to establish any valid grounds for interference with the impugned proceedings. The petitioners' argument that the names were registered with due consent and deliberation was rejected, as no specific consent was obtained for the second and third petitioners. The court upheld the first respondent's order as being within jurisdiction and compliant with the 12-month time limit under section 22(1)(b) of the Companies Act, 1956.

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