2011 (2) TMI 1268 - HC - Companies Law

Change in name of ownership of a flat - transfer under the scheme of amalgamation - Petitioner approached respondent for inserting its name in place of transferor-company but respondent raised a demand for transfer charges at rate of Rs. 300 per sq. ft. - Petitioner filed instant application seeking a direction to respondent to effect necessary change in its records to reflect name of applicant without insisting on any transfer charges.

Summary

Issues:
1. Application seeking direction for change of ownership name in records post-amalgamation.
2. Dispute over transfer charges for recording change of ownership.
3. Interpretation of Clause 24 of the Purchase Agreement.
4. Legal authority of the Court to issue appropriate orders in amalgamation cases.
5. Applicability of administrative charges versus transfer charges.
6. Resolution of the dispute and direction to update records with the correct ownership name.

Analysis:
1. The petitioner filed an application under Rule 9 of the Companies (Court) Rules, 1959, seeking a direction for the respondent to change the ownership name in records for Flat Nos. 201 to 207 post-amalgamation with the transferee-company.
2. The respondent demanded transfer charges at Rs. 300 per sq. ft., leading to a dispute. The petitioner contended that only administrative charges should apply as per the Purchase Agreement.
3. Interpretation of Clause 24 of the Purchase Agreement was crucial. The Court analyzed that the clause restricted the respondent to levy only administrative charges, not transfer charges, upon ownership change.
4. The legal authority of the Court to issue orders in amalgamation cases was established citing Section 392 of the Companies Act, 1956, and the judgment of the Supreme Court in Hindustan Lever v. State of Maharashtra.
5. The Court clarified that post-amalgamation, the amalgamated company's rights in the property were absolute, and any charges should be reasonable administrative charges, not transfer charges.
6. The Court quashed the respondent's demand for transfer charges and directed the update of records with the correct ownership name. The respondent was allowed to levy a reasonable administrative charge, not exceeding Rs. 1,000, for this purpose, to be completed within three weeks.

In conclusion, the Court resolved the dispute by emphasizing the distinction between administrative and transfer charges, ensuring the correct ownership name update without unjustified financial demands, and upholding the legal principles governing amalgamation cases.