Corporate Ministry Can Order Company To Change Name After 12 Months If Deceptively Similar To Another Priorly Registered Company: Telangana HC

The Telangana High Court has upheld that the Regional Director, Ministry of Corporate Affairs is authorised to direct a company for change of name, even after expiry of 12 months, if it has reason to believe that the company incorporated at a later date is trying to pass off as a Company incorporated on a prior date.

Justice K Lakshman has conceded with the view taken by the Delhi High Court in Mondelez Foods Private Limited v. The Regional Director (North), Ministry of Corporate Affairs passed in 2017, which held that when interpreting section 22(1)(b) of the Companies Act, 1956, the Court must read the section along with the provisions of the Trade Mark Act, 1999. In doing so, the time stipulated for issuance of direction by the Regional Director (acting on behalf of the Central Government) for change of company name would automatically be extended from 12 months to 5 years from registration.

"I respectfully agree with the view taken by the Delhi High Court. In view of the above, respondent No.1 can entertain the application even after expiry of statutory period of 12 months."

Further the Court held that the Registrar need not make a thorough investigation regarding originality of name at the time of registration, however, if a complaint is raised at a subsequent stage, the Central Government has the authority to direct change of name.

"But, however, the Registrar, while registering the company at the initial stage need not make a thorough investigation at the time of registering the company. But, however, if such an issue is brought before the Registrar of Companies within the time stipulated under Section - 22 of the Act, 1956, it is open to the Central Government to direct the later company to change its name."

The contention of the petitioner was that the petitioner had applied for availability of name before the regional director in 2005, the same was accepted and approved. Subsequently after a lapse of 2 years from the date of registration the regional director directed the petitioner to change its name, on the ground of passing off/ trade mark infringement of Respondent number 2 company which was established way earlier.

The Court observed that Respondent no. 2, even though operated in different field as compared to the petitioner, the name 'GMR' was well associated with the Respondent no. 2 company, and could create confusion in the mind of a prudent man.

The Court also observed that even though the petitioner business had just commenced, dishonest intent to use the goodwill created by Respondent no. 2 could be carved out and interference from the Regional Director was warranted.

"In view of the above and 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... Therefore the impugned order dated 13.02.2008, passed by respondent No.1 directing the petitioner Company to change its name does not require any interface."

Counsel for petitioner: DHULIPALLA V A S RAVI PRASAD

Counsel for respondent: ASSISTANT SOLICITOR GENERAL OF INDIA

Case Title: M/s GMR Spintex Private Limited, rep. by its Director vs The Regional Director, Ministry of Corporate Affairs

Date: 24.08.2023

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