Amended and updated notes on section 247 of Companies Act 2013. Detail discussion on provisions and rules related to valuation by registered valuers.
Chapter XVII (Section 247) of the Companies Act, 2013 (CA 2013) deals with the provisions related to registered valuers. Section 247 of CA 2013 provides for valuation by registered valuers.
Recently, we have discussed in detail section 246 (Application of certain provisions to proceedings under section 241 or section 245) of CA 2013. Today, we learn the provisions of section 247 of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020.
The provisions of section 247 is effective from 28th October, 2017. You may refer Notification No. S.O. 3393(E) issued dated 18-10-2017. In this article, you will learn detail of the provisions of section 247 the Companies Act 2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XVII |
| Chapter Name | Registered valuers |
| Section No. | 247 |
| Section Name | Valuation by registered valuers |
| Monthly Updated Edition | Company Law PDF |
Section 247 of Companies Act 2013: Valuation by registered valuers
[Section 247 shall come into force on 18th October, 2017 vide Notification No. S.O. 3393(E) issued dated 18.10.2017 and last updated vide S.O. 1303(E) dated 24.03.2021.]
Section 247(1) of 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 (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 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.
Section 247(2) of Companies Act
The valuer appointed under sub-section (1) shall, —
- (a) make an impartial, true and fair valuation of any assets which may be required to be valued;
- (b) exercise due diligence while performing the functions as valuer;
- (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 during a period of three years prior to his appointment as valuer or three years after the valuation of assets was conducted by him.
Section 247(3) of Companies Act
If a valuer contravenes the provisions of this section or the rules made thereunder, the valuer shall be liable to a penalty of fifty thousand rupees:
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
[Sub-section (3) of section 247 amended (substituted) w.e.f. 24-March-2021 by the Companies (Amendment) Act, 2020 vide Notification S.O. 1303(E) dated 24.03.2021]
Section 247(4) of Companies Act
Where a valuer has been convicted under sub-section (3), he shall be liable to—
- (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.
The CG vide Notification No. S.O. 3401 (E), dated 23-Oct-2017 delegated the powers and functions vested in it u/s 247 to the Insolvency and Bankruptcy Board of India, subject to the condition that the CG revoke such delegation of powers or it may exercise the powers under the said section, if in its opinion such a course of action is necessary in the public interest.