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2003 Supreme(All) 1718

HIGH COURT OF ALLAHABAD
M.Katju, R.S.Tripathi
INGERSOLL RAND WADCO TOOLS LTD
Versus
U P STATE INDUSTRIAL DEVELOPMENT CORPORATION KANPUR
Decided On : 19 August 2003
Civil Misc. Writ Petition No. 26379 of 2000

The main legal point established was that the demand for transfer charges must have statutory backing, and unilateral demands beyond the terms of the lease deed are not sustainable.

Headnote:

Transfer Charges - Company Lease Dispute - Indian Companies Act, Section 23; U.P. Urban Planning and Development Act, 1973 - The court quashed the impugned orders and directed the approval of the building expansion plan without insisting on the payment of transfer charges.

Fact of the Case:

The petitioner, a company registered under the Indian Companies Act, sought to quash orders demanding transfer charges and to direct the approval of its building expansion plan without the payment of transfer charges.

Finding of the Court:

The court found that the demand for transfer charges had no statutory basis and was beyond the terms of the lease deed. It also held that the change in the name of the company did not imply a new legal entity and that the alleged guidelines of the corporation had no statutory force.

Issues: The issues revolved around the legality of the demand for transfer charges, the authority of the corporation to demand such charges, and the impact of the change in the company's name on its legal obligations.

Ratio Decidendi: The court held that the demand for transfer charges lacked statutory sanction, the change in the company's name did not create a new legal entity, and the alleged guidelines of the corporation had no statutory force. It emphasized that the terms of the lease deed did not support the demand for transfer charges.

Final Decision: The petition was allowed, the impugned orders were quashed, and the respondents were directed to approve the building expansion plan without insisting on the payment of transfer charges.

M. KATJU, J.

This writ petition has been filed for a writ of certiorari for quashing the impugned orders dated 6-1- 2000, 15-4-2000 and 16-7-1999 Annexures 1, 2 and 3 to the writ petition passed by the respondent No. 2, Regional Manager, U. P. State Industrial Development Corporation, Ghaziabad (hereafter referred to as upsidc ). The petitioner has also prayed for a mandamus directing the respondent corporation to approve the building expansion plan submitted by the petitioner without insisting upon the payment of transfer charges.

2. Heard the learned Counsel for the parties.

The petitioner is a company registered under the Indian Companies Act. It is aggrieved against a demand of Rs. 29,74,027/- by the respondent as transfer charges by the impugned order dated 6-1- 2000 which has been reaffirmed by the impugned order dated 15-4- 2000 consequent upon the petitioner company changing its name from M/s Wadco Tools Limited to M/s Intersoll Rand Wadco Tools Limited. The petitioner is also aggrieved against the inaction of the respondent in not approving its building expansion plan and demanding transfer charges.

3. It is stated in paragraph 3 of the writ petition that pursuant to agreement between the petitioner and the respondent, the petitioner was given industrial site No. 37-A on lease for 90 years in the year 1974. True copy of the lease deed dated 22- 10- 1974 is Annexure 4 to the writ petition. Copy to the allotment of the site in favour of the Managing Director of the Company is Annexure 5 to the writ petition. The petitioner company decided to change its name from M/s Wadco Tools Ltd. to the present name of M/s. Intersoll Rand Wadco Tools Limited and sought registration of new name instead of the former, name under Section 23 of the Indian Companies Act. The Registrar of Companies duly issued a fresh certificate of incorporation of the new name in place of the old name in the register under Section 23 of the Act. True copy of the said certificate is Annexure 6 to the writ petition. The petitioner vide letter dated 10-9- 1997 informed the factum of change of name of the company to the respondent alongwith certificate of the Registrar of Companies. Copy of the said letter dated 10-9-1997 is Annexure 7 to the writ petition. It is stated in paragraph 6 of the writ petition that registration No. 17646 of the petitioner company remains the same despite the change of name as is evident from the certificate of the Registrar as well as from Section 23 of the Act which states:

" (1) Where a Company changes its name in pursuance of Section 21 or 22, the Registrar shall enter the new name on the register in place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein, and the change of name shall be complete and effective only on the issue of such a certificate.

(2) The Registrar shall also make the necessary alteration in the memorandum of association of the company.

(3) The change of name shall not effect any rights or obligations of the company, or render defective and legal proceedings by or against it, and any legal proceedings which might have been continued or commenced by or against the company by its former name may be continued by or against the company by its new name. "

4. It is alleged in paragraph 7 of the writ petition that pursuant to the lease deed the petitioner company paid the entire transfer consideration, and the possession of the site has been handed over to it and will remain with it. The factum of change of the name was accepted by the sales tax authorities, central exercise authorities, factory authorities and the U. P. State Electricity Board vide Annexure 8 to the writ petition.

5. In paragraph 9 of the writ petition it is alleged that the petitioner submitted a plan for expansion of the construction over the site in question as per existing requirement for approval. It may be mentioned that under the U. P. Urban Planning and Development Act,


















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