Allowed

Hdfc Bank Ltd. v. Ms Union Traders

DRT6 Nov 2025OA/685/2023

Case brief

AI extract

What is this about?

The DRT allowed a recovery application filed by HDFC Bank against loan defaulters. The court found the execution of loan documents and mortgage proved. The judgment directed defendants to pay dues or face asset sale.

What did the court decide?

Issuance of Recovery Certificate for Rs.2,29,30,943/-; payment of dues within two months; restraint on disposal of properties; sale of assets if dues remain unpaid.

Hdfc Bank Ltd. versus Ms Union Traders — Specific Performance | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL AT LUCKNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Case No. Original Application No.685 of 2023

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Dated: 06.11.2025

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HDFC Bank Ltd., having Branch at Pranay Tower, Near Vidhan Sabha, 38 Darbari Lal Sharma Marg, Lucknow-226001.

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. . . . . . .. Applicant Bank

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	V	ersus
1.	M/s. Union Traders	, Through its Proprietor
	Mr. Arif Husain,	Office Address:Shop
	No.1/61, Nigar Cot	tage, Vijay KhandC)pp.
	Lohia Park Gomti Pradesh, India2260	Nagar, Lucknow, Uttar 10.
2.	Mr. Arif Husain,	S/o Anwar Husain,
	(Proprietor of M/s	. Union Traders), R/o
	House No.300/26, Gate, Lucknow,UP-	Amin Complex,A]<bari 226003.
3.	Mrs. Asiya Hasmi,	D/o Syed Mohammad
	Razeen, R/o Ho	useNo.300/26,Amin
	Complex, Akbari 226003.	Gate, Lucknow,UP-

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. . . . . . .Defendants

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Ld. Counsel for applicant-bank: Mr.Nikhil Srivastava, Advocate. Ld. Counsel for defendant No.3: Mr. G.S. Mishra, Advocate. Ld. Counsel for defendant nos.1 & 2: None

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JUDGMENT

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This Original Application has been filed by the applicant Bank under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for the recovery of Rs.2,29,30,943/-(Rupees Two Crore, Twenty

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O.A. No.685 of 2023

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Nine Lac, Thirty Thousand, Nine Hundred Forty Three Only)togQther with pendent-lite and future interest, costs and other reliefs etc.

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The brief facts of case being that the defendantno.1 is proprietorship firm, of which, the defendant no.2 is the proprietor/guarantor and the defendant no.3 is also guarantor. The defendant no. 1 through defendant no.2vide loan application dated 12.7.2021approached the applicant-bank for grant of Cash Credit Facility of Rs.200 lac, which was duly considered and sanctioned by the applicant-bank on 29.7.2021 on certain terms and conditions (Annexure No. A-2 & Annexure No. A-3) to this original application.

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In order to secure the aforesaid Cash Credit facility of Rs.200 lac, the defendant no.2 on behalf of the defendant no.1/firm had executed and signed Master Facility Agreement, Deed of Hypothecation, Power of Attorney and Sole Proprietor Declaration in favour of the applicant-bank on 29.7.2021. The defendant nos.2 & 3 being guarantor towards the credit facility had executed and signed Letter of Continuing Guarantee in favour of the applicant-bank on 29.7.2021 acknowledging therein their liability same and equal with the principal borrowers (Annexure No. A-4 to Annexure No. A-8) to this original application.

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To avail the aforesaid credit facility, the applicant-bark had opened a loan account in the name of defendant no. 1/firm in order to maintain the credit facility.

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After availing the aforesaid credit facility, the defendants failed to maintain financial discipline and also failed to comply with the terms and conditions of the loan agreement, consequently, the loan account of the defendant no.1/firm was classified as NPA on 18.9.2022 by the applicant-

O.A. No.685 of 2023

bank as per RBI guidelines (Annexure No. A-9), therefore, the applicantbank issued Legal Notice dated 13.5.2023 (Annexure No.A-10), but, the defendants stated no-response and failed to repay the same and the loan account of the defendant no.1/firm is still un-liquidated, hence, this Original Application has been instituted.

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As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.2,29,30,943/-(Rupees Two Crore, Twenty Nine Lac, Thirty Thousand, Nine Hundred Forty Three Only)including interest upto01.5.2023were lying due for payment, which they did not pay despite repeated requests and demands. The applicant Bank has filed the copy of Statement of Account (Annexure No. A-11) to this original application.

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The cause of action for filing the present application arose firstly on 29.7.202 lwhen the abovementioned credit facility was sanctioned by the applicant-bank and necessary documents were executed by the defendants. The cause of action further arose on 13.5.2023 when the applicant-bank had issued legal notice recalling the defendants to repay the dues of the applicant-bank, but, the defendants failed to pay the same.

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The summons was served upon the defendants through registered post. None appeared for the defendant nos.1 & 2, hence, the case proceeded ex-parte against them vide order dated 09.4.2024. The defendant no.3 appeared before this Tribunal, but failed to file WS within the statutory period, hence, the matter proceeded against the defendant no.3.

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From perusal of the record, it is evident that the defendants were provided fair opportunities to contest the claim of the bank. As the defendants opted not to contest the case, so only point of consideration

CtF

O.A. No.685 of 2023

before this Tribunal in as to whether the bank is legally entitled to the amount as claimed in Original Application on the basis of documents and pleading submitted by it?

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In support of the case Shri Praveen Kumar, Senior Manager of the applicant Bank has supported its case on affidavit.

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On a careful scrutiny of the evidence on affidavit and Annexure marked as (AnnexureNo. A-1 to Annexure No. A- llto this original application),it stands proved that the defendants had availed the credit facility from the applicant bank by executing loan and security documents detailed as above in favour of the applicant Bank. A perusal of the application, evidence and documents relied upon clearly establishes that defendants had utilized the above loan facility as granted to them. The applicant bank has maintained the Books of account in the ordinary course of banking business showing disbursal of the loan amount. It Ru1.her shows that bank had regularly credited the amount paid by the defendants in the books of account. The Bank had also charged interest from time to time and the entries is relevant u/s 4 of the Bankers Book Evidence Act. It is also proved that the applicant bank’s claim is within limitation against the defendants, therefore, the defendants are liable to pay the dues.

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Accordingly, the defendants are directed to pay the balance dues to the applicant bank within a period of two months from the date of judgment failing which the applicant bank will be entitled to sell the hypothecated assets as well as personal properties of the defendants.

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The applicant-bank has claimed interest @9.00% per annum in the Cash Credit Loan Account together with pendent lite and hrture interest till the actual date of its realization and costs. On the basis of the R)regoing

O.A. No.685 of 2023

discussion, interest of justice will be served if pendent-lite and future interest is granted @8.00% per annum in the above loan account with monthly rest on reducing balance from the date of filing of the O. A. till the date of realization with costs.

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1 find that the bank has proved the execution of loan documents and creation of mortgage in its favour. In the result, the Original Application succeeds against the defendants with costs. The defendants are jointly and severally liable to pay the dues of the applicant-bank and the hypothecated assets as well as the personal properties are liable to be sold.

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15.It is, therefore, ordered :-

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(i) That the Original Application No.685 of 2023 of the applicant bank for issuance of Recovery Certificate to the tune of Rs'2,299309943/-(Rupees Two Crore, Twenty Nine Lac, Thirty Thousand, Nine Hundred Forty Three Only)together with the interest @8.00% per annum in the loan account from the date of fillng of the Original Application i.e. 05.6.2023 till the loan is RllIY liquidated and costs succeeds and is hereby allowed ex_ parte against the defendant nos.I & 2 and on contest against the defendant no.3.

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(ii) The defendants are directed to pay the dues within a i)eriod of two months from the date of judgment, failing which the apphcant bank will be entitled to recover the same from the secured assets, personal movables and immovable assets of the defendants

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(iii) The applicant-bank is entitled to recover aR)resaid amount by sale of hYpothecated assets (if not sold earlier under the

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O.A. No.685 of 2023

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provisions of the S.A.R.F.A.E.S.I. Act 2002). The amount, if any, already recovered by sale of hypothecated assets or otherwise shall be adjusted towards the debt and only the balance amount shall be recoverable. If the dues of the applicantbank still remain unsatisfied, the same shall be recovered by attachment and sale of the personal movable and immovable assets of the defendants.

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(iv) The defendants are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing with their properties/estates without first paying the claim of the applicant bank,

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(v) Let Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 by fixing 06.01.2026 before R.O., DRT, Lucknow.

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Judgment is pronounced in the open court.

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Dated: 06.11.2025

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(Pravas Kuma>\kln£h) Presiding Officer

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(Veeresh)

Hdfc Bank Ltd. v. Ms Union Traders

Case brief

What is this about?

What did the court decide?

Hdfc Bank Ltd. v. Ms Union Traders

Case brief

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