LEGAL CONSEQUENCES OF GIVING WRONG VALUATION

Er. Sundeep Bansal, BE, LLB

For the Council of Engineers and Valuers
(For Professional Circulation among Valuers, Chartered Engineers, and Financial Experts)

AGAINST A VALUER

Here are the key BNS sections applicable to this scenario:
1. Main Substantive Offences
Section 318(4) – Cheating and dishonestly inducing delivery of property: This is the most direct section. If the valuer, by deceiving the borrower or the bank, dishonestly makes or alters a valuation report that leads to the disposal of property, it is punishable by up to seven years imprisonment and a fine.
Section 316(5) – Criminal Breach of Trust by a Banker/Agent: If the valuer is considered an agent of the bank, and violates their legal obligation (valuation duty) to dishonestly misappropriate or dispose of the property, they can be punished with imprisonment for life, or imprisonment up to 10 years, and a fine.
Section 336(3) – Forgery for the purpose of cheating: If the valuer intentionally creates a false valuation report (a false document) to cheat the borrower, they are liable for imprisonment up to seven years and a fine.
Section 340(2) – Using a forged document as genuine: If the valuer, knowing the report is forged, uses it to influence the sale, they are punished as if they had forged it.
2. Conspiracy and Abetment
Section 61 – Criminal Conspiracy: Since this is “collusion” (agreement between two or more people, i.e., valuer and bank officials) to commit an illegal act (wrongful sale), they are liable under this section, often read with the substantive offences.
Section 49/50 – Abetment: If the valuer assisted the bank official in committing the fraud, they can be charged with abetment.
3. Procedural Aspects
Section 322 – Fraudulent deed of transfer: If the valuer and bank enter a sale deed containing a false statement regarding the consideration (price).
Section 323 – Fraudulent concealment of property: If the valuer dishonestly assists in concealing the true value to facilitate a low-price sale.
Legal Action
Nature of Offences: Non-bailable and Cognizable (police can arrest without a warrant).
Actionable Advice: The borrower should file an FIR/Complaint invoking Sections 61, 316, 318, 336, and 340 of BNS based on the collusion to conduct a “distress sale” or “throw-away price” auction, citing that the valuation was much lower than the actual value, violating the SARFAESI guideline.