2009 (12) TMI 503 - HC - Companies Law

Court dismisses petitioner's challenge on cheque validity post-company name change; emphasizes name change /= new entity. Timeliness key.

The court dismissed the petitioner's contentions regarding the validity of cheques drawn in the name of a company that underwent a name change, ... Proceedings pending for offences under section 138, read with section 142, of the Negotiable Instruments Act, 1881 on the file of the Judicial Magistrate No. I, Pondicherry Held that:- In the ultimate analysis it was found that the suit filed in the wrong name would be a case of mis-description and not a suit by a non-existing person. According to counsel for the petitioner, the notice period of 15 days should be calculated from such date and the complaint ought to have been filed within one month of the expiry of the notice period. If so calculated the complaint ought to have been filed on or before 5-6-2008. Hence, the complaint, which in this case has been filed on 12-6-2008, is not maintainable. According to counsel for the petitioner, the notice period of 15 days should be calculated from such date and the complaint ought to have been filed within one month of the expiry of the notice period. If so calculated the complaint ought to have been filed on or before 5-6-2008. Hence, the complaint, which in this case has been filed on 12-6-2008, is not maintainable. Appeal dismissed. Issues:1. Validity of cheques drawn in the name of a company that underwent a name change.2. Timeliness of filing the complaint within 30 days from the date of notice delivery.Analysis:Issue 1: Validity of ChequesThe petitioner contended that the cheques were drawn in the name of a company that had undergone a change of name and, therefore, were not enforceable under the Negotiable Instruments Act, 1881. The respondent argued that the change of name did not create a new entity, and the company continued under the new name. Referring to the Calcutta High Court judgment, it was established that a change of name did not dissolve the company or create a new one. The court analyzed various provisions of the Companies Act, 1956, emphasizing that a change of name did not alter the entity but only the name. It was concluded that filing a suit in the wrong name constituted a mis-description, not a case of a non-existing person. The court dismissed the contention, relying on legal precedents and the rationale of previous decisions.Issue 2: Timeliness of Complaint FilingThe second contention raised was regarding the timeliness of filing the complaint within 30 days from the date of notice delivery. The petitioner argued that the complaint was not filed within the stipulated period based on the date of the endorsement on the postal cover. The respondent asserted that the complaint was filed within 30 days from the expiry of the notice period after awaiting repayment. The court held that the calculation of the notice period and the time for filing the complaint fell under the lower court's jurisdiction for consideration. Consequently, the court found both contentions against the petitioner and dismissed the petition, emphasizing that such matters should be raised before the lower court for proper adjudication. The petition was dismissed, and no costs were awarded, leading to the closure of connected miscellaneous petitions.