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Petition Closed

To change the draft on technical valuation & so

that deserved opportunity should be given to
qualified individuals in the technical field of
valuation
This petition had 139 supporters
BB Goyal started this petition to IBA Indian Banks’ Association

Here is the CRUX of petition :

Overall the draft on technical valuation guidelines seems heavily biased towards providing unfair
opportunity to non qualified individuals to enter into a very Technical field of Valuation, The draft seems as
being drafted by non competent non qualified group of individuals having no or limited knowledge of
Valuation.

Here are the details of the draft with objections against the IBA guidelines.

Indian Banks’ Association

Draft Paper on

Standardization of Procedure for Empanelment of Valuers

Objections to the draft are written in red color, point wise in the draft itself so that these could be understood
easily.

At the very onset the entire draft is rejected as the competency and authority of IBA to draft any guidelines
for such a technical field as Valuation is questioned by us . Under what authority the guidelines have been
drafted, under which committee of experts this draft has been finalized, IBA being a private authority seems
incompetent to frame guidelines for Public authorities (banks)

1.0 Introduction

· Valuation as a profession is an exercise falling primarily within the domain of economics as well as
law. Valuation really concerns itself with all species of legal interests arising out of land and building as well
as plant and machinery, which are exchanged for money and, therefore, entails the phenomena of exchange,
scarcity and choice that characterizes a ‘market’ in the economic sense of the term.

Strongly Disagree- Valuation is primarily technical field ( Surveying, Site analysis, Site condition, Soil
conditions, Field conditions, Quantity and quality analysis, measurements, Area calculations, NBC co-
relation, Economic and useful life of Structure etc) and can not be called primarily Economic/Legal related.
For legal aspects verification bank hires/ maintains panel of legal professionals.
· It is utmost important that the valuers possess the requisite knowledge and experience.

Agreed

· The professions of civil, mechanical, electrical engineering, architecture, valuation of real estate and
valuation of plant and machinery are independent of each other and in order to practice these professions
academic qualification in respective disciplines is essential.

Disagreed- It is to be noted that Fields of Civil, Architectural and real estate fields are interrelated and further
mechanical, electrical and plant and machinery fields are inter related and cannot be termed as independent
of each other, The para is not clear in it’s spirit and contents and creates ambiguity.

· But there exists a peculiar situation in our country. Thereare less number of academically qualified
valuers available in the country.Therefore, provision for empanelment is to be made in such a way that a
vacuum is not created and at the same time number of academically qualified valuers continue to increase
over a period of timeand ultimately only academically qualified valuers shall be empanelled.

Disagreed- Please note that Ministry of Finance, Govt Of India has already laid down qualifications and
competency criteria for granting licence to practice under section 34AB, Wealth Tax act.

2.0 Criteria for Empanelment of Valuers including Qualifications

2.1 Educational Qualifications

It is necessary that a valuer possesses proper educational qualifications which makes him competent to carry
out the task of valuation of immoveable property and plant and machinery. In addition, relevant work
experience is also important.

Therefore, it is necessary to bear in mind following points while laying down criteria for educational
qualifications:

(i) Membership of professional body by passing an appropriate examination:

In case of S. K. Ahuja vs. CBDT-, the Allahabad High Court has held that the membership recognized by the
CBDT for registration as a valuer should have been obtained by passing an examination by the applicant and
therefore, after this judgment the CBDT made amendment to Wealth Tax Rules by inserting ‘Explanation 2’
which reads as under:

“Where the membership of any institution is recognized by the Central Government as a qualification for the
purpose of recruitment to superior services or posts under the Central Government in any field, such
membership shall not be regarded as a requisite qualification for the purposes of this rule, unless the
membership has been granted on the basis of passing the examinations conducted by the institution.”

This clearly establishes that an educational qualification obtained by undergoing a regular course in
respective disciplines from a recognized university is an essential parameter.

In view of the above, requirement of the membership of professional bodies laid down under the criteria for
empanelment of valuers must stipulate that such membership is granted to the members who have passed the
examination in respective disciplines of valuation.

As per Gujarat High Court decision in case of Institution of Valuers vs. Union of India - the disciplines of
architecture, civil, electrical, mechanical etc. engineering, valuation of real estate and plant & machinery are
different disciplines and independent of each other, in order to practice each one educational qualifications in
each one is essential.

Therefore, for valuers,an academic degree in respective branch of valuation is stipulated.

Chartered Engineers and firms with engineering professionals shall only be empanelled provided they satisfy
the condition of undergoing six months course/two week training as applicable by 31.12.2017 as stipulated
later.

The decisions quoted above are just some instances and there are thousands of decisions given by courts , No
proper and unbiased picture can be painted by quoting some handpicked decisions to reflect just one side of
picture, Further any court decision which is challengeable in a higher court cannot form basis of finalizing
future of thousands of professionals.

Ø The valuers shall be empanelled in following two categories

(a) Real estate

(b) Plant & Machinery

Ø The educational qualifications and experiences are laid down later.

Ø Individuals or a group of individuals and partnership firms shall only be considered for empanelment for
valuation of Fixed Assets. (IBA shall examine the Wealth Tax Act, 1957, Section 34AB and ascertain
whether Companies can be considered for empanelment as valuers.)

The LLPs may be permitted to empanel if they satisfy following condition:

Each of the partners of the firms must have academic degrees in respective disciplines of valuation and must
satisfy experience criteria. The staff of LLP handling the valuation also should be academically qualified
valuer in respective discipline.The report of real estate has to be performed under supervision of real estate
valuer and similarly that for plant & machinery valuation under supervision of PM valuer.

Ø Valuers should actively participate in the professional activities of the various professional bodies dealing
with valuation of assets and should be registered with any of the following professional bodies. viz.,

i. Institution of Valuers,

ii. Institution of Surveyors,

iii. Institution of Government Approved Valuers,

iv. Practicing Valuers Association of India,

v. The Indian Institution of Valuers,

vi. Centre for Valuation Studies, Research and Training,

vii. Royal Institution of Chartered Surveyors UK

viii. American Society of Appraisers, USA

ix. Appraisal Institute, USA.

Agreed

Ø The Valuer

- should also have PAN /Aadhaar and valid KYC documents,

- should be a citizen of India(it is essential to specify whether it includes or excludes overseas citizen of
India(OCI) and Person of Indian Origin(PIO),
- has not been removed / dismissed from his services, or

- not been convicted of any offence and sentenced to a term of imprisonment.

- should not have been found guilty of misconduct in professional capacity

At the time of empanelment, the valuer shall give an undertaking to above effect.

Agreed

Ø The valuer should have through knowledge of issues to be considered in valuation of real estate as well as
plant and machinery of industry concerned and also the types of assets to be valued.

Agreed

Ø The issues to be considered in valuation of real estate and plant & machinery are covered in the course
curriculum of courses leading to the respective degree courses in valuation and most of them are not covered
in civil, electrical,mechanical engineering courses which is evident fromextracts given belowfrom Para 33 of
Gujarat High Court decision referred earlier:

“On a bare reading of the course prescribed for Master of Valuation in Real Estate, it is evident that the
subjects pertaining to civil engineering are limited. In the first semester, except for elementary surveying
which there does not appear to be any other subject related to the field of engineering. As regards the second
and third semester, there are some subjects related to engineering, however, as rightly contended by the
learned advocate for the petitioner, out of total credits of 34 in the second semester and 40 in third semester,
the credits related to engineering are only eight in each of the semesters. Similarly, in the case of programme
of Studies leading to the Master of Valuation in Plant and Machinery, the syllabus shows that the subjects
related to mechanical or electrical engineering are limited to the extent of 8 credits out of 32 in the first
semester; 10 credits out of 36 in the second semester and 7 credits out of 36 in the third semester. Thus, the
syllabus makes it amply clear that the course in Master of Valuation does not predominantly pertain to any
discipline of engineering.”

The decisions quoted above are just some instances and there are thousands of decisions given by courts , No
proper and unbiased picture can be painted by quoting some handpicked decisions to reflect just one side of
picture, Further any court decision which is challengeable in a higher court cannot form basis of finalizing
future of thousands of professionals.

Ø The individual / firm working as a valuer with the Debt Recovery Tribunals and High Courts would have
preference in the empanelment.

Disagreed- There should not be any favouritism, Bias , preference towards any one, this is the entire crux of
making such guidelines and this point imparts bias to the system which is not acceptable.

Ø Note:The important thing is that one must be familiar with various issues to be considered, possess
knowledge of various methods of valuation and their application to different purposes of valuation. While
empanelling it is essential to ensure that a valuer possesses the skillfor valuation of different types of Assets
such as Land and Building, Plant and Machinery, and professionals specialised in the respective fields shall
be empanelled. Therefore, it is essential that only valuers with academic qualification are empanelled with
grandfathering provision.

The academic qualification being referred here is indeed the BE, BTech, B,Arch and other technical
qualifications for which the Valuers/ Engineers/ Architects have soiled hard for years and years and with this
interpretation of Academic qualification the above point is agreed upon.
Ø For valuation of Land and Building, the Valuer should possess the following qualifications.

(A) Immovable Property

Sr.No.
Educational Qualifications
Work Experience

1
Graduate/Post-Graduate degree in Valuation awarded by a recognized University in India
2 years work experience in the field of valuation after completing the examination

2
Pass in Valuation Examinations conducted by the Institution of Surveyors, India (Valuation Branch)
2 years work experience in the field of valuation after completing the examination

3
Bachelor’s degree in Civil Engineering/ Architecture/Town Planning or equivalent.
5 years workexperience in the field of valuation after completion of the degree or equivalent.

4
Diploma in Civil Engineering / Architecture.
10years work experience in the field of valuation after completion of the diploma

5
Chartered / Professional membership of the Royal Institution of Chartered Surveyors (RICS) OR American
Society of Appraisers (ASA) OR Appraisal Institute (AI), USAobtained

by passing an examination equivalent to examinations mentioned under sr.no. (1) & (2) above. In case of
applicants who have obtained the degree in valuation outside India - they will have to complete a course
covering Indian Laws in a stipulated time.
The work experience shall be same as for sr.no.(1) and(2),i.e.2years.The membership of any institution
should have been obtained by passing an examination in valuation equivalent to examinations referred in
sr.no.(1) and (2)above. The examinations of these institutions should have been reviewed by Ministry of
HRD, GOI from time to time.

Strongly Disagreed- Any proper and sensible path leading to any profession must be logical, should take
about similar time and should at the end impart similar skill set to the individual, The chart specified by you
above has given equal status to simple graduates, Engineers, Architects and thus is highly faulty, The entire
Idea of equalizing a non technical qualified person (BA, Bcom, Bsc , MBBS, Advocates, CA etc) are being
placed equivalent to Technical persons, Which is not acceptable.

From 1.1.2018 valuers shall be empanelled with academic qualification in valuation of real estate only.
The experience in valuation,considering various aspects of property like utility, marketability,
transferability,physical, legal, social, economic etc., shall be considered as relevant valuation experience. In
course curriculum of civil engineering and architecture these valuation aspects are not covered.

For existing or new empanelment of Valuers under category (3) above, they must complete either of the
following prior to Dec 2017.

Obtain Master of Valuation (real estate) from any recognized university

Or

Pass final/direct final examination in valuation of real estate conducted by Institution of Surveyors (India)
and recognized by Ministry of HRD- Govt. of India for recruitment to superior services

Or

Pass an examination in valuation of real estate equivalent toexaminations mentioned under sr.no (1) and (2)
above conducted by the professional society like RICS, ASA etc. The examinations conducted by RICS,
ASA should have been reviewed from time to time by Min. of HRD, GOI

Or

should complete 6 months prescribed course in Valuation in the subjects vital for valuation of real estate and
notcovered in the civil engineering and architecture courses.

Note:The valuers falling under this category shall be allowed to continue on the panel even after 1.1.2018
provided they have satisfied the any one of the four conditionsmentioned above.

For existing or new empanelment of Valuers under category (4) above they must complete either of the
following prior to Dec 2017

Pass final examination in valuation of real estate conducted by Institution of Surveyors (India) and
recognized by Ministry of HRD- Govt. of India for recruitment to superior services

Or

Pass an examination in valuation of real estate equivalent to examinations mentioned under sr.no (1) and (2)
above conducted by the professional society like RICS, ASA etc. The examinations conducted by RICS,
ASA should have been reviewed from time to time by Min. of HRD, GOI

Or

should complete 6 months prescribed course in Valuationin the subjects vital for valuation of real estate and
notcovered in the civil engineering and architecture courses

Note:The valuers falling under this category shall be allowed to continue on the panel even after 1.1.2018
provided they have satisfied the any one of the three conditions mentioned above.
For valuers who are already empanelled under category 3 and 4 above and having age exceeding 50 years as
in Dec 17 must complete a 2 weeks prescribed course on Valuation.

(B) Plant and Machinery

For valuation of Plant and Machinerythe valuer should possess the following qualifications.

Category
Educational Qualification
Work Experience

1
Graduate/Post-Graduate degree in Valuation awarded by a recognized University in India
2 years work experience in the field of valuation after completing the examination

2
Bachelor’s degree in Mechanical/Electrical/Production Engineering or equivalent.
5 years work experience in the field of valuation after completion of the degree or equivalent.

3
Diploma in Mechanical / Electrical/Production Engineering etc
10 years work experience in the field of valuation after completion of the diploma.

4
Chartered/Professional membership of the Royal Institution of Chartered Surveyors (RICS) OR American
Society of Appraisers (ASA ),USA obtained by passing an examination equivalent to mentioned under (1)
above. In case of applicants who have obtained the degree in valuation outside India - they will have to
complete a course covering Indian Laws in a stipulated time.
The work experience shall be same for sr.no.(1),i.e.2years.The membership of any institution should have
been obtained by passing an examination in valuation equivalent to examinations referred in (1) above.
These examinations of the institutions should have been reviewed by Ministry of HRD, GOI from time to
time.

From 1.1.2018 valuers shall be empanelled with academic qualification in valuation of Plant and Machinery
only.

The experience in valuation,considering various aspects of property like utility, marketability, transferability,
physical, legal, social, economic etc., shall be considered as relevant valuation experience.In syllabus of
degrees in Mechanical / Electrical/Production etc.engineering, the above aspect are not covered, therefore,
academic degree in valuation / 6 months prescribed course in Valuation / two week programme in valuation
have been emphasized on similar lines of real estate.

For existing or new empanelment of Valuers under category (2) above they must complete either of the
following prior to Dec 2017.
 Obtain Master of Valuation (plant & machinery)from any recognized university

Or

should complete 6 months prescribed course in the subjects which are vital for Valuation of Plant &
Machinery and not covered in course curriculum of
automobile,chemical,computer,electrical,.industrial,mechanical,production,textiles etc. engineering.

Note: The valuers falling under this category shall be allowed to continue on the panel even after 1.1.2018
provided they have satisfied any one of the two conditions mentioned above.

For existing or new empanelment of Valuers under category (3) above they must complete the following
prior to Dec 2017.

should complete 6 months prescribed course in the subjects which are vital for Valuation of Plant &
Machinery and not covered in course curriculum of
automobile,chemical,computer,electrical,.industrial,mechanical,production,textiles etc. engineering.

Note:The valuers falling under this category shall be allowed to continue on the panel even after 1.1.2018
provided they have satisfied the condition of passing 6 months course referred above.

For valuers who are already empanelled under category 2 and 3 above and having the age exceeding 50
years as in Dec 17must complete a 2 weeks training programme as prescribed.

(C) Agricultural Land

Ø A valuer of agricultural land other than plantations should preferably be a graduate in Agriculture Science
and must have worked as a farm valuer for a period of not less than five years.

(D) Coffee plantation, tea plantation, rubber plantation

Ø A valuer of coffee plantation, tea plantation, rubber plantation as the case may be should preferably be a
Graduate in Agriculture Science and have worked as a manager of a coffee, tea, rubber estate or as the case
may be.

Note: Valuation issues to be taken into consideration while carrying out valuation of above assets are not
covered in course curriculum of agricultural science,

2.3 Minimum Age Requirement

If the applicants satisfies the criteria for empanelment then age should not be bar.
2.4 Classof Valuers

Ø The valuers should be classified as under based on work experience:

Class of valuer
Work experience in undertaking valuations
Value of property for assignment of valuation work
A
More than 10 years
No limit
B
More than 5 years and less than 10 years
Up to INR 25 crore
C
Up to 5 years
Up to INR. 1 crore*
* In case of metropolitan cities, the limit shall be INR 3 crore.

The above criteria are based on chronological experience and same is not correct.

Valuation is a multi-disciplinary subject covering following subjects over and above the valuation:

Real Estate Plant & Machinery

Law Law

Economics Economics

Finance Finance

Environmental Science Environmental Science

Planning Planning

Building construction Industrial Processes/Factory eq.

The practitioners in the field of valuation with more than 20 years’ experience are not aware of basic
valuation maxims and hence do not use while preparing the valuation report. This is evident from the
literature available in the country from articles published by the authors having more than 20 years’
experience as valuers of immovable property and have rendered services as Valuers of immovable property
to the bank also for more than 10 years. These articles also establish that they also do not have exposure to
basic issue of valuation maxims. Similar is the case for plant & machinery valuers.

(1) We are questioning the experts and experienced valuers who have given their blood and sweat for the
banks , This is not practical and unethical .

(2) This also questions all banking practise in India which has been followed for last many decades and
concludes that valuation/ funding/ loans/ advances were given based on judgments of non competent people
engaged in valuation.

(3) It also infers that criteria’s for empanelment of valuers under section 34ab as specified by Ministry of
Finace Govt of India are also being challenged by you as WRONG, and you wish to supersede and dictate
your work and wisdom as a super body whereas , You actually have no jurisdiction/ Competency on doing
what you intend to do.

(4) Valuation work augmented with experience is an invaluable asset for bank and banking, it cannot be
replaced by a mere six months course, The valuers with 20 years of experience , The valuers like
Mr.Namavati Mr.Naini etc who have been pillers of Valuation and have written number of books and made
this field stand are no more qualified for empanelment, This itself seems like a major anomaly and needs
rectification.

(5) On one side a person with ten years experience is competent enough to value property without limit on
other side you are stating that Valuers with twenty years experience are non competent, we fail to understand
what is the real motive of drafting these self contradictory guidelines.

A few of them are given below:

(a) “at an arm’s length” is explained by the author in the year 2014 as under, which is against the principle of
valuation.

‘When we do the valuation of a specific property, we conduct market survey for a similar property in order to
know the prevailing market rate for land, reasonable rent etc. Such property under comparison should be
very nearer to the property under valuation or it should be ‘at an arm’s length.

If the property at a distant place is compared, then the value arrived at may not be nearer to the accuracy.’

Actually, at an arm’s length transaction’is one between parties who do not have a particular or special
relationship, e.g., parent and subsidiary companies or landlord and tenant, that may make the price level
uncharacteristic of the market or inflated because of an element of special value. The market value
transaction is presumed to be between unrelated parties, each acting independently.

It has nothing to do with the ‘distance’. This is very basic and fundamental aspect which a beginner ought to
know.

Now let us consider a case in which a transaction considered is very nearer to the property as suggested by
the expert but it is between related parties then it will not satisfy the concept of willing buyer and willing
seller and hence value worked out will not be as per S.5 (n) of Banking Regulation Act, 1949.

(b) The difference in basic terms cost, price and value defined by the author are as under, which is
wrong:

Cost is a fact.

Price is a policy.

Value is an Opinion.

Actually, cost and price are fact and value is an estimate of what price ought to be.

Can one not give opinion on cost, price as well as value? Certainly an opinion can be given on cost, price and
value. Then the cost, price and value also become opinion.

(c) An article suggests to carry out valuation, even in 2013, for probate as per Wealth Tax Rule 1BB on
the basis of Bombay High Court judgement delivered in Aug.1982. Actually, Wealth Tax Rules have been
amended with effect from 1.4.1989. Wealth Tax Rule 1BB is not in the statute book though author is
recommending to use the method, which was already deleted from statute book 14 years back.
(d) An award winning article on valuation under Land Acquisition Act, 1894 suggested payment of
solatium at 15% whereas solatium amount was raised to 30% way back in 1984 (18 years before the article
was published).

(e) An article suggests to certify in the valuation report that – ‘legal aspects have not been considered.’

Whereas, legal aspect is one of valuation maxims and has to be considered by a valuer.

(f) An article published in 2004 has opined that ‘reversionary value’ of land is negligible in case of
properties with new buildings and can be ignored.

This is absolutely wrong. Value of right of reversion depends on whether the occupier of the building is
protected tenant or not protected tenant. Even if the building is old but occupied by a tenant protected under
the rent act then also reversionary value will be negligible and can be ignored.

(g) The article published in 2004 giving a case study – Valuation of properties partly tenanted and
partly under self-occupation.

The case study is for a property located in Delhi. The property has construction on Basement, Ground floor,
First floor and Second floor each having built-up area of 2,250 sq. ft. Basement and ground floor are rented
at Rs.3,15,000/- per month. The first and second floors are self-occupied. Basement and ground floor are
valued on rent capitalization method without considering value of right of reversion. First and second floor
are valued on land and building method.

As per S.3(1) (c) of the Delhi Rent Act, 1995 premises fetching rent more than Rs.3,500/- per month are
exempted from operation of the Act. Hence the tenants of basement and ground floor are not protected under
the applicable rent act and hence owner will get the vacant possession of the property after the period of
tenancy is over. Therefore, value of such property consists of –

Capitalized value of rent for unexpired period of tenancy.

· Value of right of reversion of the property available after expiry of tenancy.

The author has not considered value of right of reversion and hence it is not as per principles of valuation.

Method of valuation adopted in the case study presented is as per Schedule III of Wealth Tax Act. The
valuation under Schedule III is a statutory valuation specifically for Wealth Tax Act which does not satisfy
the criteria of ‘Willing Buyer’ and ‘Willing Seller’ laid down in definition of market value. As the valuation
is required for bank finance Schedule III cannot be adopted as it does not satisfy S.5 (n) of Banking
Regulation Act, 1949.

(h) An article titled ‘present value of a cinema theatre’ states that the marketability is not considered.

In fact, marketability is one of the valuation maxims and value reported without consideration of
marketability is improper.

(i) An author has opined to carry out valuation of rented property as on 1.4.1981by land and building
method, which does not satisfy ‘willing buyer’ and ‘willing seller’ concept.

(j) In case of leasehold property with following data, an author has opined to carry out valuation by
Schedule – III of Wealth Tax Act.

– The unexpired period of lease is 55 years. The NMR is 10 lakh.

Solution by the author:

Unexpired lease period = 55 years

Multiplying factor = 10

Net Maintainable Rent = Rs.10,00,000

Value of the property = Rs.1,00,00,000

In case of leasehold property two interests are to be evaluated, lessor’s as well as lessee’s based on the terms
and conditions of the lease and the following points ought to be considered in order to estimate value of
lessor’s and lessee’s interest in a property:

(i) What is the lease rent?

(ii) What is total lease period and unexpired period of lease?

(iii) Whether lease is renewable or not?

(iv) In case of renewal of lease, will lease rent remain same, as old or new rent will be fixed?

(v) What amount will be payable to lessor as premium or capital investment in case of sale/assignment
of property or extension of lease?

(vi) On maturity of lease, if entire property reverts to the lessor or not if only land reverts then what will
happen to building constructed by the lessee on the leased land? Will building vest free of cost with the
lessor or the lessor has to buy from the lessee?

large number of civil engineers retired from the government services, practicing civil engineers and
architects possessing qualifications and experience in civil engineering and architecture have been registered
as valuers under the wealth Tax Act due to shortcomings in the criteria for registration as valuers under
Wealth Tax Act.

Strongly Disagreed- Incompetency of a single individual cannot decide fate of thousands of Valuers, If there
is one incompetent person there could be thousands of brilliant Valuers as well, so quoting such instances are
not only humiliating but also very very unprofessional by someone/ or a body who wishes to frame
guidelines for valuation profession.

There are number of bankers who cannot even do a single data entry or post a voucher, that does not means
that entire banking industry needs a revamp and should be trained again.

Since 1984, number of authors have expressed a need for training in valuation, a gist of a few is given below:

(a) An article published in 1984, the author has emphasized the need for training in valuation by giving an
example that an Architect who had absolutely no experience as a valuer got the registration as a valuer
because he is a registered architect of the Institute of Architects and thus a registered valuer. But since last
two years he had not finalized a single case of his own. In fact he finalized only one case that too was only
by the author. The architect approached the author as he wanted training in valuation.

This is the reason experience is required for a professional. And experience cannot be substituted by a mere
six months course.

(b) In 1993, a valuer empaneled by a bankstates as under:

‘I am a retired Superintending Engineer I am a novice in the field of Valuation. Recently I am appointed as

panel valuer to a bank. I request you to guide me with regards to the procedure of valuation of property
pledged to Bank as equitable mortgage.
From the above, it is evident that the situation in 1984, 1993 and 2014 remained the same except a breed of
valuers with qualification in valuation has been developed after 1996 onintroduction of the courses in
valuation disciplines by the universities.

In view of facts mentioned above, classification of valuers in category ‘A’, ‘B’ and ‘C’ needs revision. It
should be based on quality of experience.

Strongly Disagreed- Incompetency of a single individual cannot decide fate of thousands of Valuers, If there
is one incompetent person there could be thousands of brilliant Valuers as well, so quoting such instances are
not only humiliating but also very very unprofessional by someone/ or a body who wishes to frame
guidelines for valuation profession.

2.5 Empanelment Procedure

· In view of the foregoing discussions the procedure for empanel requires to be handled by the
members of committee who can judge the qualification, experience and properly scrutinize the application;
therefore it is essential that stalwart in valuation preferably academically qualified valuer is one of the
members of the committee.

Academically- Here should mean BE. Btech, Barch etc (As per Sec 34AB Wealth Tax)

· It is also in the interest of the bank to employ one academically qualified valuer to oversee the work
of empanelled valuers like chartered accountants and lawyers employed in full time service.

Academically- Here should mean BE. Btech, Barch etc (As per Sec 34AB Wealth Tax)

· All banks shall have a year round system of receiving application from intending valuers seeking
empanelment.

Agreed

· All such applications should be received in the prescribed format as per Annexure.

Agreed

· The application format shall also be available on the bank’s website and should be easily
downloadable.

Agreed

· As and when the requirement arises, the number of valuers required shall be
empanelled.Empanelment of the valuer should be done through a Committee approach.

Agreed

· The scrutiny of the application of the valuer shall be done at the Regional / Zonal office and if the
valuer is found to meet the eligibility criteria for empanelment, the application be forwarded to the Head
Office of the Bank along with the recommendations of the concerned Zonal /Regional Office for
consideration.

Agreed
· On receipt of the application at the Head Office / Corporate Office, the application of the valuer shall
undergo a final scrutiny and if found suitable the Head Office/Corporate Office may advise the concerned
Zonal / Regional Office to prepare a panel of the valuers who would be empanelled as and when required by
the Zone/Region.

Agreed

2.6 Duration of Empanelment

Ø The duration of empanelment of the valuer shall be five years and once empanelled, unless and until
removed from the panel.

Ø However, the quality of service provided by the valuers shall be reviewed on periodic intervals by the
banks.

Ø Aperiodic Performance Review shall be carried out by a Committee comprising of Senior Executives of
the Bank. The Composition of the Committee shall be decided by the individual banks.If the performance is
not satisfactory, the valuer can be depanelled at the discretion of the bank/HFI.

Agreed with a condition that the satisfactory performance of valuer is assessed by panel
consisting of bankers and valuers.

2.7 Removal of Valuers from Bank’s Panel

Ø If the performance of the valuer is not satisfactory, the valuer can be removed from the Panel at the
discretion of the Bank.

Strongly Disagreed- This provision is totally ambiguous, Whose satisfaction is being referred to, Point to be
noted is that a non qualified, incompetent person (Read as bankers non qualified technically) cannot judge a
technical person (Read- Valuer).

Ø If a valuer is prima facie, found to have involved in some fraudulent activities / conspiracy with the
borrowers/bank officials in over valuation of the property the name of the valuer should be reported to the
IBA for placing it on the IBA’s caution list of Third Party Entities (TPEs) involved in Fraud. Before
reporting the name of the TPEs the bank shall ensure that the procedure laid down by IBA in its procedural
guidelines are scrupulously followed.

Strongly Disagreed- We would like to draw your kind attention to Indian Constitution and Indian Law which
clearly works on the basis of “ Person Being presumed innocent till proven guilty” Any valuer who is found
guilty prima facie also posts a question that who is going to decide valuers guilt, Who is going to take this
decision, Bankers, Police, Investigation agencies.

Furthermore- IBA’s caution list has been challenged at every platform and IBA has lost court cases against
valuers, TPE reporting is being used to blackmail the Valuers and this provision will further encourage such
pressure tactics from bankers.

IBA’s caution list and placing of name of one of the valuer on Caution List has brewed up a major
controversy and the complaint against IBA is still being investigated by Ludhiana Police.

2.8 Valuers need to furnish proof of experience.

Evidence of previous experience needs to be provided to the bank / housing finance institution.

Agreed

2.9 Registration with Government –

Registration with the central / state governments is desirable but not compulsory. However, it may be noted
that for undertaking valuations under the SARFAESI Act, valuation has to be obtained from Registered
Valuer under the Wealth Tax Act (Sections 34 AA to 34 AE). While assigning / outsourcing valuation work
to valuers, it is necessary that banks take the provisions of the SARFAESI Act into account and comply
accordingly.

In view of facts mentioned above, it is essential that lacuna in the SARFAESI Act must be rectified by
rectifying the lacuna in registration of Wealth Tax Act.

Disagreed- We question IBA’s competency to point out any lacuna and to suggest any rectification, The
Authority competent to ammend SARFAESI act can rectify it and all following it shall be bound to follow
the same.

2.10 References

Carrying out a reference check is extremely important in order to verify the competence of a valuer. Banks
need to verify the quality of services provided by the valuer in the previous instances / reference checks
before empanelling the valuers on their panel. The referees shall be either (i) bank managers where
previously the valuer had done valuations or (ii) companies for whom the valuer had previously done
valuations.

Agreed

2.11 Re-Empanelment

Ø Valuers once removed from the panel of any bank or housing finance institution could be re-empanelled
again after 3 years or a specified period as the case may be, based on the recommendations of the bank
Conflict Resolution Committee.

Agreed
There are following general objections to this draft as well.

· Please note that over 55 technical subjects are prescribed by AICTE for obtaining an Engineering or
Architectural degree this consists of Quantity surveying, Estimating costing, Valuation, Surveying, Structure
designing, Drawing analysis and enterpretation as well as Field training these subjects form basis of a
successful VALUER and VALUATION profession, You on other hand have suggested to equilize a totally
non technical person from even ARTS , Economics , Commerce streams , who has not studies any technical
subject and cannot visualize the quality and quantity of work/ material/prep of drawings / area calculation etc
, How can such a person be competent to become a VALUER or enter VALUATION field.

· You have directly challenged the education equivilance and education system existing in India as on
date, Without having any authority to do so.

· Ref acedimic qualification assessment authorities around the world such as WES, do they give similar
equivalence to BA and Btech, if not , why are you suggesting such an flawed Idea.

· Building experts/ Valuers / Surveyors as in Indian Courts are specifically qualified engineers/
Architects and copy of their degree is specifically demanded for any such appointment.

· Building analysis can only be conducted by a qualified Engineer/ Architect.

· Please note that your guidelines are in direct contradiction to various court orders delivered by various
courts throughout India, who have ruled out “ Verification of ownership / Any legal aspects is outside the
perview of Valuer” (Copies of judgments can be supplied if demanded)

CRUX

Overall the draft seems heavily biased towards providing unfair opportunity to non qualified individuals to
enter into a very Technical field of Valuation, The draft seems as being drafted by non competent non
qualified group of individuals having no or limited knowledge of Valuation.

The Draft as whole is srongly condemned and rejected as whole.

Updates
1. 3 years ago
100 supporters
2. 3 years ago
BB Goyal started this petition

Reasons for signing

SIVAPRAKASAM CHENNAPPAN·2 years ago
I am an victim of IBA's

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M.Thimmarayaswamy motappa·3 years ago

i am not agreeing with draft and need to include institution of engineers as done companies act 2013

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Today: BB is counting on you

BB Goyal needs your help with “Indian Banks’ Association: To give well deserved opportunity to
qualified individuals in the technical field of valuation”. Join BB and 138 supporters today.

Sign this petition

Today: BB is counting on you

BB Goyal needs your help with “Indian Banks’ Association: To give well deserved opportunity to
qualified individuals in the technical field of valuation”. Join BB and 138 supporters today.

Sign this petition

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