Allowed

M/S Bharti Realty Pvt. Ltd. v. M/S Punjab Urban Planning & Dev. Authority & Ors.

Punjab & Haryana HC1 Apr 2009CWP/3776/2009

Case brief

AI extract

What is this about?

The Court allowed the writ petition of a company that changed its name after winning a land auction. It quashed orders demanding a 9% transfer fee, holding that a name change under the Companies Act does not amount to change of ownership. The respondents were directed to execute the deed in the new name without the fee.

What did the court decide?

Impugned order demanding 9% transfer fee quashed; respondents directed to execute Deed of Conveyance in new name within one month without insisting on fee.

M/S Bharti Realty Pvt. Ltd. Vs M/S Punjab Urban… — Property and Title | Punjab & Haryana HC (2009)

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C.W.P NO. 3776 OF 2009

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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C.W.P NO. 3776 OF 2009 DECIDED ON : 01.04.2009

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M/S Bharti Realty Pvt. Ltd

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...Petitioner

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versus

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M/S Punjab Urban Planning & Development Authority and others

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...Respondents

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CORAM : HON'BLE MR. JUSTICE SURYA KANT

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1. Whether Reporters of local papers may be allowed to see the judgment ?

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2. To be referred to the Reporters or not ?

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3. Whether the judgment should be reported in the Digest ?

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Present : Mr. M. L. Sarin, Senior Advocate with Mr. Rohit Khanna, Advocate, for the petitioner.

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Ms. Rupinder Khosla, Advocate, for respondent No. 1.

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Mr. R. K. Sharma, Advocate, for respondents No. 3 to 5.

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SURYA KANT, J. (ORAL)

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The petitioner seeks a mandamus to the respondents

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to carry out the necessary change regarding the name of the company for executing the Deed of Conveyance in respect of the commercial site comprising old Sessions Court, Ludhiana.

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C.W.P NO. 3776 OF 2009

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Suffice it to note that the Punjab Urban Development Authority (PUDA) issued an auction notice inviting bids for the sale of the subject land measuring 2.474 acres for developing shopping malls/multiplex.

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M/S Jasmine Projects (Pvt.) Limited, Gurgaon was the highest bidder who offered a sum of Rs.17,48,20,400/-. Its bid was accepted and the allotment letter dated 14.05.2008 (Annexure P-7) was issued in favour of the company.

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M/S Jasmine Projects (Pvt.) Limited-the Allottee Company thereafter applied to the Ministry of Corporate Affairs, Government of India, to permit it to change its name from “ M/S

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Jasmine Projects (Pvt.) Limited to M/S Bharti Realty (Pvt.)

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Limited ”. Its request was acceded to and a fresh Certificate of Incorporation, consequent upon the change of name, has been issued on 09.06.2008 by the Registrar of Companies, National Capital Territory of Delhi and Haryana. M/S Jasmine Projects (Pvt.) Limited then informed respondent No.5 on 19.06.2008 (Annexure P-8) regarding change of its name to M/S Bharti Realty (Pvt.) Limited.

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Having paid the entire sale consideration, the Allottee Company wanted execution of the Deed of Conveyance in its favour in its new name, namely, M/S Bharti Realty (Pvt.) Limited. The company sent various request letters/ representations for execution of the Deed of Conveyance in the changed name, however, the 5^th respondent vide memo dated 11.07.2008

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C.W.P NO. 3776 OF 2009

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(Annexure P-15) informed it that as per Clause 4 (iv) of the allotment letter, a transfer fee of 9% is liable to be deposited in the event of change of ownership of the land.

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Aggrieved, the Allottee Company has approached this Court, inter-alia, urging that it is not a case of change of ownership as only the name of the original allottee has been changed in accordance with the provisions of the Companies Act, 1956.

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Notice of motion was issued and in response thereto, the respondents have put in appearance.

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It is reiterated that the original allotment was in the name of M/S Jasmine Projects (Pvt.) Limited and since the Deed of Conveyance is sought to be executed in the name of M/S Bharti Realty (Pvt.) Limited, it amounts to change of ownership and as such, the petitioners are liable to pay 9% transfer fee as per Clause 4 (iv) of the allotment letter.

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It may be noticed here that on the asking of this Court, Mr. Prakash M. Mene, one of the Directors of the allottee company has filed an affidavit dated 27.03.2009 to the effect that all the four Directors of the original allottee company, namely, M/S Jasmine Projects (Pvt.) Limited continue to be the Directors even after change of name as M/S Bharti Realty (Pvt.) Limited. His affidavit categorically suggests that there is no change in the share holding.

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An opportunity was granted to the respondents to

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C.W.P NO. 3776 OF 2009

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verify the contents of the above mentioned affidavit and if found anything to the contrary, to place the same on record. No such counter-affidavit has been filed by the respondents.

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Section 21 of the Companies Act provides that “a company may by special resolution and with the approval of the Central Government in writing, change its name”. Section 23 further provides that “once a company changes its name, the Registrar shall enter the new name on the register in place of former name and shall issue a fresh Certificate of Incorporation with the necessary alternations embraced therein and the change in name shall be complete and effect only on the issue of such a Certificate”. Sub-section (3) of Section 23 explicitly says that the change of name shall not change any rights/obligations of the Company or render defective legal proceedings by or against it etc.

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It can indeed be not disputed that the Allottee Company, namely, M/S Jasmine Projects (Pvt.) Limited applied to the Central Government by way of a resolution for the change of its name. The Competent Authority has accorded its permission to change its name in writing vide Certificate of Change of Name dated 09.06.2008. The petitioner has, thus, effected the change of name strictly in accordance with the provisions of the Companies Act.

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Needless to say that mere change in name does not amount to change in ownership. The petitioner cannot, therefore,

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C.W.P NO. 3776 OF 2009

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be asked to pay 9% transfer fee on an assumption that firstly the allotted property shall be transferred in the name of M/S Jasmine Projects (Pvt. ) Limited and then in the name of M/S Bharti Realty (Pvt.) Limited. In other words, irrespective of the change of name of the original company, there shall be involved only one transfer which does not make the petitioners liable to pay any transfer fee.

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For the reasons afore-stated, the writ petition is allowed and the impugned order dated 11.07.2008 (Annexure P-15) is hereby quashed. The subsequent consequential orders dated 15.12.2008 and 02.01.2009 (Annexures P-20 and 21) are also set aside. The respondents are directed to execute the Deed of Conveyance in favour of the changed name of the allottee company, as early as possible, but not later than one month from the date of receipt of certified copy of this order, without insisting for the payment of transfer fee. The changed name, however, shall not absolve the allottee company from the liabilities, if any, arising out of the original allotment letter.

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Let a copy of this order be given dasti on payment of

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usual charges.

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(SURYA KANT) JUDGE

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APRIL 01, 2009 shalini

M/S Bharti Realty Pvt. Ltd. v. M/S Punjab Urban Planning & Dev. Authority & Ors.

Case brief

What is this about?

What did the court decide?

M/S Bharti Realty Pvt. Ltd. v. M/S Punjab Urban Planning & Dev. Authority & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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