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of <h1>Court sets aside Receiver's royalty order, emphasizes fair property value assessment for wrongful possessor. Interim royalty ordered.</h1> The court set aside the Court Receiver's order fixing the monthly royalty, emphasizing the need for a fair assessment of the property's value to the ... - Issues Involved:1. Basis for determining the amount of monthly royalty.2. Legality, validity, and propriety of the Court Receiver's order fixing monthly royalty.Issue-wise Detailed Analysis:1. Basis for Determining the Amount of Monthly Royalty:The judgment delves into the concept of 'royalty' as a form of rent or compensation paid by an occupier to a landlord for the use of property. The court draws parallels between royalty and mesne profits, emphasizing that mesne profits are damages for wrongful possession of property. The measure of mesne profits is based on the value of the property to the person in wrongful possession, not the value lost by the landlord. The court references several precedents, including the Privy Council and Supreme Court rulings, to highlight that mesne profits should reflect the advantage derived by the wrongful possessor from the property. The court emphasizes that various methods, such as the annual letting value and prevailing rental rates, should be considered to determine the appropriate amount of royalty.2. Legality, Validity, and Propriety of the Court Receiver's Order Fixing Monthly Royalty:The court scrutinizes the Court Receiver's order dated 29th November 2006, which fixed the monthly royalty at Rs. 3,70,000 based on a valuation report by M/s. S.S. Joshi & Associates. The court finds that the valuation was based on the estimated returns from the property rather than the value of its use to the defendant, which contradicts the principles established by the Supreme Court. The court notes that the valuer should have considered the annual letting value determined by the Municipal Corporation and prevailing rental rates for equivalent accommodation. The court concludes that the Court Receiver's order is unsustainable and remits the matter back for fresh determination of the royalty, with instructions to follow principles of natural justice and consider multiple valuation methods.Interim Royalty Determination:Pending the fresh determination of the monthly royalty, the court directs the defendant to pay an interim royalty of Rs. 1,75,000 per month from 1st December 2006. This amount is based on a 10% return on the balance consideration of Rs. 1,85,31,500, after accounting for the amounts deposited and exhausted. The court orders that the royalty payments be retained in deposit until the suit is decided, ensuring that the funds can be disbursed according to the final judgment.Conclusion:The court sets aside the Court Receiver's order fixing the monthly royalty and remits the matter for fresh determination, emphasizing the need for a balanced and fair assessment of the property's value to the wrongful possessor. The interim royalty is set at Rs. 1,75,000 per month, pending the final determination. The court also stays the operation of its order for eight weeks, acknowledging the ongoing payment of the initially fixed royalty by the defendant.
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