Sanofi and another Vs Zanofi Pharmaceutical Pvt. Ltd.

Interpretation of Section 12 of the Companies Act, 2013 in Mandatory Name Change Cases

In a recent ruling by the Hon'ble High Court of Delhi, the interpretation of Section 12 of the Companies Act, 2013, regarding the display of old company names came under scrutiny in a case where the court had directed a defendant to change its name. This article provides a detailed analysis of the legal implications of the court's clarification and its impact on mandatory name change cases.

Background:

The case in question involved a directive from the Hon'ble High Court of Delhi for the defendant to change its corporate name. In compliance with the court's direction, the defendant applied to the Registrar of Companies for a change of name. However, confusion arose regarding the applicability of Section 12 of the Companies Act, 2013, which mandates the display of old company names for a period of two years in cases of voluntary name changes.

Interpretation of Section 12 of the Companies Act, 2013:

Section 12 of the Companies Act, 2013, stipulates that when a company voluntarily changes its name, it must continue to display its old name along with its new name for a period of two years from the date of change. The objective behind this provision is to ensure transparency and inform stakeholders about the transition to a new corporate identity.

Clarification by the Hon'ble High Court of Delhi:

In the case before the Hon'ble High Court of Delhi, the defendant argued that it was required to comply with the provisions of Section 12 despite the name change being mandated by the court. However, the court clarified that Section 12 applies specifically to cases of voluntary name changes initiated by the company itself. In instances where the court directs a company to change its name as part of a judicial order, the provisions of Section 12 do not apply.

Conclusion:

The interpretation of Section 12 of the Companies Act, 2013, by the Hon'ble High Court of Delhi in mandatory name change cases underscores the nuanced approach required in legal proceedings involving corporate governance matters. By providing clarity on the applicability of statutory provisions, courts play a pivotal role in ensuring compliance with the law while balancing the practical realities faced by businesses.

Case Title: Sanofi and another Vs Zanofi Pharmaceutical Pvt. Ltd.

Order Date: 23.02.2024

Case No. CS Comm 881 of 2023

Neutral Citation:N.A.

Name of Court: Delhi High Court

Name of Hon'ble Judge: Anish Dayal, H.J.

Disclaimer:

Ideas, thoughts, views, information, discussions and interpretation expressed herein are being shared in the public Interest. Readers' discretion is advised as these are subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Written By: Advocate Ajay Amitabh Suman,

IP Adjutor - Patent and Trademark Attorney,

Email: ajayamitabhsuman@gmail.com,

Ph No: 9990389539

Sanofi and another Vs Zanofi Pharmaceutical Pvt. Ltd.

Section 12 of Company Act 2013 and Entitlement of Company to Use Its Old Name

Background:

In the corporate landscape, the decision to change a company's name can stem from various strategic, branding, or legal considerations. However, the question of whether a company is entitled to use its old name for a certain period after changing its name is one that requires careful legal scrutiny. This issue was recently settled by the Hon'ble High Court of Delhi in a case that sheds light on the interplay between company law and the rights of corporate entities.

Fact:

In a recent case before the Hon'ble High Court of Delhi, the defendant, formerly known as 'Zanofi Pharmaceutical Private Limited,' sought to change its corporate name to 'Naltisam Pharmaceutical Private Limited.' The Registrar of Companies, Ministry of Corporate Affairs, duly issued a certificate approving the name change. However, a note appended to the certificate required the defendant to display its earlier name for a period of two years in accordance with Section 12 of the Companies Act, 2013.

Issue:

The crux of the issue before the court was whether the defendant was entitled to display its old name for two years, as mandated by the Companies Act. The court, in its wisdom, answered this question in the negative, providing crucial insights into the legal framework governing corporate name changes.

Reasoning:

The court's reasoning hinged on the distinction between the court's power to direct a party to change its corporate name and the voluntary act of changing the name. It noted that the court's authority to mandate a change of corporate name operates in a different realm than that of a voluntary name change initiated by the company itself. As such, the court implied that it would not be bound by the provisions of the Companies Act, which pertain to situations triggered by voluntary name changes.

Analysis:

By disentangling the court's power from the statutory provisions governing voluntary name changes, the court affirmed its authority to make independent determinations regarding corporate name changes in the context of legal proceedings. It underscored the principle that the court's directives in such matters are guided by legal principles and equitable considerations rather than statutory mandates.

Consequently, the court ruled that the defendant was not entitled to display its old name for the prescribed period of two years. Instead, it directed the defendant to exclusively use its new name, 'Naltisam Pharmaceutical Private Limited,' in all its dealings, promotional materials, and online and physical media.

Conclusion:

This ruling by the Hon'ble High Court of Delhi serves as a significant precedent in clarifying the rights and obligations of companies undergoing name changes. It highlights the court's discretion in adjudicating corporate name change matters and reinforces the principle that legal directives in such cases are rooted in judicial discretion and equitable considerations rather than statutory mandates alone.

Case Title: Sanofi and another Vs Zanofi Pharmaceutical Pvt. Ltd.

Order Date: 23.02.2024

Case No. CS(COMM) 881/2023

Neutral Citation:N.A

Name of Court: Delhi High Court 

Name of Hon'ble Judge: Sanjeev Narula,HJ

Disclaimer:

Ideas, thoughts, views, information, discussions and interpretation expressed herein are being shared in the public Interest. Readers' discretion is advised as these are subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Written By: Advocate Ajay Amitabh Suman,

IP Adjutor - Patent and Trademark Attorney,

Email: ajayamitabhsuman@gmail.com,

Ph No: 9990389539