The judgment established the principle that the classification of companies for the purpose of eligibility for registration as valuers must be reasonable and have a rational nexus to the objective of maintaining independence and professionalism in the valuation industry.

V. KAMESWAR RAO, J.

1. As these four writ petitions involve a common issue with common facts, the same are being decided by this common order and for the purpose of the facts, as counter affidavit has been filed in W.P. (C) 9890/2018, the facts are being culled out from that petition.

2. The present petition has been filed with the following prayers:

“In view of the facts and grounds stated herein above the petitioners herein prays that this Hon’ble Court may be pleased to:

a. Issue appropriate writ, order or direction declaring 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 of India.

b. Pass any other order and/or direction, as this Hon’ble Court may deem fit proper under the facts and circumstances of the present case and in the interest of justice.”

3. In substance, the challenge in these petitions is 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 of India. The Rule 3(2) is reproduced as under:

X X X X X X

(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.”

4. It is the case of the petitioners and submitted by Mr. Vikas Singh, learned Senior Counsel appearing for the petitioners that the petitioners are engaged in the business of real estate consultancy services including provision of real estate valuation services. The petitioner being a subsidiary of a reputed body corporate, is universally recognized as a lauded leader in providing valuation service and enjoys a reputation beyond reproach both in India and abroad. The petitioner has over the years been instrumental in setting benchmark for high standards, transparency and fairness with respect to valuation services in India. Further the petitioner had invested time, money and experience in creating a pool of resources to carry out quality valuation services in India.

5. According to him, with the advent of Companies Act, 2013, the concept of ‘Registered Valuer’ was introduced for the first time. As per Section 247 of the Companies Act, where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets or net worth of a company or its liabilities under the provision of the Companies Act, it must be valued by a Registered Valuer.

6. On October 18, 2017, Section 247 of the Companies Act was notified along with the Companies (Registered Valuers and Valuation) Rules, 2017. According to him, Rule 3(2)of the RV 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 has impaired the right of the petitioners to carry on trade and business, which is guaranteed by the Constitution of India, as it ousts the petitioner from being a Registered Valuer merely on the ground of it being a subsidiary of a body corporate, which is patently discriminatory and arbitrary.

7. In other words, according to him, it imposes unreasonable restriction on the petitioner’s right to carry on trade and business. He also submits that the petitioner is not only discriminated against individuals and partnership entities but also such companies which are not subsidiaries, joint ventures or associates of other companies/body corporates. There is no intelligible differentia to support such classification. It is his endeavor to state that to pass