CAN A PROFESSIONAL BE CONSIDERED A CRIMINAL

A PROFESSIONAL CANNOT BE CONSIDERED CRIMINAL IF HE PRESENTS HIS EXPERT OPINIONS / REPORTS IN ANY MATTER

In the court of SH. Surinder S. Rathi: Special Judge – 05 CBI (PC act) :
Rouse Avenue district court complex, New Delhi
CBI vs Sunny Kalra & Ors.
C.C No..: 246/2019
CNR No.: DLCT-11-001351-2020: Order dt. 27.10.2021.

KNOWLEDGE BANK FROM B KANAGA SABAPATHY

LET KNOWLEDGE SPREAD

When no material is available on record to show that a valuer’s opinion is biased by any criminal intent or illegal gratification, simply because a particular Investigating Agency is of the opinion that the valuation or conclusion ought to have been somewhat different does not mean that Experts are criminals –

B. Kanaga Sabapathy
Tiruchirappalli

1. What is the case reference?
In the court of SH. Surinder S. Rathi: Special Judge – 05 CBI (PC act): Rouse Avenue district court complex, New Delhi
CBI vs Sunny Kalra & Ors.
C.C No..: 246/2019
CNR No.: DLCT-11-001351-2020: Order dt. 27.10.2021.
2. What is the name of the bank which made the allegation?
Corporation Bank, Zonal Office, New Delhi.
3. What is the allegation of the bank as per the FIR registered on 21.06.2017?
It is alleged that their bank was cheated and defrauded by the borrowers.
4. Who investigated the case?
CBI investigated and on 22.03.2019 filed a charge sheet against 11 accused persons for commission of offences under various sections. Out of eleven, two are valuers.
5. What is the brief history of the case with regard to valuation?
1. The borrower offered a property as collateral security. The said property was purchased on 15.10.2013 against a sale deed having a face value of Rs. 2.65 crores. The loan was disbursed on 19.11.2013.
2. It is alleged by the CBI that the borrower in collusion with the branch manager procured an inflated market price valuation report for Rs. 11.78 crores from the first valuer and a revaluation report for Rs. 12.0 crores from the second valuer (29.11.2013).
3. It is alleged that the bank officials ignored the bank circular (No. 302 / 2013 / 04.06.2013) which clearly specified that the value of the immovable property shall be taken from the title documents and not from the market valuation if the same is sought to be mortgaged within 12 months of the procurement.
4. CBI charge-sheeted the two valuers along with nine others for the commission of offences under section 120-B r/w section 420, 471 and u/s 13(2) r/w sec, 13(1)(d) of P.C. Act 1988.
6. What is the argument by CBI against the valuer?
The valuer conspired with the bank officials and the borrower and prepared an inflated valuation report for Rs. 11.78 crores as against the sale deed value of 2.65 crores.
7. What is the argument of the counsel of the valuer side?
The valuer assessed the market value of the property as per the duly established norms and parameters and that in carrying out this valuation, the valuer is not to be guided by the face value of the sale deed.
8. What is the observation made by the special judge on the first valuer?

I find strength in this plea in so far the mere fact that there was a difference in the valuation of property by an expert and the face value of the sale deed does not ipso facto means that the valuation given by a professional valuer is actuated by any criminal intent. The material available on record shows that the sale deed of Rs. 2.65 Crores was executed between the family members of the borrower and was grossly undervalued. I do not find any sufficient material available on record to show that the valuation of Rs. 11.78 Crores was prepared by any criminal intent. This valuation was further seconded by a subsequent fresh valuation done by another empanelled valuer who had valued this property at Rs. 12 Crores.
Two independent valuations of similar market-rate show that they were carried out as professional job works. Neither of them was binding on the bank officials, as the mandatory Circulars required them to consider the sale deed value of the property at Rs. 2.65 Crores.
Furthermore, CBI has not brought on record anything to show that in arriving at this valuation, the valuers did not follow any procedure or norm or that they went out of the way to favour the borrower or to the bank. Also, there is nothing on record to show that any illegal gratification was paid to this valuer either by any accused or by the officials of the bank. Moreover, any expert opinion be it for valuation of the property or for comparison of signatures or any other forensic assignment, are to be prepared as per their domain norms and procedures. When no material is available on record to show that their opinion is biased by any criminal intent or illegal gratification, simply because a particular Investigating Agency is of the opinion that the valuation or conclusion ought to have been somewhat different does not mean that Experts are criminals.
9. What is the judgement passed on the first valuer?
No case is made out against this valuer. He is accordingly discharged.
10. What is the observation made by the special judge on the second valuer?
It is argued by CBI that after the initial valuation was got done through the first valuer, Corporation Bank engaged services of a second empanelled valuer who valued it at Rs. 12 crores. The discussion and reasonings referred to in the case of the first valuer apply to this second valuer as well.
This valuer rather stands on better footings in so far as his valuation report is dated 29.11.2013, whereas the loan was sanctioned on 16.11.2013 and stood disbursed on 19.11,2013. Accordingly, it is evident that the valuation report of the second valuer was inconsequential in so far as it was prepared after the claimed wrongful loss stood caused to the Corporation Bank.
Moreover, this subsequent valuation rather comes to the help of the first valuer who had valued the property at Rs. 11.78 Crores.
11. What is the judgement passed on to the second valuer?
No case is made out against this valuer. He is accordingly discharged. The FIR is totally silent about this valuer but still the CBI choose to prosecute him in the light of the above factual position. This valuer is aged 82 years. Charge sheeting him in the manner done without any reasonable cause, to say the least, is insensitive and sordid.
12. What are the points to be remembered by a panel valuer when he certifies market value?
1. Enquire the borrower about the name of the bank to which he requires a valuation report.
2. If he specifies a bank, go through the guidelines issued by the said bank and follow them strictly. If you intend to deviate, write your remarks clearly about why you are deviating from the guidelines issued by the bank.
Write the following remarks in your certificate :
i) The report is prepared for ………. bank after following the guidelines issued by the bank.
ii) This report holds good only for this specific bank.
iii) This valuation assignment is undertaken based upon the written request from the bank/borrower.
3. If the borrower approaches the valuer for a valuation report on market value without mentioning any specific bank, write the following remarks in your certificate.
i) This valuation assignment is undertaken based on the written request from the borrower Mr. ‘X’.
ii) This report is meant for the borrower for his own use and not to be submitted to any bank.
iii) The market value is arrived at by adopting the general procedure of valuation considering the prevalent trend.
iv) If it is submitted to any specific bank, the concerned bank may refer this valuer to know whether the same can be accepted for them.
v) If the valuer thinks that an exclusive valuation report is to be prepared to satisfy the guidelines issued by the specific bank, then he must
reveal the fact. He should caution the bank not to accept the valuation report meant for the borrower’s own use.
4. If the valuer makes it a habit always to obtain an engagement letter either from the borrower or client indicating the purpose and scope of valuation and attach along with his valuation report, chances for facing any problem with any investigation agency will be very minimum.