Can Order Company To Change Name After 12 Months If Deceptively Similar To Another One Registered Prior: Telangana HC While Upholding MCA’s Order

The Telangana High Court has upheld the order passed by the Ministry of Corporate Affairs (MCA) whereby it directed the change of name of the petitioner’s company on grounds of causing confusion and deception.

The Court while placing reliance on the precedent of Delhi High Court in the case of Mondelez Foods Private Limited v. The Regional Director (North), Ministry of Corporate Affairs, the Court observed, "In view of the above, respondent No.1 can entertain the application even after expiry of statutory period of 12 months."

The Court said that the petitioner’s company was registered in 2006 much after registration of the respondent company. It was dealing with a writ petition seeking to issue a writ of certiorari declaring the order issued by MCA directing the petitioner to change its name as illegal and arbitrary.

A Single Bench of Justice K. Lakshman held, “… the petitioner's company has been registered in the year 2006 much after the registration of respondent No.2 Company. Further, if the petitioner is allowed to continue the name of its entity as ‘GMR’, it will cause confusion, deception to respondent No.2 business.”

The Bench added that the order passed by MCA directing the petitioner company to change its name does not require any interference.

Advocates Deekshit Kumar Teja and Dhulipalia V.A.S. Ravi Prasad represented the petitioner while DSGI and Advocates Nishanth and Challa Gunaranjan represented the respondents.

Factual Background -

The petitioner company was involved in the Textile Business and had applied for availability of name under the name and style “G.M.R SPINTEX PRIVATE LIMITED” under Section 20 of the Companies Act, 1956 to the Registrar of Companies (ROC), Ministry of Corporate Affairs, Hyderabad, for incorporating a company under the said name, after following the procedure established under the Act. The ROC after due verification had allowed the same in 2005 and thereafter, the petitioner was incorporated to carry on the business as Cotton spinners, Jute spinners, Cotton, Ginners and Wooden spinners, and to carry on the business as a silk-merchants, silk weavers, cloth manufacturers, hosiers, and dealers in textile fabrics of all kinds.

The respondent company submitted a composite application in MCA under Section 22 of the Act seeking directions to the petitioner along with 9 other companies to change its name on the ground that the promoters of the petitioner by using the word “GMR” as a prefix in its name was using its trade mark to wrongfully project to the consumers and potential investors their association with respondent’s group. On receipt of notice from the respondent, the petitioner sent a detailed reply and MCA without affording an opportunity of being heard, allowed the application of the respondent and passed orders directing the petitioner Company to change its name by removing the prefix “GMR” from existing name within three months.

The High Court in view of the above facts noted, “… the petitioner filed a reply dated 13.09.2007. Despite granting opportunities twice i.e., 04.10.2007 and 22.10.2007, the petitioner failed to appear for hearing. The said facts were specifically contended by the respondents in their respective counters. Even then, the petitioner did not file rejoinder adverting to the same.”

The Court said that in the above light, the petitioner cannot contend that the order was passed by MCA without affording any opportunity and hence the said contention is unsustainable.

“… considering the entire order passed by respondent No.1, this Court do not find any illegality or irregularity in the same. Respondent No.1 has rightly invoked the powers under Section 22 of the Act, 1956 and respondent No.2 Company being commenced its operation in the year 1978 and it has registered the trademark under various clauses”, observed the Court.

Accordingly, the High Court dismissed the writ petition.

Cause Title- M/s GMR Spintex Private Limited v. The Regional Director, Ministry of Corporate Affairs

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