TaxTMI 
TaxTMI 
2018 (7) TMI 2165
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts. Both these demands were made because the writ petitioner No. 1 duly changed its name from BNKe Solutions Private Limited to the present name of the writ petitioner No. 1, Gopi Vallabh Solutions Pvt. Ltd. The representations made by the writ petitioner against the first memo were not disposed of by a reasoned order but the demand was reiterated apparently on legal advice which sought to go into the articles of association of the petitioner No. 1 before change of its name and after change of its name, without there being any allegation at any time that there was any change in the composition of the shareholders to use the notion of legal entity to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons. 3. The facts of the case as relevant, would show that the writ petitioner used to be called BNKe Solutions Private Limited. It has its registered office at Infinity Tower-1, 4th Floor, Plot A-3, Block GP, Sector-V, Salt Lake City, Kolkata - 700091. While thus named, it took on sub-lease from the respondent No. 6 around 1.12 acres of land at Block EP and GP in Sector-V, Bidhannagar as described mo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (1) Where a company changes its name in pursuance of Section 21 or 22, the Registrar shall enter the new name on the register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein; and the change of name shall be complete and effective only on the issue of such a certificate. (2) The Registrar shall also make the necessary alteration in the memorandum of association of the company. (3) 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." 6. Therefore, the statute makes it amply clear that the change of name of a company, if duly made as above, shall not affect any rights of the company. Therefore, the change of the name of the writ petitioner from BNKe Solutions Private Limited to Gopi Vallabh Solutions Pvt. Ltd. did not affect its rights, including its rights as a sub-lessee of the said sub-leasehold, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Pvt. Ltd)". Therefore, the respondent No. 6 conducted itself, not just towards the writ petitioner, but to towards the public at large, that the writ petitioner, by whatever name called, was the sub-lessee in respect of the said sub-leasehold, and permission fees was payable by it to the urban development department of the respondent No. 1, only if the writ petitioner assigned it to a third party. 10. At this stage, suddenly, and I do not know why or under which provision of which law in India, the respondent No. 5, an officious Additional Secretary to the Government of West Bengal who was in office in October 2014, wrote a letter dated October 29, 2014 to the writ petitioner, narrating the facts relating to the sub-lease in the name of the writ petitioner under its former name, and also admitting that mutation in the records of the respondent No. 1 had been made of the name of the writ petitioner in its erstwhile name but, a propos the proposal of the writ petitioner to transfer a part of the built up space under its sub-leasehold to third parties, he intimated to the writ petitioner "Now I am directed to request you to state as to whether the change in the name....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Department had been obtained. 14. Needless to mention, the Companies Act, 1956 under which the name of the writ petitioner was changed was not only a central statute, it was made in a field of legislation covered under List I of the 7th Schedule, and neither Section 21 nor Section 23 thereof required any approval, prior or otherwise of any agency or department of the federating State, being the respondent No. 1. 15. Thus, on the basis of these decisions which on their face were alien to Indian law and were in fact; taken in ignorance of law, a demand was made as if under the contract, for Rs. 3 lakhs per cottah for according permission for "change of name of the company" as the sub-lessee of the plot in question and for further processing fees for mutation, also quite a hefty amount. This was by the letter dated July 7, 2015 as in Annexure "P/20" to the writ petition, and the writ petitioner by a representation narrated the above facts briefly by their letter dated July 27, 2015 (Annexure "P/21"), including that change of name does not bring into existence of a new company, and sought that such demand be recalled and/or rescinded in view of the fact that the clauses/notific....
X X X X Extracts X X X X
X X X X Extracts X X X X
....did not even consider these things but merely proceeded on the basis that a change of name of a company, duly made, required change in the sub-lease deed and that this resulted in change of the leasehold right from one company to another. Nothing was alleged in the letters aforesaid that this was done to justify any wrong, defeat any provision of law or defraud the creditors of the writ petitioner in its former name or was illegal. 17. I am tempted to name the firm of learned advocates as also the Learned Counsel-which appear from the records annexed to the writ petition - who gave to the respondent No. 6 the "legal opinion" on which the decision of the respondents No. 1 to 5 depended but out of Courtesy, I refrain from doing so. The respondent No. 6 while acting as "State" would be well advised to choose its experts more carefully in the future. 18. The writ petition was instituted challenging the above memoranda as in Annexures "P/20" dated July 7, 2015 and "P/27" dated May 16, 2016 basically on the above grounds. Naturally, grounds have been taken of violation of the Section 23 of the Act of 1956 by the respondent authorities and of their acts being arbitrary and not in te....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions. There is also provision of raising additional funds. iv) The clause 'DIVIDENDS' in two companies are found to be not similar. v) The provision of BOARD OF DIRECTORS are also not similar in two companies in Articles. vi) In Gopi Vallabh Solutions, There is provisions of insurance of equity shares. vii) DACL, NB Group occurring in Gopi Vallabh Solutions were found in BNKe\Solutions." 22. Even without considering the spelling mistakes in the Affidavit-in-Opposition, none of these can be found in either the Memo dated July 7, 2015 or May 16, 2016. They were never communicated even in this scanty detail, to the writ petitioner. The writ petitioner never had an opportunity of dealing with these allegations when the respondents had, even after receiving the certificate of the chartered accountant that the two memoranda and articles were the same/identical, issued the memo as in Annexure "P/27". Their representation before that, as against the memo as in Annexure "P/20" was therefore never considered and disposed of with a speaking order dealing with the, points that they had raised, whether by way of Annexure "P/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f corporate personality propounded in the said decision by statutory provisions as well as by judicial pronouncements. By the process, commonly described as "lifting the veil", the law either goes behind the corporate personality to the individual members or ignores the separate personality of each company in favour of the economic entity constituted by a group of associated companies. This course is adopted when it is found that the principle of corporate personality is too flagrantly opposed to justice, convenience or the interest of the Revenue. (See : Gower's Principles of Modern Company Law, 4th Edn., p. 112.) This concept, which is described as "piercing the veil" in the United States, has been thus put by Sanborn, J. in US v. Milwaukee Refrigerator Transit Co.[(1905) 142 Fed 247, 255]: "When the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons." I have referred to the above judgment to show that none of the conditions for lifting of the corporate veil quoted by the Hon'ble Supreme Court with approval has been even a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reme Court made it clear that in view of the various judgments, corporate veil had become more and more transparent. It had not been pleased to hold that the veil had been perpetually stripped or removed. I would respectfully follow the judgment of the Hon'ble Supreme Court to ensure that where no cause has been made out to lift the veil, I shall let the veil of modesty and corporate identity remain. 26. Mr. Sengupta, Learned Advocate for the State, fairly submitted that he could not improve upon the records which the respondent No. 4 had relied upon and could not supply the omission on the part of the other respondents to use an Affidavit-in-Opposition despite chance having been given on May 5, 2017 to do so, so far as the facts were concerned. He submitted fairly that all there was, on which he was arguing for lifting of the veil, was contained in paragraph 32 of the respondent No. 4's Affidavit-in-Opposition, as extracted above. As I have already held above while discussing the precedents cited by Mr. Sengupta, none of the facts alleged by the respondent No. 4 or apparent from the records disclosed, are sufficient to allow me to lift the corporate veil. 27. Though ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame will not affect any right or obligation of the company and that legal proceedings in the old name will not be rendered defective but will be continued by or against the company in its new name. The expression used in the Section is 'the company' and not 'old company', or 'new company', or 'dissolved company'. There are further indications that in spite of a change of name, the entity continues. For the above reasons, we hold that on a change of its name, a company does not stand dissolved nor any new company comes into existence." (emphasis supplied). (iii) The last relied case upon by Mr. Sen, perhaps clinches the issue without there being any scope of dispute by the respondents. This is the case of Prasad Technology Park P. Ltd. v. Sub-Registrar and Others reported in (2005) 128 Company Cases 996 (SC), and there the Hon'ble Supreme Court was faced with a similar fact situation where the changed name of a company was to be substituted in a lease deed where none of the conditions of the lease was being changed except that a restriction contained in the deed was changed. At page 1001 of the report, their ....