2021 (2) TMI 1223 - HC - Companies Law

Transfer of the plots from M/s Purolator India Ltd. to a new company M/s Mahle Filter Systems India Ltd., without taking prior permission/consent of the lessor - violation of Clause- 2(v)(a) of Lease Deed executed between HIMUDA and M/s Purolator India Ltd. - HELD THAT - Clause-2(v)(a) of Lease Deed mandates recovery of unearned increase for breach of this clause whereby a bar has been put on the lessee on selling, transferring, assigning or otherwise parting with possession of the whole or any part of Industrial Plots, except, in writing previous consent of parties. On change of name of A from X to Y , the person A remains the same and, thus, property of A also remains with A but with changed name and, thus, change of name of A from X to Y does not amount to selling, transferring, assigning or otherwise parting with possession of the property of A to some other person. Therefore, in present case, HIMUDA has wrongly invoked this condition for issuance of notices against the Petitioner-Company and passing impugned order dated 25.2.2010. Present case is acquisition of another company by way of amalgamation/merger and change of name of acquiring company, i.e. Lessee to the name of acquired company. Clause-2(v)(a) of Lease Deed, nowhere prohibits the lessee from changing its name. It does not contemplate a condition to have permission, muchless previous in writing permission, to change the name of lessee or to acquire any other company by way of amalgamation - In present case, assets of lessee have not been transferred to any other company but assets of another company have been transferred in favour of lessee. Previous consent for filing amalgamation petition, acquiring any other Company by lessee is not warranted under Clause-2(v)(a). Had it been a merger of lessee in any other company alongwith its assets, provisions of Clause-2(v)(a) of Lease Deed might have been attracted, but factual matrix is not so in present case. Thus, action of HIMUDA is misconceived. M/s Mahle Filter Systems India Ltd. is none else but the M/s Purolator India Ltd. and HIMUDA is not entitled to claim 50% unearned increase of ₹ 15,80,97,144/- alongwith 14% interest from the Petitioner-Company and, accordingly, Office Order dated 25.2.2010 (Annexure-1) is quashed - HIMUDA is directed to incorporate the change of name of M/s Purolator India Ltd. in its record of allotment of concerned Industrial Plots as M/s Mahle Filter Systems India Ltd. and concerned parties, including HIMUDA, are directed to execute all necessary documents, including Supplementary Lease Deed, if required so, under the Rules, Regulations and Law applicable in present case on or before 30.4.2021. Petition allowed.

Summary

Issues Involved:
1. Validity of the demand for unearned increase by HIMUDA.
2. Requirement of prior permission for change of company name.
3. Issuance of No Objection Certificate (NOC) for electricity connection.

Detailed Analysis:

Issue 1: Validity of the demand for unearned increase by HIMUDA
The petitioner, M/s Mahle Filter Systems India Ltd., contested an Office Order dated 25.2.2010 by HIMUDA, which demanded ?15,80,97,144/- plus interest for alleged transfer of leasehold rights without prior permission. The court examined the facts, including the amalgamation of M/s Mahle Filter Systems India (P) Ltd. with M/s Purolator India Ltd., sanctioned by the High Court of Delhi on 27.5.2008. The court noted that the change of name from M/s Purolator India Ltd. to M/s Mahle Filter Systems India Ltd. was legally compliant and did not constitute a transfer of property. Clause-2(v)(a) of the Lease Deed, which mandates prior consent for transfer, was deemed inapplicable as the assets remained with the same entity under a new name. Consequently, the demand for unearned increase was quashed.

Issue 2: Requirement of prior permission for change of company name
The court analyzed the provisions of the Companies Act, 1956, particularly Sections 21 and 23, which govern the change of name of a company. It was established that the change of name does not affect the rights or obligations of the company, nor does it constitute a transfer of property. The court concluded that the lease deed did not require prior permission for a name change or for the amalgamation process. Therefore, HIMUDA's insistence on prior permission was unfounded.

Issue 3: Issuance of No Objection Certificate (NOC) for electricity connection
In a related petition, the petitioner sought quashing of HIMUDA's refusal to issue an NOC for electricity connection on the grounds of unauthorized occupation. The court reiterated that M/s Mahle Filter Systems India Ltd. is the same entity as M/s Purolator India Ltd., and thus, the petitioner was entitled to the NOC. The court directed HIMUDA to complete all formalities for regularizing the electricity connection and to issue the NOC.

Conclusion:
Both petitions were allowed. The court quashed HIMUDA's demand for unearned increase and directed it to recognize the name change in its records. HIMUDA was also instructed to issue the necessary NOC for the electricity connection, regularizing the petitioner's status as the rightful lessee of the industrial plots.