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Patna High Court · body

1994 DIGILAW 273 (PAT)

Baibhaw Construction Private Limited, Gopalganj v. State of Bihar

1994-08-10

B.N.AGRAWAL, O.N.ASTHANA

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Order Heard the parties. 2. This writ application has been filed for giving direction to respondent no. 2, the Engineer-in-Chief, Road Construction Department, Government of Bihar to substitute name of the partnership firm M/s Braj Kishore Singh and Company with the name of the petitioner-Baibhaw Construction Private Limited which has been incorporated as the Company in the list of registered Class IA Contractors maintained by respondent no. 2. 3. It appears that there was a partnership firm under the name and style M/s Braj Kishore Singh & Company which was registered as Class IA Contractor with respondent no. 2 and there were various partners of this firm. Thereafter the partners of the aforesaid partnership firm decided to convert the partnership firm into a Private Limited Company for which an application was filed before Registrar of Companies, Patna for granting registration under the Companies Act in three names, viz. North Bihar Enterprise Private Limited, Baibhaw Construction Private Limited and Upkar Construction Private Limited. The Registrar of Companies by his communication dated 28.8.86 informed Sri Braj Kishore Singh who was one of the partners of the aforesaid partnership firm disclosing therein that he has no objection for registration of the company in the name of Baibhaw Construction Private Limited meaning thereby he has objection for registration of the company in other name. 4. Thereafter the State Government in the Department of Road Construction issued a notification on 20.4.89 to the effect that all partnership firms who are registered contractors should get themselves converted into a company incorporated under the Indian Companies Act by 28.2.90 and if it is not so done within the aforesaid time, the company so incorporated shall be deemed to have been registered afresh as contractor. After the registration was granted in favour of the petitioner under the Companies Act he informed the Department for change of nomenclature from partnership firm to private limited company. But since no order was passed the petitioner moved this court by filing C.W.J.C. No. 9059/93 which was disposed of on 2.12.93 and this Court directed the petitioner to file a fresh application before respondent no. 2 who was directed to consider the same in accordance with law. Respondent no. 2 by his order dated 9.2.94 contained in Annexure 7' has rejected the aforesaid application filed by the petitioner for change of name from partnership firm to private limited company. Hence this writ application. 2 who was directed to consider the same in accordance with law. Respondent no. 2 by his order dated 9.2.94 contained in Annexure 7' has rejected the aforesaid application filed by the petitioner for change of name from partnership firm to private limited company. Hence this writ application. 5. Learned counsel appearing on behalf of the petitioner has raised a few points in support of this application, Firstly, it has been submitted that according to Government Notification as contained in Annexure 3', since the conversion was done prior to 28.2.90 the authorities were bound to change the name of the registered partnership firm into that of private limited company. In this connection it has been pointed out to us on behalf of the State that the aforesaid Government Notification was quashed by Ranchi Bench of this Court on 13.12.90 and, therefore, the State Government has issued another notification un 28.6.91 (Annexure 'A') whereby the aforesaid notification as contained in Annexure 3' has been' superseded. It has been further mentioned in the said notification that the registration granted to the partnership firm before conversion shall remain operative. Since the notification as contained in Annexure 3' has already been quashed by the Ranchi Bench the petitioner cannot take any advantage on the basis thereof. Therefore, we do not find any substance in the first contention. Learned Counsel for the petitioner has further contended that order contained in Annexure 7' is arbitrary and the same is violative of Article 14 of the Constitution of India. It has also been submitted that action of the State Govt. in refusing the prayer of the petitioner is also violative of the fundamental right of the petitioner to carryon trade and business. Our attention has been drawn to order dated 21 st March, 94 contained in Annexure 8' which shows that one M/s Pandey and Company which was originally a partnership firm has been allowed to convert itself into a private limited company and the Private Limited Company has been substituted in place of the partnership firm which was registered as contractor. With regard to this document on behalf of the State two points have been raised. Firstly, it has been submitted that this order relates to Water Resources Department and does not relate to Road Construction Department. With regard to this document on behalf of the State two points have been raised. Firstly, it has been submitted that this order relates to Water Resources Department and does not relate to Road Construction Department. We fail to understand the reasoning as there is only one Government in the State of Bihar and different Departments cannot afford to act in different fashions. If different Departments are acting in different manners there will be a chaos and that can definitely be branded as an arbitrary act of the Government of Bihar which is one entity. Therefore, we do not find any substance in this point. It has also been pointed out that in that case the nomenclature was not changed whereas in the present case nomenclature of the partnership firm has been changed. With regard to that it has been pointed out that under the provision of Section 20 of the Companies Act, Registrar of Companies can refuse the registration in the name proposed if another company in the same name has already been registered or the name of proposed firm resembles with such a company already registered. The petitioner-firm applied for registration of the company in four names but the Registrar has communicated to him by Annexure 10' that it is possible to grant registration in the name of only M/s Baibhaw Construction Private Limited. The petitioner's definite case is that only nomenclature is being changed but the persons who owned the partnership• firm and who now are owning the private limited company are same. This being the position we do not find any substance in the second objection as well raised on behalf of the State. 6. In view of the foregoing discussion we are of the view that respondent no. 2 has committed a serious error of law in rejecting the prayer made on behalf of the petitioner by his order contained in Annexure 7' and the same is liable to be quashed. 7. Accordingly, the order contained in Annexure 7' is hereby quashed and respondent no. 2 is directed to substitute the name of the partnership firm M/s Braj Kishore Singh and Company with the name of petitioner-Baibhaw Construction Private Limited in the list of registered Class-1 A Contractor maintained by respondent no. 2 within a period of one month from the date of receipt/production of a copy of this order. 8. 2 is directed to substitute the name of the partnership firm M/s Braj Kishore Singh and Company with the name of petitioner-Baibhaw Construction Private Limited in the list of registered Class-1 A Contractor maintained by respondent no. 2 within a period of one month from the date of receipt/production of a copy of this order. 8. The writ application is, accordingly, allowed.