HIGH COURT OF CALCUTTA
Anil Kumar Sen & B. C. Chakrabarti, JJ.
Patel Roadways Private Ltd
Vs.
Rata Shoe Co. Private Ltd
CIVIL REVISION No. 3321 of 1978
Decided On : August 24, 1979
COMPANY LAW - CHANGE OF NAME - AMENDMENT OF PLAINT - S. 23(3) OF THE COMPANIES ACT, 1956 - WHETHER A SUIT INSTITUTED BY A COMPANY IN ITS FORMER NAME IS A MERE MISDESCRIPTION AND CAN BE CORRECTED BY WAY OF AMENDMENT.
Fact of the Case:
Bata Shoe Co. Private Ltd. instituted a suit for recovery of a sum of money for loss of goods entrusted to the petitioner for carriage. The petitioner entered appearance, filed a written statement, and contended that the court lacked jurisdiction to try the suit. The court agreed and directed the plaint to be returned for being presented to the proper court. The plaint was refilled in the court of the learned Subordinate Judge at Alipore and was numbered as Money Suit No. 20 of 1976. While the suit was proceeding, the plaintiff-opposite party was directed to discover on oath all its documents relating to the suit. The plaintiff failed to comply with the order, and the defendant-petitioner prayed for dismissal of the suit. The plaintiff-opposite party filed an objection to the defendant’s petition and also filed another application for amendment of the Cause title of the plaint under Order VI Rule 17 of the Civil Procedure Code. The plaintiff-opposite party alleged that by a Resolution of the shareholders of the company, passed on 7.4.1973, the plaintiff company was converted into a public company, that the change of the name of the company to “Bata India Ltd.” was approved by the Central Government and that a fresh certificate of corporation was issued on 29.4.1979 consequent upon such change of name and pursuant to S.23(1) of the Companies Act. The learned Judge allowed the prayer for amendment and declined to dismiss the suit as the plaintiff had in the mean time made the discovery.
Finding of the Court:
The court held that the change of name of the company did not affect a change in the identity of the company. The entity of the company is not effected by the change of the name merely. A company may be identified not merely by its correct name but by other characteristics as well. The reference to the company by its former name, namely “Bata Shoe Company Private Ltd.” was a mere misdescription and should be allowed to be corrected by way of amendment.
Issues: Whether a suit instituted by a company in its former name is a mere misdescription and can be corrected by way of amendment.
Ratio Decidendi: The court relied on the provisions of S. 23 of the Companies Act, 1956, which provides that the change of name of a company shall not effect any rights of obligations of the company, or render defective any legal proceedings by or against it. The court also relied on the decisions in Amulakchand v. Babulal and Venkata Ramaiya v. T. Ramaswani, which held that where a person has been misdescribed in the cause title, the error can be received by properly describing the person.
Final Decision: The court dismissed the revisional application and discharged the rule.
B.C. Chakraborti, J: This revisional application is directed against an order dated August 12, 1978 passed in Money Suit No. 20 of 1976 of the 1st Court of Subordinate Judge at Alipore.
2. Facts relevant for the present purposes are not in dispute. The Opposite Party, Bata Shoe Co. Private Ltd, instituted Money Suit No. 537 of 1971 in the City Civil Court, Calcutta an October 29. 1971 for recovery of a sum of Rs. 31,484.28 for loss of goods entrusted to the petitioner for carriage. The petitioner entered appearance, filed a written statement and contended inter alia that the said Court had no jurisdiction to try the suit. On the objection so taken, an issue was framed and was eventually decided in favour of the defendant petitioner. The learned Judge having found that it lacked territorial jurisdiction• to try the suit by his order dated July 1, 1976 directed the plaint to be returned for being presented to the proper Court under Order VII Rule 10 of tile Civil Procedure Code. Thereupon the plaint was refilled in the 1st Court of the learned Subordinate Judge at Alipore and was numbered as Money Suit No. 20 of 1976.
3. While the suit was proceeding in the Court of the learned Subordinate Judge, on the prayer of the defendant petitioner, (be plaintiff Opposite Party was directed to discover on oath all its documents relating to the suit by April, 5, 1977. The plaintiff failed to comply with the order even on the dates extended by the Court for the purpose whereupon the defendant petitioner prayed for dismissal of the suit under the provisions of Order XI Rule 21(1) of the Code.
4. On August 29, 1977 the plaintiff opposite party filed their objection to the defendant’s petition and also filed another application for amendment of the Cause title of the plaint under Order VI Rule 17 of the Civil Procedure Code. In the said application for amendment, the plaintiff-opposite party alleged that by a Resolution of the share holders of the company, passed on 7.4.1973, the plaintiff company was converted into a public company, that the change of the name of the company to “Bata India Ltd.” was approved by the Central Government and that a fresh certificate of corporation was issued on 29.4.1979 consequent upon such change of name and pursuant to S.23(1) of the Companies Act. On such averments, the plaintiff prayed for amendment of the cause title of the plaint by inserting “Bate India Ltd.” in place of “Bate Shoe Company Private Ltd.”. The other amendments prayed for were merely incidental.
5. The application of the defendant-petitioner under Order XI Rule 21 (i) and the application for amendment of the plaint were heard together and disposed of by the impugned order. The learned Judge allowed the prayer for amendment and declined to dismiss the suit as the plaintiff had in the mean time made the discovery. In allowing the application for amendment, the learned Judge observed that in view of S. 23(1) of the Companies Act the suit should be allowed to proceed in the new name of the company and that the amendment would neither change the character of the suit nor cause any prejudice to the defendant. This is the order under challenge before us. Although by the said order, the learned Judge disposed of two applications-one by the defendant-petitioner and the other by the plaintiff-opposite party, Mr. Sen appearing in support of the Rule challenged only that part of the order by which the amendment of the plaint was allowed.
6. The only point urged by Mr. Sen is that "Bata Shoe Company Private Limited' having ceased to exist prior to the institution of the suit, S. 23(3) of the Companies Act had no application and could not be so continued as to permit the newly incorporated company to continue the improperly constituted suit brought by the company in its former name. In fine, the contention of Mr. Sen is that by the amendment, a new plaintiff is appearing in place of one who had no legal competence to institute the suit in 1976 and that
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