Valuer's claim of Rs. 47 lakh reduced to Rs. 14.7 lakh with interest; Court rejects inflation-linked enhancement but allows continued interest; directs claim to be lodged with Official Liquidator
In a significant judgment delivered on September 3, 2026, the Bombay High Court (Division Bench comprising Justices R.I. Chagla and Farhan P. Dubash) resolved a protracted dispute involving unpaid professional fees of a Court-appointed valuer engaged over two decades ago. The valuer, M/s. AT & TS Associates, had completed valuation assignments relating to multiple properties under the supervision of the Court Receiver in proceedings connected to M/s. Kuber Mutual Benefits Ltd. The valuer's original fees totaling Rs. 7,01,858 (inclusive of service tax) were revised to Rs. 6,51,062 after excluding service tax but remained unpaid since 2004. The valuer's total claim, including interest and inflation-linked enhancement, ballooned to Rs. 47,26,710.
The Court examined the relevant statutory guidelines governing valuation fees, specifically the 1994 Guidelines applicable at the time of the valuer's appointment and completion of work. These guidelines impose a Rs. 25,000 ceiling per property valuation, subject to prior Court sanction for any excess. The Court clarified that such sanction need not precede appointment but must be obtained before payment. Given the valuer conducted five separate valuations and an inspection report, the ceiling applies separately to each property, justifying the total fee claimed.
Notably, the Court sanctioned the entire revised principal amount of Rs. 6,51,062, recognizing the valuer's work as undisputed, thorough, and accepted by the Court Receiver. It also awarded interest at 6% per annum on the principal amount from the date of billing in 2004 till May 2025, amounting to Rs. 8,20,338, and directed continuing interest at the same rate until payment. However, the Court rejected the valuer's additional claim of inflation-linked enhancement based on erosion of the rupee's purchasing power. It held that awarding both interest and inflation compensation would amount to double recovery for the same delay period.
Due to the absence of funds in the Court Receiver's account and the liquidation status of the company whose properties were valued, the Court directed the valuer to lodge its sanctioned claim with the Official Liquidator appointed by the Allahabad High Court. The Court Receiver was ordered to forward relevant documents to the Official Liquidator but was discharged from further responsibility. The Court also declined the valuer's request to freeze assets of third parties associated with the company's director, citing lack of substantive material and legal basis.
The Court expressed regret over the extraordinary delay of more than 20 years in resolving the valuer's fees and emphasized the need for administrative mechanisms to ensure timely identification and payment of professional fees before closure of Court Receiver proceedings. It hoped that this order would finally enable recovery of the valuer's legitimate dues.
This judgment sets an important precedent on the interpretation of valuation fee guidelines, the timing of Court sanctions, awarding interest for delayed payments, and the rejection of overlapping inflation claims. It underscores the judiciary's commitment to fair compensation for professionals aiding Court processes, even after prolonged delays.
Bottom Line:
Professional fees owed to a Court-appointed Valuer can be sanctioned even after completion of the assignment, provided sufficient grounds exist, and interest for delayed payment may be awarded to compensate for the extraordinary delay.
Statutory provision(s):
Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999; Guidelines dated 1st February 1994 for payment of fees to valuers; Goods and Services Tax Act, 2017 (in context of service tax/GST exemption); Civil Procedure Code (by implication, re liquidation proceedings and Official Liquidator powers)
M/s. Kuber Mutual Benefits Ltd. v. State of Maharashtra, (Bombay)(DB) : Law Finder Doc Id # 2973027
