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2015 (5) TMI 1243
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....W) of 2010, Fresenius Kabi Oncology Ltd. the company is the sole petitioner whereas in W.P. No. 26049(W) of 2014, an employee of the company has also joined the company as the second petitioner. The company has a manufacturing unit at Kalyani in the district of Nadia in West Bengal, which is the source of dispute in both these writ petitions. 3. The unit originally was owned by another corporate entity, Pfizer Limited. The land, comprising of an area of approximately 16.95 acres was allotted by the State Government to said Pfizer Limited as a lessee. The agreement to that effect was executed on 4th January, 1989 and the tenure of the lease was 999 years. This has been specified in Clause-1 of the Lease Deed, a copy of which has been made annexure 'P-1' in W.P. No. 24788(W) of 2010. I shall refer to this writ petition later in this judgment as the first petition. The lease agreement stipulates that without obtaining written consent of the lessor, the land in question could not be transferred. Sub-clause-(4), (5), (6) and (7) of Clause 2 of the agreement are relevant on this issue, and these sub-clauses provide:- "2. That the Lessee to the intent that the obligati....
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....sferred their stake in the company to Fresenius Kabi (Singapore) Pte., a company organized under the laws of Singapore. This transfer of equity stake was effected on 11th August, 2008. Thereafter, the corporate name of Dabur Pharma Ltd. was changed to Fresenius Kabi Oncology Ltd. and a fresh certificate of incorporation was issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana on 9th January 2009. Copy of the relevant document in this regard, issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana has been made Annexure "P5" to the first writ petition. The petitioner-company in both these proceedings is subsidiary of the Singapore based company. Submission of the petitioners is that all requisite approval from different authorities empowered to effect change of corporate name have been obtained by them. But that issue is not in dispute in these two proceedings. The dispute between the company and the State arose when the petitioner-company applied for recordal of change of name of the lessee in respect of the subject plot. This application was made on 6th January, 2010 and the Estate Manager, Kalyani, Urban Development D....
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....nsfer fee from the petitioners has been demanded in terms of the said circular, though the manner in which such transfer fee has been computed is not clear from the letter requiring deposit of fees. But manner of computation is not of much significance in these two proceedings. The core controversy involved in these proceedings is as to whether the authorities are empowered to demand transfer fee for effecting change of name. In the second writ petition, main complaint of the petitioners is withholding of their licence for storage and use of Hexane under the provisions of the West Bengal Solvent, Raffinate, Slop and other Equivalent Petroleum Products (Acquisition, Sale, Storage and Prevention of Use in Automobiles) Order, 2000 (the 2000 Order), mainly on the ground that the company in its present name is yet to be recognized as lessee. The company requires Hexane for manufacturing its pharmaceutical products. Contention of the petitioners is that change of name of a company does not constitute transfer of its assets, and the petitioners have questioned the very basis of such demand. Challenging the demand of transfer fee for recording the name of the petitioner-company, the first ....
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....mely, Fresenius Kabi Oncology Ltd. itself, that is, until and unless the lessor recognises such transfer of the leasehold interest in the land in question in favour of the applicant company. The application dated 16/08/2010 of the petitioners, for grant of licence to store hexane at D-35, Kalyani Estate, Nadia, is thus disposed of; and the Order dated 18/6/2014, of the Honourable Calcutta High Court i.c.w. 13631(W) of 2014, Fresenius Kabi Oncology Ltd. Vs. State of W.B. & Ors. Is hereby complied with." 6. The above-referred order was passed by the District Magistrate in pursuance of direction issued by an Hon'ble Single Judge of this Court in an earlier writ petition, which was registered as W.P. No. 13631(W) of 2014. The company had been making request for licence under the 2000 Order, from the month of August 2010, but in spite of reminders and exchange of correspondence among the petitioner company, the District Magistrate and different authorities under the State Government on the subject, actual grant of licence was withheld. Case of the petitioners is that there was no official communication on that issue, but in course of a meeting held in the office of the D....
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....ta, learned counsel appeared on behalf of the State in this matter. His submission is that on change of equity shareholding pattern, bringing a new set of shareholders in the controlling position of the company in substance has resulted in transfer of ownership and control of the company, and such change should be treated to have resulted in transfer of assets of the company. According to him, the leasehold right was shifting from one entity to another, and for this reason transfer fee was payable. His submission is that this is a case where there is simultaneous transfer of assets including leasehold right from one entity to another along with change of name and in this regard he relied on a judgment of this Court delivered on 8th February 2012 in the case of in Re:- Emami Biotech Ltd. & Anr. [ (2012) 3 CHN 102] which is also a decision of an Hon'ble Single Judge of this Court. 10. In the case of Bacha F. Guzdar (supra), it has been held by the Hon'ble Supreme Court:- "That a shareholder acquires a right to participate in the profits of the company may be readily conceded but it is not possible to accept the contention that the shareholder acquires any interest....
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....on of the two companies which is not the case before this Court. In case of amalgamation of two companies the transferor company losses its existence and all the property, rights, powers of every description including all leases and tenancy right, industrial, import and all other licences, of the transferor company without any further act or deed are transferred and vested or deemed to be transferred or vested in favour of the transferee company. Thus, in case of amalgamation no doubt the lease-hold interest of the transferor company stands transferred in favour of transferee company but the such transfer is not contemplated in case of transfer of share by the shareholder of the company to the stranger purchasers of such shares, as it was held in Mrs. Bacha F. Guzdar, Bombay vs. Commissioner of Income Tad, Bombay (supra) by the Hon'ble Supreme Court that a shareholder who buys share does not buy any interest in the property of the company which is a juristic person entirely distinct from shareholders. It was further held therein that the true position of a shareholder in a company is that on buying shares he becomes entitled to participate in the profit of the company as and wh....
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....hole approach is defective. The argument proceeds on the tooting that an application for execution was pending and in course thereof there had been a transfer of the interest of the decree-holder to another new body altogether and that it was a case of substitution in execution proceedings. This is belied by the provisions of Sections 21 and 23 of the Companies Act 1956. Section 21 enables a company to change its name by a given method, viz., by a special resolution and with the approval of the Central Government signified in writing. It does not provide for altering the entity but only the name. This is also, made quite clear by the provisions of Section 23. Subsection (1) or Section 23 states that 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 embothed therein and the change of name shall be complete and effective only on the issue of such a certificate. It would be observed that the emphasis is on the expression, "change of name". Sub-section (3) lays down that the change of name shall not ....
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.... the petitioner. Whatever transfer had taken place was at that point of time between the two entities. The consequential act of change of corporate name of the company is sought to be treated as transfer of leasehold right of the company, and transfer fee is sought to be charged on that incident or event. This, in my opinion is not permissible. To borrow the terminology from the fiscal jurisprudence, what is being subjected to transfer fee is the incidence of change of name of the company. Such a situation cannot come within the ambit of the expression "transfer of leasehold right", as stipulated in the notification of 18th December, 2007. The ratio of the judgment of this Court in the case of Emami Biotech Ltd. is not applicable in the facts of this case, as transfer fee is not being charged on any instrument of transfer, but on the basis of request for recordal of change of corporate name. It has not been argued by the State that the very act of transfer of equity-holding of the promoter group gives rise to the obligation of the company to pay transfer fee. 16. If I accept the submission of the State, then the result thereof would be that even after transfer of shareholding, d....