AI Structured Summary
Not yet generated for this judgment
Judgment
Bharucha, J.—The appeal arises in somewhat unusual circumstances.
The Court Receiver has, by an interim order in the suit, been appointed receiver of the assets of a partnership firm which has immovable property at Lonavala. The Court Receiver was advised that he would be liable to pay wealth-tax thereon. For the purposes of its valuation, the Court Receiver appointed the appellants. The appellants are architects and valuers upon the panel of the Court Receiver. The appellants valued the immovable property in the sum of Rs. 60,64,500/-. With their valuation report the appellants sent to the Court Receiver a bill for their fees in the sum of Rs. 30,870/-. The valuation was disputed by the 1st and 2nd defendants. They took out a Notice of Motion in which they prayed that the acceptance by the Court Receiver of the appellants'' valuation report should be set aside and other valuation should be obtained. When the Notice of Motion came up for hearing before the learned single Judge two additional prayers were sought, namely, that the Court Receiver''s direction to pay the appellants'' bill should be set aside and that the appellants'' valuation report should be set aside. In support of the Notice of Motion the 1st defendant filed an affidavit in which it was alleged that the appellants'' valuation was not proper and their bill was exorbitant. It stated that the appellants were entitled to a fee in the sum of Rs. 7,893/-, having regard to the fact that all registered valuers of property for taxation purposes could charge fees only in terms of a notification issued by the Central Government.
The learned Judge, after hearing counsel, including counsel for the appellants, made the Notice of Motion absolute in these terms:
"Report made by Messrs. Parelkar & Dallas (appellants) dated 24th February, 1987 stands set aside. Consequently, they are not entitled to their fees and the Court Receiver will not pay the fees to the said Architects. I further direct the Court Receiver to call a meeting of the parties and to appoint another Architect for the purpose of valuation for Wealth-tax purposes.
There will be no order as to costs."
The learned Judge found the appellants'' valuation report to be perfunctory because they had gone to the site only once and they had thereafter prepared the valuation report "sitting in their chamber" thus : "The bungalow, the car shed and an outhouse, situated on the property are valued at about Rs, 2,52,570/-. After depreciation, the same is valued at Rs. 37,885/-. As far as the valuation of the land is concerned, they found that the property has been divided into 65 residential plots, the total area being about 75,331.85 sq. metres. They were informed that the Court Receiver had sold plots in December, 1984 at prices ranging from Rs. 146 to Rs. 190 per sq. metre. Therefore, they said that an average rate of Rs. 80/- per sq. metre would be a reasonable price. Hence, they multiplied the total area by Rs, 80/- per sq. metre and arrived at the figure of Rupees 60,26,548/-. Hence the total value of land and the structure would be Rs. 60,64,500/-." The appellants'' bill was sought to be justified on the basis of the scale of fees of architects on the panel of the Court Receiver, which had been prescribed by the Chief Justice and Administrative Judges of the Court. It was not open to a party to say, the learned Judge held, that any alleged representation made by the Court Receiver was binding on the Court. The Court Receiver was not an agent of the Court but an officer of the Court. Whenever a party dealt with an officer of the Court in relation to a suit, it was implicit that the same was subject to such orders or directions that the Court might give. In the present case there was no express representation by the Court Receiver, but, even if there was, it was subject to the scrutiny of the Court. It was true that the fees had been prescribed administratively by the Chief Justice and the Administrative Judge, but that was for the general guidance of the Court Receiver and could not bind the Court in its judicial functions. No court in its judicial conscience could be subject to any direction from any other authority or agency. The learned Judge rejected the submission that if the Court were to set at naught the Court Receiver''s scale of fees, the Court Receiver might not get the services of able and efficient architects and valuers, for there are "still amongst us in the society a large number of professional brothers and sisters, may be Advocate, Architects, Accountants, or Valuers who are not motivated by consideration of money only. As long as there is concern for justice in the society, we can always find able and efficient men who would not let down the Court in the cause of justice. May be, a Parelkar or a Dallas may go, but others will come and the cause of justice will not suffer in that behalf. In my view, whenever Court Receiver''s Office fixes fees, the fees so prescribed must be commensurate with the work, the time and the effort that are put in." The learned Judge said that the appellants'' bill was "just exorbitant", but since he was inclined to reject the appellants'' valuation report altogether there was no question of paying any fees to them.
Mr. Bali, learned counsel for the appellants, made it clear that the appellants were not interested so much in the quantum of fees as in the clearance of their names. On the other hand, Mr. Desai, learned counsel for the 1st and 2nd defendant, made it clear that he was not against professional men being paid for their labour R.8(c) of the Wealth- tax Rules, 1972, prescribed a scale of fees to be charged by registered valuers. Calculated upon that scale, the amount of Rs. 7,893/-was, he said, payable to the appellants.
It has been found necessary for the Court administratively to prescribe the fees that would be paid by the Court Receiver to architects and valuers for the work of valuation. This prescription is made by the Hon''ble the Chief Justice on behalf of the Court. Fees for valuation are ordinarily fixed at a percentage of the value assessed and the Court Receiver''s scale of fees is so worked out. To bring about uniformity it is imperative that the Court Receiver should pay architects and valuers only in accordance with this scale of fees.
We cannot endorse the view that though the scale of fees might have been administratively prescribed, the court, acting judicially, is not bound by the same. The Court Receiver is an officer of the court. When he makes a representation to an architect or valuer based upon a scale of fees prescribed by the court, he makes that representation on behalf of the court and the court cannot go back on it. Once fees are prescribed the architect or valuer knows what he is going to receive and he accepts or refuses the work accordingly. It would not be in the interest of the litigant public that it should be otherwise, for, then, the quality of the professional work available to the Court Receiver would suffer.
The appellants submitted to the Court Receiver a bill that was in consonance with the scale of fees that was prescribed. No fault can be found with them for having done so. As to the correctness of their valuation, we make no comment for the correctness of the valuation subsequently obtained through other architects is also disputed, this time by other parties to the suit.
It is arguable that the Court Receiver''s scale of fees is applicable only to valuations for the purposes of sale and to valuations for the purposes of taxation the provisions of the Wealth-tax Rules apply. This is because the Court Receiver''s scale of fees provides that architects would be entitled "to fees on the actual sale price realised or the valuation, whichever is less, at the following rates.....". Had this been so put to the appellants they might well have accepted the figure of Rs. 7,893/- suggested by the 1st and 2nd defendants in their affidavit in support of the Notice of Motion. We cannot see how the appellants could have been deprived of fees altogether.
We conclude by saying that the observations of the learned Judge about the appellants and the Court Receiver were uncalled for.
The appeal is allowed. The judgment and order under appeal are set aside. The Court Receiver shall pay to the appellants, in full and final settlement of their bill for the valuation in question, the sum of Rs. 7,893/ -. The Court Receiver shall, however, act upon the basis of the valuation report that has been obtained from other architects, subject to the objection of some of the parties to the suit.
A copy of this judgment shall be placed before the Hon''ble the Chief Justice to enable him to consider whether the Court Receiver''s scale of fees should be amended so as to provide that it is applicable only to valuations for purposes other than taxation and that to valuation for taxation purposes the provisions of the Wealth-tax Rules shall apply.
Certified copies of this order shall be made available to all parties expeditiously.
Appeal allowed.