POLICY AND OPERATIONAL GUIDELINES ON VALUATION OF ASSETS FOR FY 2023-2024
LOANS & ADVANCES CIRCULAR NO.43 / 2023
Date: 01 – 04 – 2023
A. Registration with Insolvency and Bankruptcy Board of India (IBBI):
1) For valuation of properties/assets pertaining to Companies, in terms of Companies (Registered Valuers and Valuation) Rules 2017, issued as per the MCA notification dated 18.10.2017, a valuer registered as a valuer member with IBBI for relevant class of assets shall be eligible for conducting the valuation. Such valuers shall also be eligible for valuation of properties/ assets pertaining to other than Companies. As regards, all the valuation work related to the Company Assets would be undertaken only by the valuers registered with IBBI. Further, to undertake the valuation of Properties/ Assets pertaining to Companies under SARFAESI Act, 2002, the valuer must be registered under Section 34AB of Wealth Tax Act, 1957.
2) For cases referred to NCLT under IBC, IRP/RP shall appoint valuers for valuation of assets of the corporate debtor by engaging valuers who are registered with IBBI/organizations recognized by IBBI. The scope and fees payable to such valuers shall be fixed by the IRP /RP with approval of Committee of Creditors (CoC).
B. Registration with Government:
Registration with the central / state governments is desirable but not compulsory.
C. Registration under Wealth Tax Act: Valuation under SARFAESI Act, 2002:
1) For undertaking valuation of properties under SARFAESI Act, 2002 valuer has to be registered under Sec. 34 AB of Wealth Tax Act, 1957. While assigning / outsourcing valuation work to valuers, it is necessary that branches take the provisions of the SARFAESI Act into account and comply accordingly.
2) As per Section 34AC(2) of Wealth Tax Act, if a partnership firm is to be registered as a valuer, all its partners must be registered under Wealth Tax Act. Hence, only such partnership firm where all partners are registered under Wealth Tax Act shall be eligible to conduct valuation under SARFAESI Act 2002.
3) Further, no company or other body corporate can be registered as a valuer under Wealth Tax Act as per Section 34AC(2) of the Act. Since LLP is a body corporate, it cannot be registered as a valuer 5162484 01-04-2023 20:41 under Wealth Tax Act as per Section 34AC(2) of the Act. Hence, a company, LLP or other body corporate cannot conduct valuation under SARFAESI Act 2002.
D. Valuers with Diploma or qualification other than Graduation or Post Graduation:
Valuers with Educational Qualifications of Diploma shall be eligible for empanelment to undertake valuation of Properties/ Land& Building/ Real Estate/ Assets/ Plant and Machinery for loans up-to Rs.5.00 Crore only. However, Deputy Zonal Manager (DZM) shall be empowered to permit valuation to an extent of Rs. 10.00 crores and Zonal Manager (ZM) shall be empowered to permit valuation to an extent of above Rs. 10.00 crores by valuers with Diploma as qualification.
4.3.3 Qualifications and Experience
It is necessary that a valuer possesses proper educational qualifications which make him competent to carry out the task of valuation of securities. In addition, relevant work experience is also important. Educational Qualifications and Work Experience required for persons eligible for empanelment as valuers is detailed in Chapter 5.
4.3.4 Membership of Valuers Association
Valuer shall be a member in good standing of any one of the Valuers Associations viz. Institute of Valuers (IOV), Institution of Estate Managers & Appraisers (IESMA), Practicing Valuers Association (India) (PVAI), The Institute of Company Secretaries of India (ICSI), The Indian Institute of Valuers (IIV), The Institute of Cost Accountants of India (ICMAI), The Institute of Chartered Accountants of India (ICAI), Association of Certified Valuers and Analysts (ACVA), Centre For Valuation Studies, Research And Training Association (CVSRTA), Council of Engineers and Valuers, Divya Jyoti Foundation or any other association registered as RVO with IBBI.
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