Bombay High Court Sanctions Valuer’s Fees Unpaid for 22 Years; Awards ₹14.71 Lakh With Continuing Interest and Rejects Additional Inflation-Based Compensation as Double Recovery
Bombay High Court Orders Recognition of Valuer’s 22-Year-Old Unpaid Fees; Holds Court’s Prior Sanction Can Be Obtained After Completion but Before Payment
Facts
The matter arose from Court Receiver Report No. 25 of 2025 in Writ Petition No. 3661 of 2001, M/s Kuber Mutual Benefits Ltd. & Ors. v. State of Maharashtra & Ors., before the Bombay High Court.
The original writ petition concerned attachment of the petitioners’ properties under the Maharashtra Protection of Interest of Depositors (MPID) Act, 1999. By order dated 1 December 2003, the Court directed the Court Receiver to inspect the properties, report on their condition, invite purchase offers and explore completion of an unfinished building before its sale.
For this purpose, the Court Receiver engaged M/s AT & TS Associates, a panel valuer. The Valuer inspected the properties and submitted its report on 5 May 2004. It raised six bills on 15 May 2004 relating to inspection/status reporting and valuations of properties at CBD Belapur, Sector 4 Kharghar, Sector 11 Kharghar, Sector 10 Vashi and Village Pahur, Raigad. The original bills aggregated ₹7,01,858.
The fees remained unpaid despite repeated demands beginning in 2005. A Court Receiver’s Report filed in 2010 seeking directions regarding payment also remained pending without orders.
In 2025, after removing the service-tax component, the Valuer reduced its principal claim to ₹6,51,062. It additionally claimed:
- ₹8,20,338 as simple interest at 6% for 21 years;
- principal plus interest of ₹14,71,400; and
- an inflation/purchasing-power multiplier of 3.21238, taking the total demand to ₹47,26,710.
Issues
The Court principally considered:
- Whether the 1994 Guidelines or 1999 Guidelines governed the Valuer’s fees.
- Whether the ₹25,000 ceiling under the 1994 Guidelines applied collectively or separately to each property.
- Whether prior sanction for fees above ₹25,000 had to be obtained before appointment of the Valuer or merely before payment.
- Whether the Valuer was entitled to interest for the extraordinary delay.
- Whether it could additionally claim inflation/purchasing-power compensation.
- From whom and through what mechanism the sanctioned fees could be recovered.
- Whether the assets of the former director’s wife or associated companies could be frozen.
- Whether the Court Receiver should be discharged.
Valuer’s Arguments
The Valuer submitted that it had been formally engaged by the Court Receiver, had completed five separate property valuations and a status/inspection report, and that neither the Court Receiver nor any party had ever disputed the work performed or the correctness of its valuations.
Because payment had remained outstanding for over two decades, it sought 6% simple interest. It also claimed compensation for erosion in the rupee’s purchasing power, thereby raising its overall demand to ₹47,26,710.
It further sought permission to lodge the claim with the Official Liquidator and requested impleadment of Smt. Rowena Sharma, along with freezing of assets of companies associated with her if the liquidation estate proved insufficient.
Amicus Curiae’s Arguments
The Court appointed Mr. Sharad Bansal as Amicus Curiae because the original parties were largely unavailable or unable to effectively assist on the professional-fee dispute.
The Amicus submitted that the 1994 Guidelines applied because they dealt with valuation of immovable properties in aid of sale, whereas the 1999 Guidelines related to valuation for royalty or compensation.
He further argued that the ₹25,000 ceiling should apply separately to each property and that “prior sanction” meant sanction before payment, not necessarily sanction before the Valuer’s appointment.
The Amicus supported the Valuer’s principal claim of ₹6,51,062 and 6% interest, but opposed the additional inflation-linked enhancement because interest already compensates for the time value of money; awarding both would constitute double compensation.
Analysis of the Law
1. The 1994 Guidelines Applied
The Court held that the assignment was clearly one involving valuation of immovable property in aid of proposed sale, not assessment of royalty or compensation.
Since the Valuer was appointed in January 2004, completed its work in May 2004 and billed in May 2004, the subsequently issued 2007 Guidelines could not apply. The professional fees were therefore governed by the 1994 Guidelines.
2. Prior Sanction Means Before Payment, Not Before Appointment
Clause 9 prescribed a ₹25,000 ceiling but permitted higher fees with prior sanction of the Court.
The High Court gave this requirement an important interpretation: there was no requirement that sanction must precede the Valuer’s appointment.
Instead, sanction must be obtained before payment of the amount exceeding ₹25,000.
The Court reasoned that the final complexity and extent of a valuation exercise may not be known when the Valuer is appointed.
More importantly, a professional engaged by an officer of the Court is entitled to treat the assignment as legitimate. An administrative failure by that officer to obtain necessary sanction cannot deprive the professional of reasonable remuneration for work actually performed and accepted.
3. ₹25,000 Ceiling Applies Separately to Each Property
The Court held that where a Valuer separately inspects and values several distinct properties, the fee ceiling should ordinarily apply separately to each valuation exercise.
Applying one aggregate ceiling irrespective of whether one, five or ten properties were valued would be unreasonable because it would disregard the additional work, time and professional responsibility involved.
This is one of the significant legal propositions emerging from the order.
4. Entire ₹6.51-Lakh Principal Claim Sanctioned
There was no allegation that:
- the valuation work was perfunctory;
- the bills were inflated;
- the reports were defective; or
- the valuations were unreliable.
Rather, the Court Receiver had accepted the reports and had sought judicial sanction as early as 2010.
Considering that the assignment had been completed more than 22 years earlier, the Court sanctioned the entire revised principal amount of ₹6,51,062.
5. Interest Can Be Awarded Despite Silence in Guidelines
Although the 1994 Guidelines contained no express provision for interest, the Court held that this did not prevent reasonable compensation where legitimately earned professional fees remained unpaid for an extraordinary period.
A professional who performs Court-authorised work should not be left uncompensated for prolonged deprivation of the remuneration lawfully due.
The Court therefore accepted 6% simple interest, amounting to ₹8,20,338 up to May 2025, and directed continuing interest at 6% on the principal ₹6,51,062 from 1 June 2025 until actual payment.
6. Inflation Claim Rejected as Double Compensation
The Valuer’s attempt to increase ₹14.71 lakh to ₹47.26 lakh through an inflation multiplier was rejected.
The Court reasoned that interest already compensates for deprivation and the time value of money. Adding inflation-linked compensation for the same period would amount to overlapping compensation.
The Court particularly noted that the multiplier had been applied even to the interest component, thereby effectively enhancing compensation already awarded for delay.
Thus, the entitlement stood at:
₹6,51,062 principal + ₹8,20,338 interest = ₹14,71,400, plus continuing 6% simple interest on the principal from 1 June 2025 until payment.
Precedent Analysis
Bai Mamubai Trust v. Suchitra
Used to distinguish valuation for sale from assessment of royalty/compensation. The latter concerns amounts payable by an occupier to the person lawfully entitled to possession.
Parelkar & Dallas v. Blossom Industries Ltd.
Supported the proposition that the applicable fee guidelines are those governing the Valuer’s appointment and performance of the assignment.
Times Bank Ltd. v. Finoglobal Exports Ltd. and Connected Authorities
These orders demonstrated that the High Court could sanction professional fees exceeding the prescribed ceiling after completion of the assignment and submission of bills, provided sanction preceded payment.
Bank of Baroda v. Blossom Breweries Ltd.
Demonstrated that sanction above the ceiling is not automatic. A higher claim may be rejected where the valuation is perfunctory or flawed. The present case was distinguished because the work and reports were never challenged.
Bank of Baroda v. Eassy Stick Pvt. Ltd.
Supported the power to award interest where a Court-appointed Valuer’s professional fees remain unpaid. The precedent had awarded 12%, but the present Valuer claimed only 6%.
Akella Lalitha v. Konda Hanumantha Rao
Applied for the principle that the Court should not grant relief exceeding what has been claimed. Consequently, although a higher interest rate had been awarded in another case, the Court confined relief to the Valuer’s claim of 6%.
Court’s Reasoning
The Court treated the case as an exceptional instance of a professional performing work at the instance of an officer of the Court and then remaining unpaid for more than two decades through no fault of his own.
The Court emphasized that administrative or procedural difficulties following disposal of substantive litigation should not result in professionals being left unpaid for decades.
It therefore directed the Registry and Court Receiver’s office to ensure in future that, before a Receiver is discharged or proceedings are closed, outstanding professional fees are identified and appropriate directions for payment or recovery obtained.
Significantly, the Division Bench expressly recorded its regret to the Valuer for the extraordinary delay of more than two decades.
No Personal Liability of Director’s Wife
The Court rejected the request to implead Smt. Rowena Sharma and freeze her assets or those of companies associated with her.
It laid down that mere association with a company, or relationship with a person formerly associated with that company, cannot by itself justify fastening personal liability or freezing assets of separate corporate entities.
Such coercive relief requires substantive material, proper pleadings, a legally sustainable basis and an opportunity of hearing.
Conclusion
The Bombay High Court substantially accepted the Valuer’s claim but rejected the inflation component.
The Valuer was held entitled to ₹14,71,400, comprising ₹6,51,062 principal and ₹8,20,338 interest up to May 2025, together with further 6% simple interest on ₹6,51,062 from 1 June 2025 until payment.
Since the Court Receiver’s account had no funds, the Valuer was permitted to lodge the sanctioned claim before the competent Official Liquidator, subject to applicable statutory priorities. The Court Receiver was directed to forward the order, valuation reports, revised invoices and supporting material.
The Court Receiver was thereafter permitted to be discharged without passing accounts, and the suit account could be closed without further charges.
Case Details
Case: M/s. Kuber Mutual Benefits Ltd. & Ors. v. State of Maharashtra & Ors.
Citation: 2026:BHC-AS:36218-DB
Court: Bombay High Court, Civil Appellate Jurisdiction
Proceeding: Court Receiver Report No. 25 of 2025 in Writ Petition No. 3661 of 2001
Bench: Justice R. I. Chagla and Justice Farhan P. Dubash
Order by: Justice Farhan P. Dubash
Reserved on: 25 June 2026
Pronounced on: 3 September 2026
Result: Valuer’s ₹6.51-lakh principal fees sanctioned with ₹8.20-lakh accrued interest and continuing 6% interest; ₹47.26-lakh inflation claim rejected; recovery permitted through liquidation proceedings; Court Receiver discharged.
