Analysis of Delhi High Court Judgement in Cushman and Wakefield India Pvt. Ltd. & Anr. vs. Union of India & Anr.

The purpose of registration as Valuer, a separate class has been carved out based on classification which is founded on intelligible differentia and as such the Rule cannot be faulted.

These petitions were filed to declare Rule 3(2) of the Companies (Registered Valuers and Valuation) Rules, 2017 as unconstitutional for violating Article 14, Article 19(1)(g) and Article 301 of the Constitution of India.

The Learned Counsel stated that on Section 247 of the Act which introduced for the very first time the concept of valuation by a registered valuer having qualifications, and requisite experience so that an impartial, true and fair valuation may be made. Such a provision did not exist under the old Companies Act, 1956. She submits that credible valuation of assets is critical to the efficient working of the financial market. Till the commencement of the Act and the Rules, there had not been any generally accepted and uniform standards in asset valuation system in India. Valuers had been adopting divergent methodologies resulting in vast differences in their conclusions. Due to divergent valuation outcomes and criteria, asset valuation in India was not considered credibly. Lack of authentic valuation reports of assets pointed fingers at the method of asset valuation and even the credibility of valuers. It is in order to regulate valuation profession under a regulatory regime and to guide and develop the same, the Parliament decided to bring in uniformly acceptable norms and generally accepted global valuation practices in India by incorporating a separate Chapter in the Act to set regulatory norms for various classes of asset valuation for the purposes of Companies Act, 2013.

The Court dismissed the Petition keeping in view the position of law and the reasoning given by the respondents and making eligible only companies other than subsidiary companies, associate companies and joint ventures for the purpose of registration as valuer, a separate class has been carved out based on classification which is founded on intelligible differentia and as such the Rule cannot be faulted.

Judgement link : https://ibbi.gov.in/webadmin/pdf/order/2019/Feb/In%20the%20matter%20of%20Cushman%20and%20Wankefield%20India%20Private%20Limited%20Vs%20Union%20of%20India%20&%20Anr%20WP%20(C)%20No.%209883%20-2018%20CM%20No.%2038508-2018_2019-02-06%2011:30:20.pdf