Karnataka High Court shocked over valuation of plantation property worth crores at a pittance of its value for bank auction
In a stunning revelation that exposes the underbelly of a bank auction process, the Karnataka High Court has found that a registered but “unqualified” valuer
In a stunning revelation that exposes the underbelly of a bank auction process, the Karnataka High Court has found that a registered but “unqualified” valuer had valued a sprawling 39-acre coffee and cardamom plantation in Kodagu district — worth over ₹3.12 crore way back in 2014 — at a paltry sum of ₹61 lakh in 2024, resulting in its sale in an auction by the bank for a mere ₹99 lakh. The court also expressed shock over the conduct of the bank’s valuer, who had filed an affidavit before it claiming that he was “qualified to undertake valuation of plantation properties/other properties...”, even though his registration certificate, issued by the Income-Tax Department under Section 34AB of the Wealth-tax Act, 1957, expressly “barred him from valuing agricultural lands, plantations, forests, mines and quarries.” Show-cause notice Following these disclosures, the court directed Y.R. Srikanth, the valuer, to show cause why prosecution should not be initiated against him for undertaking the valuation of a plantation property despite lacking the legal competence to do so, and why criminal contempt proceedings should not be initiated for allegedly filing a false affidavit before the court.
Justice M. Nagaprasanna passed the interim order on a petition filed by Leetha Abraham, who had availed a loan from Canara Bank, Mangaluru, in 2014 by mortgaging the 39-acre plantation located at Mundrote village in Bhagamandala, Kodagu district. After the petitioner defaulted on repayment of the loan through equated monthly instalments (EMIs), the bank initiated proceedings under the SARFAESI Act, 2002. The proceedings culminated in the auction of the plantation during 2023-24, prompting the petitioner to challenge the legality of the sale of the property to an auction purchaser in January 2024. ‘Appalling affair’ The court termed the valuation process as an “appalling state of affairs”, as it found that the valuer had calculated the total value of the 39-acre land and plantation at ₹61 lakh, even though the government-fixed guidance value of the land alone was ₹2.73 crore in 2023, excluding the value of crops.
Shockingly, the court noted that the bank itself had valued the 39-acre plantation at ₹2.73 crore in 2014 when the loan was sanctioned to the petitioner. “The disparity is not merely substantial; it is startling. Such a valuation prima facie defies commercial logic and invites serious suspicion,” the court observed, adding that “such a precipitous and inexplicable depreciation in the value of the property naturally invited anxious scrutiny.” RTI disclosure It was information provided by the I-T Department to the petitioner under the RTI Act in April 2024 that revealed Mr. Srikanth’s status, as his registration certificate clearly stated that he was registered as a “valuer of immovable property (other than agricultural lands, plantations, forests, mines and quarries).” Interestingly, Mr. Srikanth had justified his valuation in an affidavit filed before the court in February 2024, while the RTI disclosure regarding his status as a valuer came from the I-T Department only in April 2024.
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