Official Liquidator, Toshiba Anand Batteries Ltd. (In Liquidation) vs Toshiba Corporation

Pius C. Kuriakose, J.—The official liquidator challenges the order of the learned company judge in C.A. No. 404 of 2008 allowing the

company application and permitting deletion of the name Toshiba from the name of the company in liquidation, viz., Toshiba Anand Batteries Ltd.

The application was filed by Toshiba Corporation who claims to have entered into annexure A promotion agreement with Kerala State Industrial

Development Corporation, Mr. C.L. Anand and others for setting up the company in liquidation Toshiba Anand Batteries Ltd. (""TABL"" for short).

According to the application, Toshiba, the applicant had allowed the use of the name Toshiba in TABL in view of the shareholding and association

with TABL. It is alleged that due to reasons beyond control of the parties TABL has gone into liquidation and is no longer an operating company.

It is claimed that the applicant is the exclusive owner of the trade mark and trade name Toshiba. The applicant has already withdrawn the licence

granted to TABL for using the name Toshiba. It is alleged that the applicant-company Toshiba does not any longer have any active association

with TABL and even otherwise since TABL is in liquidation, the applicant wishes that TABL should cease and desist from using the name Toshiba

further. Hence, the application for deletion of the name Toshiba from the name of TABL since the same is necessary for protecting the trade mark

and trade name of Toshiba. The official liquidator filed a counter statement wherein what is contended is only that subsequent to the registration of

TABL the said company has functioned in the name TABL alone and is ordered to be wound up in the name of TABL. The winding up

proceedings are still continuing and the order of dissolution is yet to be passed. It is also stated that TABL is not presently functioning and no

production or other activities are being undertaken thereby suggesting that no prejudice will be caused to Toshiba by allowing the name to continue

till such time as dissolution orders are passed. The Registrar of Companies apart from endorsing the contentions raised by the official liquidator

contended that any attempt to change the name of the company would adversely affect the ongoing litigations before various courts and authorities

and would jeopardise the interest of the company in liquidation and its board of directors. It is also pointed out that no dividend has so far been

paid to the shareholders and hence, the plea to delete the name of Toshiba from the name of TABL will be detrimental to the interest of winding up

of the company. Reference is made in the counter of the Registrar of Companies to section 21 of the Companies Act, 1956 and it is contended

that the change of name is permissible only according to the procedure laid down in that section.

Lastly, it is contended that this is an era of globalisation and a large number of multinational companies and foreign players are participating in

Indian companies and are doing business in India. Having chosen to do business in India and having made profit it is not acceptable to permit the

applicant, a foreign player to withdraw its name from TABL once the business fails and the company goes in for liquidation.

The learned company judge on considering the contentions would notice that neither the official liquidator nor the Registrar of Companies have

disputed that the name Toshiba is essentially the trade mark and trade name of the applicant and also that TABL is no longer an operating

company. The learned judge took the view that the company is in liquidation and winding up proceedings are on and apparently what remains

before the company court are only a couple of title suits in relation to certain assets of the company. According to the learned judge, even though

technically it may be plausible to project the chances of revival before dissolution, the reality as discernible from the materials available on record is

that dissolution is inevitable. On the above reason, the learned judge found that the request is justifiable and hence, allowed the application.

Mr. M. Pathrose Matthai, senior counsel for the appellant and Mr. Ciccu Mukhopadhaya, learned counsel for the respondent addressed us

extensively. Sri Pathrose Matthai, learned senior counsel would draw our attention to section 481 of the Companies Act, 1956 and submit that in

the eyes of law a company will continue to exist notwithstanding winding up order till an order for dissolution under that section is passed. So long

as the company exists all provisions of the Companies Act, according to learned senior counsel, will apply to TABL also. Learned senior counsel

submitted that Application No. 404 of 2008 was filed by the respondent invoking rule 9 of the Companies (Court) Rules, 1959. According to

learned senior counsel, rule 9 is akin to section 151 of the Code of Civil Procedure, 1908 and hence, is only procedural law in contra distinction

with section 21 which is a provision of substantive law. Section 21, according to learned senior counsel, is a specific provision dealing with change

of names of existing companies. In order that the name is changed there should be a specific resolution adopted by the board of the company and

approval of the Central Government signified in writing will also be necessary before the change of name is effected. Learned senior counsel also

referred to section 20(2) of the Companies Act, 1956 and submitted that the above provision was not in currency at the time when annexure A

agreement was entered into between the parties. Learned senior counsel highlighted that the Registrar of Companies who is the statutory authority

to give approval for any change in the name of the company has very stiffly opposed the application. Learned counsel requested that the impugned

judgment be set aside and the application be dismissed. In support of his arguments, learned senior counsel referred to the judgment in Shri

Ambica Mills Ltd., In re [1986] 59 Comp Cas 368 (Guj).

Mr. Ciccu Mukhopadhaya, learned counsel for the respondent would support the impugned judgment. Learned counsel submitted that it is not

disputed by anybody that TABL has become a non-operating company. The claim of the respondent that Toshiba is virtually the trade name and

trade mark of the respondent is also not disputed by anybody. Section 21 cannot have application to the present case where it is not the company

in liquidation which wants change of name. Mr. Ciccu Mukhopadhaya referred to section 20(2) and submitted that if an application for registration

were to be made by the TABL presently, the application would not be granted since the same will be found to be undesirable in view of the

obtaining fact situation.

We have very anxiously considered the rival submissions addressed at the Bar. We are not impressed by the argument advanced by learned

senior counsel for the appellant on the basis of section 21 of the Companies Act. Significantly, such an argument was not even raised before the

learned single judge. According to us, section 21 cannot have application in the present case where it is not the company that has moved for

change of its name. On the contrary, it is the respondent who permitted the company in liquidation to adopt the name Toshiba under annexure A

agreement that has sought for change of name giving the reason that for all practical purposes TABL has ceased to exist. As rightly noticed by the

learned single judge TABL has become non-operational and what remains before the company court are only one or two title suits regarding

certain assets of the company. The chances of revival are only a hypothetical probability and we are in agreement with the learned single judge that

the order of dissolution is inevitable. According to us, the respondent-company is justified in seeking deletion of its trade name from the name of a

company in liquidation. Learned senior counsel for the appellant was not able to convince us of any serious legal prejudice which may be

occasioned to the company in liquidation by the deletion of the name Toshiba from its present name. True, the Registrar of Companies had raised a

contention that allowing deletion applied for presently will prejudice the ongoing litigations initiated by the official liquidator but importantly such a

contention is not shared by the official liquidator who figures as plaintiff in these litigations. We are convinced on the materials available that the

word ""Toshiba"" is the trade name and trade mark of the respondent-company and they are justified in insisting that their name should not continue

in the name of a company which is on the verge of dissolution. The result is that we do not find any warrant for interference. The appeal fails and is

dismissed accordingly.