SURAJ ENTERPRISES PRIVATE LIMITED vs PUNJAB SMALL INDUSTRIES And EXPORT CORPORATION LTD.

SURAJ Enterprises Private Limited, a Company registered under the Indian Companies Act, 1956 located at Ludhiana has filed this complaint under Section 17 of the Consumer Protection Act, 1986 [for short hereinafter referred to as the C.P. Act] against the Punjab Small Industries and Export Corporation Ltd., Udyog Bhawan, Sector 17-A, Chandigarh [hereinafter to be referred in short as P.S.I.E.C.] and the Managing Director of opposite party No. 1 claiming penalty, compensation for transferring Plot No. E-482, Phase-VI, Focal Point, Ludhiana in favour of Shri Subhash Chander Lakra of M/s. S.K. Metals as prayed in application dated 26.10.1998 copy Annexure R-6.

THE averments made in the complaint, stated briefly, are as under : The complainant Company - Suraj Enterprises Pvt. Limited is a Company incorporated under the Indian Companies Act, 1956 and registered with the Registrar of Companies. Under the Memorandum and Articles of Association of the complainant Company, the Managing Director is competent to sue on behalf of the Company. The complainant Company was previously registered as M/s. Suraj Wires [P] Ltd. and was registered with the Registrar of Companies. Later on the name of the Company was changed to M/s. Suraj Enterprises Pvt. Ltd.

Plot No. E-432, Phase VI aforesaid situated in Ludhiana was allotted to one Shri Anil Chadha by the opposite parties. The said allotment was transferable. Mr. Anil Chadha transferred his lease hold rights to the complainant Company. The complainant Company moved an application seeking transfer of the said plot to its name. The opposite parties issued re-allotment letter to M/s. Suraj Wires [P] Ltd., the former Company transferring the lease hold rights in the said plot to the said Company [vide letter dated 12.2.1986 copy Annexure C-1]. The tentative price payable for the said plot was paid in entirety besides the transfer fee. A "No-Due Certificate" was issued on 26.7.1991 by the opposite parties vide copy Annexure C-2. Thereafter, a lease deed was executed on 16.7.1991 vide copy Annexure C-3. The lease deed was executed between the Company aforesaid and the opposite parties. It is alleged that Clause 9 of the re-allotment letter Annexure C-1 and Clause 2 of the lease deed Annexure C-3 are pari materia and the same was extracted in para 2 of the complaint. It is further contended that the Company raised funds from the Punjab Financial Corporation and mortgaged the lease hold rights in the plot with then Punjab Financial Corporation with the prior permission of P.S.I.E.C. Funds were raised for the working capital limit book debt at and bank guarantees etc. from the State Bank of India, Miller Ganj Branch, Ludhiana which were revised from time to time. The last such revision took place in the year 1996. The second/third charge was given on this plot, building, machinery to the said Bank. It has been contended that all the dues of the Punjab Financial Corporation have now been paid by the complainant Company. The Punjab Financial Corporation gave documents of title to the Company [M/s. Suraj Wires (P) Ltd.] and also issued a "No-Due Certificate" [copy Annexure C-4 - Colly]. The charge to the Bank had been given with the concurrence of Punjab Financial Corporation. The State Bank of India also released the security of this plot vide their letter dated 17.12.1997 [copy Annexure C-5]. The aforesaid Plot No. E-432, Phase VI, Focal Point, Ludhiana was thus released from mortgage and charge from both the financial institutions and became free from encumbrances.

THE complainant Company moved an application on 26.10.1998 [copy Annexure C-6] to the opposite parties praying that the name, style and constitution of the Company be allowed to be changed for the purpose of holding lease hold rights in Plot No. E-432, Phase VI, Focal Point, Ludhiana. It has been alleged in para 5 of the complaint that the said application [copy Annexure C-6] is still pending with the opposite parties. THE complainant Company offered to pay and is still ready to pay the transfer fee within the meaning of Clause 2 of the lease deed. It has also been reiterated that there are no dues outstanding against the complainant Company and payable to the opposite parties. Still they [opposite parties] are not permitting the complainant Company to transfer the lease hold rights in the said plot to Shri Subhash Chander Lakra of M/s. S.K. Metals. It is alleged that the opposite parties are deficient in rendering service to the complainant Company. The complainant further alleged that some persons having vested interest are approaching the opposite parties and persuading them not to allow this transfer. The vested interest referred to above though not surfaced yet they do not have any legal right to interfere. The opposite parties are not legally justified in refusing the transfer of the lease hold rights. The consideration of lease hold rights sought to be transferred to Mr. Subhash Chander Lakra is over Rs. 6.5 lacs. The complainant Company has also claimed interest on the said amount of Rs. 6.5 lacs @ 24% per annum which has been worked out at Rs. 65,000/-. Besides this amount, the complainant Company has also claimed a sum of Rs. 20,000/- towards litigation expenses.

THE opposite party Nos. 1 and 2 filed reply to the complaint case. In the preliminary objection, it was contended that the complainant is not a consumer qua the opposite parties and hence the complainant has no locus standi to file the complaint. On merits, it was contended that M/s. Suraj Wires (P) Ltd. was registered with the Registrar of Companies on 28.5.1990 as per Memorandum and Articles of Association. It was not disputed that Plot No. E-432, Phase VI, Ludhiana was allotted to M/s. Suraj Wires (P) Ltd. on 19.7.1990 through transfer. It was alleged that thereafter the Company changed its name and constitution to M/s. Suraj Enterprises Pvt. Ltd. without seeking approval of the opposite party No. 1 - P.S.I.E.C. Resultantly, the complainant Company is not the allottee of the said plot No. E-432, Phase VI, Ludhiana. THE other introductory facts have been admitted in Paragraph Nos. 2 to 4 excepting that the Punjab Financial Corporation though vacated their charge yet the Corporation has not given any charge in favour of the State Bank of India. It was mentioned that no information has been received regarding releasing of the security of this plot by the Bank. It was clarified that no transfer papers as per policy have been received from M/s. Suraj Wires (P) Ltd. regarding transfer of lessee rights in favour of Shri Subhash Chander Lakra aforesaid. It is, however, admitted that M/s. Suraj Wires (P) Ltd. transferee allottee Company had sent letter to the opposite parties which is dated 26.10.1998 regarding change of name, style and constitution of the Company to M/s. Suraj Enterprises Pvt. Ltd. It came to the notice of the opposite parties from the letter dated 28.11.1998 received from Smt. Munisha Rani w/o deceased Shri Kamal Kumar Singla that her deceased husband was one of the Directors of the Company aforesaid. She prayed that the transfer of the plot be not allowed till the settlement of the dispute between her and the two other Directors of the Company. She had alleged that her in-laws had obtained some signatures on blank papers under threat and coercion after the death of her husband. In deference to the request of Smt. Munisha Rani w/o the deceased Director/Share Holder Shri K.K. Singla, the case was examined by the opposite parties and the transferee allottee Company was informed by letter No. PSIEC/EW/EO/21507-08 dated 11.1.1999 for completion of some formalities and its copy had been endorsed to Smt. Munisha Rani w/o deceased Shri Kamal Kumar Singla. THE formalities, which were required to be completed, were not completed and, therefore, permission was not granted by the opposite party No. 1 for change in the name, style and constitution of the Company [vide Copy Annexure R-1]. In the meantime, the State Bank of India, Miller Ganj, Ludhiana had also requested vide their fax dated 5.2.1999 and letter dated 17.3.1999 for staying the transfer of plot due to their second charge. THE State Bank of India, Miller Ganj, Ludhiana had been informed by the opposite parties that M/s. Suraj Enterprises Pvt. Ltd. was not the allottee nor the opposite party - P.S.I.E.C. had given any permission for creation of second charge in relation to Plot No. E-432, Phase-VI, Ludhiana. THEy were told to approach a Court of competent jurisdiction in case they wanted the stay of transfer of the plot. The complainant filed replication to the written statement of opposite party Nos. 1 and 2 wherein the allegations made in the written statement were denied and the averments made in the complaint were reiterated. Apart from this, it was specifically mentioned that the complainant Company is the successor Company of M/s. Suraj Enterprises Pvt. Ltd. in terms of Sections 21 and 23 of the Indian Companies Act, 1956. M/s. Suraj Wires (P) Ltd., it was alleged, was incorporated vide Certificate No. 16-10419 dated 28.5.1990 and was registered with the Registrar of Companies, Jalandhar. In the year 1995, the name of the Company was changed in terms of Section 21 of the Companies Act. A fresh certificate of incorporation dated 29.3.1995 was issued by the Registrar of Companies, Jalandhar in terms of Section 23 of the Companies Act. The complainant filed affidavit of Shri Arun Kumar Singla in support of his complaint as his evidence. Apart from his affidavit, documents have also been filed which we will refer later on in our order. On behalf of the opposite parties, affidavit of Shri H.C. Chhabra, Estate Officer, P.S.I.E.C. Ltd. was filed and the opposite parties also filed documents, a reference of which will be made while dealing with the case of the opposite parties. The complainant also filed affidavit of Shri Subhash Chander Lakra s/o Shri Niranjan Dass Lakra, proprietor of M/s. S.K. Metals Works, E-432, Phase VI, Focal Point, Ludhiana. Both the parties closed their evidence.

WE have heard Mr. I.S. Ratta, Advocate for the complainant and Mr. Prem Kumar, Advocate for the opposite parties. WE have also carefully perused the record of the case.

A perusal of the complaint and the written statement filed by the opposite parties, as narrated above, will go to show that the disputed points in this case for adjudication by this Commission are as under : (1) Whether the complainant Com-pany - M/s. Suraj Enterprises Pvt. Ltd. is in essence the same Company which was incorporated prior to the complainant Company i.e. M/s. Suraj Wires [P] Ltd. and that there was only a change in the name of the Company under Section 23 of the Indian Companies Act, 1956 [for short hereinafter referred to as the Companies Act] ?

(2) Whether the change in the name, style and constitution from M/s. Suraj Wires [P] Ltd. to M/s. Suraj Enterprises Pvt. Ltd., ipso facto makes the complainant Company M/s. Suraj Enterprises Pvt. Ltd. as the transferee allottee of the plot in question and thereby entitles the complainant Company to negotiate for the transfer of lease hold rights in the said plot in favour of Shri Subhash Chander Lakra ?

(3) Whether the complainant Company M/s. Suraj Enterprises Pvt. Ltd. can validly ask for the transfer of lessee rights in the plot in question i.e. Plot No. E-432, Phase VI, Focal Point, Ludhiana in favour of Shri Subhash Chander Lakra of M/s. S.K. Metals from the opposite parties ?

(4) Whether Smt. Munisha Rani w/o deceased Shri Kamal Kumar Singla, one of the Directors of the Company was divested of the share and rights of her deceased husband by the present Directors of the complainant Company - M/s. Suraj Enterprises Pvt. Ltd. by obtaining her signatures on plain papers under threat and coercion ?

(5) Whether the opposite parties on being approached by Smt. Munisha Rani w/o deceased Shri Kamal Kumar Singla, Director of the Company could withhold validly and legally change in the name, style and consideration of the Company from M/s. Suraj Wires [P] Ltd. to M/s. Suraj Enterprises Pvt. Ltd. with reference to plot in question ?

(6) Whether the aforesaid disputed points raise intricate questions of facts and law required to be adjudicated by this Commission, if so, can this Commission under exercise of summary jurisdiction under the provisions of the C.P. Act settle such questions and decide the same or whether the complainant Company validly and legally deserves to be relegated to the remedy of approaching a Civil Court of competent jurisdiction for the adjudication and decision of the aforesaid disputed points raised in the complaint case ?

As noticed above, this Commission is called upon in this complaint case to decide the disputed questions of facts and law as formulated above. It is also worthwhile to mention that the complainant Company has not impleaded the wife of the deceased Director Shri Kamal Kumar Singla who raised her objections by moving an application before the opposite parties requesting them not to consider the case of the complainant Company till her submissions are duly considered and decided. It is the consistent stand of the opposite parties in the written statement that the opposite parties have not permitted the change in the name of the Company from M/s. Suraj Wires [P] Ltd. to M/s. Suraj Enterprises Pvt. Ltd. because of the specific objection raised by Smt. Munisha Rani w/o the deceased Director Shri Kamal Kumar Singla of the Company. There is a specific reference made in para 5 of the reply regarding the letter dated 28.11.1998 written by Smt. Munisha Rani aforesaid to the opposite parties praying that the transfer of plot be stopped till the settlement between herself and others is reached as her in-laws obtained some signatures on plain papers under pressure and threat after the death of her husband. It has also been mentioned in para 5, inter alia, that keeping in view the request letter dated 26.10.1998 and complaint and Smt. Munisha Rani, the case was examined and the transferee allottee Company was informed vide letter No. PSIEC/EW/EO/21507-08 dated 11.1.1999 for completion of some formalities which were not completed and so the permission was not granted for change in the name, style and consideration of plot. The copy of this letter was appended as Annexure R-1. A perusal of Annexure R-1 will go to show that the letter was addressed to M/s. Suraj Wires [P] Ltd. c/o M/s. Suraj Enterprises Pvt. Ltd., H. No. 188, Street No. 6, Jawahar Nagar, Moga on the subject "Change in name, style and constitution of Plot No. E-432, Phase VI, Focal Point, Ludhiana. The formalities which were required to be completed by M/s. Suraj Wires [P] Ltd. were as under : "1. Affidavit and Indemnity Bonds of legal hires and beneficiaries duly attested by Ist Class Magistrate are required in original instead of photocopies (x y and z Performa). 2. Copy of PMT SSI Registration Certificate duly attested by GMDIC, Ludiana. 3. Consent list of share holders with shares duly counter-signed by C.A. Original death certificate of deceased Sh. Kamal Kumar Singla. Copy of resignation letter of Smt. Pushpa Rani duly counter-signed by C.A. 6. Affidavit of Smt. Munisha w/o deceased Director affirming withdrawal and settlement of dispute duly attested by Ist Class Magistrate. 7. Personal appearance of Smt. Munisha, wife of deceased Director is required along with Identity Card/Driving Licence."

A copy of this letter was also endorsed to Smt. Munisha Rani w/o deceased Director Shri Kamal Kumar Singla, House No. 188, Street No. 6, Jawahar Nagar, Moga with reference to her letter and fax dated 18.11.1998. Apart from this, the written statement filed by the opposite parties also shows that they have not recognised the incorporation of the complainant Company M/s. Suraj Enterprises Pvt. Ltd. as successor to the original allottee Company M/s. Suraj Wires [P] Ltd. It is in this background that in the written statement it has been mentioned that no request was received from the transferee allottee Company - M/s. Suraj Wires [P] Ltd. regarding the transfer of the lease hold rights in the plot aforesaid in favour of Shri Subhash Chander Lakra. It is thus abundantly clear that before this Commission can examine the averment of deficiency on the part of the opposite parties in not giving effect to the request of the complainant Company regarding the transfer of the lease hold rights in the said plot i.e. E-432, Phase VI, Ludhiana in favour of Shri Subhash Chander Lakra of M/s. S.K. Metals, it will be necessary to go into the question regarding the complainant Company - M/s. Suraj Enterprises Pvt. Ltd. being in sum and substance the same Company i.e. M/s. Suraj Wires [P] Ltd. only with change in name and thus retaining the lease hold rights in Plot No. E-432, Phase VI, Ludhiana as were held by the previous Company - M/s. Suraj Wires [P] Ltd. Further it has to be found out as to whether the change is only in the name of the Company or the change is also in the constitution of the Company and whether the complainant Company is altogether a new Company having its own existence, separate and distinct from the previous Company - M/s. Suraj Wires [P] Ltd.

UNDISPUTEDLY, it was M/s. Suraj Wires [P] Ltd. which had approached for the transfer of Plot No. E-432, Phase VI, Focal Point, Ludhiana which was at that time held by Shri Anil Kumar and the same was allotted by the opposite parties to M/s. Suraj Wires [P] Ltd. It is also clear from the plea taken in the written statement of the opposite parties that the opposite parties have not given consent to the change in the name, composition and style of M/s. Suraj Enterprises Pvt. Ltd. in place of the transferee allottee Company - M/s. Suraj Wires [P] Ltd. The reasons which are mentioned in the written statement have already been referred to above are in respect of the specific objections/complaint filed by Smt. Munisha Rani wife of late Shri Kamal Kumar Singla, Director of the Company. The opposite parties had already issued letter Annexure R-1 dated 11.1.1999 in this regard to the transferee allottee Company - M/s. Suraj Wires [P] Ltd. c/o M/s. Suraj Enterprises Pvt. Ltd. about completion of some formalities, which have also been enumerated above, but the same were not complied with by the complainant. It has to be considered as to whether the complainant Company was legally bound to comply with the formalities which have been mentioned in Annexure R-1 or whether it was incumbent on the opposite parties to recognise the change in the name, style and composition of the Company from M/s. Suraj Wires [P] Ltd. to M/s. Suraj Enterprises Pvt. Ltd. only on being approached by the complainant Company. The provision of Section 23 of the Companies Act have also to be taken into consideration before deciding the case of the complainant that the change of name of the Company is covered by the provisions of Section 23 of the Companies Act. Section 23 of the Companies Act provides for registration of change of name and effect thereof and it reads as under : "23. Registration of change of name and effect thereof-(1) Whether a Company changes its name in pursuance of Section 21 or 22, the Registrar shall enter the new name on the register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein; and the change of name shall be complete and effect only on the issue of such a certificate. (2) The Registrar shall also make the necessary alteration in the Memorandum of Association of the Company. (3) The change of name shall not affect any rights or obligations of the Company, or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the Company by its former name may be continued by or against the Company by its new name."

Section 21 of the Companies Act deals with the change of name by Company and provides as under : "21. Change of name by Company-A Company may, by special resolution and with the approval of the Central Government signified in writing, change its name : [Provided that no such approval shall be required where the only change in the name of a Company is the addition thereto or, as the case may be, the deletion therefrom, of the word ''Private'', consequent on the conversion in accordance with the provisions of this Act of a public Company into a private Company or of a private Company into a public Company]."

SECTION 22 of the Companies Act deals with rectification of name of Company. The provisions of SECTION 22 of the Companies Act are not applicable in the instant case as it is not the case of the complainant that there was rectification of name of Company. Though the reference was made by the learned Counsel for the complainant Company to SECTION 23 of the Companies Act but we find that the provisions of SECTION 24 of the Companies Act could be applicable in the instant case inasmuch as SECTION 24 provides for change of name of existing private limited Companies. In the instant case, the name of the existing limited Company, which was proposed to be changed, was M/s. Suraj Wires [P] Ltd. It is not a case which is covered under the proviso to SECTION 21 because the complainant did not either convert a public Company into a private Company or a private Company into a public Company. Here the former Company was also a private limited Company and a Company after change is also a private limited Company. The learned Counsel for the complainant Company drew our attention to the specific provision contained in SECTION 23, Sub-section (3) who submitted that the change of name did not affect any rights or obligations of the Company or render any proceedings defective, by and against it. It was contended that the opposite party was thus required to act under SECTION 23, Sub-section (3) of the Companies Act and to treat the complainant Company in the same footing as the former Company - M/s. Suraj Wires [P] Ltd. and thus the complainant Company should have been treated as the transferee allottee Company with reference to Plot No. E-432, Phase VI, Focal Point, Ludhiana. It was further submitted that the opposite parties should have considered the prayer of complainant Company regarding the transferee of the lease hold rights of the Company in respect of Plot No. E-432 aforesaid to Shri Subhash Chander Lakra and since the opposite parties did not perform their duties in accordance with law, they should be adjudged as deficient in service. The learned Counsel for the complainant Company further contended that the widow of Shri Kamal Kumar Singla, the deceased Director of the Company has no locus standi to raise any objection to the transfer of the lease hold rights in favour of Shri Subhash Chander Lakra in pursuance to the agreement entered into by the complainant Company and Shri Subhash Chander Lakra and, therefore, the opposite parties were not legally justified in issuing the letter Annexure R-1 and ask for completion of the formalities mentioned therein and also in giving hearing to Smt. Munisha Rani w/o Shri Kamal Kumar Singla deceased Director of the Company. We are of the considered opinion that in the absence of Smt. Munisha Rani who is not a party impleaded in the complaint case, no finding can be recorded by this Commission in respect to her rights as the widow of the deceased Director of Company Shri Kamal Kumar Singla as the same is likely to adversely affect her claim and rights which have been raised by her in her objections/complaint before the opposite parties. Moreover, we are also of the considered opinion that the points which have cropped up for adjudication by this Commission in this case raise intricate questions of fact and law which cannot be adequately considered and decided in exercise of the summary jurisdiction under the provisions of the C.P. Act and it is a fit case wherein the complainant should be relegated to his remedy of approaching a Civil Court of competent jurisdiction for the redressal of his grievances. Section 3 of the C.P. Act, undoubtedly gives a right to the complainant to approach the consumer disputes redressal agencies for redressal of their grievances which fall within the purview of the C.P. Act, as additional remedy but the facts and circumstances of each case are to be considered. Since this complaint raises intricate questions of facts and law, the complainant has a right to approach the Civil Court of competent jurisdiction for redressal of the same. Since we are of this view, it will not be appropriate for us to go into the merit of the respective pleas raised in the complaint case by both the sides because any opinion expressed by this Commission is likely to adversely affect the decision of the case as and when filed before a Civil Court of competent jurisdiction. In view of the foregoing discussion, this complaint case is not maintainable before this Commission as it raised intricate questions of law and fact, which cannot be adequately and appropriately be dealt with under the provisions of C.P. Act. The complaint is disposed of by relegating the complainant of its remedy of approaching the Civil Court of competent jurisdiction by filing appropriate proceedings before it. There shall be no orders as to costs. Copies of this judgment be supplied to the parties free of charges. Complaint dismissed.