Date: 01.12.2016

From

ALL INDIA ENGINEERS AND VALUERS ASSOCIATION (AIEVA) Represented by V.SUBRAMANIAN. B.E., A.I.T.P., B.L., President, All India Engineers and Valuers Association, No.18,Sivasamy Nagar, North Gate of CEOA School, A.Kosakulam, Madurai – 625 017 Tamil Nadu State Mobile: 98431 53371 E mail: aievaengineers@gmail.com

To

1. UNION OF INDIA represented by The Secretary to the Government of India Department of Financial Services Banking Division Ministry of Finance New Delhi - 110 001

2. RESERVE BANK OF INDIA represented by The Governor Reserve Bank of India Central Office Building 18th floor, Shahid Bhagat Singh Road, Mumbai - 400 001

3. INDIAN BANKS’ ASSOCIATION represented by The Chairman Indian Banks’ Association World Trade Centre, 6th Floor Centre 1 Building World Trade Centre Complex Centre- Cuffe Parade Mumbai -400 005

4. NATIONAL HOUSING BANK Represented by The Chairman and Managing Director, National Housing Bank, Head Office, Core-5-A, India Habitat Centre, Lodhi Road, New Delhi – 110 003

2

5. SCHOOL OF PLANNING AND ARCHITECTURE Represented by The Registrar, School of Planning and Architecture(SPA), 4-A,Ring Road, Indraprastha Estate, New Delhi – 110 002

6. STATE BANK OF INDIA

Represented by The Chairman , State Bank of India, State Bank Bhavan, Madam Cama Road, Mumbai – 400 021

7. ALLAHABAD BANK ,

Represented by The Chairman and Managing Director, Allahabad Bank, Head Office, 2,N.S.Road, Kolkata – 700 001

8. ANDHRA BANK

Represented by The Chairman and Managing Director, Andhra Bank, Head Office, Dr.Pattabhi Bhawan, 5-9-11,Saifabad, Hyderabad 500 004 Telungana

9. BANK OF BARODA

Represented by The Chairman and Managing Director, Bank of Baroda, Head Office Suraj Plaza-1 Syaji Ganj Vadodara – 390 020

10. BANK OF INDIA

Represented by The Chairman and Managing Director, Bank of India Head Office, C-5, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051

11. BANK OF MAHARASHTRA Represented by The Chairman and Managing Director, Bank of Maharashtra, Central Office, “Lokmangal” 1501,Shivaji Nagar, Pune – 411 005

3

12. CANARA BANK

Represented by The Chairman and Managing Director, Canara Bank, Head Office, 112,Jaya Chamrajendra Road, Bengaluru- 560 002

13. CENTRAL BANK OF INDIA Represented by The Chairman and Managing Director, Central Bank of India, Central Office, Chander Mukhi, Nariman Point, Mumbai – 400 021

14. CORPORATION BANK Represented by The Chairman and Managing Director,

Corporation Bank,

Head Office,

Bharath Building,

G.H.S. Road,

Mangalore – 575 001

15. DENA BANK Represented by The Chairman and Managing Director Dena Bank, Dena Corporate Centre, C-10 G Block Bandra Kurla Complex , Bandra East, Mumbai – 400 051

16. INDIAN BANK Represented by The Chairman and Managing Director, Indian Bank, Head Office, 31,Rajaji Road, Chennai – 600 001

17. INDIAN OVERSEAS BANK

Represented by The Chairman and Managing Director, Indian Overseas Bank, Central Office, 762, Anna Salai, Chennai – 600 001

18. ORIENTAL BANK OF COMMERCE

Represented by The Chairman and Managing Director, Oriental Bank of Commerce, E-Block, Connaught Place, New Delhi - 110 001

4

19. PUNJAB & SIND BANK

Represented by The Chairman and Managing Director, Punjab & Sind Bank, Bank House, 4th Floor, 21, Rajendra Place, New Delhi – 110 008

20. PUNJAB NATIONAL BANK

Represented by The Chairman and Managing Director Punjab National Bank Head Office 7,Bhikhaji Came Place, Africa Avenue, New Delhi-110 607

21. SYNDICATE BANK

Represented by The Chairman and Managing Director, Syndicate Bank, Manipal – 576 199, Karnataka State

22. UCO BANK Represented by The Chairman and Managing Director, UCO Bank, Head Office, 10, Biplabi Trailokya Maharaj Sarani, Calcutta – 700 001

23. UNION BANK OF INDIA Represented by The Chairman and Managing Director, Union Bank of India, Union Bank Building, Central Office, 239,Backbay Reclamation , Nariman point, Mumbai – 400 021

24. UNITED BANK OF INDIA

Represented by The Chairman and Managing Director, United Bank of India, 16, Old Court House Street, Calcutta - 700 001

25. VIJAYA BANK

Represented by The Chairman and Managing Director, Vijaya Bank, Administrative Office, Janardhan Towers No.2, Residency Road, Bangalore – 560 025

5

26. IDBI Bank Ltd.,

represented by The Chairman and Managing Director IDBI Bank Ltd., IDBI Towers WTC Complex Cuffe Parade Mumbai-400 005

27. AXIS BANK Represented by The Chairman and Managing Director, Axis Bank Limited, Corporate office, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai – 400 025

28. CATHOLIC SYRIAN BANK Represented by The Chairman and Managing Director, Catholic Syrian Bank, Head office, 3rd Floor, D J M Building, Market Road, Ernakulam – 682 011 Kerala

29. CITY UNION BANK Represented by The Chairman and Managing Director, City Union Bank, Head Office, 706, Anna Salai, II floor, Chennai – 600 006

30. DEVELOPMENT CREDIT BANK

Represented by The Chairman and Managing Director, Head Office, Karimabad Cooperative Housing Society Limited, 116,Imamwada Road, Bhendi Bazar, Mumbai – 400 009

31. DHANALAKSHMI BANK Represented by The Chairman and Managing Director, Dhanalakshmi Bank, Head Office, Unit No.13, 8th Floor, Innovator Building, ITPL, Whitefield Road, Bangalore – 560 066

6

32. FEDERAL BANK

Represented by The Chairman and Managing Director, Federal Bank, Head Office, 1st floor, Rajabahadur Mansions, 32, Bombay Samachar Marg, Fort, Mumbai – 400 001

33. HDFC BANK

Represented by The Chairman and Managing Director, HDFC Bank, HDFC Bank House, 1st Floor, C.S.No.6/242, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013

34. ICICI BANK

Represented by The Chairman and Managing Director, ICICI Bank, Head Office, CPC-Transactions Unit, ICICI Towers, Plot No.24, Block No.1, Ambattur Industrial Estate, Ambattur, Chennai - 600 058

35. INDUS IND BANK Represented by The chairman and Managing Director, IndusInd Bank, Head Office, 81/82,Mittal Towers, 8th Floor, Nariman Point, Mumbai – 400 021

36. ING VYSYA BANK

Represented by The Chairman and Managing Director, ING Vysya Bank, Head Office, Hara Chambers, 4th Floor, 22,KH road, Bangalore – 560 027

37. JAMMU & KASHMIR BANK

Represented by The Chairman and Managing Director, Jammu & Kashmir Bank, Corporate Head Quarters, M.A.Road, Srinagar- 190 001 Jammu & Kashmir State

7

38. KARANATAKA BANK Represented by The Chairman and Managing Director, Karnataka Bank, Head Office, 501-504, Vardaman Chambers, Cawasji Patel Street, Fort, Mumbai – 400 001

39. KARUR VYSYA BANK

Represented by The Chairman and Managing Director, Karur Vysya Bank, Head Office, D-Block, North Wing, 6th Floor, Tel Park, Taramani, Chennai – 600 113

40. KOTAK MAHINDRA BANK

Represented by The Chairman and Managing Director, Kotak Mahindra Bank, Head Office, 6th Floor, Bldg.No.21, Zone No.3, Infinity Park, Malad (East), Mumbai – 400 097

41. LAKSHMI VILAS BANK

Represented by The Chairman and Managing Director, Lakshmi Vilas Bank, Head Office, 25-31,Aban House, 4th Floor, Sri Saibaba Marg, Kalaghoda, Fort, Mumbai – 400 023

42. NAINITAL BANK

Represented by The Chairman and Managing Director, Nainital Bank, Head Office, Seven Oaks Building, Mallital, Ninital, Uttarakhand – 263 001

43. RATNAKAR BANK

Represented by The Chairman and Managing Director, Ratnakar Bank, Corporate Office, One Indiabulls Centere, Tower 2B,6th Floor, 841,Senapati Bapat Marg, Lower Parel(W), Mumbai – 400 013

8

Notice issued under the Writ Procedure and Practice

Sirs,

Sub: Valuation of properties and empanelment of valuers-

Registration, Standards and procedures for

empanelment of valuers in Banks are prescribed in

the Indian Banks Association(IBA),National Hosuing

Bank(NHB) and School of Planning and

Architecture(SPA) Hand Book on Policy, Standards,

and Procedures for Real Estate Valuation by Banks

and Housing Finance Institutions(HFIs) in India

(2011) – Meaning of Real Estate and Real Estate

Valuation are not defined in the said Handbook –

Report of the Group constituted by the Department

of Financial Services, Ministry of Finance,

Government of India to Standardize Procedures for

44. SOUTH INDIAN BANK

Represented by The Chairman and Managing Director, South Indian Bank, Head Office, II floor, SIB Building, Market Road, Kochi – 682 035

45. TAMILNAD MERCANTILE BANK Represented by The Chairman and Managing Director, Tamilnad Mercantile Bank, Head Office, 269/2-4, 2nd Floor, Avvai Shanmugam Road, Royapettah, Chennai – 600 014

46. YES BANK

Represented by The Chairman and Managing Director, Yes Bank Limited, Corporate Head Quarters, Nehru Center, 9th Floor, Discovery of India, Dr.A.B. Road, Worli, Mumbai – 400 018

9

Valuation of Assets submitted during August 2012 -

Report of the IBA working group on Standardization

of Procedures for Empanelment of Valuers by Banks

in November 2014 - 3rd Respondent Indian Banks’

Association (IBA) is a private organization – IBA has

no legal right to regulate the valuation professionals

who are working in the banking sector - Reserve

Bank of India (RBI) is the competent authority to

prescribe the procedures for valuers empanelment in

the Banks in India - Individual Public Sector and

Private Sector banks have to act as per the RBI

guidelines only –Request submitted to 1st and 2nd

Respondents to direct 3rd Respondent to withdraw /

cancel/ recall the Report of IBA Working Group on

standardization of Procedures for Empanelment of

Valuers by Banks dated 3rd November 2014 and to

direct 6th to 46th Respondents to stop the activities

based on the aforesaid Report and further to direct

the Banks (6th to 46th Respondent) to follow the RBI

guidelines vide RBI No. 2006-2007/224 DBOD.

BP.BC.No. 50/21.04.018/2006-07 dated January 4,

2007 dated 04.01.2007 with immediate effect in the

matter of valuation of properties and empanelment

of valuers - Regarding.

Ref:

1. Representation cum legal notice sent to all the above

Respondents along with other inter-related and inter-

connected 95 Respondents dated 16.08.2016.

Prior to this legal notice we already sent the representation cum

legal notice dated 16.08.2016 to inter-connected, inter-related and

inter dependant of 95 Respondents as necessary parties with 17

prayers. In the said notice the prayers No.12 to 15 are related to the

above mentioned Respondents herein are as follows:

10

1. To quash the “Hand book on Policy, Standards and Procedures

for Real Estate Valuation by Banks and Housing Financial

Institutions-2011” which was prepared by Indian Banks

Association (IBA), National Housing Bank(NHB) and School of

Planning and Architecture(SPA) by the Secretary, Ministry of

Finance, the Secretary, Department of Financial Services and

the Governor, Reserve Bank of India as arrayed as the 49th,

50th and 51st Respondents in our earlier notice dated

16.08.2016 as arbitrary, illegal, unconstitutional and void ab

intio.

2. To quash the “Report of the Group constituted by the

Department of Financial Services, Ministry of Finance,

Government of India to Standardize Procedures for Valuation of

Assets-2012”.

3. To quash the “Report of IBA Working Group on standardization

of Procedures for Empanelment of Valuers” by the 49th

Respondent Indian Bank Association(IBA).

4. To direct the - Reserve Bank of India (RBI) (arrayed as 48th

Respondent) to direct the Public and Private sector banks

which were arrayed as 53rd to 95th Respondents of Banks to

follow the RBI Circular No.DBOD. BP.BC.No.50

/21.04.018/2006-07 dated January 4, 2007 in the matter of

Valuation of Properties and Empanelment of Valuers in Banks.

The aforementioned Respondents herein have been arrayed as

47th to 51st and 53rd to 95th Respondents in the said representation

dated 16.08.2016. So far there is no specific reply from the

Respondents with reference to the prayers mentioned above. Hence,

we are sending this 2nd notice to the above mentioned Respondents

based on the prayer related to them.

To achieve the above object, the aforementioned 46

Respondents are necessary parties in administrative hierarchy of the

11

subject matter and in our proposed court case for filing writ petition

under Article 226 of the Constitution of India for having the final and

effective legal remedy based on the laws of the land and on the

following facts and grounds.

FACTS

1) The 1st Respondent- Department of Financial Services, Ministry of

Finance is the apex authority in the administrative hierarchy on the

subject matter of banking in India. It is the appellate authority for

the 2nd Respondent (Reserve Bank of India).

2) The 2nd Respondent (Reserve Bank of India) constituted under the

Reserve Bank of India Act, 1934. The 2nd Respondent (RBI)

performs the following functions: (i) to regulate the issue of bank

notes , (ii) keeping reserves for securing monetary stability in

India, (iii) to operate the currency and credit system of the country

to its advantage, (iv) deals with incorporation, capital,

management and business of the bank, (v) banker to the

Government and all the banks of the nation, (vi) lender of last

resort, (vii) collection and furnishing of credit information, (viii)

acceptance of deposits by non-banking financial institutions, (ix)

general provisions regarding reserve fund, credit funds, publication

of bank rate, audit and accounts and (x) penalties for violation of

the provisions of the RBI Act or the directions issued there under

by the 2nd Respondent to Banks and other Financial Institutions.

The 2nd Respondent has the power to determine policy and issue

directions to regulate the financial system of the country. All other

banks are the agents to RBI in our country.

3) The Banking Regulation Act, 1949 gives enormous powers to the

2nd Respondent, and enables to it control the banking institutions

of India. The primary object of the Banking Regulation Act, 1949

is to control frauds and embezzlement of public funds in banking

industry. This Act has given vast powers to the RBI so that it can

control the entire banking sector in every corner of the country.

This Act empowers the RBI to issue directions, which should

strictly be followed by all banking companies in India. According to

12

this Act, the RBI has the responsibility of determining the policy in

relation to advances to be followed by banks and of giving

directions to the bank in that regard. The RBI acts as the

controller of credit to banks and exercises as supervisory and

controlling authority over all the Banks. Every banking company is

necessarily be bound to comply with the directions given by the

RBI.

4) The major powers of the 2nd Respondent in the different roles as

regulator and supervisor can be summed as follows:

1. to issue license;

2. appointment and removal of banking boards / personnel;

3. to regulate the business of banks;

4. to give directions;

5. to inspect and supervise banks;

6. to audit of banks;

7. to collect, collate and furnish credit information;

8. in relation to moratorium, amalgamation and winding up and

9. to impose penalties.

5) The 1st Respondent –Department of Financial Services, Ministry

of Finance, Government of India is the apex body in the

administrative hierarchy in relation to financial system of our

Nation. The 2nd Respondent (RBI) is the primary regulator of

banks. But the 1st Respondent has also been conferred with

extensive powers under the RBI Act, 1934 and Banking

Regulation Act, 1949 either directly or indirectly over the banks.

The 1st Respondent holds the entire capital of the 2nd Respondent

and appoints the Governor and the members / directors of the

Central Board and has the power to remove them. The 1st

Respondent has also the power to issue directions to the 2nd

Respondent (RBI) whenever considered necessary in public

interest after consultation with the Governor of RBI. Thus, the 1st

Respondent can exercise control over banks by influencing

decision-making by the 2nd Respondent and has also got

appellate authority in respect of several matters in which the 2nd

13

Respondent has been conferred with the power to decide at the

first instance.

6) The 2nd Respondent (RBI) has issued a guidelines on the subject

of “Valuation of Properties – Empanelment of Valuers” vide RBI

No.2006-2007/224 DBOD.BP.BC.No.50/21.04.018/2006-07 dated

January 4, 2007. In the aforesaid guidelines, the 2nd Respondent

directed the 6th to 46th (public and private sector banks)

Respondents herein to formulate a policy on three heads as

follows: (a) Policy for valuation of properties, (b) Revaluation of

bank’s own properties and (c) Policy for Empanelment of

Independent Valuers. It further stated that the each Bank (6th to

46th Respondents) should have a Board approved policy in place

for valuation of properties including collaterals accepted for their

exposure and Banks (6th to 48th Respondents) may prescribe a

minimum qualification for empanelment of valuers. Different

qualifications may be prescribed for different classes of assets

(e.g. land and building, plant and machinery, agricultural land,

etc.). While prescribing the qualification, banks (6th to 46th

Respondents) may take into consideration the qualifications

prescribed under Section 34 AB (Rule 8A) of Wealth Tax Act,

1957.

7) The 3rd Respondent-Indian Banks Association (IBA) is a private

association of banks. In response to RTI application, the 3rd

Respondent (IBA) has openly admitted that it is not a Public

Authority. Based on our correspondence with 3rd Respondent, it

seems to be an unregistered organization. Being a private

organization, IBA cannot direct the banks.

8) The 4th Respondent (National Housing Bank) is constituted under

the National Housing Bank Act, 1987. NHB has been established

to achieve the following objectives among others: a) To promote a

sound ,healthy, viable and cost effective housing finance system

to cater all segments of the population and to integrate the

housing finance system with overall financial system, b) To

promote a network of dedicated housing finance institutions to

14

adequately serve various regions and different income groups, c)

To augment resources for the sector and channelize them for

housing, d) To make housing credit more affordable, e) To

regulate the activities of housing finance companies based on

regulatory and supervisory authority derived under the Act, f) To

encourage augmentation of supply of buildable land and also

building materials for housing and to upgrade the housing stock in

the country and g) To encourage public agencies to emerge as

facilitators and suppliers of serviced land , for housing. The 4th

Respondent (NHB) is also comes under the control of the 2nd

Respondent (RBI) and in the year 2009 prepared a “Hand Book on

Policy,Standards and Procedures for Real Estate Valuation by

Banks and HFIs in India” and implemented in the year 2011. In

that Hand Book, no where mentioned that which authority has

directed NHB and IBA to prepare this Hand Book either by

Department of Financial Services, Ministry of Finance or Reserve

Bank of India.

9) The 5th Respondent-School of Planning & Architecture (SPA) New

Delhi is a specialized University, only one of its kinds, which

exclusively provides training at various levels, in different aspects

of human habitat and environment. Recognizing the specialized

nature of the fields in which the School had attained eminence, in

1979, the Government of India, through the Ministry of Education

and Culture, conferred on the School of Planning and Architecture

the status of “Deemed to be a University”. Then it was recognized

as “An Institute of National Importance” under the Act of

Parliament in 2015. The SPA offers planning, architecture and

design courses both at undergraduate and post graduate levels.

The first report in the name of “Hand Book on Policy, Standards,

and Procedures for Real Estate Valuation by Banks and HFIs in

India” has been prepared by the 5th Respondent(SPA) from the

year 2008 to 2009.

10) The Government of India set up Indian Valuation Reform

Project (IVRP) and final report has been submitted by jointly IBA-

NHB-SPA under IVRP titled “Hand Book on Policy, Standards,

15

and Procedures for Real Estate Valuation by Banks and HFIs in

India” in the year 2008. The said IBA Hand Book came into force

from February 2011. The said hand book had not addressed any

key issues in the field of valuation profession. Key issue of role of

immovable property valuers in the valuation work when the forged

documents are submitted by the loan beneficiary in the financial

business of Banks is not addressed in the Hand Book 2011.

11) The report of the Group constituted by the 1st Respondent -

Department of Financial Services, Ministry of Finance, Govt. of

India to Standardize Procedures for Valuation of Assets- August

2012. In the Report -2012, under the head 3.2 Selecting valuers

for empanelment and sub-head 3.2.1.Criteria for empanelment of

vlauers including qualification and rating have prescribed some

criteria as essential one as follows: For retail loans the empanelled

vlauer should be preferred if member of any one of the

professional bodies- Institution of Valuers, Institution of Surveyors,

Institution of Government Approved Valuers, Practicing Valuers

Association of India, The Indian Institution of Valuers, Centre for

Valuation Studies, Research and Training, Royal Institution of

Chartered Surveyors, India Chapter, American Society of

Appraisers, USA (ASA), Appraisal Institute, USA. For corporate

loan Valuers should be registered with the Institution of Valuers. It

is an open illegal act of favoritism to one particular professional

body-Institution of Valuers which is a private body. The above

mentioned all the professional bodies are privately managed one

including foreign professional bodies such as Royal Institute of

Chartered Surveyors-UK. The American Society of Appraisers-

USA and Appraisal Institute-USA. The USA based two

professional bodies have no branches in our Country. The above

mentioned institution / organization by the 1st Respondent

(Department of Financial Services, Ministry of Finance) for the

valuers are private and non-statutory bodies.

12) By taking advantages of undue recognition of the 1st

Respondent, the non-statutory private body the Institution of

Valuers misguiding the entire valuation field in India. For

16

example the Institution of Valuers had requested unnecessarily

and arbitrarily and colluded with the Annamalai university started

the illegal course in the name of M.Sc.(Real Estate Valuation) in

the year 2010. On the sole request from the Institution of Valuers,

the then privately managed educational institution-Annamalai

University (Civil Engineering Faculty) also started the illegal course

of M.Sc.(Real Estate Valuation) without getting any approval from

University Grants Commission-UGC, Distance Education Bureau-

DEB, All India Council for Technical Education-AICTE, Tamil Nadu

State Council for Technical Education-TNSTCTE for the persons

from all degree holder including arts and science discipline. It

further directed all the members of immovable property category of

Institution of Valuers should complete the illegal course namely

M.Sc.(Real Estate Valuation) conducted by Annamalai University

for this current academic year 2016-17. Valuers are forced to join

the said illegal course during this year due to sole direction from

the Institution of Valuers and the valuers are in panic about future

survival in this profession. Further the Institution of Valuers

selecting the persons who are degree holders from the AICTE

unapproved and unrecognized engineering colleges as a member.

13) The 3rd Respondent (IBA) is once again prepared a Report on

3rd November 2014 to standardizing the procedures for

empanelment of valuers based on the aforesaid two reports of 3rd

Respondent “Handbook-2011” and 1st Respondent “Report of the

Group constituted by the Department of Financial Services of

Ministry of Finance -2012”.

14) In the Report of IBA working Group-2014, it mentioned that the

diploma holders in Civil Engineering / Architecture are eligible for

empanelment to undertake valuations. This educational

qualification is considered as one of the eligibility criteria for

empanelment of valuers in Banks. It is contrary to the basic

meaning of engineer. The National Building Code of India 2005

published by Bureau of Indian Standards, defined the engineers

as follows: “the minimum qualification for engineers shall be

graduate in engineering / architecture of recognized Indian or

17

Foreign University”. So, the diploma holders are not at all

engineers based on the educational qualification. The unequal

qualified persons cannot be equal to do any work based on

practical experience alone. It is against the fundamental rights

enshrined in the Constitution of India.

15) The 3rd Respondent-IBA directed the member Banks- 6th to 46th

Respondents (public and private banks) to follow the procedures

mentioned in the Report of the IBA working group on

Standardization of Procedures for Empanelment of Valuers by

Banks dated 3rd November 2014. The 6th to 46th Respondents

(public and private banks) are insisting the existing valuers in their

panel to study the illegal course of M.Sc.(Real Estate Valuation)

and M.Sc.(Plant and Machinery) from a Recognized University and

they have to complete the said illegal course before the date of

01.01.2020. The 3rd Respondent directed the 6th to 46th

Respondents (public and private banks) that from 01.01.2020 only

academically qualified valuers – Post Graduate Degree on

M.Sc.(Real Estate Valuation or Plant and Machinery) shall be

empanelled. While renewal of empanelment of valuers, the 6th to

46th Respondents asked the valuers to give undertaking to

complete the illegal course M.Sc.(Real Estate Valuation) before

01.01.2020.

16) Based on the 1st representation dated 16.08.2016 and this 2nd

representation cum legal notice dated 01.12.2016, we request the

1st to 5th Respondents to withdraw / cancel / recall the Report of

Indian Banks Association (IBA) Working Group on standardization

of Procedures for Empanelment of Valuers by Banks dated 3rd

November 2014 and to stop the activities based on the aforesaid

Report and further to direct the Banks (6th to 46th Respondent) to

follow the RBI guidelines vide RBI No. 2006-2007/224 DBOD.

BP.BC.No.50/21.04.018/2006-07 dated January 4, 2007 in the

matter of Valuation of Properties and Empanelment of Valuers

dated 04.01.2007 with immediate effect.

17) If the above mentioned relief is not granted to us at pre-litigation

stage, we will be constrained to file a writ petition under the Article

18

226 of the Constitution of India before the Hon’ble Madras High

Court on the following among other

GROUNDS

a) The Handbook on Policy, Standards and Procedures for

Real Estate Valuation by Banks and Housing Finance

Institutions (HFIs) in India have been prepared by 3rd,4th and

5th Respondents of IBA,NHB, SPA in the year 2009 and

implemented in the year 2011. The said Handbook has

been prepared the School of Planning and Architecture, New

Delhi (SPA) on behalf of the Indian Banks Association (IBA)

and National Housing Bank (NHB). The 3rd Respondent

(IBA) has no legal authority to direct to prepare the Hand

Book. The 3rd Respondent itself declared that it is not a

Public Authority and it is purely a private organization.

Further it seems to be an unregistered organization. In that

Hand Book the terms of reference or legal frame work to

prepare the said Handbook is not mentioned. The role of 1st

and 2nd Respondents - Department of Financial Services and

Reserve Bank of India are not mentioned in anywhere in the

said Handbook.

b) Without any legal frame work the 3rd, 4th and 5th

Respondents have been prepared the said Handbook. As

far as the subject of banking is concerned, the 2nd

Respondent is solely responsible and the 1st Respondent is

only an appellate authority to the 2nd Respondent. The 3rd

Respondent (IBA) is a non-statutory and a private

organization. The 3rd Respondent cannot steps into the

shoes of the 2nd Respondent without any legal framework.

All other Banks are the agents to the 2nd Respondent-RBI in

our country and also RBI is the primary regulator of Banks.

Every banking company is necessarily being bound to

comply with the directions given by the 2nd Respondent-RBI.

Therefore it is very clear that the 3rd Respondent (IBA) has

19

no direct jurisdiction in the subject of banking and cannot

deal the subject matter without any direction from the 2nd

Respondent. The role of 3rd Respondent (IBA) in the

subject of banking is arbitrary, illegal and

unconstitutional.

c) The scope of the said “Hand Book on Policy, Standards, and

Procedures for Real Estate Valuation by Banks and HFIs in

India” mentioned as “This standard is applicable for the

estimation of the value of real estate is supposed to be for

sale in the open market and not for estimation of value of

assets as a part of a going concern or for some other

purpose”. But it has miserably failed to define the very

important and necessary terms related to valuation of real

estate such as “real estate”, “real estate valuation” and “real

estate valuer”. The said Hand Book reproduced several

terms such as “market value, property, etc.” from the Red

Book published and maintained by The Royal Institution of

Chartered Surveyors (RICS). Whereas RICS valuation-

Professional Standards defined the term real estate as

follows: “Land and all things that are a natural part of the

land (e.g. trees, minerals) and things that have been

attached to the land (e.g. buildings and site improvements)

and all permanent building attachments (e.g. mechanical

and electrical plant providing services to a building), that are

both below and above the ground”. But the IBA Sub-

Committee on Mortgage and Valuation of Property and IBA

Steering Group on Developing Valuation Standards for Real

Estate Financing in India have miserably failed to define very

primary term “real estate”. Without knowing the primary

meaning of the real estate, the further related terms of real

estate valuation, real estate financing and real estate valuer

cannot be defined by any person. But, the 3rd to 5th

Respondents have prepared the Hand Book for the sole

purpose of real estate valuation. Hence, the said Hand

Book-2011 is legally invalid document.

20

d) The 1st and 2nd Respondents namely Ministry of Finance,

Department of Financial Services, Reserve Bank of India

(RBI) are hierarchy of administrative authorities in the field of

banking. The 3rd Respondent is a private body has no legal

status to deal the subject allotted to the 2nd Respondent-RBI.

e) The 2nd Report of a Group constituted by 1st Respondent-

Department of Financial Services –August 2012. The 2nd

Respondent –RBI has not been consulted anywhere in the

said Report.

f) The minimum qualification for valuers for different kinds of

properties are mentioned in the Wealth Tax Rules,1957 and

it is governed by the Department of Revenue of Ministry of

Finance in the Government of India. It is a mandatory to

follow all the institution including banks in the subject of

valuation of properties and empanelment of valuers. But the

said Report of Group constituted by the 1st Respondent-

Department of Financial Services mentioned in the Report-

August 2012 that the valuers should be registered with the

Institution of Valuers for corporate loans. The said Institution

of Values is a private and non-statutory body and cannot

overrule the qualification fixed by the Wealth Tax Act, 1957.

The said condition is open favoritism to the private

professional body as extra-constitutional authority by the 1st

Respondent. Hence, the 2nd Report of the Group constituted

by the Department of Financial Services, Ministry of Finance,

and Government of India to standardize Procedures for

Valuation of Assets is an illegal document.

g) Hence, the 1st Respondent has to withdraw / cancel / recall

the Report of the Group constituted by the Department of

Financial Services, Ministry of Finance, Govt. of India to

Standardize Procedures for Valuation of Assets-2012 as

arbitrary, illegal, unconstitutional and void ab initio.

h) The 3rd Report of the 3rd Respondent-IBA Working Group on

Standardization of Procedures for Empanelment of Valuers

by Banks has been finalized on 3rd November 2014. In the

21

Report, the 3rd Respondent –IBA stated as follows “there is

no Act to regulate profession of valuation of real estate in our

country.” When there is no Act to regulate the profession

of valuation, the IBA which is a private and non-

statutory organisation must also have no legal right to

regulate the profession of valuation. Knowingly the IBA

unwarrantably doing this illegal act. It is not only ultravires

but also mindless action with a malafide intention on the part

of 3rd Respondent. Because the 3rd Respondent itself

admitted that it is a private body and not a public authority.

So, the report of the 3rd Respondent-IBA is open illegal act.

Hence, the Report of the 3rd Respondent- IBA working group

on Standardization of Procedures for Empanelment of

Valuers by Banks must be withdrawn by 3rd Respondent as

arbitrary, illegal and unconstitutional.

i) The 2nd Respondent-RBI has issued clear guidelines on

Valuation of Properties –Empanelment of Valuers in RBI

No.2006-2007/224 DBOD. BP. BC No.50/21.04.018/2006-07

dated January 4, 2007. In the 1st Report –Hand book on

Policy, Standards and Procedures for Real Estate Valuation

by Banks and HFIs in India-2011 prepared by the IBA-NHB-

SPA, the 2nd Report of the Group constituted by the

Department of Financial Services, Ministry of Finance,

Government of India to standardize Procedures for Valuation

of Assets-August 2012 and the 3rd Report of the IBA Working

Group on Standardization of Procedures for Empanelment of

Valuers by Banks -2014 have not mentioned about the

guidelines issued by the 2nd Respondent-RBI. The legal

necessity of the preparation of the said three reports has not

been mentioned. The RBI guideline is still in force. In this

situation, the 3rd Respondent-IBA cannot overrule the

guidelines dated 04.01.2007 issued by the 2nd Respondent-

RBI without any valid reason. Hence, the 3rd Report by IBA

Working Group on Standardization of Procedures for

22

Empanelment of Valuers by Banks-2014 based on the two

reports is arbitrary, illegal, unconstitutional and void ab initio.

j) Hence, the 2nd Respondent should direct the 6th to 46th

Respondents to follow the guidelines dated 04.01.2007 in

the matter of Valuation of Properties –Empanelment of

Valuers and further 2nd Respondent should direct the 6th to

46th Respondents to stop activities based on the illegal

Report of Working Group of IBA dated 03.11.2014 as

mentioned in this representation.

Hence, based on the above grounds, we request the 1st and 2nd

Respondents to direct 3rd Respondent to withdraw / cancel/ recall the

Report of IBA Working Group on standardization of Procedures for

Empanelment of Valuers by Banks dated 3rd November 2014 and to

direct 6th to 46th Respondents to stop the activities based on the

aforesaid Report and further to direct the Banks (6th to 46th

Respondent) to follow the RBI guidelines vide RBI No. 2006-

2007/224 DBOD. BP.BC.No. 50/21.04.018/2006-07 dated January 4,

2007 dated 04.01.2007 with immediate effect.

Therefore, if the aforesaid relief mentioned as above is not granted

to us with immediate effect, we will be constrained to file writ petition

before the Hon’ble Madras High Court against the above mentioned

authorities as respondents for their willful dereliction of legal duty,

violation of fundamental rights and principles of natural justice and for

their commission of unlawful activities and for omission of legal

duties.

Copies submitted to for necessary action:

1. His Excellency the President of India, New Delhi-4 2. Hon’ble the Prime Minister of India, New Delhi-110011 3. Hon’ble Minister of Finance, New Delhi-110 001 4. The Vice-Chairman, NITI Aayog, Sansad Marg, New Delhi-1 5. The Chairperson, Parliamentary Standing Committee on

Finance, Parliament House, New Delhi-1 6. Copy to Press, Media and all other concerned stake holders.