C.L.Muthiah v. M/s.Power Soaps (P) Ltd.,PuducherryRep. by its Authorised signatory,Mr.Sanjay Madaan

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 02.12.2009CORAM:THE HONOURABLE MR.JUSTICE C.T.SELVAMCrl.O.P.No.14139 of 2009 And M.P.Nos. 1 and 2 of 20091.C.L.Muthiah... PetitionerVersusM/s.Power Soaps (P) Ltd.,PuducherryRep. by its Authorised signatory,Mr.Sanjay Madaan ... RespondentPrayer: Petition filed under Section 482 of Cr.P.C to call for therecords pertaining to the complaint in C.C.No.516 of 2008 on the fileof the Judicial Magistrate No.I, Pondicherry, and quash the same.For Petitioner : M/s.V.M.G.Ramakannan For Respondent : Mr.G.M.Ramasubramanian for Mr.G.R.Hari for Ram & RamO R D E RThis petition seeks to quash the proceedings pending foroffences under section 138 read with Section 142 of NegotiableInstruments Act in C.C.No.516 of 2008 on the file of the JudicialMagistrate No.I, Pondicherry. 2.Heard M/s.V.M.G.Ramakannan,learned counsel for the petitioner and Mr.G.M.Ramasubramanian forMr.G.R.Hari for Ram & Ram, learned counsel for the respondent.3.Primarily there are two contentions which arise in support ofthe petition. The first is that the cheques were drawn on 15.03.2008in the name of M/s.Narmada Chemicals (P) Limited and on the date ofcheque, such company was not in existence as the company hadundergone a change of name to M/s.Power Soaps Private limited witheffect form 01.02.2008 and was again converted to M/s.Power Soapslimited with effect from 04.03.2008, as notified by the Registrar ofthe Companies. The contentions is that the cheques have been drawnin the name of a non-entity and therefore they were not valid underthe Negotiable Instruments enforceable in law. This contention ismet by the respondent by placing reliance on the Judgement of theCalcutta High Court reported in CDJ 1985 Cal HC 002. In such case ithad been contented that, "the suit was not maintainable inasmuch as Fibre GlassPilkington Ltd. was not an existing company on the date thesuit was filed, A new company, viz., F.G.P.Ltd., having beenincorporated with effect from April 15, 1982, it wascontended that Fibre Glass Pilkington Ltd. stood dissolvedand there was no company by that name on the date when the https://hcservices.ecourts.gov.in/hcservices/ suit was filed. It was contended that the suit should bedismissed with costs."4.The contention that the suit was instituted in the name of anon-existing person was met by the contention that the change of thename of a company did not bring into existence a new entity, thecompany remained the same and continued under the new name. Severaldecisions including that of a division bench of this court have beenreferred to and discussed by the Calcutta High Court. It would beuseful to refer to some of the discussions thereunder."A Division Bench of the Madras High Court consideredSection 11(6) of the Indian Companies Act, 1913, which ismore or less similar to Section 23 of the later statute of1956, and held that the object of the said section was toprovide that notwithstanding the change in the name, therewould be no alteration in the legal status of the companyas its incorporation was not in any manner affected by themere change of name. It continued to possess the samerights and remained subject to the same obligations asbefore the change."On a revision, a Division Bench of this court affirmed theamendment and observed as follows (at p.586). "Section 21enables a company to change its name by a given method,viz., by a special resolution and with the approval of theCentral Government signified in writing. It does notprovide for altering the entity but only the name. This isalso made quite clear by the provisions of Section 23. Sub-section (1) of Section 23 states that where a companychanges its name in pursuance of Section 21 or Section 22,the Registrar shall enter the new name on the register inthe place of the former name, and shall issue a freshcertificate of incorporation with the necessary alterationsembodied therein and the change of name shall be completeand effective only on the issue of such a certificate.(20)THE question before us is whether the suit in theinstant case is by an entity which is not in existence or byan entity in existence which has been misdescribed in theplaint.(21)ON a consideration of the relevant sections of theCompanies Act, 1956, relating to change of name of existingcompanies, noted earlier, it does not appear to us that achange of the name of the company results in itsdissolution and incorporation of a new company under a newname. Section 21 of the statute permits a company tochange its name in the manner as prescribed and nothingelse. Ex facie, the section indicates that the companycontinues in a new name.(22)SECTION 23 of the Act appears mainly to be aministerial section and lays down the procedure forrecording of the change of name. A fresh certificate ofincorporation is no doubt issued, but the same is only for https://hcservices.ecourts.gov.in/hcservices/ the purpose of recording the alteration in the name. Theeffect of the issue of the new certificate as provided inSub-section (1) of Section 23 is to render the change ofname complete and effective and nothing more. The sectiondoes not provide or imply that on the issue of the newcertificate, the company as it existed will stand dissolvedand a new company will come into existence.(23)SUB-SECTION (3) of Section 23 provides that change ofname will nto affect any right for obligation of thecompany and that legal proceedings in the old name will notbe rendered defective but will be continued by or againstthe company in its new name. The expression used in thesection is "the company" and not "old company", or "newcompany", or "dissolved company". There are furtherindications that in spite of a change of name, the entitycontinues.(24)FOR the above reasons, we hold that on a change of itsname, a company does not stand dissolved nor any new companycomes into existence. It follows that after change of itsname, if any legal proceeding is commenced or instituted bya company in its old name, it would be a case of meremisdescription and not a case of initiation of a proceedingby a person not in existence.A Division Bench of the Calcutta High Court in EconomicInvestment Corporation Ltd. Vs. C1t[1970] 75 ITR 233(Cal)."it is clear from Sub-section (3) that by the change ofname, the constitution of the old company is not changed.The only thing that is changed is its name and all therights and obligations under the law of the old companypass to the new company. It is not similar to thereconstitution of a partnership, which, in law, means thecreation of a new legal entity altogether.""5.In the ultimate analysis it was found that the suit filed inthe wrong name would be a case of description and not a suit by anon-existing person. The rationale of the said decision squarelywould apply and answer the contention of the petitioner.6.The other contention raised is that the complaint was filedwithin 30 days from the date of the endorsement on the postal coveras 'I.D.-Intimation Delivered'. Admittedly the statutory notice sentby the respondent was returned un-delivered in this case. Thecontention of the petitioner is that the RPAD cover containing thestatutory notice bore the endorsement I.D. [Intimation of Delivery]dated 22.04.2008. According to the counsel for the petitioner thenotice period of 15 days should be calculated from such date and thecomplaint ought to have been filed within one month of the expiry ofthe notice period. If so calculated the complaint ought to have beenfiled on or before 05.06.2008. Hence, the complaint, which in thiscase has been filed on 12.06.2008, is not maintainable. 7.On the other hand, the contention of the learned counsel forthe respondent is that the complainant had awaited repayment for the https://hcservices.ecourts.gov.in/hcservices/ period of 15 days from the date it had intimation of the return ofthe statutory notice and had filed the complaint within 30 days fromthe expiry of such period and hence the same was filed in time. Themanner of calculation of the statutory notice period and the timewithin which the complaint is to be filed, the reasons for thereceipt or non-receipt of the notice etc. are matters which wouldfall within the realm of consideration of the lower court. ThisCourt is of the view that such contentions should rightly be raisedbefore the lower court and not herein before. 8.Thus finding both contentions against the petitioner, thiscourt dismisses the petition. Accordingly the petition is dismissed.No Costs. Consequently, the connected miscellaneous petitions arealso closed. Sd/-Asst. Registrar//true copy//Sub Asst.RegistrarpriTo1.The Judicial Magistrate No.I, Pondicherry.2.-do- Thro' The Chief Judicial Magistrate, Pondicherry.3. The Public Prosecutor, (Pondicherry)High Court, Chennai.1 cc to Mr.V.M.G.Ramakkannan, Advocate, Sr.No.658771 cc to M/s.Ram & Ram, Advocate, Sr.No.65596 Crl.O.P.No.14139 of 2009 And M.P.Nos. 1 and 2 of 2009RS {CO}TP/14.12.2009.