More Retail Private Limited Vs State of Karnataka (Karnataka High Court)
In these bunch of petitions, petitioners have sought for direction to the respondents to effect the change of name of the petitioners Company i.e. M/s More Retail Limited to M/s More Retail Private Limited in excise license Form CL-2 issued by the Government of Karnataka, Department of Excise on various dates like 13.07.2020, 15.07.2020, 14.07.2020, 10.07.2020, 05.07.2018 and 17.07.2018. Some of them have expired on 30.06.2019 and 30.06.2021.
In W.P.27606/2019 the petitioner has sought for quashing Annexure – F dated 28.05.2019 issued by the second respondent and for a direction to consider the representations vide Annexures – C, C1, C2 dated 20.06.2019, 06.05.2019 and 06.05.2019 and consequently, change the name of the licensee from M/s Aditya Birla Retail Limited to M/s More Retail Limited and to extend the license in the name of M/s More Retail Limited for the year 2019-20 commencing from 01.07.2019. The license dated 05.07.2018 was issued in the name of M/s Aditya Birla Retail Limited and M/s More Retail Limited wanted its name to be incorporated pursuant to the change of name from M/s Aditya Birla Retail Limited to M/s More Retail Limited.
2. The licenses were issued in the name of M/s More Retail Limited with reference to its directors viz., Sunil Rewachand, Chandiramani, Kiran Mittal, Vikram Ranjan Agarwal, Girish Manjanath Bhat, Paurush Roy. Petitioners are having large number of outlets spread over the State. For some of the outlets, petitioners have obtained excise license CL-2. Earlier the company was called as M/s Aditya Birla Retail Limited, thereafter, the name was changed to M/s More Retail Limited and further, the name was changed from M/s More Retail Limited to M/s More Retail Private Limited. In these bunch of petitions, excise license CL-2 were issued in the name of M/s More Retail Limited with reference to the directors existing as on the date of issuance of licenses on various dates cited supra. On 20.06.2019 “M/s Aditya Birla Retail Limited” was renamed as “M/s More Retail Limited”, thereafter, it was further renamed as “M/s More Retail Private Limited” on 15.12.2020. In W.P.27606/2019 excise license stands in the name of M/ s Aditya Birla Retail Limited whereas M/s More Retail Limited intends to have the same excise license in its name.
3. Petitioners – M/s More Retail Private Limited submitted applications/representations on 17.02.2021, 20.06.2019, 06.05.2019, 18.05.2019, 06.05.2019 to the Department of Excise for change of name in the respective excise licenses which stood in the name of M/s More Retail Limited to that of M/s More Retail Private Limited. The official respondents have not acted on the petitioners grievance relating to change of name in the excise license CL-2 issued in the name of M/s More Retail Limited to that of M/s More Retail Private Limited. Hence the present petitions. In W.P.27606/2019 the official respondents have issued notice with reference to Rule 17-B of Rules, 1967 and demanded transfer of excise license fee vide endorsement dated 28.05.2019 in respect of license dated 05.07.2018 is the subject matter of writ petition.
4. Learned counsel for the petitioners submitted that initially the Company’s name was M/s Aditya Birla Retail Limited and it was changed to M/s More Retail Limited and further to M/s More Retail Private Limited. The excise license CL-2 stands in the name of M/s More Retail Limited. Government of India, Ministry of Corporate Affairs permitted change of name from M/s Aditya Birla Retail Limited to M/s More Retail Limited on 10.04.2019. Consequently, it was further renamed as M/s More Retail Private Limited on 15.12.2020.
5. Learned counsel for the petitioners is not disputing the fact that there is no provision under the Karnataka Excise Act, 1965 (Hereinafter referred to as the ‘Act, 1965’ for short) read with The Karnataka Excise (General Conditions of Licenses) Rules, 1967 (hereinafter referred to as the ‘Rules, 1967’ for short) for change of name in the excise licenses issued under the aforesaid Act/Rules. Therefore, it is submitted that under the Companies Act, 1956 read with Companies Act, 2013, Government of India permitted for change of name. Consequently, there is no hurdle in effecting change of name in the respective excise licenses CL-2 which stood in the name of M/s More Retail Limited to M/s More Retail Private Limited. Insofar as W.P.27606/2019 is concerned from M/s Aditya Birla Retail Limited to M/s More Retail Limited.
6. In the present bunch of petitions it was further submitted by the learned counsel for the petitioners that petitioners have sought only for replacing/change of name from M/s More Retail Limited to that of M/s More Retail Private Limited in the respective existing excise license CL-2 stood in the name of M/s More Retail Limited and not transfer of excise license CL-2. For change of name of the Company, Government of India’s decision under the Companies Act, 1956 read with Companies Act 2013 would suffice. Therefore, petitioners are entitled to seek a direction to the respondents/Excise Department for change of name which stood in the name of M/s More Retail Limited in the respective excise licenses CL-2 and further, for renewal of licenses.
7. In support of the aforesaid contentions, learned counsel for the petitioners cited the following decisions:
1. M/S. MYSORE-INTERCONTINENTAL HOTELS PVT LTD., V/S THE COMMISSIONER OF EXCISE. in W.P.No.408 25/17 (Excise) disposed of on 09/10/2017 (paras 3 & 5)
2. STARLIGHT BRUCHEM LTD. V/S STATE OF RAJASTHAN & ORS. reported in 2015 SCC OnLine Raj 4640.(para 8 & 9)
3. JOSHY V/S STATE OF KERALA in W.A.No.1551/ 2018 disposed of on 03/07/2019
8. Per contra, learned counsel for the State submitted that in terms of Rule 17, 17A and 17-B of Rules, 1967, excise license holder is entitled to transfer excise licenses which stood in the name of license holder under various circumstances as stated in the aforesaid Rules, 1967. There is no provision for change of name in the excise license under the Act, 1965 read with Rules, 1967. In such an event, question of interpreting provisions of General Clauses Act, Companies Act, 1956 read with Companies Act, 2013 would not assist the grievance of the petitioners. Petitioners have remedy of obtaining afresh license in terms of Act, 1965 read with Rule, 1967 and allied Rules issued under the Act, 1965. Therefore, prima facie, petitioners have not made out case for issuance of direction to the excise department to incorporate petitioners name viz., M/s More Retail Private Limited and replacing the existing name of M/s More Retail Limited in licenses dated 13.07.2020, 15.07.2020, 14.07.2020, 10.07.2020, 05.07.2018 and 17.07.2018 furnished along with respective petitions.
9. In W.P.27606/2019, Excise Department permitted for transfer of excise license CL-2 from M/s Aditya Birla Retail Limited to M/s More Retail Limited. Merely directors being common in respect of both Limited and Private Limited Company, that does not empower change of name in the excise license. That apart, Act, 1965 and allied Rules do not provide for replacing/changing names of license holders. What is permitted is only transfer under three circumstances stipulated under Rule 17, 17-A and 17-B of Rules, 1967. It is further submitted that even though the representation of M/s More Retail Limited dated 08.05.2019 cited in the endorsement dated 28.05.2019 in W.P.27606/2019 with reference to Rules 17-B, it is to be noted that license stood in the name of M/s Aditya Birla Retail Limited and application was submitted by M/s More Retail Limited for change of name. Even though, the gist of the representation dated 08.05.2019 is to change the name, since there is no provision for change of name under Act, 1965 read with allied Rules, Excise Department has issued an endorsement that only transfer under Rule 17-B of Rules, 1967 is permissible. In the light of the aforesaid legal issue read with the factual aspect of the matter that M/s More Retail Limited be incorporated in the excise license CL-2 which stood in the name of M/s Aditya Birla Retail Limited is impermissible. Petitioner has no statutory right to seek writ of mandamus for change of name from M/s Aditya Birla Retail Limited to that of M/s More Retail Limited. The statutory right is not created or vested with the petitioners in seeking writ of mandamus.
10. Heard the learned counsels for the respective parties.
11. The core issue involved in the present petitions are:
(i) Whether petitioners are entitled to writ of mandamus in respect of change of name in the excise license CL-2 which stands in the name of M/s More Retail Limited to that of M/s More Retail Private Limited or not?
(i) In W.P.27606/2019 whether petitioner is entitled to writ of mandamus in respect of change of name in the excise license CL-2 which stands in the name of M/s Aditya Birla Retail Limited to that M/s More Retail Limited and decision of the Excise Department transfer of license under Rule 17B is permissible or not?
12. Undisputed facts are that originally the name of the Company was M/s Aditya Birla Retail Limited and it was renamed as M/s More Retail Limited and further, renamed as M/s More Retail Private Limited. Petitioners are not entitled to have the name M/s More Retail Private Limited by replacing M/s More Retail Limited in the excise license CL-2 issued in the aforesaid company’s name under the Act, 1965 read with allied Rules, 1967. It is necessary to take note of Rule 2 – Application of Rules, 1967 and definition under sub-rule (2) relates to licensee under Rule 3. Rule 2 of Rules, 1967 reads as under:
“2. Application. – These rules shall apply to all licenses issued under the Karnataka Excise Act, 1965 for sale of liquors and every such license shall be deemed to include the conditions prescribed by these rules as general conditions.”
Rule 3 of Rules, 1967 reads as under:
“1. Definitions – In these rules unless the context otherwise requires.-
(1) “Educational Institution” XXXX
(2) “Licensee” means a person to whom a license to sell Liquor is granted.”
13. Similarly, in W.P.27606/2019 change of name from M/s Aditya Birla Retail Limited to that M/s More Retail Limited Rules 17, 17-A and 17-B provide for transfer of various excise licenses under different circumstances. Rules 17, 17-A and 17-B are reproduced hereunder:
17. Transfer of lease not permitted.- The right of retail vend of liquor shall not be transferred by the licensee except with the previous permission of the Deputy Commissioner.
17.A. Transfer in the even of death.- In the event of death of the licensee or the lessee, the Deputy Commissioner may on an application by the legal heirs of the deceased with the previous sanction of the Excise Commissioner, transfer the license or the lease as the case may be, in their favour.
17.8. Transfer of license in other cases.- (1) Notwithstanding anything contained in Rule-2, licenses issued.-
(i) for Sale of India Liquor (other than arrack) or Foreign Liquor or both, in Form No. CL-1 (Wholesale license) or CL-2 (retail shop licenses) [CL-6A (Star Hotel License)] or CL-7 (Hotel and Boarding House Licenses) or CL-9 (Refreshment room (Bar) License under the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, or
(ii) for sale of Beer under the Karnataka Excise (Lease of Right of Retail Vend or Beer) Rules, 1976;
The Deputy Commissioner may on an application by the licensee and [subject to payment of transfer fee equivalent to twice the annual license fee] specified in Rule 8 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 or Rule 5 of the Karnataka Excise (Lease of Right of Retail Vend of Beer, Rules, 1976, as the case may be, and with the prior approval of the Excise commissioner, transfer such license in favour of any person named by such license, if such person is eligible for grant of a license under the Karnataka Excise Act, 1965 or the rules made there under:
(2) Nothing in this rule shall apply to transfer of license under Rule 17-A.
14. In view of the aforesaid statutory provision, petitioners have only remedy of making necessary applications through M/s More Retail Limited for transfer of excise license CL-2 in the name of M/s More Retail Private Limited. Similarly, in W.P.27606/2019 M/s Aditya Birla Retail Limited has to make application for transfer of excise license in the name of M/s More Retail Limited. Petitioner – M/s More Retail Limited has no locus standi to seek change of name in the absence of statutory provision under the Act, 1965 read with Rules, 1967 and other allied Rules under Act, 1965. Even for transfer of CL-2 license only M/s More Retail Limited has to make application for transfer of license in the name of petitioners M/s More Retail Private Limited, since CL-2 license stand in the name of M/s More Retail Limited. Similarly, in W.P.No.27606/2019 the same yardstick is applicable viz., license holder M/s Aditya Birla Retail Limited has to make application in favour of M/s More Retail Limited. Therefore, petitioners have not made out statutory right to seek writ of mandamus under Article 226 of the Constitution of India.
15. Merely change of name of M/s More Retail Limited to that of M/s More Retail Private Limited under the Companies Act, 1956 read with Companies Act, 2013, the petitioners do not have the right to change the name in excise licenses CL-2 issued by the Excise Department under the Act, 1965 read with Rules, 1967. It is to be noted that the aforesaid statute are applicable to the respective issues. In the present case, for change of name from M/s More Retail Limited to that of M/s More Retail Private Limited, similarly, in W.P.27606/2019 from M/s Aditya Birla Retail Limited to that M/s More Retail Limited there is no provision. In the absence of any statutory provision provided in Act, 1965 read with allied Rules, this Court cannot issue a direction to the official respondents to change the name of M/s More Retail Limited to that of M/s More Retail Private Limited in the respective excise licenses cited supra. Similarly, in W.P.27606/2019 M/s Aditya Birla Retail Limited is not the petitioner whereas the excise license stands in its name. Under the statutory rule, only the license holder can make application for transfer/change of excise license. Therefore, application for change of name by M/s More Retail Limited is without authority of law. A change in name will not disturb a Company’s legal entity. As specified in Section 13(6) of Income Tax Act, 1961, A Company changes its name by a special resolution and with due approval from the Central Government, but this only pertains to the name change and not other pivotal aspects. Even assets and liabilities and obligations would continue depending upon the terms and conditions. Whereas, name of the excise license holder cannot be changed as Act, 1965 read with Rules, 1967. On the other hand the aforesaid provision provides only for transfer with reference to three circumstances under Rule 17, 17A and 17B of Rules, 1967.
16. If the Act and Rules are silent in respect of issue/subject, in that event, it is not possible for this Court to give any directions for amending the Act or statutory Rules. It is for the Parliament/Legislature to amend the Act and Rules. It is well established law that no direction could be given in framing statute as it would be contrary to the Act and Rules.
17. Learned counsel for the petitioners in support of change of name from M/s. More Retail Limited to that of M/s. More Retail Private Limited in the excise CL-2 license cited the following decisions:
1. High Court of Kerala – W.A. No. 155 1/20 18 (Joshy Vs/ State of Kerala) D.D.03.07.20 19
2. 2015 SCC OnLine Cal 6191 (M/s. Fresenius Kabi Oncology Limited Vs. The State of West Bengal & Ors.)
3. 2018 SCC OnLine HP 2069 (Fresenuis Kabi Oncology Limited V. H.P. State Industrial Development Corporation Limited
18. In Joshy’s case supra Foreign Liquor Rules, 1953 is interpreted whereas in the cases on hand the provisions of Karnataka Excise Act, 1965 read with The Karnataka Excise (General Conditions of Licenses) Rules, 1967 are to be taken note of. Therefore, aforesaid decision has no application to the present case.
19. The decisions in STATE OF WEST BENGAL supra and HP STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED supra are in respect of interpretation of Sections 21 and 23 of the Companies Act, 1956. Each statute is required to be taken note of with reference to the factual aspects of the matter read with relevant provisions. Therefore, the aforesaid decisions do not assist the petitioners.
20. At this juncture, it is necessary to take note of the Apex Court decision in the case of T. Beermasthan vs. Nair Service Society reported in (2009) 5 SCC 545 at Para 48 held as under:
“48. Several decisions have been cited before us by the respondents, but it is well established that judgments in service jurisprudence should be understood with reference to the particular service rules in the State governing that field. Reservation provisions are enabling provisions, and different State Governments can have different methods of reservation. There is no challenge to the Rules, and what is challenged is in the matter of application alone. In our opinion the communal rotation has to be applied taking 20 vacancies as a block.”
21. In view of the decision in the case of Nair Service Society supra, what is required to be taken into consideration is the relevant provision read with the case/s on hand. In the present case, Act 1965 read with allied Rules is required to be taken into consideration for the purpose of determining, “Whether petitioners are entitled to change of company’s name from M/s More Retail Limited to that of M/s More Retail Private Limited or not in the excise license CL-2 and similarly, in W.P.27 60 6/2019 whether petitioner is entitled to change of company’s name from M/s Aditya Birla Retail Limited to that M/s More Retail Limited” in the excise license dated 05.07.2018 issued in favour of M/s Aditya Birla Retail Limited. Therefore, cited decisions do not assist the petitioners case.
22. Learned counsel for the petitioners submitted that it is only change of name of the Company and directors and other aspects remain unchanged. However, it is to be noted that there is difference between “Limited” and “Private Limited Company”. The differences are as under:
