Change In Company's Name Does Not Affect Benefits Obtained From Favourable Decree Awarded To It: Kerala High Court
In its recent judgement, the Kerala High Court has held that the change in name of a company, without any change in its constitution, would not affect the benefit obtained by it from a decree in its favour.
Justice Easwaran S. observed,
“The decree passed in favour of the erstwhile company, whose name was the subsequently changed will enure to the benefit of the company inasmuch as there is no change in the constitution and that the name of the entity alone is changed.”
The learned Single judge made the observation while considering a Regular Second Appeal (RSA) that challenged the concurrent finding of the trial court and the first appellate court.
The appeal was preferred by the defendant in a suit for declaration of title, recovery of possession of property and other reliefs. A licence agreement was entered into between the plaintiff company with the defendant, and according to the terms of the agreement, the defendant had to renew the licence annually. However, as the defendant failed to do so, and a suit was instituted for payment of arrears.
The defendant contested the suit, stating that the plaintiff company was not in existence since its assets were handed over to M/s Tata Global Beverage Holdings Pvt. Ltd. He stated that the lease was made by another company, Kannan Devan Hills Produce Company. Trial court decreed the suit. Before the first appellate court, the defendant raised issue of non-maintainability of suit stating that it ought to have been instituted before the Munnar Special Tribunal. The appeal was dismissed and thereafter, the present RSA was filed.
The Court looked in detail into Section 23 of the erstwhile Companies Act, 1956 as well as the corresponding Section 13 of the 2013 Act.
Reading the provisions, the Court observed:
“Sub-section 3 to Section 23 specifically provides that the change of name shall not affect any rights and obligations of the company or render defective any legal proceedings by or against it. The same is the position as regards the Companies Act, 2013. Therefore, this Court finds no merit in the contention of the learned counsel for the appellant that the decree obtained is in the name of a non-existent company.”
The Court found that there was no change in the constitution of the company but merely a change in its name and thus, held that there is no cause for interfering with the finding of the subordinate courts.
Regarding the second contention that the suit ought to have been raised before the Munnar Special Tribunal, the Court found that this was not the case since the dispute does not fall within the jurisdiction of the tribunal. Moreover, since the tribunal has since been abolished, the contention is no longer tenable, it observed.
Thus, finding that no substantial question of law arises for consideration, it dismissed the appeal.
Case No: RSA No. 1148 of 2014
Case Title: Antony v. Tata Tea Ltd.
Citation: 2025 LiveLaw (Ker) 445
Counsel for the appellant: Praveen K. Joy
Counsel for the respondent: V. Abraham Markos, Abraham Joseph Markose, Isaac Thomas, P.G. Chandapillai Abraham, Alexander Joseph Markos, Sharad Joseph Kodanthara, Zainab Zebaibrahim P.M. John Vithayathil