On June 2, 2025, the Insolvency and Bankruptcy Board of India (IBBI) dismissed an appeal filed by Mr. Vipan Kumar, a registered valuer for Land and Building, against a prior suspension order dated March 26, 2025. The suspension was related to his valuation work during the Corporate Insolvency Resolution Process of Base Corporation Limited. The initial order found Mr. Kumar in violation of Rule 8(3)(g) of the Companies (Registered Valuers and Valuation) Rules, 2017, for failing to adequately disclose the sources and comparable data used in his valuation report, rendering it non-transparent.
Key issues included Mr. Kumar’s valuation of land at Hosur and Solan, where he reportedly did not reference circle rates, market comparables, or other verifiable data. His application of multiple discounting layers—first reducing land value due to location and then further discounts for fair and liquidation values—was also questioned for lacking clear justification. While Mr. Kumar argued that such disclosures are not explicitly mandated and that COVID-19 impacted data availability, the Authority found that his report did not meet the prescribed standards under the Valuation Rules.
The appellate authority reviewed his arguments and upheld the earlier decision, emphasizing the importance of verifiable data and transparency in valuation reports. These elements are considered crucial since insolvency resolutions often rely heavily on such assessments. The Authority concluded that the valuation report lacked mandatory content required by the rules and found no grounds to overturn the original suspension. The dismissal was formally issued under powers delegated to IBBI through Central Government notification GSR 1316(E) dated October 18, 2017.
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
[Authority delegated by the Central Government vide notification no. GSR 1316(E) dated 18.10.2017 under section 458 of the Companies Act, 2013 read with rule 2(1)(b) of the Companies (Registered Valuers and Valuation) Rules, 2017]
Order No. IBBI/Valuation/Disc.(A)/06/2025 Dated: 02 June 2025
This Order disposes the appeal preferred by Mr. Vipan Kumar against the Order dated 26.03.2025 passed by Insolvency and Bankruptcy Board of India (IBBI). Mr. Vipan Kumar (RV) is registered under Companies (Registered Valuers and Valuation) Rules, 2017 (“Valuation Rules”) as a valuer of Land and Building (L&B), with the Registration number IBBI/RV/06/2019/11215.
1. Brief Background
1.1 The IBBI, in accordance with rule 15 read with rule 17 of the Valuation Rules, had suspended the registration of Mr. Vipan Kumar for a period of three months vide its Order dated 26.03.2025 (hereinafter referred as “Order”). The said Order disposed of the Show Cause Notice (SCN) No.RV-13012/1/2023-IBBI/375/709, dated 20.09.2024, issued to Mr. Vipan Kumar in respect of his valuation assignment in the Corporate Insolvency Resolution Process of M/s. Base Corporation Limited (Corporate Debtor/CD).
1.2 In terms of Rule 17(9) of the Valuation Rules, Mr. Vipan Kumar has now preferred an appeal against the Order dated 26.03.2025. He availed the opportunity of personal hearing before the appellate authority on 08.05.2025.
2. IBBI Order dated 26.03.2025.
2.1 The IBBI in its Order dated 26.03.2025 examined the allegations mentioned in the SCN dated 20.09.2024 and the reply of Mr. Vipan Kumar on such allegations, which is presented here in brief as follows-
2.1.1 Issue regarding valuation of land situated at Hosur and Solan unit – It was alleged in the SCN alleged that Mr. Vipan Kumar has assigned land valuations without citing concrete sources, circle rates, or market comparables in the valuation report. The RV in his response to the SCN had stated that that neither IBBI nor RVOs mandate inclusion of circle rates or market evidence in valuation reports, and due to lack of transparency and unavailability of updated registry data during Covid it was not feasible to rely on such sources. The Authority on perusal of the materials available on record had concluded that Mr. Vipan Kumar violated Rule 8(3)(g) of the Valuation Rules by failing to disclose specific details of the sources and comparable plots relied upon by the RV to arrive at the market value, and thereby rendering the valuation report non-transparent and non-compliant with the Valuation Rules.
2.1.2 Issue regarding discounting while calculating fair value and liquidation value – It was noted in the SCN that Mr. Vipan Kumar had considered a lower market value of Rs. 17,50,000/- acre (applicable to inner road) as against Rs. 33,33,333/- acre (applicable for main road) for assessing the value of land of CD situated at Hosur unit. Further, Mr. Vipan Kumar had again applied an additional discount of 40% on the said lower value for arriving at fair value of the land of CD. Furthermore, an additional discount of 30% was applied on fair value to arrive at liquidation value. It was alleged in the SCN that the application of cumulative discounting factor has significantly reduced the fair value and liquidation value of the land unit of the CD without nay clear justification for each layer of reduction. The RV in his response to the SCN had stated that the discount rates are not fixed by any authority and were applied based on site-specific assessment, professional judgment, market surveys, valuation literature, and documented in working papers. The Authority found that although Mr. Vipan Kumar has not completely mentioned the source of information for the market value considered by him, he has mentioned the factors considered by him for applying the discount of 40% on the market value to arrive at the fair value of the property.
3. Appeal by Mr. Vipan Kumar.
3.1 In his appeal, Mr. Vipan Kumar with respect to valuation of land situated at Hosur and Solan unit has submitted that the nature and sources of information used in the valuation report were duly disclosed and previously accepted by the inspection authorities. The Order’s insistence on “verifiable data” is impractical in the context of the Indian real estate market, where transparent data is scarce. The non-inclusion of circle rates, though not mandated by any regulation, was wrongly treated as a compliance failure, despite most valuers in the same assignment have not included it either. The RV further submitted that professional judgment, market surveys, and disclaimers were appropriately applied, especially given COVID-related limitations on accessing property records. Also, neither the Resolution Professional nor the Committee of Creditors raised any objection to the valuation report at the time of submission.
4. Analysis and findings
4.1 On perusal of the Order dated 26.03.2025, it is observed that mainly the violation made out against Mr. Vipan Kumar is on the account of his failure to disclose the specific details of the nature and sources of the information upon which he has relied on for assessing the value of land of CD situated at Hosur and Solan unit rendering the valuation report non-transparent and non-compliant with the provisions of the Valuation Rules.
4.2 It is pertinent to note that Rule 8 of the Valuation Rules explicitly provides as to what all mandatory contents should be there in a valuation report submitted by a Registered Valuer. These mandatory contents help in enhancing the credibility of the valuation report and the consequently the trust of the stakeholders. This is essential as the critical decision in a CIRP/Liquidation process under the Code is taken on the basis of the valuation estimates provided in the valuation report.
4.3 In the present matter, it is observed that the RV has failed to demonstrate in his valuation report, the details of the source of information for the rate taken by him in valuation of the land of the CD situated at Hosur and Solan unit. Further, in absence of the details of the comparable plots, the value of which has been considered by the RV to ascertain the value of the land units of CD, it is not clear as to how such plots are actually comparable to the land units of the CD. Therefore, the valuation report does not disclose the complete source of information regarding valuation of CDs property.
4.4 Therefore, this Authority agrees with the findings in the Order dated 26.03.2025, that the valuation report falls short of having all the mandatory contents as required under Rule 8(3)(g) of the Valuation Rules.
5. Order
5.1 In view of the foregoing, this Authority does not find any reason to interfere with the Order dated 26.03.2025. Accordingly, the Authority in exercise of powers conferred vide notification of Central Government no. GSR 1316(E) dated 18th October 2017, under Section 458 of the Companies Act, 2013 and in pursuance of Rule 17(9) of the Valuation Rules, dismisses the appeal.
Sd/-
(Ravi Mital)
Chairperson
Insolvency and Bankruptcy Board of India
Dated: 02.06.2025
Place: New Delh
