2004 (12) TMI 390 - HC - Companies Law

Summary

Issues:
Reduction of fees charged by the Court Receiver under rule 591 of the Bombay High Court (Original Side) Rules, 1980.

Analysis:
1. The case involved a suit filed for recovery of a substantial amount, leading to the appointment of a Court Receiver by the High Court of Bombay. The Receiver was tasked with managing various properties and goods, including appointing an agent for certain units. However, the defendant challenged the fees charged by the Court Receiver, seeking a reduction based on rule 591 of the High Court Rules.

2. The defendant argued that the fees deducted by the Court Receiver were disproportionate and exaggerated, despite being in line with the prescribed scale under rule 591. Additionally, the defendant contended that the Receiver's fees should be commensurate with the efforts, work, and expenses incurred. The defendant highlighted the need for funds due to the company's status as a sick undertaking under the Sick Industrial Companies Act, emphasizing the necessity to reduce the deducted amount for the company's rehabilitation scheme.

3. The defendant relied on legal precedents to support their contentions, emphasizing that the Receiver's remuneration should align with the work performed. However, the Court noted that the Receiver in this case was a Court-appointed official, not a private receiver, and the fees were fixed based on a percentage basis as per rule 591. The Court emphasized the need for abnormal circumstances to justify a departure from the standard rule, which was not evident in this case.

4. The Court rejected the defendant's arguments for reduction, stating that no abnormal or extraordinary circumstances existed to warrant a deviation from the prescribed fees under rule 591. The Court highlighted the impracticality of reevaluating fees for every matter handled by the Court Receiver, as it would undermine the standard guidelines set by the rules. Ultimately, the Chamber Judge dismissed the Chamber Summons, ruling against reducing the Receiver's charges, with no order as to costs.