Transfer charges will not be treated as administrative charges for effecting change of name of the properties in favour of transferee company by virtue of scheme of Amalgamation
December 29, 2011
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M/S. Dabur India Limited (Petitioner) vs. Vishwa Properties Private Limited (Respondent)., Decision by Delhi High Court, on 21st February, 2011 A scheme of Amalgamation was made between Balsara Hygiene Products Limited, Besta Cosmetic Limited, Balsara Home Products Limited (hereinafter collectively referred to as the transferor companies) and Dabur India Limited (hereinafter referred to as the transferee [or] petitioner company). In terms of the aforesaid Scheme of Amalgamation, all the properties and assets (moveable or immoveable) of the transferor companies were proposed to be transferred to the transferee company. Consequently, once the Scheme was approved, the flats in question, which were owned by the transferor companies, stood automatically transferred to the transferee company, all that remains is that the name of the transferee company after amalgamation has to be substituted for the transferor company's name in the respondents record. On continuous persuation made by the petitioner to the respondent to effect the necessary change in its records thereby recording change of name of ownership in respect of Flat No. 201 to 207, Pragati Chambers, Plot No. A-5 & A-6, Community Centre, Ranjeet Nagar, New Delhi, in favour of the petitioner, the respondent raised a demand for transfer charges at the rate of Rs.300/- per sq. ft.deemed to be as administrative charges referring the purchase agreement entered by pre amalgamated companies and the petitioner wherein the petitioner agreed to bear the administrative expenses. The Delhi High Court disposed of the case on the following grounds in favour of the petitioner on an application filed by it under Rule 9 of the Companies (Court) Rules, 1959 seeking a direction to the respondent to effect the same:
- Administrative charges are always restricted to charges which are commensurate with the necessary paper work and correspondence that may have to be carried out by the respondent in its own records to reflect the changed name of the owner.
- The impugned demand of transfer charges @ Rs. 300 per sq. ft. is unsustainable and deserves to be quashed.