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Judgment
Dharam Chand Chaudhary, J
1) A short, but an interested question, as to whether on mere change of the name of a Company with the approval of the Registrar, in terms of Section
21 and 23 of the Companies Act 1956 {Section 13(2) of the Companies Act 2013}, sale/transfer of its immovable property takes place and stamp duty
chargeable on its value or not?
In order to answer this poser, the elaboration of the given facts and circumstances and also the legal provisions attracted to a preposition of this nature
is required.
2) Admittedly, the petitioner-Company was initially incorporated as a public limited company by the name of Reckitt & Colman of India on 5.7.1951.
Subsequently, it got its name changed to Rackitt Benckiser (India) Limited on 18.12.2000. Thereafter, the name of the petitioner was again changed to
Reckitt Benckiser (India) Private Limited on 13.5.2015 vide certificate of incorporation Annexure P-3 issued by the Registrar of Companies, NCT of
Delhi and NCT of Haryana.
3) The petitioner had acquired a piece of Industrial plot measuring 7-14 bigha entered in Khewat/Khatauni Nos. 39min/64 min, bearing Khasra
No.449/2 situated in village Nandpur, BH No.170, Pargana Dharampur, Tehsil Nalagarh, District Solan, Himachal Pradesh together with factory
building measuring 46000 square feet vide sale deed dated 24.2.2006. The respondents-State also approved the sale of the land and building while
granting permission in favour of the petitioner under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 vide letter dated
7.12.2005 Annexure P-5.
4) As noticed supra, the petitioner earlier “Reckitt Benckiser (India) Limited†got its name changed under Section 13(2) of the Companies Act
2013 on and w.e.f. 13.5.2015 as “Reckitt Benckiser (India) Private Limitedâ€. The change of name of the petitioner was carried out consequent
upon the conversion of the petitioner from a public limited company to a private limited company, in accordance with the provisions of the Companies
Act, 2013. There was neither binding up nor liquidation of the petitioner company as a consequence of its conversion from public company to a private
company. The petitioner company rather continued to exist as a legal entity after its conversion as is apparent from the master data available on the
website of the Ministry of Corporate Affairs, Annexure P-6.
5) Subsequently, due to operational and business reasons, the petitioner ceased to carry on business on the Demised land w.e.f. 31.3.2016, hence
proposed to transfer the land and also the building in existence thereon to Harbinder Singh Purewal, resident of Kasauli, District Solan and M/s
Precision Components, a partnership firm having its registered office at Jubbar, District Solan, Himachal Pradesh through its partner Mr. Harbinder
Singh Purewal. The master agreement Annexure P-6 came to be executed between the partitioner-company and Mr. Purewal and also Precision
Components. One of the conditions of Master Agreement was to obtain prior approval of the Government of Himachal Pradesh under Section 118 of
the Himachal Pradesh Tenancy and Land Reforms Act, 1972 for transfer of the land and building in favour of Purewal aforesaid. Accordingly, the
petitioner made application Annexure P-9 to respondent No.2 for grant of approval of transfer of land and building by the petitioner in favour of the
purchaser Mr. Purewal. The NOC from the department of Industries, Government of Himachal Pradesh as required was also applied for. The
department of Industries vide letter Annexure P-11, informed the petitioner that earlier essentiality certificate and permission under Section 118 of the
HP Tenancy and Land Reforms Act was issued in the name Reckitt Benckiser (India) and as the name of the petitioner as now Reckitt Benckiser
(India) Private Limited, therefore, necessary changes in the revenue record were sought to be made.
6) Accordingly, the petitioner made the application Annexure P-12 to respondent No.2 for change of name of petitioner from Reckitt Benckiser
(India) Limited to Reckitt Benckiser (India) Private Limited in the revenue record pertaining to the land in question. The said respondents vide order
dated 20.2.2019 Annexure P-1 recommended the case of the petitioner for permission to transfer the land along with assets in the name of M/s
Reckitt Benckiser (India) Private Limited. In other words, respondent No.2 though accorded approval for change of name of the petitioner to Reckitt
Benckiser (India) Private Limited in the revenue record pertaining to the land in question, however, subject to payment of stamp duty and registration
fee on its value merely on account of addition of word ‘private’ in its name. The stamp duty and registration fee on the value of the land and
assets were sought to be changed pursuant to the instructions contained in the letter dated 16.2.2012 Annexure P-2 and letter No.Rev.B.F. (10)
154/2009, dated 28.12.2016.
7) The complaint is that the impugned order Annexure P-1 is without any jurisdiction and due application of mind as according to the petitioner merely
on change of its name neither stamp duty nor registration fee on the value of the land and assets is required to be paid for the reason that there is no
transfer and conveyance of land and other assets and rather the same remained with the petitioner-company throughout and never transferred nor
conveyed consequent upon addition of word ‘private’ in its name. Therefore, the impugned Order Annexure P-1 has been sought to be quashed
and set aside being without any jurisdiction, contrary to the provisions contained under the Indian Stamp Act and also the Registration Act. The Stamp
duty is required to be paid on the instruments mentioned in schedule-I, in case the transfer of the assets is made under the stamp Act. In the case in
hand, no transfer of assets has taken place on account of change of name of the petitioner or its conversion into a private Company. Similarly, on
account of mere addition of word ‘private’ in the name of the petitioner, registration fee is not required to be paid. The registration fee,
according to the petitioner, is required to be paid on an instrument compulsorily registerable under Section 17 of the Registration Act. Since there is no
transfer of the immovable property, hence no instrument is required to be compulsorily registered under the Registration Act and registration fee is
also not payable. The impugned order is also stated to be contrary to the provisions contained under Section 13 of the Companies Act, 2013 as it is
only change of name has taken place and not the transfer of assets and property of the petitioner-Company.
8) The change in the name of the company is with the approval of the Registrar of the Companies though even such approval is also not required as
per the proviso to Section 13(2) of the Act where the only change in the name of the company is either deletion therefrom or addition thereto the word
‘private’, consequent upon conversion of any one class of Companies to another Class in accordance with the provisions contained under the
Act. Section 13(3) provides that as and when there is any change in the name of the company under sub-section 3, the Registrar shall enter the new
name in the Register of the Company and issue fresh certificate of registration with new name. Therefore Section 13(2), according to the petitioner,
makes it crystal clear that no new company was ever created as a result of the change of its name and it is the case of mere addition of word
‘private’ to its name. Respondent N.2 as such has erroneously concluded that there is transfer of assets and property of the petitioner-
company.
9) It has been pointed out that the impugned order is based on instructions dated 16.2.2012 Annexure P-2 and letter dated 28.12.2016. Annexure P-2
is a circular to all the Deputy Commissioners in the State of Himachal Pradesh. As per this document when it is merely the name of the company has
been changed with the approval of the Registrar of the Companies in terms of Sections 21 and 23 of he Companies Act 1956 (Section 13 of the
Companies Act 2013) and no transaction/sale of property takes place and the only change in the name of the company is sought to be recorded in the
revenue record, no stamp duty is chargeable. As per this document, stamp duty is chargeable only when along with change of the name of the
Company, its assets are also proposed to be transferred to the Company incorporated with such changed name. The present being a case of simple
change of name of the petitioner company i.e. addition of word ‘private’ with the approval of the Registrar of Companies. Therefore, according
to the petitioner, no stamp duty and registration fee is chargeable for recording its name in the revenue record pertaining to the land in question. As
regard, 2016 letter, the same, accordingly to the petitioner, pertains to M/s Inox Air Products Ltd., hence not binding on it. It is in this backdrop, the
following reliefs have been sought to be granted to the petitioner:
“1. Issue a writ of Certiorari or any other appropriate writ, order or direction in the nature of Certiorri for quashing the Impugned Order (Annexure
P-1) issued by the Respondent in so far as it requires payment of stamp duty and registration fees on ‘transfer of assets’ on change of name of
the petitioner as being illegal, arbitrary and unreasonable and ultra vires the provision of the Companies Act, 2013, Indian Stamp Act, 1899 and the
Registration Act 1908;
ii) Issue a writ of Mandamus or any other appropriate Writ, order or direction in the nature of Mandamus for directing the Respondent to update the
revenue records pertaining to the demised land with the new name of the petitioner by addition of word “private†in its name without payment of
any stamp duty and registration fees;
iii) Issue a writ of Mandamus or any other appropriate writ, order or direction in the nature of Mandamus for directing the respondents to grant
approval for transfer of demised land from the petitioner to HSP under Section 118 of the HP Tenancy and Land Reforms Act;â€
10) In reply, the respondents has blown hot and cold in the same breath as on one hand while referring to the circular Annexure P-2, it has been
submitted that in a case of mere change of name of the company neither stamp duty nor registration fee is required for making entries in the revenue
record qua the land in question and on the other hand while referring to letter No.REV.B.F.(10)154/2019 dated 28.12.2016 the plea has been raised
that stamp duty and registration fee is required to be charged from the petitioner on the value of the assets to be transferred from one company to
another.
11) We have heard Mr. Jawahar Lal and Mr. Atul Jhingan, Advocates, on behalf of the petitioner and Mr. Ajay Vaidya, learned Senior Additional
Advocate General on behalf of the respondent-State.
12) On the very date of motion i.e. 17.6.2019, while issuing notices to the respondents, the following orders came to be passed in this writ petitions:
“ Notice. Mr. Narinder Guleria, learned Additional Advocate General, appears and accepts service of notice on behalf of the respondents. He
seeks and is granted two weeks’ time to obtain instructions.
The petitioner-Company has only changed its name from Reckit Benckiser (India) Limited to Reckit Benckiser (India) Private Limited, therefore,
perhaps no registration fee is required to be paid at the time of transfer of the assets and property of the erstwhile Reckit Benckiser (India) Limited in
the name of the same Company. However, learned Sr. Additional Advocate General to seek instructions with regard to the registration fee, if any
required to be paid, within two weeks. List on 4th July, 2019.â€
13) On the next date, the written instructions were placed on record and on perusal thereof, this Court has passed the following orders:
“The learned Additional Advocate General has produced a copy of the instructions received from the Principal Secretary cum-Financial
Commissioner (Revenue). Even as per the written instructions given by the Principal Secretary to the learned Additional Advocate General, a mere
change of name would not warrant the payment of stamp duty and registration charges.
The document at Page 46 of the paper book, which is a certificate issued by the Registrar (Companies), shows that this was a case of change of
name. Therefore, the learned Additional Advocate General shall specifically bring to the notice of the respondent the document at Page 46 and get
instructions with reference to the same. Post on 17th July, 2019.â€
14) It is thus noticed in the order ibid that the respondent-State in the instructions placed on record has itself agreed that mere change of name of the
company would not warrant the payment of stamp duty and registration charges. Since change in the name of petitioner company was with the
approval of the Registrar of the Companies (Certificate at page 46), therefore, learned Additional Advocate General was directed to get instructions
with regard to the same. Though such instructions did not see the light of the day being not placed on record by learned Additional Advocate General,
however, reply to the writ petition was filed and the petitioner also controverted the contentions to the contrary raised therein in rejoinder filed thereto.
15) As pointed out in the written instructions dated 3.7.2019, placed on record by the respondents as per the circular dated 16.2.2012 Annexure P-2,
change of name of the company with the approval of the Registrar of Companies, under Sections 21 and 23 of the Companies Act, 1956 (Section 13
of the Companies Act 2013), is required to be reflected in the revenue record without payment of stamp duty and registration charges. As per this
circular, the stamp duty and registration fee is chargeable in those cases, where along with the change of name of the company, its assets and
property are also proposed to be transferred in favour of the company. The present is not a case where the petitioner while making addition of word
‘private’ alone in its name, it proposed to transfer its assets also. The change is rather only to the limited extent from “public limited
Company†to private limited Company. The proviso to Section 13(2) of the Act reveals that even in a case of such change approval of Registrar of
Companies is also not required. Anyhow, in this case the approval of the Registrar of Companies has been obtained. The petitioner as such is
absolutely justified in claiming that neither stamp duty nor registration fee is chargeable and its name should be entered in the revenue record being
owner in possession of the land in question and also the building standing thereon. The own stand of the respondents in reply to the writ petition and
reproduced here as under, also substantiates this part of the case of the petitioner:
“3. That the contents of para 3 of the petition are wrong, hence denied. In this regard, it is submitted that as per Government letter No.Rev.B.F.
(10)-154/2009, dated 16.2.2012 where merely the name of the Company is changed with the approval of the Registrar of the Companies, no in terms
of Section 21 and 23 of the Companies, no transfer/sale of property takes place and only change in the name of he Company is sought to be recorded
in the revenue record, no stamp duty is chargeable….â€
16) The stand of the respondents that the present is not a case of mere change of name and rather a case of conversion of public limited company to
private limited company, hence stamp duty is chargeable under Section 3 of the Indian Stamp Act, 1899 though has been taken by the respondents-
State to make an attempt just to mislead this Court and confuse the whole issue, however, unsuccessfully. Section 3 of the Stamp Act speaks about
the instruments, which are chargeable with duties, subject to the exemptions contained in Schedule-I. The instrument referred to herein and also
Schedule-I, nowhere show that on mere addition of word ‘private’ in the name of a company without transfer of its assets and liability, is an
instrument, which is chargeable thereunder. So far as the Registration Act is concerned, only that instrument is chargeable, which needs registration.
17) In the case in hand, land and building remained with the petitioner-company, even after addition of word ‘private’ to its name. Therefore,
there is no question of existence of an instrument of transfer of its assets and property and the compulsorily registration thereof. The respondents
though have made an attempt to draw the distinction between a public limited and private limited company from its definition finds mentioned in
Section 2 of the Companies Act, 2013 and has canvased that two companies are quite different and distinct However, learned Senior Additional
Advocate General has failed to satisfy this Court about the justifiability of such distinction drawn and how the addition of word ‘private’ in the
name of the petitioner company amount to transfer of its assets and liability and consequently levying of stamp duty and Registration charges. The
respondent-State rather seems to have taken such stand in reply filed to the writ petition merely for rejection.
18) It is worth mentioning that the circular dated 16.2.2012 Annexure P- 2 clearly distinguishes between cases pertaining to change of name
simplicitor under the provisions of Companies Act 1956 and for that matter Companies Act 2013 and those with transfer of assets. The second
category of cases cover transaction like merger, demerger and amalgamation etc., which involve two separate entities and transfer of assets from one
entity to another. Annexure P-2 clearly postulates that no stamp duty or registration fee is payable in a case of change of name of the Company. In
the case in hand since no transfer of assets occurred on account of change of the name of the petitioner Company, hence neither stamp duty nor
registration charges is payable on such change of name of the petitioner and its name is required to be entered in the revenue record pertaining to the
land and building in question. The respondents, therefore, are under an obligation to update the entries in the revenue record pertaining to the land with
the new name of the petitioner Company by addition of word ‘private’ without payment of any stamp duty and registration charges.
19) The writ petition for the relief at Sl. No 1 and 2 of the prayer clause, therefore, succeeds and the same is accordingly allowed. So far as relief
No.3, regarding grant of permission to transfer of the land and building in existence thereon in the name of Harbinder Singh Purewal, under Section
118 of the HP Tenancy and Land Reforms Act is concerned, the writ petition is neither maintainable nor can be entertained for grant of such relief
because it is for the appropriate authority under the Act to examine this aspect of the matter and pass appropriate orders, in accordance with law.
Issuing the writ of mandamus to the respondents to grant such approval would definitely amounts to interfere in the jurisdiction of statutory authorities
under the Act, which is not legally permissible.
20) The question formulated at the very outset in this judgment, therefore, stands answered accordingly.
21) In view of what has been said hereinabove, this writ petition succeeds partly and the same is accordingly allowed. Consequently, the impugned
order Annexure P-1 to the extent of charging of stamp duty and registration fee from the petitioner on the value of its assets at the time of making
entries of its name with mere addition of word ‘private’ pertaining to the land and the building standing thereon, being not legally and factually
sustainable, is quashed and set aside. The respondents are directed to enter the changed name of the petitioner in Revenue record within a period of
six weeks enabling thereby the petitioner to approach the competent authority for obtaining approval as required under Section 118 of the HP Tenancy
and Land Reforms Act. The petitioner’s case for the grant of relief at Sl. No.3, for the reasons recorded hereinabove is, however, rejected. The
writ petition is accordingly disposed of, so also the pending application(s), if any.