MCA amends Companies (Registered Valuers and Valuation) Rules,

2017
- By Swapnill Sharma
Corporate Law division
corplaw@vinodkothari.com

The Ministry of Corporate Affairs vide its notification1 dated November 13, 2018 has issued Companies
(Registered Valuers and Valuation) Fourth Amendment Rules, 2018 (hereinafter referred to as “The
Rules”) which shall come into force from the date of its publication in the official gazette.

This write up covers the following changes made to the Rules by the amendment:

Relevant Earlier provision Revised provision Impact

Rule/Clause
Rule 1 Short title and Short title, commencement and The heading revised to include
commencement application applicability of the Rules as
well.
Sub - rule 3 - (3) These rules shall apply for The applicability of the Rules
inserted valuation in respect of any has been defined.
property, stocks, shares,
debentures, securities or
goodwill or any other assets or
net worth of a Company or its
liabilities under the provision of
the Act or these rules.

Explanation.- It is hereby
clarified that conduct of
valuation under any other law
other than the Act or these rules
by any person shall not be
affected by virtue of coming into
effect of these rules."
Rule 3 Eligibility for registered valuers
Sub - rule 2, (2) No partnership entity (2) No partnership entity or “Not” has been omitted, to
clause (a) or company shall be company shall be eligible to be a give clarity that No Company
eligible to be a registered valuer if- shall be eligible to be a
registered valuer if- a) It has been set up for objects registered valuer if it is a
a) It has been set up for other than for rendering subsidiary, joint venture or
objects other than for professional or financial associate of another company
rendering professional services, including valuation or body corporate.
or financial services, services and that in the case of a
including valuation company, it is a subsidiary, joint
services and that in the venture or associate of another
case of a company, it is company or body corporate;
not a subsidiary, joint

1
http://www.mca.gov.in/Ministry/pdf/CompaniesRegisteredValuers4AmdtRules_13112018.pdf
Relevant Earlier provision Revised provision Impact
Rule/Clause
venture or associate of
another company or
body corporate;
Sub - rule 2 All the partners or All the partners or directors, as (f) of sub rule 1 is inserted-
clause (c) directors, as the case the case may be, are not Has not been declared to be of
may be, are not ineligible under clauses (c), (d), unsound mind is been inserted
ineligible under clauses (e), (f),(g), (h), (i), (j) and (k) of along with other ineligibilities
(c), (d), (e), (g), (h), (i), (j) sub-rule (1) of the partners and directors.
and (k) of sub-rule (1)
Rule 4 Qualifications and experience
clause (c) membership of a membership of a professional The requirement of a member
the words, professional institute institute established by an Act of
of a professional institute to
brackets and established by an Act of Parliament enacted for the also hold either a post-
letters "and Parliament enacted for purpose of regulation of a graduate degree or post-
having the purpose of profession with at least three graduate diploma, in the
qualification regulation of a years' experience after such specified discipline, from a
mentioned at profession with at least membership University or Institute
clause (a) or (b)" three years' experience established, recognised or
shall be after such membership incorporated by law in India
omitted; and having qualification and at least three years of
mentioned at clause (a) experience in the specified
or (b) discipline thereafter or 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,
is now done away with.
Explanation II Qualifying education Qualifying education and the words "and examination or
and experience and experience and for various asset training" are omitted
examination or training classes, is given in an indicative
for various asset classes, manner in Annexure-IV of these
is given in an indicative rules.
manner in Annexure-IV
of these rules.

Explanation III - Explanation III - For the purposes Further clarity has been
inserted of this rule and Annexure IV, provided for what professional
'equivalent' shall mean and technical qualifications
professional and technical would be considered
qualifications which are equivalent to a Bachelor’s
recognised by the Ministry of degree.
Human Resources and
Development as equivalent to
professional and technical
degree.
Relevant Earlier provision Revised provision Impact
Rule/Clause
Rule 10 Functions of a Valuer
Rule 10 A valuer shall conduct A valuer shall conduct valuation Omitted - “and he may conduct
valuation required required under the Act as per valuation as per these rules if
under the Act as per these rules required under any other law
these rules and he may or by any other regulatory
conduct valuation as per authority”
these rules if required
under any other law or
by any other regulatory
authority
Rule 11 Transitional Arrangement
Rule 11 Explanation 1 is omitted Explanation has been omitted
- It is hereby clarified form Rule 11 as the same has
that conduct of been inserted under Rule 1 in
valuation by any person application of the Rules.
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 regulator
Rule 12 Eligibility for registered valuers organisations
Sub-rule 1 a professional institute it is a professional institute Language correction is made
clause (ii) established by an Act of established by an Act of for - “a professional institute”
Parliament enacted for Parliament enacted for the to “It is a professional
the purpose of purpose of regulation of a institute” were made.
regulation of a profession
profession
Annexure IV - Indicative Matrix on requisite qualifications/experience in specified discipline
Plant and Graduate or Post Graduate or Post Graduate in Graduate/Post Graduate
Machinery Graduate in Mechanical Mechanical, Electrical, courses for eligibility
or Electrical Engineering Electronic and Communication qualification have been added
of a recognised ,Electronic and Instrumentation, Mechanical,
University Production, Chemical, Textiles, Electrical,Electronic and
Leather, Metallurry, or Communication ,Electronic
Aeronautical Engineering. and Instrumentation,
Production, Chemical, Textiles,
Leather, Metallurry, or
Aeronautical Engineering.
Relevant Earlier provision Revised provision Impact
Rule/Clause
Securities and Graduate in any field Omitted To be registered valuer for
Financial assets Securities and Financial assets
the valuer has to be atleast a
Post Graduate in Finance.