Delhi High Court directs RoC to exercise its Discretionary Powers without arbitrariness

Delhi High Court (“Court”) has directed the Registrar of Companies (“RoC”) to utilise its discretionary power efficiently and without any arbitrariness. The Court was hearing a matter involving issue related to registration of company.

In the present matter the RoC denied registration to a company on the ground that it included the word “Pandit” in its name, which is already a registered trademark. The petitioners challenged the decision given by the RoC on the grounds that they did not give the petitioners any opportunity to present their case and refused the registration without any valid reasoning.

The petitioners also claimed that a trademark cannot be registered for a generic word like “Pandit”. Additionally, the petitioners also claimed that there are 116 companies which have the word “Pandit” in their names. The petitioners stated that the RoC has been given wide discretionary powers without limitation in absence of guidelines, which leads to arbitrary decision passed by them in cases related to registration.

The Court directed the RoC to register the desired name of the petitioner’s company. The Court also held that the decision to deny registration was against the law and the RoC has the duty to act fairly and responsibly. The Court also noted that the RoC shall decide without arbitrariness and provide an opportunity to be heard to the parties whose registration application is rejected by it.

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This judgment rightly recognizes the responsibilities of RoC in matters related to registration of the companies. The judgment brings the concept of audi alteram partem i.e., hear the other side in the matter of registration of companies and also states that since the RoC has wide discretionary powers that they have similarly wide responsibilities to ensure every decision is fair.

Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.

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