Register Valuer: Valuations under IBC
Under IBBI, the reference for valuations has been made to the Companies Act, 2013 while defining registered valuer. The appointment of a Registered Valuer has been prescribed in various regulations issued by IBBI from time to time, some of which are below
Valuations required Insolvency & Bankruptcy Code
| Section | Requirement of Register Valuer |
| CIRP 27 | Two registered valuers are required to be appointed by Resolution Professional in 7 days to determine fair value and liquidation value |
| CIRP 35 | If two liquidation values are significantly different [under CIRP 27], he may appoint another registered valuer who shall submit an estimate computed in the same manner; and the average of the two closest estimates shall be considered the liquidation value. |
| VLR 3(2) | In Voluntarily liquidation, valuation of assets of the corporate person by RV |
| VLR 38(1) | The liquidator prepares a sales statement explaining for the shortfall in the value assigned by registered valuer |
| LPR 34(2) | Two registered valuers are required to be appointed by the liquidator to value the assets |
| FTIRP 26 | One registered valuer is required to be appointed by RP to determine fair value and liquidation value |
| Section 46(2) of IBC | The Adjudicating Authority may require an independent expert to assess evidence relating to the value of the transactions mentioned in this section. |
| CIRP 27 | Two registered valuers are required to be appointed by Resolution Professional in 7 days to determine fair value and liquidation value |
| CIRP 35 | If two liquidation values are significantly different [under CIRP 27], he may appoint another registered valuer who shall submit an estimate computed in the same manner; and the average of the two closest estimates shall be considered the liquidation value. |
| VLR 3(2) | In Voluntarily liquidation, valuation of assets of the corporate person by RV |
| VLR 38(1) | The liquidator prepares a sales statement explaining the shortfall in the value assigned by a registered valuer |
Two registered valuers are required to be appointed by the resolution professional to determine fair value and liquidation value [Refer Regulation 27 and 35 of The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016]
- One registered valuer is required to be appointed by a resolution professional to determine fair value and liquidation value [Refer Regulation 26 and 34 of The Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017]
- Two registered valuers are required to be appointed by the liquidator to value the assets [Refer Regulation 34(2) & 35 of The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016]
- In reference to voluntary liquidation, the registered valuer report [Section 59 (3)(b)(ii) of the Insolvency and Bankruptcy Code, 2016] – This report is required before initiation of the process of Voluntary Liquidation.
In the case of two registered valuers, both are supposed to submit their separate independent reports.
Provided that the following persons shall not be appointed as registered valuers:
- a relative of the interim resolution professional
- a related party of the corporate debtor
- an auditor of the corporate debtor in the five years preceding the insolvency commencement date or
- a partner or director of the insolvency professional entity.
