This appeal challenged the Court Receiver's claim of 1% commission on movable property secured under an interim order. The Bench held that formal possession sufficed to trigger the commission under the Rules and dismissed the appeal.
The appeal was dismissed; 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.
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APP/18/2013
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.18 OF 2013 IN COURT RECEIVER'S REPORT NO.577 OF 2012 IN ARBITRATION PETITION NO.1214 OF 2010
L & T Finance Limited, a Company ) incorporated under the provisions of ) The Companies Act, 1956, having its ) Registered Office at L & T House, ) Ballard Estate, Mumbai 400 001 ) and Corporate Office at 8th Floor, ) Metropolitan, C-25/C-26, 'E' Block, ) Bandra Kurla (East), Mumbai – 400 051 ) …. Appellant.
(Original Petitioner)
V/s
(Original Respondent)
And
)
) Respondent.
Mrs. S.I. Joshi i/b S.I. Joshi & Co. for the Appellant
Mr. C.M. Korde, Senior Counsel i/b Mr. Sasikumar T.C for Respondent No.2.
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CORAM: V. M. KANADE & DR. SHALINI PHANSALKAR-JOSHI, JJ.
Judgment reserved on : 26/08/2015. Judgment pronounced on : 06/10/2015.
ORAL JUDGMENT (Per V.M. Kanade, J.)
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Infrastructure Pvt. Ltd as agent of the Court Receiver.
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commission on particulars of claim. It was submitted that particulars of claim included not only value of the vehicles but also the other claims including damages, compensation, interest etc. A reply has been filed by the Court Receiver to the affidavit in support filed in Notice of Motion taken out by the Appellant.
“591(5) For taking charge of movable property which is not sold on the estimated value.”
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valuation done. Grievance was made that the Court Receiver had not taken any efforts to get the valuation done. It was submitted that the Court Receiver, on the other hand, informed the Appellant that it was a Finance Company and it should be aware of the valuation of the hypothecated goods.
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27th October, 2010 and the representative of the Court Receiver proceeded at suit site at Chandrapur and took formal possession of the vehicles/equipments by affixing two possession boards indicating possession of the Court Receiver. After the formal possession was taken, a meeting was fixed in the office of the Court Receiver on 21/12/2010. In the said meeting, Advocate for the Appellant submitted that the Respondent - AGT Infrastructure Pvt. Ltd was liable to pay royalty from October, 2010 as the possession of the vehicles had been taken by the Court Receiver in October, 2010. The Appellant's Advocate suggested that royalty may be fixed @ Rs 1,10,210/- and this was accepted by the Respondent - AGT Infrastructure Pvt. Ltd., who agreed to deposit three months' royalty. Thereafter, meetings were held and again on 21/06/2011, representative of the Court Receiver went to the suit site at Chandrapur on which date the representative of the Respondent - AGT Infrastructure Pvt. Ltd. agreed to pay Rs 30 lakhs to the Appellant. Again, representative of the Court Receiver went to the suit site on the next date i.e. on 22/06/2011. However, possession was not handed over.
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the Bombay High Court (Original Side) Rules, the Court Receiver was entitled to claim 1% commission for taking charge of movable property. It was contended that even in cases of tenanted property always formal possession is taken by the Court Receiver and actual possession remains with the tenant. It was contended that therefore the submission of the Appellant that possession was not taken was incorrect. He then submitted that the representative of the Court Receiver had taken pains by going to site at Chandrapur and had called for police help since there was a possibility of resistance at the time of taking formal possession of the property. He submitted that though 1% commission could not be charged on the particulars of claim, if the value at which the vehicles were purchased was taken into consideration, the invoices indicated that the total value was Rs 38,15,654/- and after deducting depreciation and other expenses, the valuation of the property even otherwise was correctly estimated to be Rs 24,27,595/- It was therefore submitted that 1% of Rs 24,27,595/- was charged as commission. It was submitted that instead of appreciating the efforts taken by the Court Receiver in securing the property and ensuring return of money to the Appellant, the Appellant had made false and frivolous allegations and had challenged the said Report. He submitted that now the said Rule has been amended and this question has become academic.
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vehicles was Rs 38 lakhs approximately, after deducting depreciation and other expenses, the valuation which was made at Rs 24,27,595/- also cannot be said to be an exorbitant amount showing the valuation of the property. The Court Receiver, far from being benefited or taking undue advantage, had taken great efforts to secure the property. Rule 591 of the Bombay High Court (Original Side) Rules clearly reveals the scale of fees which are to be charged by the Court Receiver. Clause (5) of Rule 591 talks about taking charge of movable property. By taking formal possession, the Court Receiver therefore had taken charge of the movable property. The submission of the Appellant that the actual possession is not taken and therefore the Court Receiver is not entitled to charge 1% commission therefore is without any substance.
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should make a grievance of this nature and that too after availing the services of the Court Receiver.
(DR. SHALINI PHANSALKAR-JOSHI, J.) (V.M. KANADE, J.)
bdpps
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CERTIFICATE
Certified to be true and correct copy of the original signed judgment.
3 issues framed by the court
Whether 1% commission under Rule 591(5) of High Court (Original Side) Rules is chargeable on particulars of claim when only formal possession of movable property was taken.
Whether the absence of market valuation of hypothecated vehicles renders the Court Receiver's commission demand invalid.
Whether the appeal against the Single Judge's confirmation of the Court Receiver's claim should be allowed.
1 provisions across 1 enactments
L & T Finance Limited
AGT Infrastructure Pvt. Ltd.
The Court Receiver, High Court, Bombay
V. M. Kanade
Dr. Shalini Phansalkar-Joshi
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
