2012 (10) TMI 1155 - HC - Companies Law

Summary

Issues involved: Winding up petition u/s 433 and 434 of the Companies Act, 1956 based on unpaid consultancy fees.

Judgment Summary:

Issue 1: Unpaid Consultancy Fees
The Petitioner filed a winding up petition against the Respondent Company for unpaid consultancy fees as per the Financial Advisor Agreement. The Agreement required both parties to fulfill their obligations, including regular payments by the Company. The Petitioner claimed a balance of &8377; 18,96,344, including interest. The Company denied liability, leading to a statutory notice for payment. The Company contested the claim, alleging non-compliance and lack of professional services by the Petitioner.

Issue 2: Bonafide Dispute
The Company raised a bonafide dispute regarding the consultancy fees, citing non-compliance by the Petitioner with the Agreement terms. The Court referred to previous judgments emphasizing that a bona fide disputed debt should be resolved through legal action, not winding up. Mere denial in response to a statutory notice does not establish neglect to pay, especially when the disputed amount is not acknowledged or crystallized.

Issue 3: Arbitration Clause
The Court noted the existence of an arbitration clause in the Agreement, indicating that disputed matters should be resolved through arbitration proceedings. The Petitioner's denial of an oral settlement was countered by the Company's assertion of non-compliance by the Petitioner. The Court found the dispute genuine and unresolved, dismissing the winding up petition due to the bonafide nature of the disagreement.

Conclusion:
The Company Petition was dismissed, with no costs awarded, as the Court determined that the disputed consultancy fees should be resolved through arbitration rather than winding up proceedings.