Manoj Kumar Sharma vs PUNJAB NATIONAL BANK on 30 June 2026

ORDER

1. This misc. Application has been filed under section 19 & 29 of the SARFAESI Act, 2002 by applicant to declare the Mortgage Deed No. 6043 dated 25.07.2015 as void ab initio and also for compensation for Rs.10.00 lacs

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2. It has been submitted by the applicant that the applicant availed Credit facilities with the bank. On default in repayment of dues, the account was classified as NPA. Thereafter, the bank initiated SARFAESI proceedings and issued Demand Notice u/s 13(2) dated 08.11.2017 of the SARFAESI Act. Further the bank took possession of the secured asset on 28.02.2018 by issuing possession notice u/s 13(4) of the act. Thereafter, the respondent bank put the property on auction sale vide sale notice dated 26.08.2019 fixing the date of auction sale on 26.09.2019. Against which, the applicant filed S. application bearing no. SA 172/2019 before this Tribunal which was allowed in favour of applicant vide order dated 08.05.2025 and quashed SARFAESI Action including Sale. After the above adjudication, the applicant tried to deposit the Holding and Municipal Tax then he came to know that his property had been mutated in favour of one Arun Prakash, Advocate. On further enquiry, it also came to the notice of the applicant that Shri Arun Praksh who is an empanelled lawyer of the respondent Bank has signed as Mortgagee instead of respondent Bank. The said lawyer of the Bank made use of the Mortgage deed and got his name mutated in the records of Circle Office. The applicant approached the Circle Office for removal of the name of Arun Prakash from Jambandi but the concerned official refused to do so. In the above fact, the invocation of the SARFAEsl Act was itself illegal, because the property was not mortgaged to the Bank with a legally enforceable document (Mortgage Deed). A document created with fraud cannot be enforced by the Court of law. Due to such illegal acts of the respondent bank, the business as well as reputation of the applicant is ruined. Hence, it is requested to pass an order for compensation for Rs.10.00 lacs with interest till realization from the bank.

3. The respondent bank appeared in the matter 26.11.2025 and filed Vakalatnama. Since then more than 6 months have already been passed but failed to file its counter affidavit/reply.

4. Despite substituted service by way of Paper Publication, respondents neither appeared in the matter nor filed its reply,

5. Considered the submission of the applicant as well as respondent Bank and facts of the case. other

6. The applicant of the present case has prayed to declare the Mortgage Deed No. 6043 dated 25.07.2015 as void ab initio and also for compensation for Rs.10.00 lacs. It has been alleged that Mortgaged Deed was executed by the Advocate Arun Praksh on behalf of respondent bank to secure the loan in question and further Arun Prakash mutated the property in question in his name before Revenue Department of Bihar DRT, PATN A

while the property was auctioned to Bipin Bihari Prasad. Mr. Arun Prakash, Advocate played fraud with the applicant. Due to illegal acts of the respondent bank and his empanelled advocate, the applicant suffered heavy loss economically and mentally. Therefore the applicant has claimed compensation by filing this petition under section 19 of the Act.

7. Section 19 runs as under- 19- Right of borrower to receive compensation and costs in certain cases - if the debts recovery tribunal or the court of District Judge on the application made under section 17 or section 17 A or the Appellate tribunal or the High Court on an appeal preferred under section 18 or section 18-A, holds that the possession of secured assets by the secured creditor is not in accordance with the provisions of this Act and rules made thereunder and directs the secured creditors to return such secured assets to the concerned borrowers or any other aggrieved person who has filed the application under section 17 or section 17A or appeal under section 18 or section 18 A, as the case may be, the borrower or such other person shall be entitled to the payment of such compensation and costs as may be determined by such tribunal or court of District Judge or appellate tribunal or the High Court referred to in section 18B. For the purpose of the present petition it is necessary to hold that (A)That the applicant was dispossessed from the secured assets by the secured creditor against the provisions of this Act and rules made there under and (B) The direction was given to the secured creditors to return such secured assets to the concerned borrowers or any other aggrieved person who has filed the application under section 17 or section 17A or appeal under section 18 or section 18 A, as the case may be, and ( C) The tribunal or court of District Judge or appellate tribunal or the High Court referred to in section 18B The tribunal or court of District Judge or appellate tribunal or the High Court referred to in section 18B has held that the borrower or such other person shall be entitled to the payment of such compensation and costs as may be determined by it.

8. The plain reading of the aforesaid provision means the compensation under section 19 can be granted only if the applicant was dispossessed DRT, PATN A

MA 133/2025 lo] and the Tribunal or the Court mentioned which directed to restore the possession of the borrower, also holds him entitled for compensation and determines the amount of compensation.

9. Accordingly, it is clear that compensation can only be granted in case when the order for restoration of the position was passed and the amount of compensation has been determined by the Tribunal or the District Judge or the Appellate Tribunal or the High Court at the time when such application under section 17 or section 17A or the Appellate Tribunal or the High Court on an appeal preferred under section 18 or section 18-A is being decided. The prayer for compensation is liable to be dismissed and also the prayer to declare Mortgage Deed No. 6043 dated 25.07.2015 void ab initio is liable to be dismissed for want of jurisdiction.

ORDER

The Misc. Application No.133 Of 2025 filed by Manoj Kumar Sharma is dismissed with liberty to seek cancellation before a competent Cour£ r „//sL\’~ [KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna Consign the record.