Madhya Pradesh High Court
M/S Satpuda Infracon Private Ltd vs M/S Satpura Infrcon Private Ltd on 24 August, 2017
HIGH COURT OF MADHYA PRADESH, PRINCIPAL SEAT AT
JABALPUR
Case No. WP. No.6972/2017
Parties Name M/s Satpuda Infracon Private Limited.
Vs.
M/s Satpura Infracon Private Limited and
others.
Date of Judgment 24.08.2017
Bench Constituted Single Bench
Judgment delivered by Justice Sujoy Paul
Whether approved for YES
reporting
Name of counsels for parties Petitioner:Shri Shashank Shekhar and
Shri Munish Saini, Advocates.
Respondent No.1 to 4: Shri Sanjay K.
Agrawal, Advocate.
Respondent No.5 & 6 Shri Aditya Pyasi,
Government Advocate.
Law laid down (i) The Central Government can form
opinion for the purpose of rectification
suo-motu or on an application filed by
the aggrieved person.
(ii) The litigant must approach the court
with clean hands, clean mind, clean heart
and clean objective.
(iii) The litigant is not entitled for
hearing of the matter on merits when
material facts are suppressed by him.
The disputed question of fact cannot be
decided in a writ petition. Moreso, when
a civil suit touching the similar aspect is
pending.
Significant paragraph Para 11 &13.
numbers
O R D E R
(24.08.2017) In this petition filed under Article 226 of the Constitution, the parties are at logger heads on the question of legality, validity and propriety of the
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WP. No. 6972 of 2017order dated 23.3.2017 Annexure P/8 whereby the Regional Director, North Western Region has allowed the application filed by respondent No.1 under Section 16 of the Companies Act, 2013 (hereinafter called as 'the Act') and directed the petitioner Company to change its name.
2. The petitioner contended that a partnership firm in the name and style of M/s Om Sai Prakash Construction was formed having four partners namely; late Shri Laxmikant Shrivastava, Smt. Preeti Kapoor, Smt. Pushpa Sahni and Smt. Chandrakant Shrivastava. Subsequently, the name of respondent No.2 Shri Ayodhya Prasad Tripathi was introduced as partner. Shri Ayodhya Prasad Tripathi is the father of Shri Vivek Tripathi who happens to be the Government servant i.e. Tahsildar and at present is suspended whereas Smt. Preeti Kapoor and Smt. Pushpa Sahni (mother-in- law) are also close relatives of Shri Vivek Tripathi. Shri Vivek Tripathi introduced his relatives as partners in the firm as being Government servant he himself was not in a position to carry on the business of real estate in his own name. Shri Shashank Shekhar submitted that due to death of Shri Laxmikant Shrivastava, the partnership deed of M/s Om Sai Prakash Construction was amended on 12.10.2000 and as such Sanjay Shrivastava and Smt. Baijanti Shrivastava (mother of Sanjay Shrivastava) were introduced as partners in the firm with 50% shares in aggregate. It is submitted that one Vinod Chate who was the owner of land situated at Khasra No.4/4, P.C. No.28/32, Number Bandobast 726, Mauja Nayagaon, Tahsil and District Jabalpur having Rakba of 23 acres executed an agreement to sale with M/s Om Sai Prakash Construction. However, Shri Vinod Chate instead of selling the land to M/s Om Sai Prakash Construction also executed an agreement to sell with one Ashok Urmaliya. Being aggrieved by the same, M/s Om Sai Prakash Construction preferred a civil suit bearing Civil Suit No.12-A/2005 for specific performance of the agreement executed between Shri Vinod Chate and M/s Om Sai Prakash Construction and vide judgment and decree dated 26.3.2007, the suit was decreed in favour M/s Om Sai Prakash Construction. It is submitted that
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WP. No. 6972 of 2017against the judgment and decree dated 26.3.2007, Shri Vinod Chate preferred an first appeal before this court which was registered as F.A. No.303/2007 wherein Shri Vinod Chate and M/s Om Sai Prakash Construction reached to a compromise and a compromise deed alongwith other terms and conditions was presented before this Court. As per the compromise deed, it was agreed upon that out of the total 23 acres of the land in question, 12 acres 35 dismal land would be sol to M/s Om Sai Prakash Construction and remaining 10 acres 65 dismal of land would be sold to Shri Ashok Urmarlia. It is submitted that this court vide order dated 4.9.2010 in Lok Adalat allowed the compromise in terms of settlement mentioned in the compromise deed. Shri Shekhar further submits that Shri Sanjay Shrivastava and Shri Vivek Tripathi (represented through his relative in the firm as being Government servant he was not able to do the real estate business in his own name) purchased number of properties in the city of Jabalpur and adjoining villages under the M/s Om Sai Prakash Construction. It is submitted that an understanding was made between Shri Sanjay Shrivastava on one part and Shri Vivek Tripathi and Shri Ayodhya Tripathi (father of Vivek Tripathi and respondent no.2) that both the persons were ready to divide the properties owned and purchased by M/s Om Sai Prakash Construction and as such, it was agreed that the land which was to be purchased pursuant to the compromise decree in F.A. No.303/2007 would be purchased by Shri Sanjay Shrivastava and he would be the sole owner of the property, whereas, in lieu thereof, Shri Sanjay Shrivastava would transfer the property in the name of Sukoon Hotel of Smt. Bimmi Tripathi (wife of Shri Vivek Tripathi). It is further submitted that on 29.3.2011 Shri Sanjay Shrivastava informed Shri Ayodhya Tripathi that he alongwith another partner is forming a partnership firm in the name and style of M/s Satpuda Infracon Pvt. Ltd. and pursuant to which Shri Sanjay Shrivastava and Shri Joseph Verghese formed an unregistered partnership firm in the name & style of Satpuda Infracon Pvt. Ltd. Shri Shashank Shekhar contended that pursuant to the understanding arrived at between Shri Sanjay Shrivastava, Shri Vivek Tripathi and Shri Ayodhya
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Tripathi (father of Vivek Tripathi), Shri Sanjay Shrivastava transferredthe property in the name of Sukoon Hotel in favour of Smt. Bimmi Tripathi and in lieu thereof Shri Sanjay Shrivastava purchased the land measuring 11.35 acres from Shri Vinod Chate (in compliance of compromise decree passed in FA No.303/2007) vide registered sale deed dated 13.5.2011. In this sale deed, M/s Om Sai Prakash Construction granted its consent/no objection for the sale. This property was purchased in favour of M/s Satpuda Infracon Pvt. Ltd. and Shri Sanjay Shrivastava's name was shown as its Proprietor/Executor. The amount of consideration against the purchase of the land was given by Shri Sanjay Shrivastava from his bank account. It is submitted that Shri Vivek Tripathi formed a company in the name and style of Satpura Infracon Pvt. Ltd. with malafide intention. Shri Vinod Chate handed over the physical possession of the property in question to Shri Sanjay Shrivastava. It is submitted that Shri Sanjay Shrivastava formed a company and got it registered in the name and style of Satpuda Infracon Pvt. Ltd. and the said company, respondent No.1 herein, filed an application under Section 16 of the Companies Act before the Regional Director, North Western Region, Ministry of Corporate Affair, Ahmedabad against the petitioner and the said authority vide order dated 20.3.2017 allowed the said application and erroneously directed the petitioner to change its name.
3. Shri Shekhar Sharma submits that the unregistered partnership of petitioner was formed on 1.4.2011. Merely because the respondent No.1 got his company registered under the Companies Act prior in time, this will not make any difference because the aforesaid factual detail makes it clear that it was a calculated attempt on the part of the respondent No.1 to grab the land and business of petitioner company and therefore they have chosen a similar name by adopting a linguistic engineering. In nutshell, the points raised by Shri Sharma, learned counsel for the petitioner can be culled out as under:
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(i) The application preferred by respondent no.1 under Section 16 of the Act was not maintainable. Section 16 of the Act can be invoked by Central Government suo motu or on an application preferred by a registered proprietor of a Trade Mark. Reliance is placed on Section 2(1)(b) of the Trade Marks Act, 1999 which defines 'registered proprietor' under the Trade Marks Act;
(ii) Mere registration of respondent No.1 Company prior to registration of petitioner Company is not decisive. The other relevant facts were not examined by respondent No.7. Reliance is placed on the judgment of Bombay High Court in the case reported in 2013 (4) Mh. L.J. 168 (Vov Cosmetic vs. Union of India).
(iii) The direction to change the name of petitioner company by impugned order should not, in any way, effect the assets, rights, business, etc. of petitioner company. In other words, it is submitted that rights of the petitioner accrued prior to the direction of change of name of the company may be directed to remain intact. Reliance is placed on Section 23 of the Companies Act, 1956 (old Act). However, during the course of arguments, Shri Shekhar Sharma fairly admitted that in the new Act of 2013, there is no corresponding/analogous provision like Section 23 of the old Act.
4. In support of aforesaid contentions, Shri Shekhar Sharma relied upon 2013 SCC On Line Bom 1093 (Intelgain Technologies Pvt. Ltd. vs. Regional Director, Western Region, Ministries of Corporate Affairs and another) and 2014 SCC OnLine P&H 24572 (Mind Tree Limited vs. Ministry of Corporate Affairs). Lastly, he relied upon an injunction order passed by Delhi High Court in Bhandari Homoeopathic vs. L.R. Bhandari on 3.4.1975.
5. Per contra, Shri Sanjay K. Agrawal, learned counsel for the respondent No.1 to 4 contended that the application preferred under Section 16 of the Act was maintainable. The reliance is placed on the judgment of Delhi High Court 2017 SCC OnLine Del 9219 (Mondelez Foods Private
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WP. No. 6972 of 2017Limited vs. The Regional Directo (North), Ministry of Corporate Affairs & others). He further contended that the acid test in this regard is which company was registered first under the provision of the Companies Act. The judgment of Supreme Court reported in 2004 (12) SCC 624 (Milmet Oftha Industries and others vs. Allergan Inc) is relied upon for this purpose which is related with the question of trade mark. Shri Agrawal further urged that the respondent no.7 has considered the real issues involved in Section 16 proceedings and recorded its satisfaction in accordance with the mandate of Section 16 of the Act. The petitioner in order to create confusion, has made wild and reckless allegations which cannot be entertained. It is averred that respondent no.1 Satpura Infra Con Pvt. Ltd. was registered and incorporated as a private company on 1.4.2011 Annexure R-1/1. It is further averred that respondent no.1 company purchased a piece of land bearing Khasra No.4/4 area 4.600 hectare Situated at Nayagaon, Tahsil & District Jabalpur. The respondent no.1 company authorized Shri Sanjay Shrivastava to execute sale-deed for and in favour of respondent no.1 Company. The resolution authorizing the said person to get sale deed executed in favour of respondent no.1 company is filed as Annexure R-1/2. On the basis of aforesaid, Shri Sanjay Shrivastava signed the sale deed as purchaser on behalf of the respondent No.1 Company. The sale deed was executed on 13.5.2011. The name of the Company in the sale deed was mentioned in Hindi. Since 'Saturda' and 'Satpura' are pronounced similarly in Hindi, Shri Sanjay Shrivastava with an ill motive trying to grab the valuable property of respondent no.1 Company. Since sale deed dated 3.5.2011 is executed after registration of respondent no.1 company, it is clear that sale deed was executed by Shri Shrivastava at the behest of respondent No.1 company.
6. In the reply, it is further stated that upon receiving information that Shri Sanjay Shrivastava and petitioner are playing fraud by getting a company registered with a similar name, a complain was lodged by Shri Ayodhya Tripathi in Police Station, Omti, Jabalpur. Since petitioner
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company started claiming right over the property in question only on the basis of its registration with almost similar name, Respondent No.1 preferred application under Section 16 of the Act which was rightly entertained and allowed by respondent no.7. It is categorically denied in the reply that Sarva Shri Sanjay Shrivastava and Joseph Varghese were carrying on the same business under an unregistered partnership firm with a similar name. It is vehemently argued that partnership firm cannot use the expression "private limited" as per Section 453 of the Old Act which is analogous to Section 631 of the New Act. The said partnership firm was also not registered under any provision of law and therefore no such firm was in existence.
7. The respondents have placed the copy of civil suit No.336/2017 Annexure R-1/04 filed by the petitioner Company. Shri Sanjay K. Agrawal urged that property rights of the petitioner may be decided by the civil court and said aspect cannot be gone into in the present petition. Respondent no.1 has no objection whatsoever if petitioner is permitted to pursue his civil suit in accordance with law.
8. No other point is pressed by learned counsel for the parties.
9. I have heard the learned counsel for the parties and perused the record.
10. Before dealing with the rival contentions, it is apposite to quote Section 22 of the old Act and Section 16 of the new Act in juxtaposition which shows that both the provisions are almost similar:
Section 22 of the old Act, 1956 Section 16 of the new Act, 2013
22. Rectification of name of Rectification of name of company. company.
If, through inadvertence or If, through inadvertence or otherwise, a company on its first otherwise, a company on its first registration or on its registration by a registration or on its registration by a
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WP. No. 6972 of 2017new name, is registered by a name new name, is registered by a name which, which,
(i) in the opinion of the Central (i) in the opinion of the Central Government, is identical with, or too Government, is identical with, or too nearly resembles, the name by which nearly resembles, the name by which a company in existence has been a company in existence had been previously registered, whether under previously registered, whether under this Act or any previous companies this Act or any previous company law, the first- mentioned company- law, it may direct the company to
(ii) on an application by a registered change its name and the company proprietor of a trade mark, is in the shall change its name or new name, opinion of the Central Government as the case may be, within a period identical with, or too nearly of three months from the issue of resembles, a registered trade mark of such direction, after adopting an such proprietor under the Trade ordinary resolution for the purpose; Mark Act, 1999, such company- (b) on an application by a registered
(a) may, by ordinary resolution and proprietor of a trade mark that the with the previous approval of the name is identical with or too nearly Central Government signified in resembles, a registered trade mark of writing, change its name or new such proprietor under the Trade name; and Mark Act, 1999 (47 of 1999), made
(b) shall, if the Central Government to the Central Government within so directs within 12 months of its three years of incorporation or first registration or registration by its registration or change of name of the new name, as the case may be, or company, whether under this Act or within 12 months of the any previous company law, in the commencement of this Act, opinion of the Central Government whichever is later, by ordinary is identical with or too nearly resolution and with the previous resembles an existing trade mark, it approval of the Central Government may direct the company to change signified in writing, change its name its name and the company shall or new name within a period of three change its name or new name, as the months from the date of the case may be within a period of six direction or such longer period as months from the issue of such the Central Government may think direction, after adopting an ordinary fit to allow. resolution for the purpose-
Provided that no application under (2) Where a company changes its clause (ii) made by a registered name or obtain a new name under proprietor of a trade mark after five sub-section (1), it shall within a years of coming to notice of period of 15 days from the date of registration of the Company shall be such change, give notice of the considered by the Central change to the Registrar alongwith Government. the order of the Central Government, (2) If a Company makes default in who shall carry out necessary complying with any direction given changes in the certificate of under clause (b) of sub section (1), incorporation and the memorandum. the Company, and every officer who (2) If a Company makes default in
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WP. No. 6972 of 2017is in default, shall be punishable complying with any direction given with fine which may extent to one under clause (1), the company shall thousand rupees for every day be punishable with fine of one during which the default continues. thousand rupees for every day during which the default continues and every officer who is in default shall be punishable with fine which shall not be five thousand rupees but which may extend to one lakh rupees.
11. Point No.1 is relating to maintainability of application under Section 16 of the Act by respondent No.7. Admittedly, the application which is decided by impugned order was not preferred by a registered proprietor of a trade mark. Thus, (b) of Section 16 of the New Act is clearly not attracted.
The spinal issue is whether Central Government can form an opinion under clause (i) of Section 16 on an application preferred by an aggrieved party? In the considered opinion of this court, the Central Government can form such an opinion suo motu or on the basis of an application preferred by an aggrieved person. Clause (ii) nowhere restricts the Government that such powers can be exercised only suo motu by Central Government. In the case of Intelgain Technologies Pvt. Ltd. (Supra), in para 11, the High Court considered Section 22 of the old Act and almost reproduced the language employed therein. A microscopic reading of this judgment also shows that the court opined that "it is abundantly clear that Central Government may suo motu give direction to a Company to change its name provided an application is made within twelve months from the date of first registration of the Company". Thus, this judgment cited by the petitioner does not help the point raised by the petitioner. In the case of Mind Tree Ltd. (Supra), the High Court has not decided the question whether powers under Section 16 can be exercised by Central Government on an application preferred by an aggrieved party. This is trite law that a judgment is an authority/precedent on the point actually decided by it and not on something which is logically flowing from it. See AIR 1968 SC 647 (State of Orissa vs. Sudhansu Sekhar Misra and others), AIR 1976 SC 1766
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WP. No. 6972 of 2017(Regional Manager and another vs. Pavan Kumar Dubey) and AIR 1987 SC 1073 (Ambica Quarry Works vs. State of Gujarat and others).
12. In view of aforesaid analysis, In my considered opinion, Section 16 of the new Act which is pari materia to Section 22 of the old Act cannot be read in the manner suggested by learned counsel for the petitioner. It nowhere restrict the Central Government to exercise its powers for change of name of Company if other parameters are satisfied. I find support in my view from AIR 1999 Calcutta 289 (Sen & Pandit Electronics (P) Ltd.
and others vs. Union of India and others) wherein it is held as under:
"In my judgment, what is conferred by S. 22 of the Act is a discretionary power to be exercised by the repository of the power on the formation of an opinion. The said power may be exercised suo motu and may be upon an application by an aggrieved person."
The same view is taken in 2010 SCC OnLine Guj 4123 (Bisazza India Limited vs. Pino Bsazza Glass Pvt. Ltd. and another), MBC Logistics Pvt. Ltd. vs. Regional Director, 2009 SCC OnLine Bom 769 and 2013 SCC OnLine Bom 1093 (Intelgain Technologies Pvt. Ltd. vs. Regional Director, Western Region, Ministries of Corporate Affairs and another). Thus, first point raised by the petitioner must fail.
13. Point (ii) is based on the judgment of Bombay High Court in the case of Vov Cosmetic (Supra). In para 19 of the judgment, court opined that the word "otherwise" mentioned in Section 2(1) is not defined in the Act. Whether the Registration in favour of a particular party is deliberate or inadvertent was not decided by the court and this question was left open. For this purpose, the said judgment is of no assistance to the petitioner. No doubt, in Vov Cosmetic (Supra), it was held that while exercising powers under Section 22 of the old Act, it is necessary for Regional Director to consider various aspects. However, court made it clear that such aspects
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WP. No. 6972 of 2017cannot be defined in a straightjacket manner. It depends on the facts and circumstances of the case. The petitioner has placed heavy reliance on certain factual aspects i.e. registration of sale deed with the signature of Shri Sanjay Shrivastava, his rights under civil/revenue laws based on it, etc. The question is whether these aspects raised by the petitioner were required to be gone into by respondent no.7 and whether these aspects can be said to be decisive factors for deciding an application preferred under Section 16 of the Act. Pausing here for a moment, it is apposite to quote the relief claimed by the petitioner in Civil Suit No.336/2017 as under:
"In the facts and circumstances of the instant case, the plaintiff prays for following judgments and decrees in favour of the plaintiff against the defendants:
1. To declare that the plaintiff through Sanjay Shrivastava who is the owner of the suit premises is having right over and above defendant No.1 to 4, the suit premises.
2. To declare that defendant no.1 to 4 are falsely projecting themselves to be owners of the suit premises with malafide intention to defraud the plaintiff and its directors.
3. To restrain the defendants permanently not to disturb the peaceful physical possession of the plaintiff and its directors on the suit premises.
4. To restrain the defendants from interfering in any manner in the usage of suit premises by the plaintiff or to create any third party right in relation to the suit premises.
5. To grant any other relief as may be deemed fit and proper by this Hon'ble Court."
If averments of civil suit are examined in juxtaposition to the averments of this writ petition, it will be clear that certain paras are verbatim same. For instance, para 3 of civil suit is similar to para 5.3 of the writ petition. Subject matter of civil suit has a direct nexus with the points involved in the present petition. In all fairness, petitioner should have disclosed about filing/pendency of civil suit in para 2 of this petition. During the course of arguments, learned counsel for the petitioner fairly admitted that the petitioner should have disclosed about filing of civil suit in the body of present writ petition. Even otherwise, a conjoint reading of the averments of the writ petition and said civil suit makes it clear that there is direct
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WP. No. 6972 of 2017nexus between both the matters. The basic factual background in both the matters are similar Thus, the action of the petitioner in not disclosing about pendency of the said civil suit in the body of writ petition is deprecated. The Apex Court in catena of judgments held that a litigant must approach the court with clean hands, clean mind, clean heart and clean objective. In cases of suppression of material facts, litigant is not entitled to be heard on merits. See 2010 (11) SCC 557 (Manoharlal Vs. Ugrasen), 2011 (7) SCC 69 (Amar Singh vs. Union of India), 2007 (8) SCC 449 (Prestige Lights Ltd. vs. State Bank of India) and 2012 (8) SCC 384 (Vidur Impex & Traders Pvt. Ltd. and others vs. Tosh Apartments Pvt. Ltd. and others).
The factual matrix further shows that parties are not at ad idem on the factum of formation of unregistered partnership in the name & style of Satpuda Infra Con. Pvt. Ltd. On 1.4.2011. The petitioner and respondent No.1 have taken diametrically opposite stand on this aspect. Hence, this disputed question of fact whether any such unregistered firm was actually formed cannot be gone into in this petition. The Civil Court is best suited to record evidence on this aspect and decide the disputed questions. The statements of witnesses filed with the petition can also be gone into by the appropriate court of first instance and no finding on merits can be given by this court. Since serious disputed questions of fact are involved in relation to formation of partnership firm (unregistered) on 1.4.2011, I am unable to hold that such point was a relevant point and should have been taken into account by respondent no.7 while deciding application under Section 16 of the Act. Similarly whether Shri Sanjay Shrivastava had put his signature on the sale deed for respondent no.1 or for respondent no.2 or in his individual capacity, is also a disputed question of fact which can be gone into by the Civil Court. Accordingly, I am unable to hold that these were the relevant points for the purpose of deciding an application under Section 16 of the Act of respondent no.7. In my view, the respondent no.7 has taken into account the relevant facts. The respondent no.7 rightly held that prior registration of a company is a relevant factor. No fault can be found in the said finding. While arguing point (iii), Shri Shekhar Sharma argued that
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WP. No. 6972 of 2017petitioner's rights and assets flowing from the sale-deeds and other benefits may be protected in the teeth of Section 23 of the old Act. A writ of mandamus may be issued in this regard. However, a plain reading of the relief claimed, shows that no such relief is claimed by the petitioner in para 7 of the petition. The relief not claimed, cannot be granted [see 2011 (3) SCC 436 (State of Orissa and another vs. Mamta Mohanty)]. Apart from this, the petitioner has already claimed such relief in the civil suit. Thus, no relief is due to the petitioner based on arguments relating to point (iii).
14. In the result, since no jurisdictional error, procedural impropriety or perversity would be established by the petitioner in impugned order dated 23.3.2017 passed by respondent no.7, the impugned order dated 23.3.2017 is upheld. The petitioner is free to establish his rights in the pending civil suit or in any other proceedings in accordance with law.
15. With the aforesaid observation, petition is dismissed.
(Sujoy Paul) Judge YS/