D SRINIVASAIAH Vs. VELLORE VARALAKSHMI BANK LTD
HIGH COURT OF MADRAS
VELLORE VARALAKSHMI BANK LTD
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Satyanarayana Rao, J. -
(1.) This is an appeal against the order of the learned Subordinate Judge in E. A. No. 201 or 1952 in E. P. No. 213 of 1951. The application was by the decree-holder in O. S. No. 27 of 1950, which was the Vetlore Varalakshmi Bank Ltd. The object of the application was for leave to amend the long and short cause-title in E. P. No. 213 of 1951 by substituting for the description of the decree-holder, the Vellore Varalakshmi Bank Ltd., the new name, "the Varalakshmi Fund Vellore Ltd." In pursuance of a special resolution of the banking company, the name of the company was altered, and under Sections 11(4) and (5), Companies Act, 1913, the company obtained a certificate in respect of the change of the name. The application was opposed by the judgment-debtor on the sole ground that the object of the petitioner was to substitute one legal person for another, and that such a change could be effected only under Order 21, Rule 16, C. P. C. The substance of the contention therefore was that by the alteration of the name of the company, in pursuance of the special resolution, which was sanctioned by the Registrar of Joint Stock Companies a different legal 'persona' or a different company came into existence, totally different from the old company, and that therefore the application for amendment should not be granted. In view of the language of Section 11(6), Companies Act, the trial Judge had no difficulty in overruling the objection and in granting the permission sought for.
(2.) In this appeal it was argued that under Section 11(6), Companies Act while it was permissible to continue legal proceedings started against the company by its former name, in its new name, It was not permissible for the company to continue proceedings started by it in its former name tn its new name, as there is no specific provision for it in the section. Section 11(6), Companies Act is as follows :
"The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company; and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name." The object of this sub-section undoubtedly is to provide that notwithstanding the change In the name, there is no alteration in the legal status of the company, as its incorporation is not in any manner affected by the mere change in name. It continues to possess the same rights and will be subject to the same obligations as before the change of the name, which implies therefore that if it has power to execute a decree in its old name, it has got a right even after the change of the name to execute the decree in the new name. Even if the proceedings were initiated by or against It in its former name, the fact that the. alteration in the name was not brought to the notice of the court would not in any manner render those proceedings defective or irregular. The third part of the sub-section is a permissive one, and is intended to provide for the continuance of the proceedings initiated in its former name against the company, by its new name. It does not imply that so far as proceedings initiated by the company in its former name are concerned they could not be continued in the new name. We are unable to read any such prohibition in the latter part of the sub-section, as was contended for on behalf of the appellant. Notwithstanding the alteration in the name the company continues its legal status as before, and the mere change in the name would not, in any manner, affect its constitution. The view taken therefore by the lower court is, in our opinion, correct.
(3.) Learned advocate for the appellant also attempted to argue that when he made an endeavour in the trial court to establish that there was a change in the constitution of the company, and that It was altogether a different legal entity from the former company, he was not given an opportunity by the lower court. For this, we find no justification either in the order of the lower court or in the grounds of appeal filed in this court. There is not even an affidavit by the appellant to substantiate such a plea. The contention must therefore be overruled.;
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