Judgment Summaries (High Court) Cushman And Wakefield India Private Limited v. Union Of India

  March 3, 2022

Case Summary:

Cushman And Wakefield India Private Limited V. Union Of India

W.P.(C) 9883/2018, CM No. 38508/2018

High Court of Delhi, Decided on 31.01.2019


Committee of Creditors CoC
Corporate Debtor CD
Corporate Insolvency Resolution Process CIRP
Financial Creditor FC
The Insolvency and Bankruptcy Board of India IBBI
Insolvency and Bankruptcy Code, 2016 the Code
National Company Law Appellate Tribunal NCLAT
National Company Law Tribunal NCLT
Operational Creditor OC

The batch of petitions in this case sought 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. As per Rule 3(2),

(2) No partnership entity or company shall be eligible to be a registered valuer if-

(a) it has been set up for objects other than for rendering professional or financial services, including valuation services and that in the case of a company, it is a subsidiary, joint venture or associate or another company or body corporate.”

The court tested Rule 3(2) only on the touchstone of Article 14. The precise issue was whether in Rule 3(2), the exclusion of a subsidiary, joint venture, or associate company of another company/body corporate for the purpose of eligibility for registration as a valuer is reasonable. The court answered in affirmative and hence, declared Rule 3(2) as constitutional.


  • Exclusion of a subsidiary, joint venture, associate company from being a registered valuer – reasonable under Article 14 of the Constitution.


The NCLAT discussed the reasons for introducing Rule 3(2) exclusion, which was to introduce high standards of professionalism and independence in the valuation industry, particularly, for the valuations pursuant to the Companies Act 2013 and the Insolvency and Bankruptcy Code 2016. It accepted the argument that a subsidiary, a joint venture, and an associate company, are not completely independent of their parent/controlling companies. Hence, if they are allowed to become registered valuers, they may not gain credibility as independent professional bodies, which is a sine qua non for a registered valuer.

Therefore, Rule 3(2), by excluding these companies, obviates the possibility of a conflict of interest attributable to the diverging interests of the parent/controlling companies or entities. Hence, Rule 3(2), by making eligible only those companies other than subsidiaries, joint ventures or associate companies, for being registered as a registered valuer, carves out a separate class. This classification is reasonable, keeping in mind the objectives and rationale of having independent valuers. Therefore, Rule 3(2) passes the test of constitutionality, held the NCLAT.


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