2009 (6) TMI 579 - HC - Companies Law

Rectification of Name of company - Held that - In the present case, in the first round of litigation between the parties the competent authority had taken the view that the orders could not be passed after lapse of twelve months period but that order by consent was set aside and the matter was remanded keeping all the contentions of the parties open. Now, the authority has arrived at the conclusion that the petitioner company is required to change its name. Thus, the subsequently registered company has approached this Court. We are of the considered view that the Central Government had lost its jurisdiction to pass appropriate order and to give direction as admittedly the period of twelve months had lapsed on the date of passing such order. W.P. allowed.

Summary

Issues Involved:
1. Registration and incorporation of companies.
2. Application for registration of a trademark.
3. Issuance of notice under Section 22 of the Companies Act.
4. Examination of the period for exercising powers under Section 22.
5. Directions for changing the company name.
6. Jurisdiction and limitations of the Central Government under Section 22.
7. Remedies available to aggrieved parties.

Issue-wise Detailed Analysis:

1. Registration and Incorporation of Companies:
The petitioner, MRC Logistics Private Limited, was incorporated under the Indian Companies Act, 1956, on 3-5-2006. The directors of this company were previously partners in a registered partnership firm, Mumbai Road Carriers, established on 1-4-1998. The respondent, MRC Logistics (India) Private Limited, was incorporated earlier on 25-9-2002.

2. Application for Registration of a Trademark:
The petitioner company made an application for the registration of its trademark, which was still pending with the Registrar of Trade Mark. Similarly, the respondent company also had a pending trademark registration application.

3. Issuance of Notice under Section 22 of the Companies Act:
Respondent No. 1, the Regional Director, Western Region, Ministry of Corporate Affairs, issued a notice to the petitioner under Section 22 of the Companies Act. The notice was based on a complaint from the respondent company, alleging that the petitioner's name was identical to its own, and requested a direction for the petitioner to change its name.

4. Examination of the Period for Exercising Powers under Section 22:
The Regional Director initially declined to exercise powers under Section 22 due to the lapse of the 12-month period. However, upon remand by the Division Bench of the High Court, the Regional Director reconsidered and directed the petitioner to change its name, referencing a precedent from the Calcutta High Court.

5. Directions for Changing the Company Name:
The Regional Director issued directions under Section 22(1)(b) of the Companies Act, requiring the petitioner to change its name within three months. This direction was challenged by the petitioner on the grounds of jurisdiction and limitation.

6. Jurisdiction and Limitations of the Central Government under Section 22:
Section 22 of the Companies Act allows the Central Government to direct a company to change its name if it is identical or too nearly resembles an existing company's name. This power must be exercised within 12 months of the company's first registration or registration by a new name. The High Court emphasized that this 12-month period is an essential limitation on the Central Government's jurisdiction.

7. Remedies Available to Aggrieved Parties:
The Court noted that if the Central Government loses its jurisdiction due to the lapse of the 12-month period, the aggrieved party is not left without remedy. They can seek redress through civil courts, which have broader jurisdiction to grant relief under the Specific Relief Act, 1963, and the Code of Civil Procedure.

Conclusion:
The High Court concluded that the Central Government had lost its jurisdiction to issue directions to the petitioner to change its name as the 12-month period had lapsed. Consequently, the impugned order was quashed, and the writ petition was allowed, with each party bearing its own costs.