Karnataka High Court Questions Bank Auction Valuation After Property Sold at Fraction of Its Worth
The Karnataka High Court has raised serious concerns over the valuation of a 39-acre coffee and cardamom plantation in Kodagu district, which was sold in a bank auction for ₹99 lakh despite being valued at over ₹3.12 crore in 2014. The court found that the valuer, Y.R. Srikanth, was not legally qualified to assess plantation properties, as his registration certificate from the Income-Tax Department barred him from valuing agricultural lands, plantations, forests, mines, and quarries.
Justice M. Nagaprasanna, hearing a petition by the property owner Leetha Abraham, noted that the valuer had assessed the plantation at just ₹61 lakh in 2024, while the government-fixed guidance value of the land alone was ₹2.73 crore in 2023. The bank itself had valued the property at ₹2.73 crore when the loan was sanctioned in 2014. The court described the disparity as 'startling' and said it 'prima facie defies commercial logic and invites serious suspicion.'
The court issued a show-cause notice to Srikanth, directing him to explain why prosecution should not be initiated for undertaking valuation without legal competence and for allegedly filing a false affidavit before the court. The affidavit claimed he was qualified to value plantation properties, but an RTI disclosure in April 2024 revealed the restriction on his registration.
The auction was conducted under the SARFAESI Act after Abraham defaulted on loan repayments. The court's interim order challenges the legality of the sale and highlights potential irregularities in the valuation process.
