2023 (9) TMI 529 - HC - Companies Law

Imposition of stamp duty and registration fee - change of name of a company with the approval of Registrar of Companies, would amount to transfer of assets of the company or not - HELD THAT - This Court find that the Division Bench has held that mere acquiring of equity share capital of Company does not amount to transfer, assignment or parting with the possession or any other rights of the allottee Company, neither with the plot in question nor structure in existence thereon. Acquiring of equity share capital of the allottee Company by the petitioner also does not contravene the conditions contained in Clause 2(xi) of the conveyance deed. Reliance placed in the case of JSTI Transformers 2022 (4) TMI 1480 - HIMACHAL PARDESH HIGH COURT where reliance was placed in Reckitt Benckiser (India) Private Limited 2020 (9) TMI 80 - HIMACHAL PRADESH HIGH COURT , where it was held that Section 13(3) provides that as and when there is any change in the name of the company under sub-Section 3, the Registrar shall enter the new name in the Register of the Company and issue fresh certificate of registration with new name. Section 13(2) made it crystal clear that no new company was ever created as a result of the change of its name and it is the case of mere addition of word private to its name. Relying upon aforesaid instructions/clarification dated 16.2.2012 issued by the respondent- State, this Court held that respondents erroneously concluded that there is transfer of assets and property by the Company. Undisputedly, in the case at hand, change in the name with the approval of Registrar of Companies came to be effected by Department of Industries, as such, respondents Nos. 1 and 2 had no option but to change the name of petitioner No.1 in the revenue records. Approval for change of name by Registrar of Companies under Ss. 21 and 23 of the 1956 Act corresponding to S.13 of the 2013 Act does not mean transaction or sale as such no stamp duty is chargeable. In the instant case, respondents Nos. 1 and 2 have failed to appreciate that change in name with approval of Registrar of Companies and issuance of Certificate of Incorporation by Registrar of Companies under Companies Act, 2013 does not mean transfer of land under S.118 of the Act. In the case at hand, change in the name of company from MWIL to MWIPL is mere change by addition of word private . Moreover, number of shareholding in MWIL and MWIPL remained the same and that cannot be said to attract stamp duty and registration fee. Petition allowed.

Summary

Issues Involved:
1. Imposition of Stamp Duty and Registration Fee on Change of Company Name.
2. Interpretation of Transfer of Assets under the Himachal Pradesh Tenancy and Land Reforms Act.

Summary:

Issue 1: Imposition of Stamp Duty and Registration Fee on Change of Company Name

The petitioner challenged the imposition of stamp duty and registration fee by the Department of Revenue, Government of Himachal Pradesh, upon the change of the company's name from Maharaja Whiteline Industries Limited (MWIL) to Groupe SEB India Private Limited (GSIPL). The petitioner argued that the change in the company's name, as approved by the Registrar of Companies, did not constitute a transfer of assets and therefore should not attract stamp duty or registration fees. The court held that "change in the name of petitioner No.1 in the revenue records does not mean transfer of assets," and thus, no stamp duty or registration fee is payable.

Issue 2: Interpretation of Transfer of Assets under the Himachal Pradesh Tenancy and Land Reforms Act

The court examined whether the change of name of a company with the approval of the Registrar of Companies would amount to a transfer of assets attracting stamp duty and registration fees. The court referred to previous judgments and clarifications, noting that "where merely the name of the Company is changed with the approval of Registrar of Companies in terms of Sections 21 and 23 of the Companies Act, 1956, no transaction/sale of property takes place." The court concluded that the change in the name from MWIL to GSIPL was a result of passing a special resolution under Section 13 of the Companies Act, 2013, and did not constitute a transfer of assets. Consequently, the conditions imposed by the respondents for the payment of stamp duty and registration fees were deemed erroneous and were quashed.

Conclusion:

The court allowed the petition, quashing the conditions imposed by the respondents regarding the payment of stamp duty and registration fees. It directed the respondents to take further action accordingly, emphasizing that the change in the company's name did not amount to a transfer of assets and therefore did not attract stamp duty or registration fees.