Petitioner sought winding up of Respondent claiming indebtedness for NSEL contract. Court held Respondent acted only as broker. Contract note and agreement exempted Member from liability if payout does not come from Exchange. Petition dismissed.
Company Petition dismissed with no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
21.cp.820.2014.doc
dik
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY PETITION NO. 820 OF 2014
Responsive Industries Ltd. ...Petitioner vs Phillip Commodities India Pvt. Ltd. ...Respondent.
Ms Sahistha Pathan i/b Yusufs & Associates for the Petitioner. Mr Simil Purohit i/b M/s Purohit & Co. for the Respondent.
CORAM : B.P. COLABAWALLA J.
MARCH 22, 2016
P.C. :
This Company Petition is filed by the Petitioner – Responsive Industries Ltd. seeking to wind up the Respondent company – Phillip Commodities India Pvt. Ltd. It is the case of the Petitioner that the Respondent company is indebted to the Petitioner in the sum of Rs.1,04,03,638.67 (Rupees One Crore Four Lakhs Three Thousand Six Hundred Thirty Eight and Paise Sixty Seven only) being the value of the contract entered into by the Petitioner through the Respondent company, a broker on the National Spot Exchange Limited (“NSEL”). It is not in dispute that the Respondent company was acting merely as a broker and that the monies that were invested through it by the Petitioner were with NSEL. In fact the Contract Notes issued by the Respondent company were also as a broker for the Petitioner. The Client Member Agreement dated 27 June 2013 entered into between the Respondent company as a member and the Petitioner as a client specifically stipulates as under.
“The client understands and agrees that if funds and/or commodities payout does not come from the Exchange, then Member cannot and will not be liable to pay / deliver the funds and / or commodities to the client. In case of part payout received from Exchange for funds/ commodities, Client will also get part funds/ commodities. The Client understands and agrees that Member shall not be
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21.cp.820.2014.doc
liable in any manner whatsoever for any losses that client may incur because of part payout or no payout received from Exchange for funds and / or commodities.”
On perusing the aforesaid clause it is ex-facie clear that the Respondent company will not be liable to pay / deliver the funds or commodities to the Petitioner if the payout does not come from NSEL. In the present case, it is not the case of the Petitioner that NSEL has declared a payout which has not been handed over to the Petitioner. In view of the clear language of clause 6 reproduced above, the Respondent company cannot be held liable for the claim that is made in the present petition. The petition is, therefore, wholly misconceived and is dismissed. There shall be no order as to costs.
( B.P.COLABAWALLA J. )
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2 issues framed by the court
Whether the Respondent company, acting solely as a broker on NSEL, is liable to refund funds when payout does not come from the Exchange?
Whether the Client Member Agreement clause exonerates the Member from liability in cases of no payout from the Exchange?
Responsive Industries Ltd.
Phillip Commodities India Pvt. Ltd.
B.P. Colabawalla
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
