TaxTMI 
TaxTMI 
2026 (9) TMI 465
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....ve subsequently been revised to Rs. 6,51,062/- upon exclusion of the service tax component. The Valuer has, in addition, claimed interest and a further amount towards the alleged erosion in the purchasing power of the rupee, thereby quantifying its aggregate claim at Rs. 47,26,710/-. The present Report has accordingly been placed before the Court seeking appropriate directions in regard to the Valuer's outstanding claim and the discharge of the Court Receiver. FACTUAL MATRIX 2. Before considering the issues which arise for determination, it would be appropriate to briefly set out the facts relevant to the adjudication of the present Court Receiver's Report. A. The Petitioners had instituted the above Writ Petition challenging, inter alia, the attachment of their properties under the provisions of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 ("the MPID Act"). In Civil Application No. 2017 of 2003, Ms. Clare Gonsalves, an investor, sought appropriate directions in respect of the incomplete building and properties of the Petitioners. B. By an order dated 1st December 2003, this Court directed the Court Receiver, H....
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....he Advocates for the Petitioners to instruct their clients to deposit Rs. 7,01,858/- so as to enable payment to the Valuer. F. The Valuer reiterated its request for payment by a further communication dated 1st March 2007. On 20th December 2007, the Court Receiver once again called upon the Advocates for the Petitioners to arrange for deposit of the aforesaid amount. The bills, however, continued to remain unpaid. G. In Court Receiver's Report No. 126 of 2010, the Court Receiver sought directions as to whether the bill of Rs. 12,400/- towards inspection and preparation of the status report ought to be restricted to Rs. 5,000/- and whether each of the four valuation bills exceeding Rs. 25,000/- ought to be restricted to the maximum amount of Rs. 25,000/-, contemplated under the applicable Guidelines, or whether a higher amount ought to be sanctioned by this Court. The Court Receiver also sought a direction requiring the Petitioners, who had carriage of the proceedings, to deposit the valuation charges and a further sum of Rs. 10,000/- towards the costs and expenses of the Court Receiver. The said Report has remained pending and no order has been passed thereon. ....
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....ond with the Court Receiver regarding its outstanding professional fees. By communication dated 15th May 2025, the Valuer stated that the original bills had been raised in accordance with the Guidelines dated 1st February 1994. Since service tax was no longer leviable, the Valuer submitted revised invoices excluding the service tax component contained in the original bills. The aggregate principal amount claimed was thereby reduced from Rs. 7,01,858/- to Rs. 6,51,062/-. N. The Valuer also furnished a declaration dated 15th May 2025 stating that it was not required to be registered under the Goods and Services Tax Act, 2017, since its turnover was below the prescribed threshold. It further undertook to bear any liability towards GST which may subsequently arise and stated that the Court Receiver would not be responsible for discharging any such liability. O. In addition to the revised principal amount of Rs. 6,51,062/-, the Valuer claimed simple interest at the rate of 6 percent per annum for a period of 21 years, quantified at Rs. 8,20,338/-. The aggregate amount of principal and interest was accordingly stated to be Rs. 14,71,400/-. The Valuer thereafter applied ....
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....passing accounts and permission to close the suit account without charging any further costs, charges or expenses. In the alternative, the Court Receiver seeks directions regarding the steps to be taken in respect of the Valuer's outstanding bills and the reliefs sought by the Valuer in its communication dated 15th May 2025, together with directions as to the person who would bear the costs and expenses of taking such steps. U. During the hearing of the present Court Receiver's Report, an Advocate entered appearance on behalf of Smt. Rowena Sharma. SUBMISSIONS OF THE COURT RECEIVER 3. Mr. B. V. Bavakar, learned Court Receiver, submits that the Valuer was engaged pursuant to the order dated 1st December 2003 and completed the assignment by inspecting the subject properties and submitting its report on 5th May 2004. Six bills were thereafter raised on 15th May 2004 aggregating Rs. 7,01,858/-. He points out that despite repeated communications addressed to the Petitioners and their Advocates, the bills have remained unpaid. 4. Mr. Bavakar submits that Court Receiver's Report No. 126 of 2010 was filed seeking directions concerning payment of the Valuer's professional ....
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....included an amount towards service tax, the Valuer, by its communication dated 15th May 2025, submitted revised invoices excluding the said component and the principal claim was consequently reduced from Rs. 7,01,858/- to Rs. 6,51,062/-. 10. Mr. Sinha further submits that on account of the delay of more than two decades in payment of the professional fees, the Valuer is entitled to simple interest at the rate of 6% per annum for a period of 21 years. The interest component has been quantified at Rs. 8,20,338/-, bringing the aggregate amount of principal and interest to Rs. 14,71,400/-. 11. Mr. Sinha additionally claims compensation on account of the alleged depreciation or erosion in the purchasing power of the rupee between 2004 and 2025. On the basis of the Cost Inflation Index, a multiplier of 3.21238 has been applied to the aggregate amount of principal and interest, resulting in a total claim of Rs. 47,26,710/-. 12. Mr. Sinha accordingly seeks an order for Rs. 47,26,710/- against Petitioner No. 1 - Company. He further seeks authority for the Court Receiver to lodge the Valuer's claim before the Official Liquidator, Uttar Pradesh and Uttarakhand, and seeks impleadment ....
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....ubai Trust v. Suchitra 2019 SCC OnLine Bom 1854, the learned Amicus submits that royalty or compensation, in this context, refers to the amount payable by an occupier to the person lawfully entitled to possession and is conceptually akin to mesne profits. 16. The learned Amicus further submits that the Guidelines issued in 2007 maintain the same distinction. He points out that Annexure I thereto concerns valuation of immovable properties, whereas Annexure III concerns determination of royalty and compensation. He, however, submits that the 2007 Guidelines, cannot govern the present assignment since the Valuer was engaged in January 2004, completed the assignment in May 2004 and raised its bills on 15th May 2004. Relying upon Parelkar & Dallas v. Blossom Industries Limited Order dated 4th December 2025 passed in Appeal No. 78 of 2010, it is submitted that the applicable Guidelines are those in force when the Valuer was appointed and when the work was performed. The professional fees must, therefore, be determined under the 1994 Guidelines. 17. Our attention is invited to clause 9 of the 1994 Guidelines which inter alia provide that professional fees payable for valuation of im....
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....e quality and correctness of the valuation exercise and the delay in payment of the Valuer's bills. 21. Applying these principles to the present case, Mr. Bansal submits that five of the six bills raised by the Valuer pertain to separate valuation reports, while the remaining bill concerns inspection of the subject properties and preparation of a status report. He points out that four of the five valuation bills exceed the ceiling of Rs. 25,000/-. He further adds that neither the Court Receiver nor any party to the Writ Petition, however, has disputed the nature or extent of the work performed, alleged that the bills are inflated, or questioned the correctness of the valuation reports. He has accordingly submitted that the Valuer ought to be compensated for the work actually performed and that the entire revised principal claim of Rs. 6,51,062/- ought to be sanctioned. 22. As regards the bill concerning inspection of the subject properties and preparation of the status report, Mr. Bansal points out that the 1994 Guidelines prescribe a maximum amount of Rs. 5,000/-. He submits, however, that this Court retains discretion to sanction a higher amount. Having regard to the nature....
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....s, a Panel Valuer agrees to claim its professional fees from the funds available to the credit of the concerned proceedings in the hands of the Court Receiver, Commissioner for Taking Accounts, Official Assignee or Official Liquidator, and not to look personally to the office of the Court Receiver or to the State Government for payment. It is therefore submitted that, upon this Court sanctioning the amount payable, the Valuer's claim would have to be pursued against the funds or assets of Petitioner No. 1 - Company in accordance with law. ANALYSIS, REASONS & FINDINGS 28. We have heard the Court Receiver; Mr. T. K. Sinha, the Valuer and the learned Amicus Curiae. We have also perused Court Receiver's Report No. 25 of 2025, the earlier Court Receiver's Report No. 126 of 2010, the note submitted by the learned Amicus Curiae, the Guidelines placed on record and the compilation of authorities tendered for consideration. 29. The Valuer has raised its claim under the 1994 Guidelines. The Accounts Officer, while verifying the bills, referred to the 1999 Guidelines, but simultaneously applied the ceiling of Rs. 25,000/- prescribed under the 1994 Guidelines. It is therefore necessar....
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....sequently, plainly cannot govern an assignment which had already been completed. The Division Bench in Blossom Industries (supra) has also recognised that the Guidelines applicable to the claim of a Valuer are those governing the appointment and performance of the assignment. We therefore find that the professional fees payable to the Valuer in the present case are governed by the 1994 Guidelines. 33. Clause 9 of the 1994 Guidelines, insofar as relevant, reads as follows: "Architects as per present scale will be paid subject maximum fees of Rs. 25,000/- in respect of valuation of immovable properties. In case of fees exceeding Rs. 25,000/- to valuers of immovable properties, prior sanction of the Court be obtained." Clause 9 thus prescribes a ceiling of Rs. 25,000/- for valuation of immovable property, while expressly contemplating the sanction of this Court where the fees exceed that amount. The question is whether such sanction necessarily had to be obtained before the Valuer was appointed or whether the Court can sanction the higher fees after completion of the assignment and before payment. 34. On a plain reading of Clause 9, we find no stipulation requiring t....
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....rcise. Any other interpretation would produce an anomalous result. A Valuer engaged to value one property and a Valuer required to inspect and separately value five or ten distinct properties would, on such an interpretation, be subject to the same aggregate ceiling, irrespective of the additional work, time and professional responsibility involved. The Guidelines cannot reasonably be construed so as to produce such a result. 37. In the present case, the Valuer prepared five separate valuation reports concerning five distinct properties. Four of the five valuation bills exceed Rs. 25,000/-. The sixth bill relates to inspection of the properties, the cost of photographs and preparation of a report concerning their existing condition. The claim must therefore be examined with reference to the work performed under each component of the assignment. The authorities relied upon by the learned Amicus Curiae indicate that sanction of fees exceeding the prescribed ceiling is not automatic. The Court is required to examine, inter alia, the nature and extent of the work performed and the quality and correctness of the valuation exercise. The circumstances in which the claim has remained un....
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....erformed, we are satisfied that the higher amount claimed under this bill also merits sanction. The revised principal claim of Rs. 6,51,062/- is therefore sanctioned in full. 40. The 1994 Guidelines do not expressly provide for payment of interest where the professional fees of a Panel Valuer remain unpaid. The absence of an express provision, however, does not prevent the Court, in an appropriate case, from awarding reasonable compensation for an extraordinary period during which professional fees legitimately earned pursuant to a Court-authorised assignment have remained unpaid. In Bank of Baroda (supra), this Court granted interest at the rate of 12% per annum from the date of the respective bills until payment. The principle underlying such an award is that a professional who has performed the work entrusted by the Court and has remained deprived of the remuneration lawfully due ought not to be left without compensation for the period of delay. 41. The present case presents an especially compelling instance. The Valuer completed its assignment and raised its bills in May 2004. It repeatedly sought payment. The Court Receiver repeatedly called upon the Petitioners to depos....
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....sent case, simultaneously recover interest for the period of delay and a further inflation-linked enhancement for that same period. The claim based upon the multiplier of 3.21238 and the alleged erosion in the purchasing power of the rupee is accordingly rejected. 45. The Valuer is consequently entitled to the revised principal amount of Rs. 6,51,062/- and interest of Rs. 8,20,338/- calculated up to May 2025, aggregating to Rs. 14,71,400/- together with further simple interest at the rate of 6% per annum on the principal amount of Rs. 6,51,062/- from 1st June 2025 until actual payment. 46. The next question concerns the manner in which the sanctioned amount is to be paid. Clause 8 of the 1994 Guidelines contemplates a declaration by a Panel Valuer that its professional fees shall be claimed from the funds available to the credit of the concerned proceedings in the hands of the Court Receiver, Commissioner for Taking Accounts, Official Assignee or Official Liquidator, and that the Valuer shall not look personally to the office of the Court Receiver or to the State Government for payment. In the present case, the Court Receiver has categorically stated that there are no funds a....
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....ority/forum in accordance with the applicable law. 50. The Valuer has sought impleadment of Smt. Rowena Sharma and directions for freezing the bank accounts and assets of companies with which she is stated to be associated, in the event that the funds available with the Official Liquidator are insufficient to satisfy the Valuer's claim. We are unable to grant such reliefs in the present proceedings. There is no substantive material before us establishing any personal liability of Smt. Rowena Sharma for the liabilities of Petitioner No. 1 - Company. Nor is there material establishing that the assets of any separate corporate entity with which she may have been associated are liable to be proceeded against for satisfaction of the present claim. Mere association with a company, or relationship with a person who was formerly associated with that company, cannot by itself constitute a legal basis for fastening personal liability or freezing the assets of separate corporate entities. Such reliefs would require appropriate pleadings, a legally sustainable basis for the relief sought and an opportunity of hearing to the persons or entities whose assets are proposed to be affected. The r....
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.... their assignments in the legitimate expectation that their professional fees will be paid in accordance with law within a reasonable time. Administrative or procedural difficulties following disposal of the substantive proceedings should not result in a professional being left without payment for decades and thereafter being required to litigate for recovery of fees which were never disputed on merits. 54. Appropriate administrative mechanisms must therefore ensure that, before a Court Receiver is discharged or a proceeding is closed, all outstanding professional fees of persons engaged in aid of the Court's proceedings are identified and appropriate directions for their payment or recovery are obtained. The Registry and the office of the Court Receiver shall bear this consideration in mind in future matters. The Court also considers it appropriate to express its regret to the Valuer for the extraordinary delay which has occurred in the resolution of its claim. The delay of more than two decades is wholly disproportionate to the nature of the professional assignment and is plainly an unfortunate consequence of the manner in which the matter remained unresolved. We hope that the....