Allowed

Hdfc Bank Limited v. M/S Chandan Yarns and Others

DRT5 Jun 2026OA/5/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application under the Recovery of Debts and Bankruptcy Act for recovery of approximately Rs 3.49 crores treated as NPA. While allowing the claim for principal and costs, the Tribunal exercised discretion to grant interest at 8% p.a. instead of the claimed 18% p.a. and ordered issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs. 3,49,18,184.84 plus costs and simple interest at 8% p.a.; Issuance of Recovery Certificate.

Hdfc Bank Limited versus M/S Chandan Yarns and Others — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.5/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 31.12.2024

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DATE OF DECISION: 05.06.2026

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HDFC Bank Ltd., a Banking Company incorporated under Companies Act, 1956 having its Registered Office at HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai, Maharashtra- 400013 and one of its Branch at Sunder Nagar Chowk, 1284/95, Ludhiana, Punjab through its duly Constituted Attorney, Sh. Madhur Sharma, HDFC Bank Ltd. working as Deputy Vice President currently posted at HDFC Bank Ltd., Department for Special Operations at 5^th Floor, B-21-14570, GT Road, Dholewal Chowk, Adjoining Gulzar Motors, Ludhiana, Punjab141008

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……..Applicant

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Versus

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M/S Chandan Yarns, a Proprietorship Firm through its Proprietor, Sh. Ashok Kumar Jain, S/o Sh. Surinder Kumar Jain having its Place of Business at 44B, Sunder Nagar, Ludhiana, Punjab141008

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Sh. Ashok Kumar Jain, S/o Sh. Surinder Kumar Jain, R/o House no. 49A, near Police Station, Sunder Nagar, Ludhiana, Punjab141007

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Smt. Simmi Jain, W/o Sh. Ashok Kumar Jain, R/o House no. 49A, near Police Station, Sunder Nagar, Ludhiana, Punjab- 141007

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….……Defendants

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Advocates:

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Argued by Ms. Lovedeep Kaur, Advocate proxy for Sh. Sumit Batra, Advocate for applicant

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None for defendants (already ex-parte vide order dated 03.06.2026)

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2 OA/5/2025 HDFC BANK LIMITED VS. M/S CHANDAN YARNS AND OTHERS

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, against the defendants for recovery of Rs. 3,49,18,184.84 (Rupees Three Crores Forty Nine Lacs Eighteen Thousand One Hundred Eighty Four and Paise Eighty Four Only). The Original Application has been filed through Sh. Madhur Sharma, Deputy Vice President of the applicant, who is competent to institute the Original Application vide Board Resolution dated 22.11.2023, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for grant of CC Limit of Rs. 250.00 Lacs vide Loan Application Form, which is Annexure A2 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 235.00 Lacs vide Request Letter dated 20.06.2018, which is Annexure A14 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 265.00 Lacs. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 285.00 Lacs vide Request Letter dated 24.06.2019, which is Annexure A35 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for renewal of CC Limit of Rs. 285.00 Lacs. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 again approached the applicant for renewal of CC Limit of Rs. 285.00 Lacs vide Request Letter dated 20.10.2022, which is Annexure A48 to this OA. 3. The applicant sanctioned CC Limit of Rs. 200.00 Lacs vide Sanction Letter dated 17.10.2017, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs. 235.00 Lacs vide Sanction Letter dated 20.06.2018, which is

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3 OA/5/2025 HDFC BANK LIMITED VS. M/S CHANDAN YARNS AND OTHERS

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Annexure A15 to this OA. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs. 265.00 Lacs vide Sanction Letter dated 03.10.2018, which is Annexure A25 to this OA. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs. 285.00 Lacs vide Sanction Letter dated 01.08.2019, which is Annexure A36 to this OA. Thereafter, the applicant sanctioned renewal of CC Limit of Rs. 285.00 Lacs vide Sanction Letter dated 02.11.2020, which is Annexure A46 to this OA. Thereafter, the applicant again sanctioned renewal of CC Limit of Rs. 285.00 Lacs vide Sanction Letter dated 20.10.2022, which is Annexure A49 to this OA. Defendant nos. 2 and 3 stood as guarantors.

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Defendant nos. 2 and 3 mortgaged their immovable property i.e. Land measuring 368 Sq. Yards situated at Village Barewal Awana, New Surya Vihar, Ludhiana, Punjab vide Sale Deed bearing vasika no. 2415 dated 23.05.2016 along with its translation, Memorandums of Creation dated 17.10.2017, 20.06.2018, 03.10.2018 and 01.08.2019 and Valuation Report dated 12.07.2019, which are Annexure A10, A10/T, A11, A22, A32, A43 and A13 to this OA.

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Documents executed: DP Note, Amendment Agreement, Master Facility Agreement, Deed of Hypothecation, Power of Attorney, Letter of Continuing Guarantee and Deed of Indemnity, all dated 17.10.2017, which are Annexure A4 to A9 and A12 to this OA; DP Note, Letter of Continuing Security, Supplementary Agreement, Supplementary Letter of Hypothecation, Power of Attorney, Letter of Continuing Guarantee, Declaration cum Indemnity and Deed of Indemnity, all dated 20.06.2018, which are Annexure A16 to A21, A23 and A24 to this OA; DP Note, Letter of Continuing Security, Supplementary Agreement, Supplementary Letter of Hypothecation, Power of Attorney, Supplementary Letter of Guarantee, Declaration cum Indemnity and Deed of Indemnity, all dated 03.10.2018, which are Annexure A26 to A31, A33 and A34 to this OA; DP Note, Letter of Continuing Security, Supplementary Agreement, Supplementary Letter

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4 OA/5/2025

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HDFC BANK LIMITED VS. M/S CHANDAN YARNS AND OTHERS

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of Hypothecation, Power of Attorney, Letter of Continuing Guarantee, Declaration cum Indemnity and Deed of Indemnity, all dated 01.08.2019, which are Annexure A37 to A42, A44 and A45 to this OA; Addendum dated 02.11.2020, which is Annexure A47 to this OA; Recall Notice dated 29.11.2023, which is Annexure A50 to this OA and Account Statement with interest calculation, which are Annexure A51 and A52 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs. 3,49,18,184.84, which is recoverable and the defendants were served recall notice but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly. 6. The defendants were served summons to appear before this Tribunal and after service upon defendants, Sh. Bhupender Gupta, Advocate appeared on behalf of defendants on 19.04.2025 and filed Memo of Appearance. POA was filed on 10.07.2025. Paper book was supplied to him. WS on behalf of defendants was filed on 22.08.2025 i.e. beyond stipulated period. WS was taken on record subject to payment of cost. Thereafter, none appeared on behalf of defendants. Therefore, they were proceeded ex-parte vide order dated 03.06.2026. 7. In support of the OA, affidavit of Sh. Madhur Sharma, Deputy Vice President, HDFC Bank Limited has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy counsel that in view of the documentary evidence brought on record, the applicant had proved its case.

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From the perusal of all the Annexure A1 to A52 to this OA, it is proved that defendant no. 1 through its Proprietor defendant no. 2 approached applicant for availing of the loan facility which was granted to them. Defendant nos. 2 and 3 stood as guarantors. Defendants had executed all the relevant documents in favour of the bank. The

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OA/5/2025

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HDFC BANK LIMITED VS. M/S CHANDAN YARNS AND OTHERS

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defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs. 3,49,18,184.84 (Rupees Three Crores Forty Nine Lacs Eighteen Thousand One Hundred Eighty Four and Paise Eighty Four Only), along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the amount.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @18.00%p.a. from 01.11.2024 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property/hypothecated assets, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant simple interest @08.00% p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.3,49,18,184.84 (Rupees Three Crores Forty Nine Lacs Eighteen Thousand One Hundred Eighty Four and Paise Eighty Four Only), jointly and severally, with costs, current and future simple interest @08.00% p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of mortgaged property of the defendant nos. 2 and 3 in execution proceedings if not

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OA/5/2025

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HDFC BANK LIMITED VS. M/S CHANDAN YARNS AND OTHERS

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sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the applicant still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

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12. Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 29.06.2026.

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Copy of this order be given dasti to the applicant and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned.

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Pronounced by me in the open Tribunal .

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Dated: 05.06.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Hdfc Bank Limited v. M/S Chandan Yarns and Others

Case brief

What is this about?

What did the court decide?

Hdfc Bank Limited v. M/S Chandan Yarns and Others

Case brief

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What did the court decide?

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