Recent NCLT Kolkata Orders Show Why Valuation Must Be Defensible

NCLT Kolkata Bench: What Recent Valuation-Related Orders Are Really Signalling

Valuation is often treated as a support document. In practice, it can decide the direction of an entire transaction. That is especially true in Kolkata Bench matters, where recent orders show a clear trend: the Tribunal is willing to respect expert valuation, but it is equally willing to test whether the valuation is being used for a genuine corporate purpose or simply as a convenient label for a contested outcome. That distinction matters more now because the IBBI’s February 2026 amendments have made the insolvency valuation framework more structured, more documented, and harder to treat casually.

Why this topic matters now

For founders, SMEs, NRIs, and CFOs, valuation is no longer only a fundraising concept. It comes up in capital reduction, squeeze-out, minority exit, amalgamation, shareholder disputes, and insolvency resolution. Under the Companies (Registered Valuers and Valuation) Rules, 2017, valuation covers shares, securities, goodwill, liabilities, and related asset classes. In the insolvency context, the 2026 amendments now require a more structured process: two sets of registered valuers, a coordinating valuer, a methodology briefing to the committee, a third valuation set where the difference is 25% or more, and a formal documentation format.

That is important because tribunals do not read valuation reports in isolation. They read them against purpose, process, and commercial logic. The IBBI’s own guidance says valuation is an estimate built from multiple parameters and externalities, and different valuers can arrive at different conclusions even in the same case. That is a healthy reminder for businesses that valuation is not a hard science. But it also means that the quality of the process matters as much as the final number.

1. Philip India Ltd.: when valuation is used to support a minority exit

In Philip India Ltd., decided on 19 September 2024, the company was dealing with a concentrated shareholding structure. The company appointed a registered valuer and determined the fair value of equity shares at ₹740 per share. The board then proposed to pay a ₹175 premium over that valuation to public shareholders as consideration for the exit route.

What made the matter interesting was not just the valuation number. The Tribunal looked at the real purpose of the petition and held that Section 66 could not be used as a backdoor route to buy out minority shareholders. It noted that the petition was, in substance, aimed at buying out minority public shareholders, while the capital reduction was only incidental. The Bench also said that a mere challenge to valuation does not, by itself, create exceptional circumstances for waiver under Section 244.

For founders and promoters, the message is straightforward. If the commercial objective is a minority exit, the legal route must match the objective. A valuation report can support fairness, but it cannot convert an otherwise unsupported statutory route into a valid one. In other words, valuation can support a decision; it cannot rescue a poorly chosen structure.

2. Manjushree Plantations Ltd.: valuation is technical, but not immune from scrutiny

The Manjushree Plantations Ltd. matter, decided on 22 March 2024, is a good example of how sharply minority disputes can turn on valuation. The petitioners alleged oppression and mismanagement, and one of their core grievances was that the company had been undervalued. They even alleged that certain land parcels in Kolkata, Hosur, and elsewhere were valued negatively.

The Bench did not treat the allegation lightly, but it also did not treat it as a reason to turn the waiver stage into a trial on merits. The order refers to the well-established idea that valuation is a technical and complex exercise with many imponderables, and that if a valuer uses a prescribed or recognized method, the valuation is not something courts should casually overturn. At the same time, the Bench made it clear that the merits of the proposed oppression claim should not be decided while considering waiver under Section 244.

That is a useful lesson for mid-sized companies and family businesses. Valuation disputes often arise not because the report is mathematically wrong, but because one side feels the outcome is commercially unfair. The Tribunal’s approach suggests that a valuation challenge has to be framed with precision: was the wrong method used, was material information omitted, or was the process itself compromised? Bare dissatisfaction with the number is rarely enough.

3. Balajee Ingot India Pvt. Ltd.: when low value triggers higher scrutiny

The Balajee Ingot order, signed on 1 September 2025, is the clearest reminder that valuation is not just about compliance; it is about credibility. In that matter, the RP had appointed two registered valuers under Regulations 27 and 35. The combined fair value came to roughly ₹10.62 lakh, and liquidation value to around ₹10.00 lakh. The Bench also noted that admitted claims were around ₹20 crore, while the book value of realizable financial assets was about ₹4.23 crore.

On paper, a sharp disconnect between book value and realizable value is not automatically suspicious. Stale receivables, non-recoverable deposits, or time-barred claims can justify a steep haircut. In this order, the valuers explained that certain long-term loans and advances and trade receivables were treated as nil because they were not recoverable or were time-barred. That is exactly the kind of explanation a tribunal expects to see. But the Bench also went further and questioned whether the corporate debtor’s recovery efforts and process discipline had been adequate.

This is where the practical lesson becomes sharper. In insolvency, a low valuation is not the problem by itself. The problem is a low valuation without a persuasive narrative on recoverability, diligence, and process. If receivables are old, show the steps taken to recover them. If assets are impaired, show why. If the resolution plan is based on that valuation, the logic has to be visible to the tribunal.

What founders and CFOs should take from these orders

The three orders point in the same direction. First, valuation must match the legal purpose. A squeeze-out, a capital reduction, an exit for minority shareholders, and an insolvency resolution exercise are not interchangeable. Second, the report has to be defensible, not just favorable. Third, the more commercial pressure there is on the number, the more important the paper trail becomes.

A practical way to think about it is this: the tribunal is usually not asking, “Is this the best possible price?” It is asking, “Was this conclusion reached in a methodical, fair, and legally appropriate way?” That is why the 2026 IBBI changes matter. The law is moving toward more structured valuation governance, not less.

For businesses preparing for a transaction, the safest approach is to treat valuation as a process document, not merely a valuation number. The purpose should be defined upfront. The method should be suitable for that purpose. The assumptions should be written clearly. And when the number is challenged, the company should be able to explain not just what it concluded, but how it got there.

The Kolkata Bench’s recent orders are a reminder that valuation is not a decorative annexure. It is often the place where fairness, control, recoverability, and legal strategy meet. When those pieces do not align, the number will not hold for long.