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B. Soundarapandian Vs. Industrial Finance Corporation of India - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberO.S.A. No. 74 of 1981
Judge
Reported inAIR1982Mad206; (1982)1MLJ233
ActsIndustrial Finance Corporation Act, 1948 - Sections 30 (11) and 30(14); Madras High Court Original Side Rules, 1956 - Order 34, Rules 7 and 4; Code of Civil Procedure (CPC), 1908 - Sections 122 - Order 40, Rule 2
AppellantB. Soundarapandian
Respondentindustrial Finance Corporation of India
Appellant AdvocateO.V. Baluswami, Adv.
Respondent AdvocateR. David, Adv., for King and Partridge, ;A.L. Somayajulu, Adv., for Aiyar and Dolia and ; R. Muthukumaraswami, Adv.
Cases ReferredKabalamurthi Pillai v. Subramanian
Excerpt:
original side rules 1956, order xxxiv rule 7--applicable to proceedings under section 30 of the industrial finance corporation act (x of 1948) -remuneration not fixed at the time of appointment of receivers--court vested with the power to fix either at a percentage of the collection or at a fixed monthly remuneration according to the circumstances of each case.; the first respondent filed a petition under section 30 of the industrial finance corporation act (x of 1948) for sale of the properties of the first respondent and for the appointment of a receiver. two advocates were appointed as joint receivers, the joint receivers called for tenders for purchase of the factory by publishing advertisements in the newspapers widely. the party who made the offer made as initial deposit but.....1. this is an appeal preferred by the joint receivers of micro tools ltd. the industrial finance corporation of india, the first respondent herein filed o.p. 200 of 1977 on the file of this court under sec. 30 of the industrial finance corporation act, 1948 praying for sale of the properties of mls micro tools ltd., described in the mortgage deed dated 2nd may 1967, and the deed of further charge created there under and for the appointment of a receiver in respect of the said properties. they have also prayed for a direction to the receiver to take possession of the properties forthwith. by an order dated 26th july 1977, this court appointed two advocates, messrs. g. gopalaswami and a. sivap, as joint receivers and directed them to take possession of the factory pursuant to this order,.....
Judgment:
1. This is an appeal preferred by the Joint Receivers of Micro Tools Ltd. The Industrial Finance Corporation of India, the first respondent herein filed o.p. 200 of 1977 on the file of this Court under Sec. 30 of the Industrial Finance Corporation Act, 1948 praying for sale of the properties of Mls Micro Tools Ltd., described in the mortgage deed dated 2nd May 1967, and the deed of further charge created there under and for the appointment of a receiver in respect of the said properties. They have also prayed for a direction to the Receiver to take possession of the properties forthwith. By an order dated 26th July 1977, this court appointed two advocates, Messrs. G. Gopalaswami and A. Sivap, as Joint Receivers and directed them to take possession of the factory pursuant to this order, the Joint Receivers took possession of the factory, made a detailed inventory of the machineries and other articles and filed a first report. Thereafter the joint Receivers were visiting the factory and taking such other action as is necessary to keep the machinery and other articles intact including supervision of the watch and ward staff. Various other proceedings also appear to have been taken in order to maintain the discipline of the watch and ward staff and make available the security for the satisfaction of the mortgage debt due to the first respondent. At the time when the two Joint Receivers were appointed, this court ordered an initial remuneration of Rs. 2000, which was divided by the two receivers equally. One of the Joint Receivers Mr. G. GoDalaswami was relieved from receivership at his own request by an order-dated 21-11-1979 and at that time he was paid an additional remuneration of Rs. 1000. By the same order. this court appointed Mr. B, Soundara Pandian. an advocate of this court as a Joint Receiver in the place of Mr. G. Gopalaswami. This court also directed the new Joint Receivers to call for tenders for Purchase of the factory by publishing advertisements in the newspapers widely. The Joint Receivers accordingly called for tenders, making wide publication throughout the country. Among the offers received. the highest was one for Rs. 38.00.000. on the suggestion made by the first respondent herein, the Industrial Credit and Investment Corporation of India Ltd., the third respondent herein and the Tamil Nadu Industrial Investment Corporation Ltd. the fourth respondent herein who are also creditors having certain claims over Micro Tools Ltd. this court directed the Joint Receivers to appoint Government approved valuers for valuing the properties.

These valuers valued the land and building at Rs. 34.00.000, and machineries at Rs. 68,31,475. Since the offer of Rs. 38,00,000. was nowhere near the aforesaid estimation, this court directed the Joint Receivers to invite fresh offers. one Messrs Bijay Tractors Spares, Calcutta, made an offer for Rs. 51,51,551, and this offer was accepted bV this court by an order dated 23rd April 1980. Though the party had deposited a sum of Rs. 1,00,000. as an initial deposit. had defaulted to furnish Bank guarantee and pay the balance sale consideration within the time given by this court and therefore the sale in favour of txhe said party was set aside and the sum of Rs. 100.000 deposited by the said rty was forfeited.

On further directions given by this Court, the Joint Receivers again published inviting offers and the highest offer made this time was Rs. 50,76,001, 'and that was accepted by this court. The purchasers deposited the entire sum of Rs. 50,76,001 and the sale was confirmed in their favour on 3-2-1981. While submitting their accounts, the Joint Receivers filed a memo praying to fix their remuneration at 5 per cent of 'the sale consideration realised out of the sale of Micro Tools factory., It may be mentioned that the Joint Receivers were paid then and there whatever out-of-pocket expenses they made in respect of the administration of the factorv or the sale by publication and also their legal expenses and the amount claimed in this case referred to only remuneration. When this Matter came up for orders, by an order dated 20th February 1981 the learned Judge (Sathiadev J) directed the Parties to file their statements or objections in writing. The first respondent filed their objection in which they have stated that taking into consideration the period for which the Joint Receivers were made to administer the properties and the actual work that they were called upon to do as such Joint Receivers. a remuneration at the rate of Rs. 500 per month to each of the Receivers would be reasonable and the claim of 5 per cent on the sale consideration was exorbitant. if not too high. After hearing the parties, by an order dated 7th April 1981, the learned Judge fixed the remuneration at the rate of Rs. 500 per month and since each of the Receivers was working for different periods, the remuneration payable was fixed with reference to the period for which they worked. Accordingly Sri Soundarapandian's remuneration was fixed at Rs. 9000, at the rate of Rs. 500 per month for 18 months worked by him and that of Mr. Sivaii was fixed at Rs. 23,000, again on the basis of Rs. 500 per month for a -period of 46 months worked by him. It is against this order, the Joint Receivers have filed this appeal.

2. Two main grounds were raised in the grounds of appeal in this case. The first ground was that the remuneration will have to be fixed at a percentage of the collections made by the receivers and not on fixed remuneration or salary basis. The second ground was that the remuneration of Rs. 500 per month fixed by the learned Judge was unrelated to the quantum of work done by the receivers and it was merely fixed on an acceptance of the suggestion of the first respondent. Mr. Somayajee, the learned counsel for the third respondent raised two preliminary objections. one relating to the maintainability of the appeal and the other relating to the applicability of the Original Side Rules as such. Therefore. those objections can be disposed of before we go into the merits of the appeal itself.

According to the learned counsel, the Petition for sale of the mortgaged -properties was filed by the first respondent under Sec. 30 of the I. F. C. Act 1948 (Act 15 of 1948), and under that provision, the proceedings for sale initiated bY the respondents were in the nature of execution proceedings and even such proceedings are governed by the various sub-sections in See. 30 Then he referred to the various provisions in See. 30 and contended that an order of the nature of fixing the remuneration is not an appealable order. Micro Tools Ltd. had borrowed a large sum of money on mortgage of the factory and building from the first respondent Corporation and defaulted in repayment of the loan. Under Sec. 30 of the I. F. C. Act, where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any instalment thereof, the Corporation without prejudice to their right of sale either under S. 28 of the I. F. C. Act or under S. 69 of the T. P. Act, may apply to court for any one of the following relief, viz., (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Corporation as security for the loan Or advance: (b) for transferring the management of the industrial concern to the Corporation; or (c) for an ad interim injunction where there is apprehension of the machinery or the equipment being removed from the premises of the industrial concern without the permission of the Board.

In this case, the application has been made for an order for sale of the mortgaged properties. Under sub-sec. (3) of S. 30 where the application is for the relief mentioned in sub-cls. (a) and (c) of sub-sec. (1), the court shall pass an ad interim order attaching the security with or without an ad interim injunction restraining the industrial concern from transferring or removing its machinery or equipment. Under sub sec. (14) the court is also competent to appoint a receiver and to exercise all other powers incidental thereto. Sub sec. (6) further directed that a notice shall be issued to the industrial concern as to why the ad interim order should not be made absolute or the injunction confirmed. if no cause is shown, under sub-sec. (7), the court shall forthwith make the ad interim order absolute and direct the sale of the attached properties. Such an order would be appealable under sub-sec. (11) of S. 30. If cause is shown, the court shall, under sub-sec. (8), proceed to investigate the claim of the Corporation and the provisions of the C. P. Code. shall, as far as practicable, apply to such proceedings. After such investigation is made, the court shall pass an order confirming the order of attachment or direct the sale of the attached property or such other order as is referred to in sub-see. (9) there of. An appeal against this order is also provided under sub-see. (11). The learned counsel for the third respondent contended that though an order making the ad interim attachment absolute and directing the sale of the attached property under sub-see. (7), is made appealable, an order appointing a Receiver or exercising any of the power incidental to such appointment of a Receiver is not made appealable under sub-sec. (11) and that, therefore, an order by which the remuneration was fixed is also not appealable.

3. There can be no doubt that proceeding for sale of the security or mortgaged property for realisation of the dues under S. 30 of the 1. F. C. Act are in the nature of proceedings in execution of decrees. in fact, considering similar provisions in the State Financial Corporation Act, 1951, which is in pari. materia, the Supreme Court in Gujarat State Financial Corporation v. Natson Manufacturing Co. , held that the substantive relief in an application of this nature is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree. Such a procedure is also not unknown as in French jurisprudence which we are applying in respect of Pondicherry matters, the mortgagee was permitted to execute the mortgage as if it were a decree bV itself. But even so, we are unable to agree with the learned counsel that an order appointing a Receiver or an order made by the court in exercise of the powers incidental to such appointment of a Receiver is an order which is not appealable.

It is true that sub-see. (11) of See. 30 specifically refers to sub-see. (7) and sub-see. (9). As already stated, sub-section (7) relates to making an order of ad interim attachment absolute and directing a sale and an order under sub-sec. (9) relates to a similar order but made after an investigation into the claim of the Corporation and they do not relate to the appointment of a Receiver or any of the powers exercised in relation to such power of appointment of a Receiver. But we may mention that the court to which the application should be made under S. 30 of the 1. F. C. Act is the High Court within the local limits of whose jurisdiction the defendants or respondents carried on the whole or substantial part of their business, The appointment of a Receiver is one of the modes by which the mortgaged property is secured for the purpose of sale in order to realise the loan or advance. Since there is no restriction as to the mode or manner of execution for sale of the property mortgaged, all the powers available to the court under the C. P. C. and the Original Side Rules are, in our view, applicable and available while dealing with an application under .S. 30. Therefore, though the appointment of a Receiver or exercise of the Power incidental thereto is not one of the orders mentioned in sub-see. (11), such an order would still be an appealable one if that is otherwise appealable under the provisions of the C. P. C. or any other Provision of law for the time being in force. In fact, we may also point out that sub-see. (14) was not originally found when S. 30 of the 1. F. C. Act was enacted and it came in onlv by way of amendment by Act 74 of 1972 and, therefore neither sub-sec. (11) should control sub-see, (14) nor could the appealability of the order under sub-sec. (14) be interpreted and understood with reference to the provisions in sub-sec. (11). We are therefore, of view that there is nothing in S. 30 which bars the filing of an appeal against the order fixing the remuneration of a receiver if that order is otherwise appealable under any other provision of law.

4. It was then contended by the learned counsel for the third respondent, that in any case the order now sought to be appealed cannot be considered to be a judgment within the meaning of Cl. 15 of the Letters Patent and that, therefore, no appeal lies. This point is not res integra and is covered by authorities and the weight of authorities are against the contention of the learned counsel. A Full Bench of this court considered the scope of Cl. 15 of the Letters Patent in the decision reported in Palaniappa v. Krishnamurthi,

(FB). The point for consideration was whether an order granting leave to sue in forma pauperis by a single Judge of a High Court is a judgment within the meaning of C1. 15 of the Letters Patent There was a conflict of opinion, some cases taking the view that the order by a single Judge excusing the delay in filling pauper appeal is not a judgment which can be the subject matter of an appeal on the ground that it does not put an end to the proceeding and some other cases holding that an order dismissing an application for permission to file a suit in forma pauperis is a judgment on the ground that it puts an end to the litigation. The matter was considered by the Full Bench in detail and the Full Bench proposed four tests for the purpose of determining the question and held that any one of them if satisfied will be sufficient to decide whether the particular order is a judgment within the meaning of Cl. 15, Letters Patent. The following are the tests propounded-

1. Whether the judgment or order of the single Judge terminated the suit or proceeding:

2. Whether it affects the merits of. the controversy between the parties to the suit itself:

3. Whether it determines some right or liability as between the two parties; and

4. Whether apart from the actual order in the lis or proceeding 'a conceivable order, or an order to the contrary effect would have disposed of the suit,

If we apply these tests certainly the order in question will be appealable, though the order will not terminate the main proceeding as such, but it would terminate an incidental proceeding. The dispute is between the parties and the Joint Receivers as to the amount of remuneration to be fixed. That is an independent proceeding in which the rights of the Receivers are determined. Accordingly it could be said that the order had decided an issue between the parties and so far as the Receivers and the parties to such dispute are concerned, there is a termination of the proceeding. Even if it has some relation to the main proceeding itself, it had determined that right as between the Parties and therefore it would amount to a judgment falling within cl. 15 of the Letters -Patent.

5. In fact, an identical question was considered by a Division Bench of the Calcutta High Court in Ali Ismail v.Momin Bibi, . In that case, by an order dated 8th Dec. 1947, a Receiver was appointed and in the same order it was providedis hereby appointed on a remuneration of five per cent on all collections to be made by him."

He filed his accounts for passing in which he had claimed five per cent on the value of the corpus of the property by way of his remuneration. The parties objected to the claim of remuneration at five per cent on the value of the corpus of the property and contended that as per the order of appointment he was entitled to only five per cent on all collections made by him. The learned single Judge before whom the matter came UP for consideration, on a construction of the order appointing the Receiver, held that he was entitled to five per cent on the corpus of the property. Against that order an appeal was preferred. A preliminary objection was raised as to the maintainability of the appeal. The Division Bench held that the order appealed against was a decision between the parties to the appeal, finally determining the rights and obligations of the parties with respect to remuneration. Though there is an interposition of an order appointing a receiver and a construction of the terms of the appointment, still the decision of the single Judge in that case was a decision that the Receiver was entitled to what he claimed and that was an obligation to which the appellants were bound to submit and it is in that view. it was held that it was a judgment within the meaning of Cl. 15 of the Letters Patent. We are also of the view that the order of the learned single judge in this case also decided what the joint Receivers were entitled to and if an appeal could be maintained by the parties against that order, certainly the Receiver, if they feel aggrieved against that order could also file an appeal as, according to them, the obligation of the respondent was to pay them five per cent and if that was not paid they had not discharged their obligation. We are therefore of the Opinion that the decision now under appeal is also a judgment within the meaning of Cl. 15 of the Letters Patent and this appeal is maintainable.

6. It was contended by the learned counsel for the third respondent that 0. XXXIV R. 7 of the original Side Rules on which the Joint Receivers rely for claiming at five per cent on the total value realised bv them is not applicable, and only the C. P. C. is applicable. Under 0. XL R. 2 of the C. P. C., the remuneration will have to be fixed with reference to the services rendered by the receiver and the learned counsel also contended incidentally that an order fixing remuneration under 0, XL Rule 2 is also not appealable. We have already pointed out that while referring to the provisions of the C. P. C., in the matter of considering the objections to, the order of attachment and direction for sale or investigation of the claims of the Corporation under sub-see. (8) of the, I. F. C. Act, there is no reference to the provisions of the C. P. C. generally as ,applicable to proceedings under S, 10 of that Act. But since a mortgagee is entitled to an order of sale in an application filed under S. 30, it implies that the court's ordinary jurisdiction for execution of decrees is invoked and all the powers vested in the court would be applicable for such execution applications. All the powers of the High Court as such exercisable in execution of its decree would therefore be available to the court. In exercise of the original civil jurisdiction, the High Court is governed by the Original Side Rules 1956. R. 3 of 0. 1 of the original Side Rules provides that except to the extent specifically provided for by those rules, the provisions of the C. P. C. shall applv to all proceedings. Thus the provisions of the C. P. C. subject to the modifications mentioned in the Original Side Rules would be applicable to the exercise of ordinary civil jurisdiction by the High Court. The matter also could be looked at from a different angle. Under S. 122 of C. P. C., the High Court can make rules regulating their own procedure. The Preamble to the Original Side Rules specifically states that the Rules are framed by virtue of the powers conferred by the C. p. C. and other enactments set out in Appendix I. In that sense, the modification contained in the original Side Rules can be treated as part of the C. P. C. also. In any view of the matter, therefore, we cannot exclude the applicability of 0. XXXIV R. 7 of the Original Side Rules to proceedings under Sec. 30 of the 1. F. C. Act 1948.

7. The more important question, therefore, is even if R. 7 of 0. XXXIV of the Original Side Rules is applicable, whether the remuneration fixed by the learned single Judge could be considered to be reasonable or whether the joint Receivers are entitled to five per cent on the total value realised by them as their remuneration. As we have already stated at the beginning of the -judgment, the contention of the learned counsel for the appellants was that the remuneration of the Joint Receivers will have to be fixed on a percentage of the collections made by the receivers and not as a fixed remuneration on salary basis. R. 7 of the 0. XXXIV of the Original Side Rules, 1956, reads as follows-

"Unless the judge otherwise directs, the receiver shall be entitled on his passing his accounts, to draw from the moneys in court to the credit of the suit or matter or from the moneys in the bank to the credit of the receivership, the commission at the rate of five per cent on rents, or out standings recovered, and on sales of properties, movable or immovable, calculated on the total value realised by him."

8. It may be seen from this provision that normally five per cent on the total value realised by him could be claimed by the Receiver as commission, but that is subject to the condition referred to in that rule itself, namely, unless the Judge otherwise directs.' Though the discretion vested in the court in this regard may be considered to be a judicial discretion, still that a discretion is vested in the Judge to grant less or more than five per cent cannot be disputed. We are also not persuaded to agree with the learned counsel for the appellants that this discretion vested in the Judge could only be exercised for the purpose of variation of the percentage and should not be considered as giving a power to fix the remuneration at a fixed figure or on a monthly salary basis. In fact, a clue for understanding R. 7 of 0. XXXIV could be found in R. 4 of that Order read with Form No. 80, referred to therein. Under R. 4, an order appointing a Received shall be drawn up in Form No. 80. That part of Form No. 80 relating to the remuneration of the Receiver reads as follows:-

"He shall be entitled. on his passing his accounts to draw, from the moneys in court to the credit of the suit or matter a commission at the rate of 5 per cent on the net amount collected by him as his remuneration (or to the sum of Rs per month, or as the case may be), as his remuneration (or he shall act without any remuneration)."

9. This will show that at the time of the appointment as Receiver, his remuneration should be fixed and that remuneration could be at a fixed percentage of the amount collected by him or at a fixed monthly remuneration. It is true that if it were to be a monthly remuneration that was sought to be fixed at the time of the appointment of Receiver, it would be open to the Receiver to accept the receivership on such commission or reject the same. But that does not mean that if a receiver is appoint(,d without fixing any remuneration at the time of appointment, he will always be entitled to either five per cent or such percentage of the collections as may be fixed by the court and it is not open to the court to fix any remuneration later on. We are also unable to agree with the learned counsel that if such a discretion is vested in the court to fix a remuneration on fixed basis, the receiver loses his right of option either to accept or reject as the work had already been done. This is for the simple reason that the Receiver should be understood to have known that the court is vested with the power to fix the remuneration at the end of the service on a monthly basis or at the fixed percentage of the collections. Having accepted the office of receivership with the powers of the court to fix the remuneration at a later date it is not open to the receiver to fix the remuneration himself and claim that he will act only at 5 per cent of the collections and that he would not have acted as receiver for anything less than that figure. Once the remuneration is not fixed at the time of the appointment of receiver, the Power is always vested in the Court to fix the remuneration either at a percentage of the collections or at a fixed amount or at a fixed monthly remuneration according to the circumstances of each case. Of course the Judge would be guided by the quantum of work and the other circumstances in each case. In all such matters, therefore, the court must fix the remuneration with reference to the period for which the receivers worked and the quantum of work turned out by them. In fact, in one of the decisons of this court reported in Kabalamurthi Pillai v. Subramanian pillai 60 Mad LJ 332: (AIR 1931 Mad 500) with regard to the fixing of commission for receivers, this court observed. the receivers, commission is in rut the price of the work done by them. It must have some relation tothe labour involved and the time taken". We have already noticed that till 21-111979 one set of receivers were functioning and one of them voluntarily relieved himself on that date. The remuneration paid by this court for the receiver who was relieved on that day was Rs. 2000 in all. The other receiver. Mr. Sivaji, continued even after 21-11-1979. We can therefore easily fix the remuneration of Mr. Sivaji up to 21-11-1979 at Rs, 2000. as it is not possible to make a difference in the remuneration of the Junior receiver when the senior receiver is paid separately at that figure. Accordingly, his remuneration up to 21-11-1979 is fixed at Rs. 2000, The present joint receivers worked from 21-11-1979, till 30-5-1981. The work turned out by them subsequent to 21-11-79, as seen from the report No. 7, was the actual publication in newspapers, calling for tenders for the sale of the property. As already noticed, the highest tender made on the first occasion was not accepted bv this court and the receivers were directed to get the value of the land, building and machinery from the Government approved valuers. The receivers obtained such valuation reports from the Government approved valuers and filed the same in court, Thereafter fresh publication calling for tenders was made throughout India in various newspapers and the highest bid for Rs. 51,51,551, was accepted by this court. But that party also failed to pay the balance of the consideration after depositing Rs. 1,00,000. as his initial deposit and the sale was cancelled. Again the receivers published in newspapers calling for fresh tenders and ultimately the tender for a sum of Rs. 50,76,001, was accepted on 3-2-1981 and the purchaser had also paid the entire amount.

One other circumstance also has to be mentioned at this stage. Along with the liquidator, it appears one W. G. Forge and Allied Industries, Bombay who were the lessees of the factory for some time had some of their own machinery inside the factory which were permitted to be taken out of the factory by an order of this court .When they sought to remove those machinery , the workers obstructed such removal . On the occasion, it appears that both the joint receivers were also there in the factory in order to facilitate the easy removal . It appears that the workers did not allow the joint Receivers to come out of the factory and virtually they were gathered till about 11-15 p.m on that day. Later on with help of the police they had to come out of the factory. The report states that the Joint Receivers had to starve that day and they also had some mental tension and torture due to the obstruction made by the ex-workers. It is also seen from the report that the ex-workers threatened the Joint Receivers with dire consequences. One could easily understand and imagine the situation of that type and the mental agony that would have passed at that time. These are the various factors and work which will have to be taken into account in fixing the amount of remuneration for the receivers.

10. After the sale the Joint Receivers handed over possession of the factory and its machinery with reference to the inventories taken already. The learned single judge who heared the matter fixed the remuneration at Rs. 500/- per month, but he had not given any reason or basis on which this remuneration was fixed. It appears that the first and the third respondents contended before the learned judge that taking into consideration the period for which the Joint Receivers were made to administer the property and the actual work done by them , the remuneration at the rate of Rs. 500/- per month to each of the Joint Receivers would be reasonable. Such a connection is also found in the counter statement filled by the first respondent it was adopted by the other respondent. The learned judge seems to have taking this as the agreement expressed by the parties and as if that is binding on the applent hear in. since the learned judge not fixed the remuneration with reference to the period of work donr by the receiver the actual work involved we are of the view that the order concentrating (constructing) the matter has discretion vested in the learned single judge if not binding on us. We have tried to fix the remuneration on various methods and principles and tried to find out what would be the reasonable figure, having regard to the work involved and the period for which the Joint Receivers worked. We find that normally when authorised auctioneers are asked to sell the property, the practice of this Court is to give 2-1/2 per cent of the total realised up to Rs. 50,000, and at 1-1/2 per cent for the balance. R. 5 of 0. XXXVIII provides that the court may under special circumstances upon the application of the party or suo motu appoint an advocate or other person as Commissioner to sell the property and may fix as his remuneration a sum certain, or a percentage on the net sale proceeds not exceeding the scale fixed by items 29 and 30 of Appendix II of the High Court Fees Rules. (The reference should be to items 28 and 29 and not items 29 and 30). Items 28 and 29 of Appendix II of the High Court Fees Rules read as follows-

"28. on the sale of property conducted by the Official Referee, a commission at the rate of 2-1/2 per cent on the net sale proceeds, not exceeding Rs. 50,000, and at the rate of 1-1/2 per cent on the balance.

29. On the sale of property in partition suits by the Offical Referee between the parties for the purpose of Partition and for equalising the shares, half the above rates."

11. It may be seen from the above items that a distinction is made between a sale in a partition suit and a sale in other circumstances. Even treating the proceedings in this case as something akin to a non-partition suit, still the remuneration therein referred to is for the entirety of the work from the time the Receiver is appointed till the completion of the sale and rendition of accounts. In this case the original Joint Receivers were appointed on 26-7-1977 and that set of Receivers continued upto 21-11-1979. The present set of receivers were working only from 21-11-1979. The remuneration to be fixed, therefore, should be referable to the work done from 21-11-1979 till 30-5-1981. alone. The rate of 2-1/2 per cent up to Rs. 50.000, and at 1-1/2 per cent on the balance which is applicable to the whole period, therefore. should not be adopted But if we were to take that as the -proper method, then the total remuneration payable, would be as follows-

The total amount realised is Rs. 51,91,376 made up of Rs. 50,76,001, the sale of consideration, Rs. 1,00,000 the forfeited amount and Rs. 15,375 the sale price of scrap. This can be rounded off for the purpose of easv calculation and it comes to Rs. 52,00,000.

12. The remuneration payable at the rate of 2-1/2 per cent for the first Rs. 50,000 and at 1-1/2 per cent for the balance would be Rs. 78,500. But this is payable not only for the present set of two receivers, but also to the person who had already retired as he had also served as Receiver. It is neither Possible, nor feasible nor just to pay the remuneration payable to that Receiver to the present set of Receivers. That Joint Receiver who retired had worked for nearly 28 months. If we reduce roughly 1/3 of the remuneration as payable to him, the balance will be Rs. 52,500. This amount will be the normal amount Payable to the present appellants. Another way of calculating the remuneration would be to fix a monthly remuneration. The learned counsel for the respondents after verifying the normal payments made in other High Courts stated that in Bombay the practice is to pay a monthly remuneration ranging from Rs. 500 to Rs. 1500. Taking the maximum of Rs. 1500 as payable for each of the Joint Receivers herein. who haveworked for 18 months together from 21-11-1979, at the rate of Rs. 3000 jointly for them. the remuneration work out to Rs. 54000. We think, this figure of Rs. 54,000. therefore, will be very reasonable in the circumstances of this case. In fact the learned counsel for the third respondent, on instructions from his client stated originally that they would be prepared to pay Rs. 50,000, including what was granted by the learned single Judge. But when it was suggested to him whether thev would be willing to pay another sum of Rs. 4000, the learned counsel very fairly agreed and said that they would be willing to pay another Rs. 4000, and will have no objection if this were considered reasonable. We think that having regard to all the circumstances, the reasonable remuneration would be Rs. 54,000, for the Joint Receivers. Since both the Receivers have worked for 18 months from 21-11-1979, this remuneration will have to be divided between them equally. Mr. Sivali, one of theJoint Receivers will be Paid Rs. 2000 for the work done by him along with the other Joint Receiver who was relieved on 21-11-1979, for the period of his work prior to 21-11-1979.

13. The learned counsel for the respondents wanted that the earlier interim orders made pending this appeal be vacated, but we consider that it is not necessary to make any specific order since, with the disposal of the appeal, all interim orders also lapse subject to the orders in the main appeal itself. The appeal is allowed in part. There will be no order as to costs in this appeal,

14. Appeal allowed in part.


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