SKA Insurance Surveyors and Loss Assessors Private Limited v. Regional Director (Northern Region), Ministry of Corporate Affairs & Anr.

1. The petitioner has approached this Court under Article 226 of the Constitution, against an order passed by the Regional Director, Ministry of Corporate Affairs, Delhi, [“RD”] under Section 16(1)(a) of the Companies Act, 2013 [“the Act”], by which the petitioner has been granted a period of three months to change its name in accordance with the process prescribed under the said Act.

2. Section 16(1) of the Act reads as follows:

3. The petitioner–Company was incorporated as “SKA Insurance Surveyors and Loss Assessors Private Limited” on 25.02.2022. The impugned order is based on the identity or substantial resemblance in the name of the petitioner with the name of another previously incorporated company, viz., ‘SKAAD Insurance Surveyors and Loss Assessors Private Limited’ (respondent No. 2 herein). Emphasis supplied.

4. The undisputed facts in the present case are that respondent No. 2 was incorporated on 21.02.2008 under the name “SKAAD Surveyors and Loss Adjustors Private Limited”. Its name was changed on 05.10.2013 to “SKAAD Insurance Surveyors and Loss Assessors Pvt. Ltd.”. Mr. Sushil Kumar Agarwal, a director of the petitioner–company, who has filed this writ petition on behalf of the petitioner - company, was a director of respondent No. 2 from 21.02.2008 to 07.12.2021. Approximately two months after ceasing to be a director of respondent No. 2, the petitioner– company was incorporated by him, alongwith others, on 25.02.2022. It is also undisputed that both the petitioner and respondent No. 2 carry on similar business as insurance surveyors and loss assessors.

5. The RD has come to the conclusion that jurisdiction under Section 16(1)(a) of the Act ought to be exercised. The relevant observations of the RD are as follows: “9. Now therefore, in exercise of the powers conferred by sub-section (I) (a) of Section 16 of the Companies Act, 2013 read with Notification No. S.O. 4090 (E) dated 19.12.2016, Ministry of Corporate Affairs, Government of India, the application filed by the applicant company I found merit and deserve to be allowed in the interest of justice. The respondent found to be infringing the rights of the petitioners and may likely to cause confusion in the minds of general public as the director of Respondent company has served as Director of the Petitioner company also. The petitioner and Respondent are working as INSURANCE SURVEYORS & LOSS ASSESSORS and area of operations are also same which will be only misleading and deceptive. The application is allowed and disposed of with following directions: a. SKA Insurance Surveyors & Loss Assessors Private Limited shall change its name within a period of three months from the date of this order and by following the due process as required under the provisions of Chapter If of the Companies Act, 2013 and Rules made thereunder. b. The Registrar of Companies, NCT of Delhi and Haryana to take necessary action, if the Respondent company does not change its name within 3 months from the date of this order and issue change of name certificate on expiry of the period if the company number-2 is not changing its name within the aforesaid period. c. A copy of this order should be filed with the Registrar of Companies within the statutory timeline defined under the Act. CRC shall consider the new name of Respondent as permissible in law.”

6. Mr. Varun Mudgil, learned counsel for the petitioner, submits that Section 16(1)(a) of the Act incorporates a suo motu power of the RD to direct change of name of a company, only on the ground that it is identical with, or too nearly resembles, the name of an existing company, whereas Section 16(1)(b) entitles the proprietor of a registered trademark to seek such an order on virtually the same ground. He draws my attention to an order of the Trademarks Registry dated 12.09.2023, by which the application of respondent No. 2 for registration of a mark incorporating the word “SKAAD” did not proceed to examination, due to lack of documentation “in support of user claim and continuous use”. The communication further provided that, in the absence of the required information, the application would be treated as abandoned. According to Mr. Mudgil, the trademark application of respondent No. 2 presently shows a status of failed formalities check. He submits that, in these circumstances, the RD ought not to have protected the alleged rights of respondent No. 2 in respect of the word “SKAAD”, and exceeded its jurisdiction by concluding that the petitioner’s name infringes the rights of respondent No. 2 and may cause confusion in the minds of the general public. Mr. Mudgil relies upon two judgments of this Court - cGMP Pharmaplan P. Ltd. v. Regional Director, Ministry of Corporate Affairs & Anr.[2] and Panchhi Petha Store v. Union of India & Ors.[3] - to submit that the RD has exceeded his jurisdiction by proceeding on considerations which would involve a trademark infringement case, rather than an application under Section 16(1)(a).

7. I am of the view that the aforesaid contention is misconceived. Section 16(1)(a) is not restricted to a claim of trademark infringement. It can be invoked in any case where the name of a company is identical with, or closely resembles, the name of a pre-existing company.

8. The judgments cited by Mr. Mudgil also do not, in my view, support the petitioner’s case. The coordinate Bench judgment of this Court in cGMP Pharmaplan, concerns the exercise of powers by the RD under Section 22 of the Companies Act, 1956. The said provision was admittedly pari materia with Section 16(1)(a) of the 2013 Act. The Court’s analysis was that the names of the two companies in question – cGMP Pharmaplan P. Ltd. and NNE Pharmaplan India P. Ltd., had to be compared as a whole, and did structurally and phonetical too nearly resemble each other. The Court noted that the jurisdiction of the RD is independent of the powers of a Civil Court in a passing off action and observed as follows: “While it is true that respondent No. 1 cannot approach the case as it would in a trademark dispute, it is nevertheless required to come to the conclusion whether the name of which the registration is sought or has been granted too nearly resembles the name of another company. Mr. Chandra is right in his contention that the powers of the Central Government under section 22 of the Act are wider inasmuch as there is no need to examine whether there is a likelihood of deception or confusion. It is enough to examine if the name registered too nearly resembles another registered name. Respondent W.P.(C) 3217/2010, decided on 16.07.2010, [hereinafter, “cGMP Pharmaplan”]. W.P.(C) 773/2019, decided on 11.11.2024, [hereinafter, “Panchhi Petha Store”]. No. 2 has been able to show that both names too nearly resemble each other.”4

9. In Panchhi Petha Store, this Court noted the judgment in cGMP Pharmaplan. However, the decision of the RD was set aside on the ground that the RD in that case had returned a finding with regard to ownership of the trademark, and therefore directed change of name of the petitioner – company.

10. In my view, the present case is closer on facts to the judgment in cGMP Pharmaplan, which, in fact, supports the stand of the respondent. Jurisdiction under Section 16(1)(a) of the Act can be invoked merely upon a finding that the names of two companies are identical or too closely resemble each other, without any finding of deception or confusion. In the present case, the names of the petitioner and respondent No. 2 are admittedly identical, except for the first word, which is “SKA” and “SKAAD” respectively. The names are therefore substantially identical.