Indian judiciary has recognized the report of a valuer. The reporter. I.e. the valuer status is not recognized by many clients particularly the Corporate Clients. In my view, the principles of natural justice are not followed in the valuation profession;
PRINCIPLES OF NATURAL JUSTICE:
1. Audi alteram partem. I.e. A legal principle of fairness. Also worded as audiatur et altera pars (let the other side be heard too).
2. Nemojudex in causa sua. I.e. no man shall be a judge in his own caus. Legal principle that no individual can preside over a hearing in which he holds a specific interest or bias.
We all know that Valuers Bill is pending for a long time and no revision of fees for a very long time from the appropriate authority. My understanding is that the Central Board of Direct Taxes (CBDT) is the competent authority for notifying such scale of fees and we hope the new scale of fees will soon be published taking into consideration of the cost of living. Further, the Government must instruct all banks and Public sector undertakings to pay as per prescribed scale of fees.
I heard many years ago, the minimum valuation fee for a certified appraiser in the U.S was USD 500. Some banks in India are reported as paying in June 2014 INR 500 per valuation report plus insult to valuers; it can be with due respect, plus inflation added and current exchange rate of USD 500.
I am reproducing my suggestion to the Ministry of Corporate Affairs, Government of India w.r.t Companies Act Draft Rules regarding technical and financial valuation:
Rule 17.2.1 & 17.2.2.: Under the instruction of CBDT, all Chief Commissioners of Income-tax are maintaining a Register of Valuers under the Wealth-tax Act 1957 u/s 34 AB for Category (Cat) I: Immovable Properties, Cat II: Agricultural lands, Cat III: Coffee-tea, rubber, or cardamom plantations, Cat IV: Forest, Cat V: Mines & Quarries, Cat VI: Stocks, Shares, Debentures, Securities, Shares in partnership firms and business assets including goodwill but excluding those referred to in any other categories, Cat VII: Machinery & Plant, Cat VIII: Jewellery, Cat IX: Works of Art and Cat X: Life interest reversion and interest in expectancy.
Valuers registered with CBDT status-quo can be maintained. Registered Valuers’s status can be like Architects, Advocates and Chartered Accountants. All valuers are given equal opportunity in valuation assignments in Government and private sectors in every place in India. Independent valuer’s role (Sole-proprietorship) in job assignment and status can be safeguarded.
Rule 17.2.3 Valuation fee as per Annexure B, if once notified by Government, all banks in India (Local or foreign) are to be abided by that fee structure, which is currently not fully followed.
Justification for Rule 17.2: There are registered valuers registered in the Register of Valuers for decades, from sixties to current digital era. Therefore for a smooth transition, the status quo of existing panel can be maintained.
The Status of Registered Valuers: “The legal status of Registered Valuer’s Report is recognized by judiciary as “Once there is a report by the registered valuer it is incumbent upon an authority to dislodge the same by bringing adequate material on record in the form of departmental valuation report, because in absence of the same a technical experts opinion (registered valuers report) cannot be dislodged by any authority by merely ignoring the same”. (Source: (2002) 174 CTR Guj 90 ^ http://indiankanoon.org/doc/1123736/.” (2002) 174 CTR Guj 90).
But the Status of Registered Valuers needs to be recognized like Advocates. Architects and Chartered Accountants in the spirit of the above judicial pronouncement. The one of principles of natural justice, “audi alteram partem” i.e. the judicial fairness is invited here.
The valuers are not given the required status and fees by some or many banks. Valuers role is vital for management of NPA (Non-performing assets) of banks. The net non-performing assets (NPAs) of banks had gone up 51% in FY13 to INR.92,825/- crores. According to a recent CRISIL report, the gross NPAs of banks are slated to increase from 3.3% in March 2013 to 4% by March 2014.
Thanks for your response. Just like all other stuff you have uploaded. This one is also eye opener for me and i am sure for most of other valuers and client and related parties. We will await how soon govt. , banks, valuers , client and valuer's professional bodies together come up with mutual acceptable ameicable solution to safeguard nation interest and every one own interest.
An able and knowldegeble leadership is necessary from valuers side to propose, negotiate and execute and implement. Even though their many legal,technical and multidiciplinary experts are available within valuers community, due to lack of unity, any comandable progress is not yet achived by valuers in getting solution to thier problems.
I sincearely wish something to be done in positively.