2017 (9) TMI 2 - HC - Companies Law

Court allows petition to quash order shifting company office, emphasizes legal obligations.

Quintlies Research India Private Limited Versus Regional Director, Ministry Of Corporate Affairs

The court allowed the petition to quash the order for shifting the registered office of the petitioner company, directing the respondent to give effect to ... Shifting of the registered office - scheme of amalgamation approved - Held that:- Once the Company Court has approved the scheme of amalgamation it has to be given effect to. Therefore, when the amalgamation is permitted as per the Company (incorporation) Rules 2014, it will be the registered office of the company which will have to be mentioned. The applicant company is required to meet with the deadline for filing income tax return and finalizing the assessment proceedings. It is also stated that non shifting of the registered office from the State of Gujarat to the State of Karnataka would cause serious prejudice and therefore, the present application has been filed. Therefore, the impugned order at Annexure-A, cannot be sustained in light of discussion made hereinabove and therefore, it deserves to be quashed and set aside. The only ground mentioned is that the Company Application Nos.79 to 81 of 2014 has been filed in the respective Company Petitions regarding the scheme for arrangement and amalgamation. However, as stated, once the review applications have been dismissed for default, there is no justification for not considering the application filed by the petitioner company under Section 13 of the Companies Act, 2013. The application as provided in the Act for shifting of the registered office and/or alteration of the memorandum has to allow as a necessary corollary. Therefore, the impugned communication/order at Annexure-A passed by the Deputy Director for Regional Director, dated 21.03.2017, office of the Regional Director, North-Western Region, Ahmedabad deserves to be quashed and set aside and accordingly set aside. Issues:1. Quashing of the order for shifting the registered office of the petitioner company.2. Fixing an early date of hearing for the main matter.3. Review and modification of the order passed by the High Court regarding amalgamation.4. Dismissal of review application and subsequent passing of impugned order by the Deputy Director.5. Justification for not considering the application filed by the petitioner company under Section 13 of the Companies Act, 2013.Analysis:1. The petitioner company filed a Special Civil Application seeking to quash the impugned order passed by the Deputy Director, Ministry of Corporate Affairs, regarding the shifting of the registered office. The application was filed under Article 226 of the Constitution of India and the Companies Act. The court found that once the Company Court had approved the scheme of amalgamation, it had to be given effect to, and the impugned order could not be sustained. The court allowed the petition and set aside the impugned order, directing the respondent to give effect to the Company Court's order regarding amalgamation.2. The Civil Application was also filed to fix an early date of hearing for the main matter. The court noted the reasons stated in the application and proceeded with the detailed analysis of the issues related to the scheme of arrangement and amalgamation of the petitioner company with other entities. The court's decision to set aside the impugned order indirectly addressed the need for an expedited hearing of the main matter, ensuring timely resolution of the issues at hand.3. The background facts revealed that the petitioner company had filed a scheme of arrangement for amalgamation, which was initially granted by the Company Court. However, the respondent Regional Director filed an application for review and modification of the order, which was subsequently dismissed for default. Despite the dismissal, the Deputy Director passed the impugned order reiterating the grounds mentioned in the review application, which was deemed impermissible by the court. The court emphasized the binding nature of the Company Court's order on the company, creditors, and shareholders, highlighting the legal obligations created by such judicial approvals.4. The court addressed the dismissal of the review application and the subsequent passing of the impugned order by the Deputy Director. It scrutinized the reasons provided for the impugned order and found them inconsistent with the Company Court's approved scheme of amalgamation. The court emphasized the importance of following the provisions of the Companies Act, specifically Sections 391 to 394, which govern schemes of amalgamation and their legal implications on the involved parties. The court's decision to set aside the impugned order was based on the legal principles and obligations established by the Company Court's approval of the amalgamation scheme.5. The court further discussed the justification for not considering the application filed by the petitioner company under Section 13 of the Companies Act, 2013. It highlighted the necessity of allowing such applications for shifting the registered office or altering the memorandum as a necessary corollary to the scheme of amalgamation. The court found that the impugned communication/order passed by the Deputy Director deserved to be quashed and set aside, ensuring the proper implementation of the Company Court's order regarding the amalgamation process.