The Insolvency and Bankruptcy Board of India (IBBI) has recently restored the registration details of the registered valuer Entity Since the matter was sub judice t by the stay order of the Bombay High Court.
Yardi Prabhu Consultants & Valuers Pvt. Ltd, the appellant challenged the Order which disposed of the Show Cause Notice issued to the Registered Valuer entity (RV-E) Yardi Prabhu Consultants & Valuers Pvt. Ltd.
The Insolvency and Bankruptcy Board of India (IBBI) by rule 15 read with rule 17 of the Valuation Rules, had suspended the registration of the appellant. The said Order disposed of the SCN issued to Yardi Prabhu Consultants & Valuers Pvt. Ltd for contravention of the provisions of the Rules about the eligibility of a company to be a registered valuer under the Valuation Rules.
The Show Cause notice was issued with the allegation that the filing of a chargesheet by the Economic Offences Wing, Mumbai, under serious offences of the Banking Regulation Act, 1949 against one of the directors of the RV-E, may make the director not ‘fit and proper’ under the Valuation Rules and therefore the RV-E shall also be violating the condition of registration of an entity as a valuer in terms of rule 7(a) read with rule 3(2)(c) of the Valuation Rules.
The registration of the director was suspended till he is exonerated of the charges framed against him. The Order, therefore, concluded that in such a situation where the registration of a registered valuer entity is suspended, the RV-E also becomes ineligible to continue as a registered valuer, in terms of rule 3(2)(c) read with rule 7(a).
It was submitted that the concerned director had preferred a Writ Petition before the Bombay High which granted interim relief by staying the effect and operation of the Order dated 28th February 2022.
The authority held that since the subject matter is sub-judice with the High Court of Bombay, it will not be appropriate to go into the merits of the suspension order of the director who is also a registered valuer or the RV-E.
Considering the decision of the High Court, the Authority suspended the operation of IBBI’s Order. The registration details of the RVE shall be restored in the records of IBBI.
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