2000 (1) TMI 897 - HC - Companies Law

High Court overturns order for company name change, citing Regional Director's overreach.

The High Court set aside the order directing a company to change its name under section 22 of the Companies Act. The Court found that the Regional ... Name of company - Rectification of Issues:Challenge against order directing change of company name under section 22 of the Companies Act, 1956.Analysis:1. Factual Background: The writ petitioner, a company, was directed to change its name by deleting the word 'Kalpana' by an order dated 30-6-1997 issued by the Regional Director, Department of Company Affairs, Government of India. The order was based on the contention that the use of the name 'Kalpana' by the petitioner was likely to cause confusion with another company's name, leading to an advantage derived by the petitioner.2. Legal Submissions: The main argument presented was that the Regional Director erred in interpreting and applying section 22 of the Companies Act. It was contended that the Director considered irrelevant factors, such as the similarity in business nature and pending registration of the brand name 'Kalpana', leading to an unjust order for name change.3. Jurisdictional Analysis: The High Court analyzed the jurisdiction of the Regional Director under section 22 and emphasized that the Director's authority must be exercised within the statutory limits. The Court highlighted that the Director's decision should not overlap with the jurisdiction of a civil court, especially in matters of passing-off actions.4. Error in Order: The Court found that the Regional Director's order suffered from an error apparent on the face of the record. The Director exceeded his jurisdiction by considering irrelevant factors and not focusing on the core issue of inadvertence or undesirableness as per the provisions of section 22.5. Judgment: The High Court set aside the impugned order dated 30-6-1997, directing the petitioner to change its name. The Court allowed the appeal, granting the parties the liberty to pursue their contentions in the ongoing suit before the Court. The judgment highlighted the importance of considering relevant factors and exercising jurisdiction within statutory boundaries.6. Additional Judge's Opinion: Justice Ansari concurred with the decision, indicating agreement with the analysis and outcome of setting aside the impugned order. The judgment concluded that no costs were to be awarded in the given circumstances.In conclusion, the High Court's judgment focused on the correct interpretation and application of section 22 of the Companies Act, emphasizing the need for statutory authorities to act within their prescribed limits and avoid errors apparent on the face of the record. The decision provided clarity on the jurisdictional boundaries of the Regional Director and the importance of considering relevant factors in such matters.