Facts of the case:
- The petitioners were engaged in the business of real estate consultancy services including provision of real estate valuation services.
- The petitioner is a subsidiary of a reputed body corporate and is
universally recognized as a lauded leader in providing valuation service. - The petitioner filed writ petition for declaring rule 3(2) of the Companies (Registered Valuers and Valuation) Rules, 2017 as unconstitutional.
- According to petitioner, rule 3(2) of the above stated rules and in
particular rule 3(2)(a) explicitly provides that a company shall not be
eligible to be a Registered Valuer, if it is a subsidiary, joint venture or
associate of another company or body corporate, and this had impaired the right of the petitioners to carry on trade and business, which is guaranteed by the Constitution of India, as it ousted the petitioner from being a Registered Valuer merely on the ground of it being a subsidiary of a body corporate, which was discriminatory and arbitrary.
Judgement: The Honorable Supreme Court in the instant case has held the following - “The objective and intention behind laying down the impugned rule 3(2) is clearly to introduce higher standards of professionalism in valuation industry. The impugned rule obviates the possibility of conflict of interest on account of diverging interests of constituent / associate entities which resultantly shall undermine the very process of valuation. Keeping in view the position of law and the reasoning given by the respondents and making eligible only companies other than subsidiary companies, associate companies and joint ventures for the purpose of registration as valuer, a separate class has been carved out based on classification and as such the rule 3(2) cannot be faulted. There is no merit in the ground urged by the petitioners. Hence, the petitions are dismissed.”