Eligibility, Qualifications and Registration of Valuers of the Company
Eligibility for registered Valuers
A person shall be eligible to be a registered valuer if he-
- is a valuer member of a registered Valuers organization; Explanation- For the purposes of this clause, “a valuer member” is a member of a registered Valuers organization who possesses the requisite educational qualifications and experience for being registered as a valuer;
- is recommended by the registered Valuers organization of which he is a valuer member for registration as a valuer;
- has passed the valuation examination under rule 5 within three years preceding the date of making an application for registration under rule 6;
- possesses the qualifications and experience as specified in rule 4:
- is not a minor;
- has not been declared to be of unsound mind;
- is not an undischarged bankrupt, or has not applied to be adjudicated as a bankrupt;
- 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;
- has not been convicted by any competent court for an offense punishable imprisonment for a term exceeding six months or for an offense involving moral turpitude, and a period of five years has not elapsed from the date of expiry of the sentence: Provided that if a person has been convicted of any offense and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be registered;
- 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
- 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.
No partnership entity or company shall be eligible to be a registered valuer if-
- 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;
- it is undergoing an insolvency resolution or is an undischarged bankrupt;
- All the partners or directors, as the case may be, are not ineligible under clauses (c), (d), (e), (g). (h), (i), G) and (k) of sub-rule (1);
- 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
- 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.
Qualifications and experience
An individual shall have the following qualifications and experience to be eligible for company registration under rule 3, namely:-
- Post-graduate degree or post-graduate diploma, in the specified discipline, from a University or Institute established, recognized or incorporated by law in India and at least three years of experience in the specified discipline thereafter; or
- a Bachelor’s degree or equivalent, in the specified discipline, from a University or Institute established, recognized or incorporated by law in India and at least five years of experience in the specified discipline thereafter; or
- 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).
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 company registration as a valuer or recognition as a registered Valuers organization 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.
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 organization, to test their professional knowledge, skills, values and ethics in respect of valuation: Provided that the authority may recognize an educational course conducted by a registered Valuers organization before its recognition as adequate for the purpose of appearing for valuation examination: Provided also that the authority may recognize 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. 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. 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. An individual who passes the valuation examination, shall receive acknowledgement of passing the examination. An individual may appear for the valuation examination any number of times.
Application for certificate of registration
An individual eligible for company 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 favor of the authority. 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-Il along with a nonrefundable application fee of ten thousand rupees in favor of the authority. The authority shall examine the application, and may grant twenty one days to the applicant to remove the deficiencies, if any, in the application. The authority may require the applicant to submit additional documents or clarification within twenty- one days. The authority may require the applicant to appear, within twenty one days, before the authority in person, or through its authorized representative for explanation or clarifications required for processing the application. 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 company 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. 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 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. 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. After considering the explanation, if any, given by the applicant under sub-rule (8), the authority shall either-
- Accept the application and grant the certificate of company registration; or
- Reject the application by an order, giving reasons thereof.
The authority shall communicate its decision to the applicant within thirty days of receipt of explanation.
Conditions of Registration
The registration granted under rule 6 shall be subject to the conditions that the valuer shall-
- At all times possess the eligibility and qualification and experience criteria as specified under rule 3 and rule 4;
- 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 organization;
- In his capacity as a registered valuer, not conduct valuation of the assets or classes of assets other than for which he/it has been registered by the authority.
- take prior permission of the authority for shifting his/ its membership from one registered Valuers organization to another;
- take adequate steps for redressal of grievances;
- maintain records of each assignment undertaken by him for at least three years from the completion of such assignment;
- comply with the Code of Conduct (as per Annexure-I of these rules) of the registered Valuers organization of which he is a member;
- 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 classes that is being valued to sign and act on behalf of it;
- 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;
- 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:
- in case a company is the registered valuer, be liable along with director who signs and acts in respect of a valuation assignment on behalf of the company;
- 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
- Comply with such other conditions as may be imposed by the authority.
Conduct of Valuation
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 of the company are notified or modified by the Central Government, a valuer shall make valuations as per-
- internationally accepted valuation standards,
- Valuation standards adopted by registered Valuers organization.
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. The valuer shall, in his report, state the following:-
- Background information of the asset being valued;
- purpose of valuation and appointing authority;
- identity of the valuer and any other experts involved in the valuation;
- disclosure of valuer interest or conflict, if any;
- date of appointment, valuation date and date of report;
- inspections and/or investigations undertaken;
- nature and sources of the information used or relied upon;
- procedures adopted in carrying out the valuation and valuation standards followed;
- restrictions on use of the report, if any,
- major factors that were taken into account during the valuation
- conclusion; and
- 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.
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 organization and on such surrender, the valuer shall inform the authority for taking such information on record. A registered Valuers organization 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. Every registered Valuers organization 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.
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.
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 up to 30 September, 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 30th September, 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.
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