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TMI Blog2004 (8) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... s that had been put forth by the secured creditors who are three in number namely M/s. Karnataka State Financial Corporation ( K.S.F.C. for short), M/s. Karnataka State Industrial Investment Development Corporation ( M/s. KSIIDC for short) and M/s. Canara Bank. This Court, while considering the C.A. 38/98 filed by M/s. Karnataka State Financial Corporation, had vide order dated 10-6-2002 directed the Official Liquidator to call a joint meeting of all the creditors at his Office and to take a joint decision in the matter of disposal of the assets of the company under liquidation and also regarding the distribution of the amount realised amongst the secured creditors of the company under liquidation. The Official Liquidator through his report has sought permission to place before the Court the outcome of the meetings that had taken place, wherein the Official Liquidator and the secured creditors participated and have submitted a joint report. It is for further orders on the joint report that the Official Liquidator has filed this report before this Court. A copy of the minutes and the joint report prepared at the meeting held on 3-7-2002 at the Office of the Official Liquidator w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard learned Counsel has sought to point out the distinction between a tax and a fee ; that the concept and connotation of the fee is always that it is for a specific service and commensurate to the quantity and quality of services; that where there is no service, there cannot be any fee. Learned Counsel, by relying upon the definition of fee as enunciated in various dictionaries and Law Lexicons submits that this Court should not order permitting the Official Liquidator to debit any amount by way of fee payable to Central Government from out of the amounts due and payable to M/s. KSIIDC and in terms of the joint report and consensus arrived amongst the secured creditors and Official Liquidator at the meeting held on 3-7-2002. 7. Sri. K. Gopal Hegde, learned Counsel appearing for another secured creditor namely M/s. K.S.F.C. and on whose behalf objections have been filed in the context of the report of the Official Liquidator and wherein it has been indicated that M/s. K.S.F.C. has no objection for payment of fee payable to Central Government so long as the fee payable to Central Government is being shared amongst all the secured creditors namely M/s. KSIIDC an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Liquidator nor as a claim put forth by the Official Liquidator, but it is a statutory levy made payable to the Central Government. Learned Counsel submits that the Rule by itself implies that there is certain service rendered by the Central Government through the agency of Official Liquidator and as such a fee is sought to be levied. Learned Counsel points out that the fee so payable differs from situation to situation; that while in a situation where the Official Liquidator acts only as a provisional liquidator, the fee payable is left entirely to the discretion of the Court; the fee payable when the Official Liquidator acts as the Liquidator on the company being ordered to be wound up has been statutorily fixed and that different rates are mentioned in different situations namely the fee payable in respect of distribution of the assets; that different rates of fees are contemplated in different situations; that a discretion has been allowed in respect of the amounts payable to persons who have rendered some special services; that while in a case of the fee required to be realized on the amounts due to a secured creditor the fee is statutorily fixed and there is no discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of some of the assets of the company, to sell such asset by itself subsequent to the passing of the winding up order; that the mere fact a secured creditor is permitted to sell a secured item belonging to the company under liquidation does not mean that no service is rendered by the Official Liquidator as the Official Liquidator is never absolved of his obligations and duty to over-see the over all winding up proceedings and to keep a watch and control over even the sale proceedings conducted by a secured creditor in whose favour the Court has granted a permission; that it can never be said that the Official Liquidator has not performed any function nor has rendered any service in such a situation. 10. It is also the submission of the learned Counsel for the Official Liquidator that in the present case the parties themselves were aware that there is such service rendered and have in fact agreed about the fee payable to the Central Government in terms of the Resolution at the meeting of parties on 3-7-2002 and that the secured creditors are virtually estopped from contending to the contrary. It is also the submission of the learned Counsel for the Official Liquidator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e service rendered to the particular person. The strict view of the concept of fee has given way to a more liberal view in recent times and the accepted principle now is that if there is a broad correlation to the total extent of expenditure incurred for rendering the service vis-a-vis the total fee collected from the entire class of persons who may receive such service, nothing more is required to be demonstrated for the sustenance of fee [ Municipal Corpn. of Delhi v. Mohamed Yasin AIR 1983 SC 617]. 13. In the instant case, the challenge to the levy of fee is not on such grounds but on the ground that no specific service for a particular secured creditor is rendered. Even here the requirement of law is not that fee should be shared uniformly by all service receivers, but even in the exercise of delegated legislation, levy and collection can be from identified group or class of persons within such body of service receivers. 14. The substantial provision which enables levy of such fee is provision of section 448 and sub-section (2) of section 451. Section 451(2) reads as under : "(2). Where the Official Liquidator referred to in clause ( c ) of sub-section (1) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C had taken over in exercise of its power under section 29 of the Act and which had been sold by the Corporation itself, is a situation where it can be said that the Official Liquidator has not rendered any service and as such cannot claim any fee in terms of sub-rule 4 of rule 291 of the Rules, necessarily fails and is rejected. 17. Now, with regard to the submission of Sri. K. Gopal Hegde about the meaning and understanding of the word "realisation" as it occurs in sub-rule 4 of rule 291 of the Rules. It is a cardinal principle of interpretation that the word should be understood in the context in which it occurs and if it is indicative of any particular type of action and if similar type of action has been referred to in the earlier provisions of the same Rule or section, it should be so understood in the same context and not in different ways. While sub-rule 2 of rule 291 of the Rules contemplates of a situation where the Official Liquidator is enabled to realise a fee unless it is mentioned in this sub-rule in respect of the total assets realised or brought to credit by the Official Liquidator which is indicative that the fee chargeable is on the value of the overall asset ..... X X X X Extracts X X X X X X X X Extracts X X X X
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