The Companies (Registered Valuers andValuation) Rules, 2017

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 18th October, 2017

G.S.R 1316(E).─ In exercise of the powers conferred by section 247 read with sections 458, 459 and 469 of the
Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely:-
CHAPTER I
PRELIMINARY
1. Short title and commencement.─ (1) These rules may be called the Companies (Registered Valuers and
Valuation) Rules, 2017.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions.─ (1) In these rules, unless the context otherwise requires ─
(a) “Act” means the Companies Act, 2013 (18 of 2013);
(b) “authority” means an authority specified by the Central Government under section 458 of the
Companies Act, 2013 to perform the functions under these rules;
(c) “asset class” means a distinct group of assets, such as land and building, machinery and
equipment, displaying similar characteristics, that can be classified and requires separate set of
valuers for valuation;
(d) “certificate of recognition” means the certificate of recognition granted to a registered valuers
organisation under sub-rule (5) of rule 13 and the term “recognition” shall be construed
accordingly;
(e) “certificate of registration” means the certificate of registration granted to a valuer under subrule (6) of rule 6 and the term “registration” shall be construed accordingly;
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(f) “partnership entity” means a partnership firm registered under the Indian Partnership Act,
1932 (9 of 1932) or a limited liability partnership registered under the Limited Liability
Partnership Act, 2008 (6 of 2009);
(g) “Annexure” means an annexure to these rules;
(h) “registered valuers organisation” means a registered valuers organisation recognised under
sub-rule (5) of rule 13;
(i) “valuation standards” means the standards on valuation referred to in rule 18; and
(j) “valuer” means a person registered with the authority in accordance with these rules and the
term “registered valuer” shall be construed accordingly.
(2) Words and expressions used but not defined in these rules, and defined in the Act or in the Companies
(Specification of Definitions Details) Rules, 2014, shall have the same meanings respectively assigned to them in
the Act or in the said rules.
CHAPTER II
ELIGIBILITY, QUALIFICATIONS AND REGISTRATION OF VALUERS
3. Eligibility for registered valuers.─ (1) A person shall be eligible to be a registered valuer if he-
(a) is a valuer member of a registered valuers organisation;
Explanation.─ For the purposes of this clause, “a valuer member” is a member of a registered
valuers organisation who possesses the requisite educational qualifications and experience for
being registered as a valuer;
(b) is recommended by the registered valuers organisation of which he is a valuer member for
registration as a valuer;
(c) has passed the valuation examination under rule 5 within three years preceding the date of
making an application for registration under rule 6;
(d) possesses the qualifications and experience as specified in rule 4;
(e) is not a minor;
(f) has not been declared to be of unsound mind;
(g) is not an undischarged bankrupt, or has not applied to be adjudicated as a bankrupt;
(h) is a person resident in India;
Explanation.─ For the purposes of these rules ‘person resident in India’ shall have the same
meaning as defined in clause (v) of section 2 of the Foreign Exchange Management Act, 1999
(42 of 1999) as far as it is applicable to an individual;
(i) has not been convicted by any competent court for an offence punishable with imprisonment
for a term exceeding six months or for an offence involving moral turpitude, and a period of
five years has not elapsed from the date of expiry of the sentence:
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Provided that if a person has been convicted of any offence and sentenced in respect thereof to
imprisonment for a period of seven years or more, he shall not be eligible to be registered;
(j) has not been levied a penalty under section 271J of Income-tax Act, 1961 (43 of 1961) and
time limit for filing appeal before Commissioner of Income-tax (Appeals) or Income-tax
Appellate Tribunal, as the case may be has expired, or such penalty has been confirmed by
Income-tax Appellate Tribunal, and five years have not elapsed after levy of such penalty; and
(k) is a fit and proper person:
Explanation.─ For determining whether an individual is a fit and proper person under these
rules, the authority may take account of any relevant consideration, including but not limited
to the following criteria-
(i) integrity, reputation and character,
(ii) absence of convictions and restraint orders, and
(iii) competence and financial solvency.
(2) No partnership entity or company shall be eligible to be a registered valuer if-
(a) it has been set up for objects other than for rendering professional or financial services, including
valuation services and that in the case of a company, it is not a subsidiary, joint venture or associate of
another company or body corporate;
(b) it is undergoing an insolvency resolution or is an undischarged bankrupt;
(c) all the partners or directors, as the case may be, are not ineligible under clauses (c), (d), (e), (g), (h),
(i), (j) and (k) of sub-rule (1);
(d) three or all the partners or directors, whichever is lower, of the partnership entity or company, as the
case may be, are not registered valuers; or
(e) none of its partners or directors, as the case may be, is a registered valuer for the asset class, for the
valuation of which it seeks to be a registered valuer.
4. Qualifications and experience.─ An individual shall have the following qualifications and experience to be eligible
for registration under rule 3, namely:-
(a) post-graduate degree or post-graduate diploma, in the specified discipline, from a University or
Institute established, recognised or incorporated by law in India and at least three years of experience in
the specified discipline thereafter; or
(b) a Bachelor’s degree or equivalent, in the specified discipline, from a University or Institute
established, recognised or incorporated by law in India and at least five years of experience in the
specified discipline thereafter; or
(c) membership of a professional institute established by an Act of Parliament enacted for the purpose of regulation of a
profession with at least three years’ experience after such membership and having qualification mentioned at clause (a)
or (b).
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Explanation-I.─ For the purposes of this clause the ‘specified discipline’ shall mean the specific discipline which is
relevant for valuation of an asset class for which the registration as a valuer or recognition as a registered valuers
organisation is sought under these rules.
Explanation-II.─ Qualifying education and experience and examination or training for various asset classes, is given in
an indicative manner in Annexure–IV of these rules.
5. Valuation Examination.─ (1) The authority shall, either on its own or through a designated agency,
conduct valuation examination for one or more asset classes, for individuals, who possess the qualifications and
experience as specified in rule 4, and have completed their educational courses as member of a registered valuers
organisation, to test their professional knowledge, skills, values and ethics in respect of valuation:
Provided that the authority may recognise an educational course conducted by a registered valuers organisation before its
recognition as adequate for the purpose of appearing for valuation examination:
Provided also that the authority may recognise an examination conducted as part of a master’s or post graduate degree
course conducted by a University which is equivalent to the valuation examination.
(2) The authority shall determine the syllabus for various valuation specific subjects or assets classes for the
valuation examination on the recommendation of one or more Committee of experts constituted by the authority in this
regard.
(3) The syllabus, format and frequency of the valuation examination, including qualifying marks, shall be published
on the website of the authority at least three months before the examination.
(4) An individual who passes the valuation examination, shall receive acknowledgement of passing the
examination.
(5) An individual may appear for the valuation examination any number of times.
6. Application for certificate of registration.─ (1) An individual eligible for registration as a registered valuer under
rule 3 may make an application to the authority in Form-A of Annexure-II along with a non-refundable application fee
of five thousand rupees in favour of the authority.
(2) A partnership entity or company eligible for registration as a registered valuer under rule 3 may make an
application to the authority in Form-B of Annexure-II along with a non-refundable application fee of ten thousand
rupees in favour of the authority .
(3) The authority shall examine the application, and may grant twenty one days to the applicant to remove the
deficiencies, if any, in the application.
(4) The authority may require the applicant to submit additional documents or clarification within twenty- one
days.
(5) The authority may require the applicant to appear, within twenty one days, before the authority in person, or
through its authorised representative for explanation or clarifications required for processing the application.
(6) If the authority is satisfied, after such scrutiny, inspection or inquiry as it deems necessary, that the applicant is
eligible under these rules, it may grant a certificate of registration to the applicant to carry on the activities of a registered
valuer for the relevant asset class or classes in Form-C of the Annexure-II within sixty days of receipt of the
application, excluding the time given by the authority for presenting additional documents, information or clarification,
or appearing in person, as the case may be.
(7) If, after considering an application made under this rule, the authority is of the prima facie opinion that the
registration ought not be granted, it shall communicate the reasons for forming such an opinion within forty-five days of
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receipt of the application, excluding the time given by it for removing the deficiencies, presenting additional documents
or clarifications, or appearing in person, as the case may be.
(8) The applicant shall submit an explanation as to why his/its application should be accepted within fifteen days of the
receipt of the communication under sub- rule (7), to enable the authority to form a final opinion.
(9) After considering the explanation, if any, given by the applicant under sub-rule (8), the authority shall either –
(a) accept the application and grant the certificate of registration; or
(b) reject the application by an order, giving reasons thereof.
(10) The authority shall communicate its decision to the applicant within thirty days of receipt of explanation.
7. Conditions of Registration.─ The registration granted under rule 6 shall be subject to the conditions that the valuer
shall –
(a) at all times possess the eligibility and qualification and experience criteria as specified under rule 3 and rule 4;
(b) at all times comply with the provisions of the Act , these rules and the Bye-laws or internal regulations, as the
case may be, of the respective registered valuers organisation;
(c) in his capacity as a registered valuer, not conduct valuation of the assets or class(es) of assets other than for
which he/it has been registered by the authority;
(d) take prior permission of the authority for shifting his/ its membership from one registered valuers organisation
to another;
(e) take adequate steps for redressal of grievances;
(f) maintain records of each assignment undertaken by him for at least three years from the completion of such
assignment;
(g) comply with the Code of Conduct (as per Annexure-I of these rules) of the registered valuers organisation of
which he is a member;
(h) in case a partnership entity or company is the registered valuer, allow only the partner or director who is a
registered valuer for the asset class(es) that is being valued to sign and act on behalf of it;
(i) in case a partnership entity or company is the registered valuer, it shall disclose to the company concerned, the
extent of capital employed or contributed in the partnership entity or the company by the partner or director, as the case
may be, who would sign and act in respect of relevant valuation assignment for the company;
(j) in case a partnership entity is the registered valuer, be liable jointly and severally along with the partner who
signs and acts in respect of a valuation assignment on behalf of the partnership entity;
(k) in case a company is the registered valuer, be liable alongwith director who signs and acts in respect of a
valuation assignment on behalf of the company;
(l) in case a partnership entity or company is the registered valuer, immediately inform the authority on the removal
of a partner or director, as the case may be, who is a registered valuer along with detailed reasons for such removal; and
(m) comply with such other conditions as may be imposed by the authority.
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8. Conduct of Valuation.─ (1) The registered valuer shall, while conducting a valuation, comply with the valuation
standards as notified or modified under rule 18:
Provided that until the valuation standards are notified or modified by the Central Government, a valuer shall make
valuations as per-
(a) internationally accepted valuation standards;
(b) valuation standards adopted by any registered valuers organisation.
(2) The registered valuer may obtain inputs for his valuation report or get a separate valuation for an asset class
conducted from another registered valuer, in which case he shall fully disclose the details of the inputs and the particulars
etc. of the other registered valuer in his report and the liabilities against the resultant valuation, irrespective of the nature
of inputs or valuation by the other registered valuer, shall remain of the first mentioned registered valuer.

(3) The valuer shall, in his report, state the following:-
(a) background information of the asset being valued;
(b) purpose of valuation and appointing authority;
(c) identity of the valuer and any other experts involved in the valuation;
(d) disclosure of valuer interest or conflict, if any;
(e) date of appointment, valuation date and date of report;
(f) inspections and/or investigations undertaken;
(g) nature and sources of the information used or relied upon;
(h) procedures adopted in carrying out the valuation and valuation standards followed;
(i) restrictions on use of the report, if any;
(j) major factors that were taken into account during the valuation;
(k) conclusion; and
(l) caveats, limitations and disclaimers to the extent they explain or elucidate the limitations faced by valuer, which
shall not be for the purpose of limiting his responsibility for the valuation report.
9. Temporary surrender.─ (1) A registered valuer may temporarily surrender his registration certificate in
accordance with the bye-laws or regulations, as the case may be, of the registered valuers organisation and on such
surrender, the valuer shall inform the authority for taking such information on record.
(2) A registered valuers organisation shall inform the authority if any valuer member has temporarily surrendered
his/its membership or revived his/ its membership after temporary surrender, not later than seven days from approval of
the application for temporary surrender or revival, as the case may be.
(3) Every registered valuers organisation shall place, on its website, in a searchable format, the names and other
details of its valuers members who have surrendered or revived their memberships.
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10. Functions of a Valuer.─ A valuer shall conduct valuation required under the Act as per these rules and he may
conduct valuation as per these rules if required under any other law or by any other regulatory authority.
11. Transitional Arrangement.─ Any person who may be rendering valuation services under the Act, on the date
of commencement of these rules, may continue to render valuation services without a certificate of registration under
these rules upto 31st March, 2018:
Provided that if a company has appointed any valuer before such date and the valuation or any part of it has not
been completed before 31st March, 2018, the valuer shall complete such valuation or such part within three months
thereafter.
Explanation.─ It is hereby clarified that conduct of valuation by any person under any law other than the Act, or these
rules shall not be effected by virtue of coming into effect of these rules unless the relevant other laws or other
regulatory bodies require valuation by such person in accordance with these rules in which case these rules shall apply
for such valuation also from the date specified under the laws or by the regulatory bodies.