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2025 Supreme(Raj) 1635
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR
SUDESH BANSAL, J.
Re Sustainability Limited - Appellant
Versus
Ajmer Municipal Corporation - Respondent
S.B. Civil Writ Petition No. 18178 of 2024
Decided On : 07-03-2025
Advocate Appeared:
For the Appellants : Sachin Acharya, Shridhar Mehta
For the Respondent: Brij Kishore Sharma
A change of name of a company does not affect its legal identity or entitlement to an arbitral award, and denying fund release on such grounds constitutes a jurisdictional error.
Headnote:
(A) Arbitration and Conciliation Act, 1996 - Section 34 - Writ petition under Article 227 - Challenge to Commercial Court's order denying release of 25% of arbitral award - The petitioner, formerly known as 'Ramky Enviro Engineers Ltd.', sought release of funds after a name change to 'RE Sustainability Ltd.' - The Commercial Court allowed the name change but denied fund release based on this change. (Paras 2, 7, 12)
(B) Jurisdictional error - The court found the denial to release funds based solely on a name change to be a technicality that does not affect the company's legal identity or the arbitral award. (Paras 12, 13)
Facts of the case:
The petitioner challenged the Commercial Court's order denying the release of 25% of an arbitral award due to a name change, despite the High Court and Commercial Court permitting the change.
Findings of Court:
The court ruled that the denial was perverse and a jurisdictional error, directing the release of the funds.
Issues: The main issue was whether the change of name affected the entitlement to the arbitral award.
Ratio Decidendi: The court emphasized that a mere name change does not alter the fundamental identity of the company or its rights under the arbitral award.
Result: The impugned order was quashed, and the Commercial Court was directed to release the funds.
ORDER :
1. Heard counsel for both parties and perused the record.
2. Petitioner, by means of filing instant writ petition under Article 227 of the Constitution of India, has challenged the order dated 12.09.2023 passed by the Commercial Court in Civil Misc. Case No. 01/2019 to the limited extent of denying to release 25% of the awarded amount under the arbitral award dated 07.07.2018.
3. Undisputedly, an arbitral award dated 07.07.2018 was passed in favour of "Ramky Enviro Engineers Ltd." whereagainst respondent - Ajmer Municipal Corporation filed an application under Section 34 of the Arbitration and Conciliation Act, but same has been dismissed vide order dated 25.03.2021 and there-against the respondent Municipal Corporation Ajmer has preferred a D.B. CMA No. 1807/2021, which is pending before the Rajasthan High Court.
4. It appears that during pendency of the Civil Misc. Appeal, respondent-Corporation prayed for staying the execution of award whereupon the High Court directed to deposit the entire amount of Arbitral award vide order dated 01.08.2022 and on such condition, the arbitral award was stayed.
5. Respondent preferred Special Leave to Appeal (C) No.20080/2022 before the Hon'ble Supreme Court. The Hon'ble Supreme Court vide order dated 18.11.2022, modified the stay order dated 01.08.2022 with direction that respondent- Corporation shall deposit 50% of the arbitral award out of which 25% shall be released to the claimant-Company, on furnishing Bank Guarantee and rest 25% shall be kept in any nationalized Bank, which shall be subject to outcome of the appeal pending before the Rajasthan High Court.
6. It has been pleaded and argued by learned Senior Counsel appearing on behalf of the petitioner that in the meanwhile, the name of claimant Company Viz. "Ramky Enviro Engineers Ltd." has been changed as "RE Sustainability Ltd." and in support thereof, a certificate dated 10.02.2022, issued by the Government of India Ministry of Corporate Affairs has been enclosed with the writ petition as Annexure-5.
7. Learned Senior Counsel submits that the Commercial Court, although, by the order impugned dated 12.09.2023 has allowed to change the name of Company from "Ramky Enviro Engineers Ltd."to "RE Sustainability Ltd." and such change of name has also been permitted by the High Court in the pending DB CMA No. 1807/2021, yet the Commercial Court declined to release 25% of the arbitral award to the petitioner-Company just due to change of its name from from "Ramky Enviro Engineers Ltd." to "RE Sustainability Ltd."
8. Learned Senior Counsel has pointed out that after passing the order dated 12.09.2023 by the Commercial Court denying to release the 25% of the arbitral award to the petitioner-Company only on account of change of its name, petitioner-Company moved a misc. application before the Hon'ble Supreme Court seeking correction/ clarification in the order dated 18.11.2022 to change the name of Company whereupon the Hon'ble Supreme Court disposed of the misc. application vide order dated 05.04.2024 with liberty to petitioner to challenge the order before the High Court.
9. It has also been pointed out by the learned Senior Counsel that petitioner moved a misc. application before the Division Bench of the High Court in the pending DB CMA No.1807/2021, but same has been disposed of vide order dated 19.10.2024, granting liberty to petitioner to take appropriate legal remedy against the order dated 12.09.2023 passed by the Commercial Court, hence, in such circumstances, petitioner has filed the present writ petition for issuing directions to the Commercial Court to release 25% amount of the arbitral award to the petitioner-Company viz. "RE Sustainability Ltd." formerly known as "Ramky Enviro Engineers Ltd." in compliance of the order dated 18.11.2022 passed by the Hon'ble Supreme Court.
10. Learned counsel appearing on behalf of respondent- Municipal Corporation, Ajmer has opposed the writ petition, however, does not dispute that in the pending
