VALUER’S ROLE IS CONFINED TO ASSESSMENT OF THE MARKET VALUE OF THE PROPERTY

RAM BALAK PRASAD V. STATE OF BIHAR & ANR.

LANDMARK JUDGEMENT & CASE LAW RELATED TO VALUATION

Er. Sundeep Bansal, BE, LLB

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

Case Title

RAM BALAK PRASAD V. STATE OF BIHAR & ANR.

Criminal Miscellaneous No. 43160 of 2016
High Court of Judicature at Patna
Coram: Hon’ble Mr. Justice Sandeep Kumar
Decision dated: 13.01.2026

Background of the Case

The present criminal miscellaneous application was filed by the petitioner seeking quashing of the order dated 21.01.2016 passed by the Learned A.C.J.M., Patna, whereby cognizance was taken against the petitioner for the offences punishable under Sections 406, 409, 420, 467, 468, 471, 474 and 120(B) of the Indian Penal Code in connection with Gandhi Maidan P.S. Case No. 366 of 2008.

The F.I.R. was lodged on the basis of a written report dated 28.11.2008 submitted by the then Chief Manager, U.C.O. Bank, Exhibition Road, Patna alleging criminal conspiracy by bank officials in connivance with borrowers and guarantors, resulting in wrongful sanction of cash credit limits and loss to the bank on account of forged title deeds offered as collateral security.

Facts of the Case

The F.I.R. bearing Gandhi Maidan P.S. Case No. 366/2008 dated 03.12.2008 was registered under Sections 406, 409, 420, 467, 468, 471, 474 and 120(B) of the Indian Penal Code.
The allegations disclosed that cash credit limits were sanctioned to different firms, namely:
- M/s Jai Mata Di – Rs. 10 lakhs
- M/s Tyre Emporium – Rs. 5 lakhs
- New Adarsh Medical Hall – Rs. 10 lakhs
- M/s India Motors – Rs. 4.5 lakhs
The borrowers and guarantors had offered properties as collateral securities, which were later found to be fraudulent on the basis of the opinion of empanelled solicitors/lawyers of the bank.
The bank suffered a loss of Rs. 29.54 lakhs and the accounts were classified as Non-Performing Assets.
The petitioner is an Engineer by profession and a Registered Valuer licensed by the Ministry of Finance, Government of India. He was assigned the job of valuation of one of the properties by the bank and submitted his valuation report on 13.02.2004 on the basis of documents provided by the bank.
The petitioner contended that he had no role in verifying the genuineness of the title deeds and that legal opinion of an advocate was taken by the bank regarding the title documents.
It was further submitted that the valuation report itself mentioned that the valuer was not responsible for the genuineness of the title deed or documents furnished by the borrower.

Issues for Consideration

Whether the petitioner, being a registered valuer, could be fastened with criminal liability for offences relating to forged title deeds submitted by borrowers as collateral security.
Whether taking cognizance against the petitioner for offences under Sections 406, 409, 420, 467, 468, 471 and 120(B) IPC was legally sustainable in the absence of any allegation regarding incorrect or fraudulent valuation.
Whether the continuation of criminal prosecution against the petitioner would amount to an abuse of the process of the court.

Findings and Reasoning of the Court

The Court found that the bank was defrauded on account of forged title deeds submitted by the borrowers and guarantors.
The petitioner, being merely a valuer, was not responsible for verifying the genuineness of the title deeds. The role of the valuer was limited to ascertaining the market value of the property offered as security.
The Court relied upon earlier coordinate bench decisions in:
- Vijay Kumar Singh v. State of Bihar
- Navin Chandra Jha v. State of Bihar
wherein it was held that a valuer cannot be held criminally liable for forged documents submitted by borrowers, in absence of any evidence of conspiracy, abetment or fraudulent valuation.
The Court also relied upon the principles laid down by the Hon’ble Supreme Court in:
- Pepsi Foods Ltd. v. Special Judicial Magistrate
- G. Sagar Suri v. State of U.P.
emphasizing that the summoning of an accused is a serious matter, and cognizance should not be taken mechanically without application of mind.
The Court observed that there was no allegation that the valuation done by the petitioner was incorrect, undervalued or overvalued.
The order dated 21.01.2016 taking cognizance was found to be mechanically passed without proper application of mind and therefore unsustainable.

Final Judgment

The High Court held that the petitioner, being merely a valuer, cannot be fastened with criminal liability since ascertaining the genuineness of the forged document was beyond his official duty. Continuation of criminal prosecution against the petitioner would amount to abuse of the process of law.

Accordingly, the impugned order dated 21.01.2016 passed by the Learned A.C.J.M., Patna in connection with Gandhi Maidan P.S. Case No. 366/2008 was quashed and set aside.

The criminal miscellaneous application was allowed.

Case Law Principle

This case reiterates that a valuer’s role is confined to assessment of market value of the property and does not extend to verification of the genuineness of title deeds. In absence of material showing conspiracy, abetment or fraudulent valuation, criminal prosecution against a valuer is unsustainable and amounts to abuse of the process of court.

A registered valuer, whose role is confined to the assessment of the market value of property offered as collateral security, cannot be prosecuted for offences relating to forged title deeds submitted by borrowers in the absence of material showing conspiracy, abetment or incorrect valuation. Cognizance taken mechanically without application of the mind is liable to be quashed.