Dismissed

j.k.synthetics Ltd. v. state of maharashtra and Ors.

Bombay HC17 Jul 2006APP/833/2005

Case brief

AI extract

What is this about?

The High Court dismissed an appeal by J.K. Synthetics Limited challenging the commission charged by the Court Receiver under Rule 591 of the Bombay O.S. Rules. The Court held that the fixed scale must be followed unless exceptional circumstances exist, rejecting claims based solely on the quantum of work or citation of high courts dealing with ad-hoc fees.

What did the court decide?

Appeal dismissed; no order as to costs.

j.k.synthetics Ltd. Vs state of maharashtra and Ors. — Company and Corporate | Bombay HC (2006)

¶1

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

¶2

 ORDINARY ORIGINAL CIVIL JURISDICTION

¶3

 APPEAL NO. 833 OF 2005
 IN
 CHAMBER SUMMONS NO. 1211 OF 2003
 IN

¶4

 SUIT NO. 4411 OF 1997

¶5

 J.K. SYNTHETICS LIMITED ]

¶6

 A Company within the meaning of ] Appellant
 Companies Act, 1956 and having ] (Original
 its Registered Office at Kamla Tower ] deft. no.1)
 Kanpur- 208 001 (U.P.) ]

¶7

 Versus

¶8

 1) State of Maharashtra through the ]
 Principal Secretary and RLA to ] Original
 Government, having his office at ] Appellant in
 Mantralaya, Mumbai - 400 032 ] Appeal 477/04
 2) The Industrial Credit and ]
 Investment Corporation of India ]
 Ltd., a Public Limited Company ]
 incorporated under the Indian ]
 Companies Act, 1913 (Act VII of ]
 1913) having its registered office ]
 at 163, Backbay Reclamation, ]
 Mumbai - 400 020 ]
 3) The Industrial Finance Corporation ]
 of India Limited, a Public Limited ]
 Company within the meaning of ]
 Companies Act, 1956 and having its ]
 Registered Office at 16, Sansad ]
 Marg, Bank of Baroda Building, ]
 New Delhi - 110 001 and its ]
 Registered Office at Earnest House ]
 Nariman Point, Mumbai - 400 021 ]
 4) Industrial Development Bank of ]
 India, a Statutory Corporation ]
 established under the Industrial ]
 Development Bank of India Act, ]
 1964, having its Head Office at ]
 IDBI Tower, Cuffe Parade, ]
 Mumbai - 400 021 ]
 5) Life Insurance Corporation of ]
 India, a statutory Corporation ]
 established under the Life ]
 Insurance Corporation of India ]

¶9

¶10

`Limited Act, 1956 having its ]` `Central Office at Yogakshema, ]` `Jivan Bima Marg, Mumbai - 400 021 ]`
`6) Unit Trust of India, constituted ]` `under the provisions of the Unit ]` `Trust of India Act, 1963 having ]` `its Registered Office at Sir ]` `Vithaldas Thackersey Marg, ]` `New Marine Line, Mumbai - 400 020 ]`
`7) General Insurance Corporation of ]` `India constituted under the ]` `General Insurance business ]` `(Nationalisation) Act, 1972 ]` `(57 of 1972) having its Registered ]` `Office at Industrial Assurance ]` `Building, Churchgate, Mumbai- 20 ]`
`8) Industrial Investment Bank of India]` `a Public Limited Company within ]` `the meaning of Companies Act, 1956 ]` `and having its Registered Office ]` `at 19, Netaji Subhash Road, ]` `Calcutta- 700 001 and its Mumbai ]` `Office at Earnest House, Nariman ]` `Point, Mumbai - 400 023. ]`
`9) National Insurance Company Ltd. ]` `a Subsidiary of General Insurance ]` `Corporation of India and having ]` `its Head Office at Middleton Road ]` `Calcutta - 700 071 and its Mumbai ]` `Office at 12, Jamshedji Tata Road ]` `Churchgate, Mumbai - 400 020. ]`
`10) New India Assurance Company Ltd. ]` `a subsidiary of General Insurance ]` `Corporation of India having its ]` `Head Office at New Indian ]` `Asurance Bldg., M.G. Road, Fort ]` `Mumbai - 400 023. ]`
`11) Oriental Insurance Company Ltd. ]` `(formerly known as Fire & General ]` `Insurance Company Ltd.) a ]` `subsidiary of General Insurance ]` `Corporation of India, having its ]` `Head Office at Jivan & Udyog ]` `Bldg., A-25/27, Asaf Ali Road, ]` `New Delhi 110 001 and its Mumbai ]` `Office at 7, J. Tata Road, ]` `Churchagate, Mumbai - 400 020. ]`
`12) United India Insurance Company ]` `Ltd., a Subsidiary of General ]` `Insurance Corporation of India, ]`

¶11

¶12

`having its head Office at 24, ]` `White Road, Madras - 600 014 and ]` `its Registered Office at ]` `1, Stadium House, Veer Nariman ]` `Road, Mumbai - 400 020 ]`
`13) Rajasthan State Industrial ]` `Investment Corporation, having ]` `its office at Udyog Bhavan, ]` `Tilak Marg, Jaipur- 302 005 ]`
`14) State Bank of India, a body ]` `Corporate under the Banking ]` `Companies (Acquisition & Transfer ]` `of Undertaking) Act, 1970 and ]` `having its Office at Motimahal ]` `Marg, Admn. Bldg., Hoyarat Ganj, ]` `P.B. no. 57, Lucknow- 276 001 ]` `and Domestic Treasury Department, ]` `Central Office, PB no. 12, ]` `Mumbai - 400 021 ]`
`15) Bank of Tokyo a banking Company ]` `incorporated under the laws of ]` `Japan and having a Branch Office ]` `at Jeevan Prakash, Sir PM Road, ]` `Mumbai - 400 023 ]`
`16) Syndicate Bank, a body Corporate ]` `the Banking Companies ]` `(Acquisition & Transfer of ]` `Undertakings) Act, 1970 and ]` `having its Zonal Office at ]` `Sarojini House, Bhagwandas Road, ]` `New Delhi and its Zonal Office at ]` `E-Maker Tower, Mumbai - 400 005 ]`
`17) Bank of Rajasthan, having its ]` `Office at Central Admn. & Indl. ]` `Banking Department Central Office ]` `C-3, S.P. Marg, "C" Scheme, ]` `Jaipr. ]`
`18) Central Bank of India, a body ]` `corporate under the Banking ]` `Companies (Acquisition & Transfer ]` `of Undertaking), Act, 1970 and ]` `having its office at Chandramukhi ]` `Nariman Point, Mumbai - 400 021. ]`
`19) ANZ Grindlays Bank PLC, having ]` `its Office at Mercantile House, ]` `1st Floor, 15, Kasturba Gandhi ]` `Marg, New Delhi and having its ]` `Branch Office at M.G. Road, Fort, ]` `Mumbai - 400 023. ]`

¶13

¶14

`20)`	`The Industrial Credit & ]` `Investment Corporation of India ]` `Limited, a Public Ltd. Company ]` `incorporated under the Indian ]` `Companies Act, 1913 (Act VII of ]` `1913) in its capacity as ]` `trustees for "B" Series, "C" ]` `Series and partly Convertible ]` `Debenture Series and having its ]` `Registered Office at 163,Backbay ]` `Reclamation, Mumbai - 400 020 ]`
`21)`	`Punjab National Bank, a body ]` `corporate under the Banking ]` `Companies (Acquisition and ]` `Transfer of Undertakings) Act, ]` `1970 and having its office at ]` `Kalpi Road, Kanpur and its Delhi ]` `Office at P.N.B. House, Bhikaji ]` `Cama Place, New Delhi- 101 029 ]`
`22)`	`State Bank of Bikaner and Jaipur ]` `under the State Bank of India ]` `(subsidiaries) Act, 1959 having ]` `its Branch Office at Kaushal Puri ]` `Gumti Number 5, Kanpur- 208 012 ]`
`23)`	`Bank of Baroda a Body Corporate ]` `constituted under the Banker’s ]` `Companies (Acqusition & Transfer ]` `of Undertakings) Act, 1920, ]` `having its Central Office at ]` `3, Walchand Hirachand marg, ]` `Ballard Estate, Mumbai - 400 038 ]` `and Branch Office at 118/330 ]` `Kaushal Puri, Gumti Numbers, 5 ]` `Kanpur. ]`
`24)`	`Hongkong & Sanghai Banking ] Respondents` `Corporation Limited having its ] (Original` `Office at Mahatma Gandhi Road, ] Defendant)` `Fort, Mumbai - 400 020 ]` `AND`
	`COURT RECEIVER, HIGH COURT, ] Respondent` `BOMBAY ]`

¶15

 Mr. Virag Tulzapurkar, Senior Advocate with Ms.
 Soumya Srikrishna i/b Malvi Ranchoddas & Company for
 Appellant.

¶16

 Mr. Niranjan Pandit, A.G.P. for Respondent No. 1.

¶17

 Mr. B.D. Joshi for the Court Receiver, High Court,
 Bombay.

¶18

¶19

 CORAM : KSHITIJ R. VYAS, C.J. &
 ABHAY S. OKA, J.
 DATE ON WHICH : 29TH JUNE, 2006
 JUDGMENT IS
 RESERVED.
 DATE ON WHICH : 17TH JULY, 2006
 JUDGMENT IS
 PRONOUNCED

¶20

 JUDGMENT (PER ABHAY S. OKA, J.)

¶21

 1. By this Appeal, the Appellant first Defendant
 has taken an exception to the judgment and order dated
 13th December, 2004 passed in Chamber Summons No. 1211
 of 2003 in Suit No. 4411 of 1997. The issue involved
 in this Appeal is regarding entitlement of the
 Appellant to reduction in the amount of fees/
 commission charged by the Court Receiver as per the
 rates prescribed by Rule 591 of The Rules and Forms of
 the High Court of Judicature at Bombay on the Original
 Side in its several Jurisdiction Rules, 1980

¶22

 (hereinafter referred to as "O.S. Rules").

¶23

 2. For the purposes of appreciating the

¶24

 submissions made by the learned counsel appearing for
 the parties, it will be necessary to refer to the facts
 of the case in brief.

¶25

 3. The second Respondent filed a suit against the
 Appellant for recovery of a sum of Rs.101.29 Crores and
 other reliefs which are more particularly set out in

¶26

¶27

 the plaint. By order dated 7th January, 1998, the
 Court Receiver, High Court was appointed as Receiver of
 the properties of the Appellant described in Exhibit
 "A-1" to "A-5" to the plaint. Court Receiver was also
 appointed in respect of the properties at Exhibit "B-1"
 to "B-7" and Exhibit "C" to the plaint. This Court
 directed that the Appellant shall be appointed as the
 Agent of the Court Receiver of all the suit properties
 without insisting upon any security. On the basis of
 the said order, the Appellant opted to act as an Agent
 of the Court Receiver only in respect of two running
 Units of Cement Plants of the Appellant situate at
 Gotan and Nimbahera in the State of Rajasthan. In
 respect of rest of the properties, the Appellant did
 not accept the agency. The Court Receiver after
 hearing the plaintiffs and the appellants fixed the
 Adhoc Royalty @ Rs.25.00 Lacs per month for each of the
 aforesaid Unit w.e.f. 7th January, 1998. A Chamber
 Summons was taken out by the Appellant for reduction of
 the adhoc Royalty fixed by the Court Receiver. The
 said Chamber Summons was dismissed by this Court.
 Initially there was some default on the part of the
 Appellant in payment of monthly royalty. Later on the
 Appellant started regularly paying monthly royalty
 amount of Rs.50.00 Lacs. It appears that the suit
 filed by the second Respondent was transferred to the
 Debt Recovery Tribunal, Mumbai. The parties moved the
 said Tribunal for appointment of the DRT Receiver in
 place of Court Receiver. By order dated 20th December,

¶28

¶29

 2002 passed by the DRT, Mumbai, the Court Receiver,
 High Court was discharged and a DRT Receiver was
 appointed. Till the end of December, 2002, the
 Appellant had deposited the total sum of
 Rs.29,73,99,998/- with the Court Receiver by way of
 Royalty. The Court Receiver made payment of
 Rs.2,79,84,771/- to the plaintiff towards reimbursement
 of security charges and Insurance premium. The royalty
 amount received from the Appellant was deposited in
 fixed deposits by the Court Receiver under different
 deposits of Rs.10.00 Lacs. each. The royalty amount
 was invested by the Court Receiver under 272 different
 fixed deposit receipts. In terms of the Rule 591 of
 the O.S. Rules, the Court Receiver charged commission
 at the rate of 6% on the royalty amount collected from
 the Appellant. The total commission at the rate of 6%
 works out to be Rs.1,78,44,000/- which has been already
 credited by the Court Receiver to the Government
 account. As per the said Rule 591, the Court Receiver
 charged commission at the rate of 5% on the interest
 received on the fixed deposits. The said commission of
 Rs.9,94,739/- has been already credited by the Court
 Receiver in the Government account.

¶30

 4. The Appellant took out Chamber Summons No.
 1211 of 2003. Prayer (a) of the said Chamber Summons
 is as under :

¶31

 "(a) That this Hon’ble Court be pleased to

¶32

¶33

 waive the fees chargable under Rule 591 of the
 Bombay High Court (Original Side) Rules, 1980
 by the Respondent at the rate of 6% on the
 amounts of royalties recovered by the
 Respondent from Defendant No. 1 and at the
 rate of 5% on the interest earned on the
 investment of funds in the custody of the
 Respondent and in particular on the amounts of
 royalties recovered by the Respondent from
 Defendant No.1".

¶34

 5. The said Chamber summons was initially decided
 by the learned Single Judge by an order dated 4th
 Feburary, 2004. By the said order, the learned single
 Judge reduced the commission of the Court Receiver on
 royalty and commission on interest on fixed deposits.
 A lumpsum amount of Rs.10.00 Lacs was fixed. The State
 Government carried the said order in an Appeal before a
 Division Bench of this Court. By the Judgment and
 order dated 1st September, 2004, the appeal was allowed
 and the learned single Judge was directed to decide the
 Chamber Summons afresh. By the order impugned in this
 appeal, the Chamber Summons has been decided afresh and
 the same has been dismissed.

¶35

 6. Shri. Tulzapurkar, the learned senior Counsel
 appearing on behalf of the Appellant submitted that the
 Court has a power to fix the fee payable to the Court
 Receiver. He submitted that the rates of commission

¶36

¶37

 payable on royalty and interest fixed by Rule 591 of
 the O.S. Rules are subject to variation by the Court.
 Placing reliance on a decision of a learned Single
 Judge of Karnataka High Court in the case of N.
 Jayadevappa v/s G. Nanjundappa (AIR 1976 Karnataka
 page 27) he submitted that remuneration of the Court
 Receiver has to be commensurate with the work actually
 done by him. Relying upon a decision of a Division
 Bench of Madras High Court in the case of B.
 Soundarapandian and another v/s IFCI (AIR 1982 Madras

¶38

 P. 206), he urged that the remuneration of the
 Receiver has to be fixed by giving due consideration to
 the quantum of work done by the Receiver and the other
 circumstances of the case. He pointed out that the
 Madras High Court has also framed a rule which is
 similar to rule 591 of the O.S. Rules. He stated that
 the only work done by the Court Receiver in this case
 is of investment of the royalty amount paid by the
 Appellant in various banks. He urged that total
 commission of Rs.1,85,22,958/- charged by the Receiver
 is exhorbitant and is not at all commensurate with the
 work done by the Court Receiver. He submitted that the
 learned single Judge has declined to exercise the power
 vested in him only on the ground that if the case of
 the Appellant is entertained, in large number of cases
 the same exercise will have to be done. He urged that
 the order passed by the learned Single Judge is
 illegal. He submitted that this was a fit case for
 exercise of power under Rule 591.

¶39

¶40

 7. Shri. N.P. Pandit, the learned AGP appearing
 for the State submitted that a departure can be made
 from Rule 591 only in exceptional cases. He submitted
 that wherever the Rule makers intended that the
 remuneration has to be fixed considering the quantum of
 work, a specific provision to that effect has been made
 in Rule 591 and 592. He submitted that the decisions
 of Madras and Karnataka High Courts have no application
 to the facts of this case.

¶41

 8. Shri. B.D. Joshi, the learned Counsel

¶42

 appearing for the Court Receiver pointed out from the
 Reports submitted by the Court Receiver that huge funds
 are required for running the establishment of the
 Office of the Court Receiver. He stated that every
 year a large amount by way of revenue has been
 transferred by the office of the Court Receiver to the
 State Government. He submitted that the learned Single
 Judge has laid down correct principles.

¶43

 9. We have given our anxious consideration to the
 submissions made by the learned Counsel appearing for
 the parties. Rule 591 and 592 of the O.S. rules read
 as under :

¶44

 "591. Unless otherwise ordered by the Judge,
 the Court Receiver shall charge fees according
 to the following scale :-

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¶46

`----` `----`	`---------------------------------------------------` `Scale of fees Per cent` `---------------------------------------------------`
`(1)`	`On Rents, Royalties or licence fees 6` `recovered .. ..`
`(2)`	`On outstanding recovered except as` `provided in item 3 below .. .. ..`
	`On the first Rs.25,000 or fraction` `thereof .. .. .. 5`
	`On the next Rs.25,000 or fraction 3` `thereof .. .. ..`
	`On the next Rs.50,000 or fraction 2` `thereof .. .. ..`
	`On any further sum over Rs.1,00,000 .. 1`
`(3)`	`On outstanding recovered from a` `Bank or from a public servant` `without filing a suit .. .. .. 1`
`(4)`	`On sale of properties movable or` `immovable calculated on the total` `value realised in any one estate :`
	`On the first Rs.25,000 or fraction 3` `thereof .. .. ..`
	`On the next 25,000 or fraction` `thereof .. .. .. 2 1/2`
	`On the next Rs.50,000 or fraction` `thereof .. .. .. 2`
	`On any sum above Rs.1,00,000 .. .. 1`
`(5)`	`For taking charge of movable property` `which is not sold on the estimated` `value 1`
`(6)`	`For taking custody of moneys .. .. 1`
`(7)`	`For taking custody of Government` `Securities or Stocks, Shares,` `Debentures, Debenture-Stock or` `other Securities which are not sold` `on the estimated value 1`
`(8)`	`On the interest earned by investment` `of funds in the custody of the Court` `Receiver. 5`
`(9)`	`For any special work, not provided`

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¶48

 for above, such remuneration as the
 Court on the application of the
 Receiver shall think reasonable ..

¶49

 -------------------------------------------------------

¶50

 . While calculating fees to be charged, the
 amount will be calculated to the nearer whole rupee by
 giving up the amount less than 0.50 ps. and counting
 the amount of 0.50 ps. and above a whole rupee.

¶51

 592. The Court Receiver shall, unless
 otherwise ordered by the Judge, charge to
 suits, estates or matters under his management
 a sum which in his discretion he considers
 proper, towards the expenses of his office
 including his salary and this he shall do so
 with due regard to the fees charged by him
 under rule 591 and to the value of each suit,
 estate or matter and the labour and trouble
 involved in its management."

¶52

 10. Rule 591 lays down the scale of fee and/or

¶53

 commission to be charged by the Receiver. Items 1 to 8
 provide for a specific percentage to be charged by way
 of fees by the Receiver. Item No.1 provides for fees
 of 6% on rents, royalties or licence fees recovered by
 the Receiver. Item 8 provides for 5% of fee which is
 payable on interest earned on the funds invested by the
 Court Receiver. Fee prescribed in items 1 to 8 has no
 co-relation with the efforts put in by Office of the
 Receiver. However, item 9 gives complete discretion to
 the Court to fix remuneration of the Receiver for any
 special work which is not provided for in items 1 to 8.
 Rule 591 makes it very clear that normally the charges
 of the Receiver will be as per the scale prescribed by
 the rule unless the Court otherwise directs. Rule 592
 provides that the Receiver has a discretion to charge
 to the suits a sum which he in his discretion considers

¶54

¶55

 proper towards the expenses of his office. While
 charging the said amount, the Receiver has to give due
 regard to the fee charged by him under Rule 591 and the
 labour and trouble involved in the management. Thus
 the sum which can be charged under Rule 592 is in
 addition to the fee payable under Rule 591. It is
 pertinent to note that while framing the Rules a fixed
 percentage is prescribed so far as work covered by
 items 1 to 8 of Rule 591 is concerned. However for the
 work covered by item 9 of Rule 591 and the Rule 592,
 the fee will have to be fixed commensurate with the
 actual work done.

¶56

 11. It will be necesary to refer to the rules
 framed by this Court in the year 1922. Rule 411 of the
 said rule reads thus :

¶57

 411. The rate of the remuneration of a
 receiver shall in no case exceed the amount
 specified in the scale of fees given below :

¶58

 (a) No Officer of the Court acting as
 receiver shall settle his remuneration with the
 attorneys for the parties concerned or with the
 parties if in person.

¶59

 (b) No remuneration, except on the scale
 laid down, shall be allowed by the Commissioner
 for taking accounts in passing a receiver’s

¶60

¶61

 accounts.

¶62

 Scale of Fees
 -------------
 (1) On rents recovered .. .. .. 5 per
 cent.
 (2) On outstanding recovered :
 . On the first Rs.10,000 or fraction thereof 5 per
 cent
 . On the next " 15,000 " " 3 per
 cent
 . On the next " 25,000 " " 2 per
 cent
 . On the next " 50,000 " " 1 per
 cent
 . On any further sums over Rs.1,00,000 1/2
 per cent
 (3) On sales of properties, moveable or immovable,
 calculated on the total value realised in any one
 estate -
 . On the first Rs.10,000 or fraction thereof 3 per
 cent
 . On the next " 15,000 " " 2 1/2
 per cent
 . On the next " 25,000 " " 2 per
 cent
 . On the next " 50,000 " " 1 per
 cent
 . On any sums above Rs.1,00,000 ... 1/2
 per cent
 (4) For taking charge of moveable ... 1 per
 property which is not sold on cent.
 the estimated value
 (5) For special attendance out of
 office in cases not provided
 for above -

¶63

 For the first half hour .. .. .. Rs. 15-0-0
 Over half an hour and under an hour " 30-0-0

¶64

 For every hour or fraction of
 an hour over one hour .. .. .. " 15-0-0

¶65

¶66

 (6) For any special work, not provided for above,
 such remuneration as the Court on the application of
 the receiver shall think reasonable.

¶67

 12. In the rules which are published in the year

¶68

 1930, Rule 434 deals with the rate of remuneration of
 the Receiver. Rule 434 is more or less identical to
 Rule 411 of the rules of the year 1922. The rules
 published in the year 1936 contain identical rule which
 is the rule 444.

¶69

 13. There is a clear distinction between present
 rule 591 and the earlier rules, namely, rule nos. 411,
 434 and 444. Items 1 to 8 of Rule 591 provide that
 normally the fee of the Receiver will be as per the
 scale prescribed in the rule unless otherwise directed
 by the Court. Whereas the old rules of 1923 and 1930
 provided that the scale which is mentioned in the rule
 411 of 1923 Rules and Rule 434 of 1930 Rules is the
 upper limit of the rate of remuneration of a Receiver.
 The said rules do not provide that the remuneration
 shall be as per the scale of fees provided in the
 rules. Rule 441 which finds place in 1936 rules
 provided that without an express order of the court,
 the rate of remuneration of a Receiver shall in no case

¶70

 exceed the amounts specified in the scale of fees
 mentioned in the rule. The said opening part of rule
 441 was amended on 15th July, 1948 and the opening
 words of rule 441 were substituted as under :

¶71

¶72

 "Unless otherwise ordered by the Judge, the
 Court Receiver shall charge fees according to
 the following scales"

¶73

 Another set of rules came into existence which was
 published in the year 1957. Rule 476 in the said rules
 is a re-production of rule 441 in the earlier rules as
 amended in the year 1948. The present rule 591 was
 incorporated in the rules which were published in the
 year 1980. Thus upto 1948 the position was that the
 Receiver could fix fees subject to upper limit provided
 by the scale prescribed by the rules. From 1948 the
 position is that the Receiver has to charge the fee as
 per the scale prescribed by the concerned rule unless a
 contrary order is passed by the Court. Thus the
 Receiver is bound to claim fees as per scale prescribed
 by the rule 591 unless there is a contrary order of the
 Court. Now the question to be decided is under what
 circumstances the Court should exercise the power of
 directing the Receiver to charge fee which is not in
 conformity with the scale prescribed by the rule 591.

¶74

 14. On plain reading of rule 591, it is apparent
 that the intention is that in normal circumstances the
 Receiver must charge fees as per the scales prescribed
 in rule 591. Only by way of an exception, the Court
 will exercise power of permitting Receiver to charge
 fee which may not be consistent with the scale
 prescribed by rule 591. Only by way of an exception

¶75

¶76

 that the fee payable as per the scale prescribed in
 items 1 to 8 of the Rule 591 of the O.S. Rules can be
 reduced. The learned Single Judge, in our view, has
 rightly held that the fee shall be charged in
 accordance with the scale prescribed by the rule 591
 and reduction of fee by exercising discretion vested in
 the Court cannot become a normal feature. He has
 rightly held that reduction of fees can be only by way
 of exception. The learned Single Judge by way of
 illustration has stated that the discretion of reducing
 the fee or commission payable under Rule 591 can be
 exercised where the party liable to pay fee belongs to
 a weaker strata of the society or the party is a widow
 or a minor. Thus it is very clear to us that departure
 can be made from the scale prescribed by rule 591 only
 by way of an exception. The Court has to exercise
 discretion of reducing fee prescribed by rule 591 only
 in exceptional cases considering the peculiar facts of
 the case. The reduction of fee cannot become a normal
 feature.

¶77

 15. It is obvious from the language of rule 591
 that the rule makers did not intend that while taking
 fee or commission on the royalty or rent collected and
 on interest earned on the amounts invested by the
 Receiver, the amount of fee or commission shall be
 commensurate with the efforts put in by the Court
 Receiver. If that was the intention, the framers of
 the rules could not have provided for payment of fee on

¶78

¶79

 percentage of the royalty received and interest earned
 on fixed deposit. That is the reason why the earlier
 rule which provided for upper limit of scale of fees
 had been replaced by the present Rule 591.

¶80

 16. It will be necessary to refer to various
 reports submitted by the Court Receiver in this Appeal
 in compliance with the direction given by this Court.
 In the said reports, the Receiver has set out the
 expenditure incurred for running his Office, the
 quantum of fee/remuneration charged by the Receiver in
 various cases and the revenue remitted to the State
 Governemt. The Office of the Court Receiver has a
 staff of 100 officials. A Chart incorporated in the
 report showing the revenue remitted to the Government
 and the expenditure incurred by the office of the Court
 Receiver is as under.

¶81

`------------------` `Year Revenues` `remitted` `to Govt.`	`------------------------------------` `Expenditure Exp.in Exp.in` `of this Printing Postage &` `Office on & Revenue` `salary Statio- St.` `nery`
`------------------` `2001 2,95,00,000`	`-------------------------------------` `1,09,27,858 2,60,020.50 1,12,710`
`2002 1,64,51,170`	`1,03,11,134 1,27,157.50 1,25,207`
`2003 1,65,80,000`	`1,12,73,203 2,12,422.00 40,136`
`2004 1,50,00,000`	`1,27,94,735 2,32,688.00 1,55,145`
`2005 1,70,00,000` `------------------`	`1,47,07,748 1,43,714.00 1,75,225` `-------------------------------------`

¶82

 17. The Court Receiver has to look after various

¶83

¶84

 properties in respect of which he is appointed as a
 Receiver by this Court. The properties are not
 confined to city of Mumbai and the properties are at
 different places in the state and even outside the
 State. The Receiver has to look after investments made
 in different proceedings in different banks. The
 Receiver’s office has to keep track of all the
 investments made in different banks. Thus a large
 revenue is needed to maintain the Receiver’s Office
 consisting of 100 officials.

¶85

 18. Thus in our view departure can be made from the
 fixed percentage of fees prescribed in Rule 591 only in
 exceptional cases. For considering the question
 whether a particular case is an exceptional case,
 various factors will have to be considered by the Court
 in each case. It is very difficult to give exhaustive
 list of such factors. However, the discretion will
 have to be exercised having regard to the nature of the
 litigation, the financial capacity of the litigant, the
 social status of the litigant. In case of a person who
 belongs to weaker strata of society or a widow or a
 minor, the question of exercising the discretion can be
 considered.

¶86

 19. Now the question before us is whether
 discretion should be exercised in favour of the
 appellant which is a Public Limited Company. Certain
 factual aspects will have to be considered. The

¶87

¶88

 appellant was appointed as an Agent of the Court
 Receiver in respect of several properties. The
 Appellant has chosen to accept agency in respect of
 only two properties on which there is a Cement Plant.
 Ad-hoc royalty of Rs.25.00 Lacs. per unit per month
 was fixed when the agency was taken by the appellant.
 The Appellant applied to this Court for reduction of
 the adhoc royalty amount fixed by the Receiver by
 taking out Chamber Summons No. 1037 of 1998. The said
 Chamber Summons was dismissed by this Court.
 Thereafter the Appellant continued to pay royalty of
 Rs.50.00 Lacs per month. The Appellant is a Limited
 Company and is not an ordinary litigant. Rule 591 very
 much existed when the Appellant accepted the agency.
 Therefore, the Appellant accepted the agency with the
 full knowledge of the fixed scale of commission
 incorporated in Rule 591 on the royalty and interest
 amount. The Appellant was all along aware that the
 amount of royalty was being invested by the Court
 Receiver in fixed deposits from time to time. As
 stated earlier in December, 2002, the Court Receiver,
 High Court was discharged and DRT appointed its own
 Receiver. However, the Chamber Summons for reduction
 of fees was taken out on 2nd September, 2003. If the
 Appellant was desirous of obtaining of reduction in the
 fees, the Appellant should have moved the Court long
 back. The Appellant is a litigant capable of paying
 royalty of Rs.50.00 Lacs per month for a long span of
 time.

¶89

¶90

 20. The decision of Karnataka High Court in the
 case of N. Jayadevappa will not be of any help to the
 Appellant. The Karnataka High Court was not dealing
 with a Rule like Rule 591 of the O.S. Rules. The High
 Court was dealing with the issue of fixation of fees of
 an Advocate who was appointed as a Receiver. In the
 decision of the Madras High Court relied upon by the
 Appellant, the Division Bench held that in a case where
 remuneration of the Receiver is not fixed at the time
 of his appointment, a power is vested in the Court to
 fix the remuneration either on a percentage of
 collections or at a fixed monthly remuneration. The
 Court further held that in such a case the Court would
 be guided by the quantum of work and the other
 circumstances. This decision is of no help to the
 Appellant. In this case, we are concerned with the
 exercise of power of the Court of reducing the fixed
 fee prescribed by Rule 591 of the Rules. The O.S.
 Rules have been framed in exercise of power conferred
 by Section 129 of the Code of Civil Procedure, 1908.

¶91

 The Rules framed under Section 129 can be inconsistent
 with the Rules under the First Schedule of said Code.
 However the said Rules cannot be inconsistent with
 Letters Patent.

¶92

 21. As stated earlier, the order passed on the
 Chamber Summons earlier was set aside by the Division
 Bench of this Court and the Chamber Summons was

¶93

¶94

 remitted to the learned Single Judge for a fresh
 consideration. After the remand, no further material
 was placed on record by the Appellant. The Appellant
 accepted the agency of the two properties having Cement
 Plants and willingly paid royalty of Rs.50.00 Lacs per
 month. The royalty amount was invested by the Court
 Receiver from time to time under separate fixed deposit
 receipts in the sum of Rs.10.00 Lacs each. More than
 200 of such fixed deposits were made from time to time
 by the Court Receiver. As per scale prescribed by Rule
 591, a small percentage of royalty collected and
 interest earned for all these years by the Court
 Receiver is required to be paid by way of fee to the
 Court Receiver. Considering all the aforsaid factors,
 the discretion cannot be exercised of reducing the fee
 payable by the Appellant as per the scale prescribed by
 Rule 591. The view taken by the learned Single Judge
 is correct. The quantum of work done by the Court
 Receiver cannot be the only consideration for reduction
 or waiver of the fee claimed as per scale prescribed by
 Rule 591.

¶95

 22. In the circumstances, we find that the view
 taken by the learned Single Judge is legal and proper
 and no interference is required. We accordingly
 dismiss the appeal with no order as to costs.

¶96

¶97

 (KSHITIJ R. VYAS, CHIEF JUSTICE)

¶98

 ( ABHAY S. OKA, J.)

j.k.synthetics Ltd. v. state of maharashtra and Ors.

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j.k.synthetics Ltd. v. state of maharashtra and Ors.

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