Amalgamation – objection to change name as part of scheme

In Re: Michelin India Private Limited [MANU/TN/0817/2015] Madrad High Court

In a scheme of amalgamation, it was proposed that name of the transferor company shall be deemed to be name of the transferee company. The Regional Director, Ministry of Company Affairs (‘MCA’), objected to the same on the ground that as per General Circular No. 45/2011 dated 8.7.2011 of MCA on Name Availability Guidelines, 2011, a proposed name is considered to be undesirable if it is identical with or too nearly resembling with name of the company in existence and names already approved by the Registrar of Companies. The Transferee Company shall follow the Procedures and Rules laid down for such change of name.

The petitioner company relied upon unreported judgement of Madras High Court in C.P. Nos. 54 to 56 of 2014, Eye Foundation Ltd. vs. Lasik Centre (India) P. Ltd.[1] wherein Madras high Court referred judgement of Bombay High Court In Re: PMP Auto Industries Ltd.[2] and the judgment of the Karnataka High Court in Mysore Cements Limited[3] where the compliance of Section 21 was dispensed with on the ground that Section 391 of the Companies Act invests the court with powers to approve or sanction a scheme of amalgamation/arrangement and in doing so, if there are any other things which for effectuation, require a special procedure to be followed except reduction of capital, then the court has power to sanction them, while sanctioning the scheme itself. And that section 391 is a complete code in the nature of a “single window clearance” system: (i) order passed by our High Court in C.P. Nos. 177 and 178 of 2008 in Mehala Machines Limited, and M/s. Sanmarco Texmac P. Ltd..


The petitioner company also relied on the judgment of the Gujarat High Court in Mekaster Valves and Engineering Services Private Limited[4], wherein, reliance was placed on the judgment of the Bombay High Court in Vasant Investment Corporation Limited v. Official Liquidator, Colaba Land and Mill Co. Ltd.[5], which has dealt with the wide powers under Section 391 of the Companies Act, 1956.

And reliance was also placed upon the judgment of the Supreme Court in Bhagwati Developers v. Peerless General Finance and Investment Co. and others[6], wherein it was observed that these Circulars (referring to MCA circulars) are merely advisory in character.


Madras High Court held that General Circular No. 45/2011 dated 8.7.2011 of MCA does not have any mandatory effect and it is merely advisory in character. Hon’ble High Court also considered sections 21 of the Companies Act 1956 and Section 13 of the Companies Act 2013. And observed that Chapter V (of Companies Act 1956) is a complete code by itself on the subject of arrangement/compromise and reconstruction comprehensive enough to include a change in the name consequent on the amalgamation or arrangement.

It may be noted that Rule 8 (8) of the Companies (Incorporation) Rules, 2014 was not brought to notice of Hon’ble Court, which provides that names released on change of name shall not be allowed to be taken by any other company (including group company) for a period of three years, except where specific directions given by competent authority in course of compromise, arrangement and amalgamation.

[1] [ 2013 ] 113 CLA 93 ( Mad. ), [ 2013 ] 176 CompCas 345 ( Mad )

[2] [ 1994 ] 80 CompCas 289 ( Bom ); 1991 ( 4 ) BomCR 387

[3] [ 2009 ] 150 CompCas 623 ( Kar ); [ 2010 ] 97 SCL 290 ( Kar ); 2009 ( 4 ) KCCR 2707; 2009 ( 4 ) KarLJ 388

[4] [2009] Comp. Cases 593

[5] (1981) 51 Comp. Case 20

[6] AIR 2005 SC 3345

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