1999 (8) TMI 741 - HC - Companies Law

Court denies winding up petition over brokerage fees dispute; parties to bear own costs

Kumar Securities Ltd. Versus Stickwell Fashions Ltd.

The Court dismissed the petition for winding up based on the petitioner's claim of non-payment of brokerage fees, citing lack of merit and failure to ... Winding up - Circumstances in which a company may be wound up Issues: Petition for winding up under sections 433, 434(e) and 439 of the Companies Act, 1956 based on alleged non-payment of brokerage fees by the respondent company to the petitioner.Analysis:1. The petitioner, a company of Chartered Accountants specializing in Financial Consultancy, filed a petition seeking winding up of the respondent company for non-payment of brokerage fees. The petitioner alleged that an agreement was reached with the respondent for brokerage on a deal with CRB Capital Markets Ltd. Despite sending a bill, the amount remained unpaid, leading to the petition.2. The respondent raised preliminary objections, denying the existence of any agreement with the petitioner for brokerage fees. The respondent claimed that the petitioner's demand was inflated, and no statutory notice was served. The respondent also alleged that the petitioner fabricated evidence and the petition was an abuse of the court process.3. The Court examined the submissions and documents. It noted the respondent's denial of any agreement with the petitioner and raised doubts about the nature of the petitioner's claim for brokerage fees, suggesting that Chartered Accountants should charge professional fees, not brokerage. The Court found the respondent's defense not entirely lacking merit, considering the professional background of the petitioners.4. The Court declined to delve into the veracity of the respondent's claim that documents were fabricated, emphasizing that the company's liability was not admitted. Consequently, the Court held that the petition lacked merit and dismissed it. The parties were directed to bear their own costs, highlighting the lack of entitlement for relief to the petitioner in this case.In conclusion, the Court dismissed the petition for winding up based on the petitioner's claim of non-payment of brokerage fees, citing lack of merit and failure to establish an admitted liability on the part of the respondent company. The judgment highlighted the importance of distinguishing between brokerage fees and professional fees for Chartered Accountants and directed each party to bear their own costs.