Sapna Trading Corporation v. Adajee Dhakjee & Co Pvt Ltd

NAJMI WAZIRI, J MAY 06, 2014/ak

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 06.05.2014 + RC.REV. 437/2012, CM Nos.15036/2012 & 12425/2013 SAPNA TRADING CORPORATION ..... Petitioner Through: Mr. Vijay Kishan, Mr. Vikram Jetley & Mr. Sanjeev Sharma, Advs. versus DADAJEE DHAKJEE & CO PVT LTD ..... Respondent Through: Mr. Rajat Aneja with Ms. Swati Gupta, Advs. CORAM: HON'BLE MR. JUSTICE NAJMI WAZIRI % MR. JUSTICE NAJMI WAZIRI (Open Court) 1. The learned counsel for the petitioner states that the proceedings before the Trial Court were an illegality because the petition was filed in the name of the company which did not exist by that name, since by the year 2001 the name of the company had changed from Dadajee Dhakjee & Co. Pvt. Ltd. to Dadajee Dhakjee Pvt. Ltd. Therefore the entire proceedings suffered from an incurable locus standi, as the petition was filed in the former name of the company. 2. The learned counsel for the respondent states that there is no dispute with respect to the identity of the landlord nor has there been any dispute apropos the landlord-tenant relationship. It is just that since the sale deed by which the landlord has attained ownership of the property, is in the name of the Dadajee Dhakjee & Co. Pvt. Ltd. He submits that this would have no bearing upon the identity of the landlord Dadajee Dhakjee Pvt. Ltd. 3. Learned counsel for the petitioner submits that as per Section 23(3) of the Companies Act, any proceedings initiated in a wrong name would be non-est. He relies upon the Division Bench Judgment of the Calcutta High Court in M/s. Malhati Tea Syndicate Limited vs. Revenue Officer, Jalpaiguri & Ors., AIR 1973 Calcutta 78 to support his contention which records as under:- "20. There can be no doubt that on the day on which the appeal was filed, there was no company in existence by the name of Malhati Tea Syndicate Ltd., and the appeal purported to have been filed by a company which was not on the Register of Joint Slock Companies, and had therefore no existence in accordance with the provisions of the Companies Act, 1956, cannot but be held to be incompetent. Learned Advocate for the applicant contended that the appeal was competent by reason of the provisions in subsection (3) of Section 23 of the Companies Act, 1956. That sub-section runs as follows:-- "The change of name shall not affect any rights or obligations of the company or render defective any 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." 21. We are unable to accept this contention on behalf of the applicant. The first part of the sub-section protects the rights and obligations of the company, already acquired before the change of its name and also protects legal proceedings by or against it. The second part of the sub-section authorises the continuation of a pending legal proceeding which was commenced by the company in its former name. The second part provides that legal proceedings commenced by the company in its former name may be continued by the company after the change of its name. Nothing in this subsection authorised the company to commence a legal proceeding in its former name at a time, when it had acquired its new name which has been put on the Register of the Joint Stock Companies. In this case, the Memorandum of Appeal had been filed by the company in its former name, namely, Malhati Tea Syndicate Ltd., which was no longer on the Register of the Joint Stock Companies. We arc, therefore, of the view that the appeal itself is incompetent, as it has been purported to be filed in a name which is no longer there on the Register of the Joint Stock Companies. 22. In support of his contention learned Advocate for the applicant relied upon a decision of the Madras High Court reported in ILR (1954) Mad 533. In that case the question was whether execution proceedings could be conducted by a