IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
M/S. T.T.Ltd., Represented by its Authorised Signatory, Mahendra kumar Nahata, New Delhi - Appellant
Versus
Union of India, Throught its Secretary, Ministry of Corporate Affairs, Govt. of India, New Delhi & Others - Respondent
W.P. Nos. 52 of 2022 & 5330, 5325 & 5327 of 2020
Decided On : 25-08-2022
Companies Act, 2013 - Rectification of Company Name - Section 16 (1) (a) - [LIMITATION, RECTIFICATION, COMPANIES ACT, 2013, SECTION 16 (1) (a)] - The court discussed the provisions of Section 16 (1) (a) of the Companies Act, 2013 and its similarity to Section 22 (1) (i) of the old Act, emphasizing the absence of a limitation period in the former. The court highlighted the importance of limitation laws, the need for reasonable diligence, and the public interest in finality of legal proceedings. It concluded that the applications for rectification of company names were barred by limitation, and the second respondent rightly rejected them.
Fact of the Case:
The petitioner filed writ petitions challenging the rejection of applications under Section 16(1)(a) of the Companies Act, 2013 seeking to change the name of respective third respondent companies. The petitioner claimed that the rejection was non-application of mind, and the circular issued by the Ministry of Corporate Affairs did not apply to their applications.
Finding of the Court:
The court found that the applications were barred by limitation and rejected them. It held that the power under Section 16(1)(a) is a suo-motu power vested exclusively with the Central Government and must be exercised within a reasonable time. The court also noted that the petitioner's attempt to restrain the third respondent in the Delhi High Court and the delay in filing the writ petitions were additional grounds for dismissal.
Issues: The issues involved the rejection of applications under Section 16(1)(a) of the Companies Act, 2013, the applicability of the circular issued by the Ministry of Corporate Affairs, and the petitioner's previous litigation attempts.
Ratio Decidendi: The court held that the applications were barred by limitation, and the power under Section 16(1)(a) is a suo-motu power vested exclusively with the Central Government. It also emphasized the importance of reasonable diligence and the finality of legal proceedings.
Final Decision: The writ petitions were dismissed as there was no merit in them, and the petitioner was not entitled to any costs.
JUDGMENT
(Prayer: Writ Petitions are filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus calling for the records of the second respondent and thereby quashing the Order No.4/Sec16/06/2017-18 dated 22.02.2018 passed by respondent No.2 and consequently to direct the second respondent to consider the representation in SRN No.G 10671865/05.09.2016 for rectification of company name under Section 16 (1) (b) of the Companies Act, 2013.)
Common Order:
1. These four writ petitions have been filed challenging four different impugned orders all dated 22.02.2018 passed by the second respondent rejecting the petitioner's applications filed under section 16(1)(a) of the Companies Act, 2013 seeking for changing the name of the respective third respondent Company on the ground that the name is identical with or too nearly resembles the petitioner's name.
2. The petitioner has challenged the impugned orders on the following grounds:
(a) Impugned orders, all dated 22.02.2018, have been passed by total non application of mind to section 16(1)(a) of the Companies Act, 2013. According to the petitioner, the said provision does not specify any period of limitation as was the case in section 22(1)(ii)(b) of the Companies Act, 1956.
(b) The Companies Act, 2013 came into effect on 01.04.2014 repealing the old Companies Act, 1956. The petitioner has filed the applications under section 16(1)(a) of the Companies Act, 2013 on 12.05.2017 prior to the date of general circular No.04/17 dated 16.05.2017.
(c) The general circular No.04/17 dated 16.05.2017 is applicable only to those applicants whose application was rejected by the Regional Director earlier under section 22(1)(ii)(b) of the Companies Act, 1956 on the ground that the said applications were made beyond the prescribed period of twelve months. According to the petitioner, Section 22(1)(ii)(b) of the Companies Act, 1956 has no bearing if an application has been filed afresh under section 16(1)(a) of the Companies Act, 2013, as the petitioner never filed an application under section 22(1)(ii)(b) of the Companies Act, 1956 earlier before the Companies Act, 2013 came into effect.
(d) The petitioner was incorporated in the year 1978 and its chairman who is the founder of the petitioner company is a registered trademark user since 1964, whereas the respective third respondent was incorporated only much later.
3. Counter affidavits have been filed by respective third respondents stating as follows:
(a) They were incorporated under the Companies Act, 1956 and its founding directors are descendants of the eminent industrialist T.T.Krishnamachari, the former Union Finance Minister of India.
(b) The respective third respondent has bonafidely adopted its name from the initials of T.T.Krishnamachari and his descendants. Late T.T.Krishnamachari was a pioneer in the industrial scene of India. They have a well established mark presence and their turn over is huge. The mark 'T.T.' used in combination with various businesses includes but not limited to services pertaining to logistics, Insurance, Aviation and has tremendous goodwill and brand recognition due to the excellent quality of products and services rendered as evidenced by the outstanding turnover, market share and customer loyalty for the eminent mark TT.
(c) They have extensively promoted the wide and continuous use of the service mark/ trading style through various advertisements including electronic and print media, creating exceptional brand recognition and customer loyalty.
(d) The petitioner herein filed civil suits before the Delhi High Court in C.S.(OS) No.101 of 2008 & C.S.(OS) No.102 of 2008 seeking to restrain the third respondent from using the mark "TT Services" and "TT Logistics" respectively. The Delhi High Court by its order dated 20.02.2013, dismissed the said suits filed by the
The main legal point established in the judgment is the importance of limitation laws, the need for reasonable diligence, and the exclusive nature of the suo-motu power vested with the Central Govern....
The main legal point established in the judgment is the interpretation of the limitation period under Section 16 of the Companies Act, 2013, and the application of the new enactment replacing the old....
The prior user of a trademark holds exclusive rights, and similarity in name constitutes a bar against adoption by a subsequent user.
Jurisdiction under Article 226 only applies if part of the cause of action arises within the territory; since the company is registered in Tamil Nadu, the writ petition in Kerala is not maintainable.
The court established that the NCLT must conduct a thorough examination of evidence in cases involving rectification of the Register of Members under the Companies Act, 2013.
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