NCLAT Delhi Rules Pre-CIRP Valuations Cannot Replace Registered Valuers Report

The National Company Law Appellate Tribunal, Delhi, ruled that preliminary pre-CIRP valuation figures cannot supersede or override the statutory report prepared by registered valuers under the corporate insolvency resolution process. The tribunal stressed that statutory valuations conducted in compliance with regulatory standards carry legal primacy for determining asset worth. This prevents reliance on arbitrary or outdated estimates gathered before the formal commencement of insolvency proceedings.

In past insolvency proceedings, financial creditors and resolution applicants occasionally attempted to substitute official valuation reports with earlier figures obtained during debt restructuring talks or loan syndication. This practice created disputes over the actual liquidation value and fair value of the distressed corporate debtor. The current ruling mandates that adjudicating authorities and resolution professionals must adhere exclusively to valuations derived through certified registered valuers as required by law.

Resolution professionals must ensure that all formal asset valuations strictly follow registered valuer frameworks to avoid legal challenges during plan approvals. Corporate advisors should counsel clients to disregard informal pre-CIRP valuations when formulating or assessing resolution plans. Bottom line: formal registered valuer reports remain the definitive standard for asset valuation in corporate insolvency.