39-Acre Coffee Plantation Valued at Rs 312 Crore Auctioned for Just Rs 99 Lakh

Bengaluru, Jul. 2: A serious lapse in the bank auction process has come to the notice of the state High Court during the hearing of a petition and it has taken it seriously.

The High Court has found that a registered but “unqualified” valuer had valued a 39-acre coffee and cardamom plantation in Kodagu district worth over Rs 3.12 crore in 2014 at a paltry sum of Rs 61 lakh in 2024, resulting in the bank selling the plantation in the auction in 2024 for just Rs 99 lakh.

The court was also shocked by the conduct of the bank's valuer, who had filed an affidavit stating that he was "qualified to undertake the valuation of plantation properties/other properties..." even though the certificate of registration issued to the valuer by the Income-tax Department under Section 34 of the Wealth-tax Act, 1957, clearly stated that the valuer was "prohibited from undertaking the valuation of agricultural land, plantations, forests, mines and quarries".

Action against valuer

After the matter came to light, the court ordered a show cause notice to be issued asking why a case should not be registered against valuer Y.R. Srikanth for undertaking the valuation of plantation properties despite having no force of law and a criminal contempt case should not be filed for filing a false affidavit before the court. Leetha Abraham, the owner of the 39-acre plantation in Mundrot village of Bhagamandala in Kodagu district, had taken a loan from Canara Bank in 2014. Justice M. Nagaprasanna passed the interim order on a petition filed by Leetha challenging the auction sale of the property. After the petitioner failed to repay the loan through equal monthly installments, the bank initiated the sale process under the SARFAESI Act, 2002. As part of this process, the property was auctioned online to a person for just Rs 99 lakh in January 2024. The owner had challenged this by moving the High Court.

‘A terrible deal’

The court called the valuation process “a terrible deal” because while the state government’s own guide value of the land in 2023 was Rs. 2.73 crore excluding the value of crops grown on the land, the valuers had calculated the total value of the 39 acres of land and plantation at Rs. 61 lakh, the high court observed. Most shockingly, the court observed that the bank itself had valued the 39 acres of plantation at Rs. 2.73 crore when it sanctioned the loan to the applicant in 2014.

“This discrepancy is not only substantial; it is astonishing. The court observed that such valuation had raised serious doubts in the first place, saying, “Such a drastic and unexplained devaluation in the value of the property naturally called for strict scrutiny.”

The truth revealed by RTI

The information provided by the Income Tax Department itself to the applicant under the RTI Act in April 2024 has put Valuer Srikanth in the wrong position. Because his registration certificate clearly states that he is registered as a “Valuer of immovable property (excluding agricultural lands, gardens, forests, mines and quarries)”. Interestingly, Srikanth had maintained in his affidavit filed in the court in February 2024 that he had been duly authorised by the Income Tax Department to carry out the valuation, but the Income Tax Department itself clarified this issue in its reply to the RTI application in April 2024 regarding his status as a valuer. The contradiction between Srikanth’s claim and the document filed The court said it was outrageous.

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