While flagging administrative failure in processing professional dues, the Bombay High Court has held that a Panel Valuer engaged by the Court Receiver pursuant to a Court order is entitled to reasonable remuneration for work actually performed and accepted, even where fees exceed the ceiling prescribed under the applicable Guidelines, provided the Court’s sanction is obtained before payment. The applicable Guidelines are those in force at the time of appointment and performance of the assignment, and the per-property ceiling must be applied separately to each distinct property valued.
The High Court clarified that where professional fees legitimately earned under a Court-authorised assignment remain unpaid for a prolonged period, the Court may award reasonable interest as compensation for the delay but cannot grant relief in excess of what has been claimed, and a Valuer cannot simultaneously recover interest and an inflation-linked enhancement for the same period of delay. Further, sanction of fees by the Court does not, by itself, determine priority in liquidation or create personal liability on the Court Receiver, the Official Liquidator, the State Government, or any associated person or entity.
The Division Bench comprising Justice R.I. Chagla and Justice Farhan P. Dubash first determined which set of Guidelines governed the Valuer’s professional fees. The 1994 Guidelines (bearing No. G/643/1149) deal with valuation of immovable properties in aid of their sale, while the 1999 Guidelines (bearing No. G/6795) govern valuation for determination of royalty or compensation payable by an occupier to the person lawfully entitled to possession, conceptually akin to mesne profits. The 2007 Guidelines maintained the same distinction between Annexure I (valuation of immovable properties) and Annexure III (royalty and compensation).
Since the assignment in the present case was for valuation of immovable properties in aid of their proposed sale and not for determination of royalty or compensation and since the Valuer was engaged in January 2004, completed the assignment in May 2004, and raised bills on 15th May 2004, the Court held that the 1994 Guidelines applied, and the 2007 Guidelines could not govern an assignment already completed. The Court reaffirmed that the applicable Guidelines are those in force when the Valuer was appointed and when the work was performed.
On Clause 9 of the 1994 Guidelines, which prescribes a maximum fee of Rs. 25,000/- per valuation of immovable property and requires prior sanction of the Court for fees exceeding that amount, the Court held that ‘prior sanction’ relates to the act of payment, not to the act of appointment. The Court further held that the ceiling of Rs. 25,000/- must be applied separately to each property valued, and not collectively to the entire assignment, since any other interpretation would produce an anomalous result.
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On interest, the Court noted that the 1994 Guidelines do not expressly provide for interest on delayed payment, but the absence of an express provision does not prevent the Court from awarding reasonable compensation for an extraordinary period of non-payment. Drawing support from Bank of Baroda v. Eassy Stick Private Limited [Order dated 5th May 2014 passed in CRR No. 63 OF 2014], where this Court had granted interest at 12% per annum from the date of each bill until payment, the Court held that a professional who has performed work entrusted by the Court and remained deprived of lawful remuneration ought not to be left without compensation for the period of delay.
The Court rejected the Valuer’s additional claim for erosion in the purchasing power of the rupee, holding that once reasonable interest is awarded for the entire period of deprivation, a further inflation-linked enhancement would result in overlapping compensation for the same period of delay. The Court noted that the multiplier of 3.21238 had been applied not merely to the principal but to the aggregate of principal and interest, which would apply an inflation-linked enhancement even to the amount awarded as compensation for delay itself.
On the reliefs sought against Smt. Rowena Sharma and the freezing of bank accounts and assets of companies associated with her, the Court held that there was no substantive material establishing any personal liability on her part for the liabilities of Petitioner No. 1 – Company, and that mere association with a 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, and an opportunity of hearing to the affected persons or entities.
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Briefly, the original writ petition was filed in 2001 by M/s. Kuber Mutual Benefits Ltd. and others, challenging the attachment of their properties under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act). By an order dated 1st December 2003, the Bombay High Court directed the Court Receiver to visit the site, report on its condition, invite offers for purchase of the building on an ‘as is where is’ basis, and explore the possibility of completing the construction in accordance with sanctioned plans before making the building available for sale.
Pursuant to this order, the Court Receiver engaged M/s. AT & TS Associates (the Valuer) in January 2004 to provide technical assistance. The Valuer inspected the subject properties and submitted a detailed report on 5th May 2004. On 15th May 2004, the Valuer raised six bills, one for inspection and photographs, and five for separate valuation reports concerning properties at CBD Belapur, Sector 4 Kharghar, Sector 11 Kharghar, Sector 10 Vashi, and Village Pahur, Taluka Mangaon/Roha, District Raigad, aggregating Rs. 7.01 lakhs, inclusive of service tax.
The writ petition was disposed of on 5th September 2005, but the Valuer’s bills remained unpaid. Despite repeated communications from the Valuer and the Court Receiver, the Petitioners and their Advocates did not deposit the amount. Court Receiver’s Report No. 126 of 2010 was filed seeking directions on the Valuer’s fees but remained pending for years, with no order being passed despite repeated listing requests.
By communication dated 15th May 2025, the Valuer submitted revised invoices excluding the service tax component, reducing the principal claim from Rs. 7.01 lakhs to Rs. 6.51 lakhs. The Valuer additionally claimed simple interest at 6% per annum for 21 years and applied a multiplier of 3.21238 towards alleged erosion in the purchasing power of the rupee, thereby raising its total claim to Rs. 47.26 lakhs. The Valuer sought a judgment and decree for this amount against Petitioner No. 1 – Company, impleadment of the Official Liquidator, Uttar Pradesh and Uttarakhand (designated by the Allahabad High Court to settle creditors’ claims), and impleadment of Smt. Rowena Sharma, wife of the late Director Shri Pradyuman K. Sharma, along with directions to freeze bank accounts and assets of companies associated with her.
The Court Receiver recorded that Petitioner No. 1 – Company was under liquidation, its Director had expired, the whereabouts of the Company were not known, the suit account was running into debit to the extent of Rs. 684/-, and no further steps were possible for recovery of the Valuer’s fees. The Court Receiver accordingly filed Court Receiver’s Report No. 25 of 2025 seeking discharge without passing accounts, or alternatively, directions regarding the Valuer’s outstanding claim.
