This section is for ensuring that company assets are valued fairly and impartially by registered valuers who follow prescribed rules and are held accountable for any wrongdoing.
Penalty
(3) If a valuer contravenes the provisions of this section or the rules made thereunder, the valuer shall be 3[liable to a penalty of fifty thousand rupees]:
(3) Provided that if the valuer has contravened such provisions with the intention to defraud the company or its members, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
What the section says
In plain terms
(1)Where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provision of this Act, it shall be valued by 1[a person having such qualifications and experience, registered as a valuer and being a member of an organisation recognised, in such manner, on such terms and conditions as may be prescribed] and appointed by the audit committee or in its absence by the Board of Directors of that company.
When a company needs to determine the value of its property, stocks, shares, or other assets, it must hire a registered valuer with the right qualifications and experience, appointed by the audit committee or the Board of Directors.
(2)The valuer appointed under sub-section (1) shall,—
The hired valuer must make a fair and impartial valuation, follow prescribed rules, and not value assets in which they have a direct or indirect interest for three years before or after the valuation.
(2)(a)make an impartial, true and fair valuation of any assets which may be required to be valued;
(2)(b)exercise due diligence while performing the functions as valuer;
(2)(c)make the valuation in accordance with such rules as may be prescribed; and (d) not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time 2[during a period of three years prior to his appointments as valuer or three years after the valuation of assets was conducted by him].
(3)If a valuer contravenes the provisions of this section or the rules made thereunder, the valuer shall be 3[liable to a penalty of fifty thousand rupees]:
If a valuer breaks the rules, they will be fined 50,000 rupees, or face imprisonment for up to one year and a fine of 1-5 lakh rupees if they acted with intent to defraud.
provisoProvided that if the valuer has contravened such provisions with the intention to defraud the company or its members, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
(4)Where a valuer has been convicted under sub-section (3), he shall be liable to—
A convicted valuer must refund their pay to the company and compensate for any losses caused by their incorrect or misleading report.
(4)(i)refund the remuneration received by him to the company; and (ii) pay for damages to the company or to any other person for loss arising out of incorrect or misleading statements of particulars made in his report.
(4)CHAPTER XVIII REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.