Allowed

Hdfc Bank Limited v. M/S Sara Retail and Others

DRT17 Aug 2026OA/573/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an original application filed by HDFC Bank Limited for recovery of a loan amount against a sole proprietorship and its guarantors. With one defendant discharged, the act disclosed default. The court adjudged liability and modified the claimed interest rate while issuing a recovery certificate.

What did the court decide?

Declare defendants 1, 2, 4, and 5 liable to pay Rs.26,52,475.23 plus interest @8% p.a.; issue Recovery Certificate; allow recovery via sale of mortgaged property.

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

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.573/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 16.04.2025

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DATE OF DECISION: 17.08.2026

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HDFC Bank Limited, a Banking Company incorporated and registered under the Companies Act 1956, having its Registered Office at HDFC Bank House, Senapati Bapat Marg, Lower Patel (West), Mumbai 400013 and one of its Branch Office, amongst others at The Mall Road, Ludhiana (Punjab) being represented through its duly Authorized Official Sh. Madhur Sharma, Assistant Vice President, Department For Special Operations, HDFC Bank Ltd., 5^th Floor, B-21-14570, G T Road, Dholewal Chowk, Adjoining Gulzar Motors, Ludhiana (Punjab) - 141008.

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……..Applicant

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Versus

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1. M/s Sara Retail, a sole-proprietorship firm of Smt. Sharanjit Kaur W/o Sh. Manmohan Singh, having place of business at B- 1,1446/8/1, Kapil Park, Hambran Road, Ludhiana (Punjab) – 141001. ALSO AT: 158, Kapil Park, Hambran Road, Ludhiana (Punjab) – 141001.

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1. Smt. Sharanjit Kaur W/o Sh. Manmohan Singh, R/o Guru Nanak Public School, J-6, Sarabha Nagar, Ludhiana (Punjab) – 141001.

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1. M/s Arora Apparels, a sole-Proprietorship firm of Sh. Ramnek Singh Arora S/o Sh. Manmohan Singh, having place of business at P/10, Kapil Park, Hambran Road, Ludhiana (Punjab) – 141001.

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1. Sh. Ramnek Singh Arora S/o Sh. Manmohan Singh, R/o House No. 162, I-Block, Sarabha Nagar, Ludhiana (Punjab) - 141001.

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1. Sh. Manmohan Singh S/o Sh. Joginder Singh, R/o House No. 162-1, Sarabha Nagar, Ludhiana (Punjab) – 141001. ……. .Defendants

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2 OA NO.573/2025 HDFC BANK LTD. VS M/S SARA RETAIL AND OTHERS

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Advocates:

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Argued by Sh. Satish Kumar Arora, Advocate for the applicant (through VC) None for defendants (Already ex-parte vide order dated 11.08.2026).

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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 & Bankruptcy Act 1993, against the defendants for recovery of Rs.26,52,475.23 (Rupees Twenty Six Lacs Fifty Two Thousand Four Hundred Seventy Five and Paise Twenty Three Only). The Original Application has been filed throug h Sh. Madhur Sharma, Assistant Vice President of the applicant, who is competent to institute the Original Application vide Board Resolution, dated 28.07.2023, 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 Cash Credit Limit of Rs.20,00,000.00 vide Application Form for Credit Facilities to MSEs, which is Annexure A2 to this OA. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for renewal of Cash Credit Limit of Rs.17,00,000.00 vide Request Letter dated 04.06.2015, which is Annexure A15 to this OA. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for renewal of Cash Credit Limit of Rs.25,00,000.00. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of Cash Credit Limit from Rs.25,00,000.00 to Rs.45,00,000.00 vide Request Letter. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for renewal and reduce of Cash Credit Limit from Rs.45,00,000.00 to Rs.25,00,000.00 vide Request Letter. 3. The applicant sanctioned the Cash Credit Limit of Rs.17,00,000.00 vide Sanction Letter, dated 28.05.2014, which is Annexure A3 to this OA and the terms and conditions were duly

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3 OA NO.573/2025 HDFC BANK LTD. VS M/S SARA RETAIL AND OTHERS

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accepted by the defendant no. 1 through its proprietor defendant no. 2. Defendant nos. 2 & 4 stood as guarantors.

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Thereafter, the applicant renewed and enhanced the Cash Credit Limit from Rs.17,00,000.00 to Rs.25,00,000.00 vide Sanction Letters, dated 04.06.2015, 30.07.2015, which is Annexure A16 to this OA and the terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2. Defendant nos. 2 to 4 stood as guarantors.

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Thereafter, the applicant renewed the Cash Credit Limit of Rs.25,00,000.00 vide Sanction Letter, dated 22.08.2016, which is Annexure A24 to this OA and the terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2. Defendant nos. 2 to 4 stood as guarantors.

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Thereafter, the applicant renewed the Cash Credit Limit of Rs.25,00,000.00 vide 00 Request Letter and Sanction Letter, dated 17.05.2017, which is Annexure A25 to this OA and the terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2. Defendant nos. 2 to 4 stood as guarantors. Thereafter, the applicant renewed and enhanced the Cash Credit Limit from Rs.25,00,000.00 to Rs.45,00,000.00 vide Sanction Letter, dated 05.06.2017, which is Annexure A27 to this OA and the terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2. Defendant nos. 2, 4 & 5 stood as guarantors.

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Thereafter, the applicant renewed and reduced the Cash Credit Limit from Rs.45,00,000.00 to Rs.25,00,000.00 vide Sanction Letter, dated 22.06.2018, 15.05.2019, 17.06.2021, 27.06.2022, 22.11.2022, 29.06.2023, 28.09.2024, which are Annexures A37 to A43 to this OA and the terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2. Defendant nos. 2, 4 & 5 stood as guarantors.

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Defendant No. 3 having been discharged as a guarantor as per latest sanction letters, no relief can be granted against defendant no. 3

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4 OA NO.573/2025 HDFC BANK LTD. VS M/S SARA RETAIL AND OTHERS

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Defendant no. 2 mortgaged her Immovable Property i.e., Plot No. 10min, measuring 266-2/3 Square Yards, situated at 1446/10, A/9, Kapil Park, Hambran Road, Ludhiana vide Memorandum Recording Past Transactions of Creation of Mortgage By Delivery of Title Deeds, dated 28.05.2014, 30.07.2015, 09.06.2017, Registered Sale Deed No. 130, dated 06.04.2009, along with its translation and Gift Deed No. 11453, dated 25.10.2012, along with its translation, Deeds of Indemnity, dated 28.05.2014, 30.07.2015, 05.06.2017, which are Annexures A11 to A14, A21, A22, A34 & A35 to this OA. Documents executed: Letter of Continuing Security and Demand Promissory Note, Master Facility Agreement, Power of Attorney, Letter of Hypothecation, Declaration cum Indemnity, Undertaking cum Indemnity, Letter of Continuing Guarantee, all dated 28.05.2014, which are Annexures A4 to A10 to this OA; Letter of Continuing Security and Demand Promissory Note, Supplementary Agreement, Supplementary Letter of Hypothecation, Power of Attorney, Supplementary Letter of Continuing Guarantee, Declaration cum Indemnity, all dated 30.07.2015, which are Annexures A16A to A20 & A23 to this OA; Amendment Agreement dated 22.08.2016, which is Annexure A26 to this OA; Letter of Continuing Security and Demand Promissory Note, Supplementary Agreement, Supplementary Letter of Hypothecation, Power of Attorney, Amendment Agreement, Supplementary Letter of Continuing Guarantee, all dated 05.06.2017, which are Annexures A28 to A33 to this OA; Declaration cum Indemnity, dated 09.06.2017, which is Annexure A36 to this OA; Addendum to the Master Facility Agreement, dated 28.09.2024,which is Annexure A44 to this OA; Notice u/s 13(2) dated 23.01.2025, along with postal receipts, which is Annexure A45 to this OA; Statement of Account along with Memoranda and certificate, which are Annexures A46 & A47 to this OA; Valuation Report, dated 27.05.2014, which is Annexure A48 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 the loan account there was a debit of Rs.26,52,475.23, which is recoverable and the

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5 OA NO.573/2025 HDFC BANK LTD. VS M/S SARA RETAIL AND OTHERS

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defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served summons to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 11.08.2026.

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In support of the OA, affidavit of Sh. Madhur Sharma, Assistant Vice President , HDFC Bank Ltd. has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned counsel for applicant through video conferencing that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case.

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From the perusal of all the Annexures A1 to A48 to this OA, it is proved that the defendant no. 1 through its proprietor defendant no. 2 approached applicant for availing of loan facility which was granted to them, defendant nos. 2, 4 & 5 stood as guarantors and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, loan account was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.26,52,475.23 (Rupees Twenty Six Lacs Fifty Two Thousand Four Hundred Seventy Five and Paise Twenty Three 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. 10. In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.47%p.a. with penal interest @7.530%p.a. from 17.03.2025 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, undertaking

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6 OA NO.573/2025 HDFC BANK LTD. VS M/S SARA RETAIL AND OTHERS

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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 @8.00%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 defendant nos. 1, 2, 4 & 5 are liable to pay to the applicant sum of Rs.26,52,475.23 (Rupees Twenty Six Lacs Fifty Two Thousand Four Hundred Seventy Five and Paise Twenty Three Only), along with interest, jointly and severally, with costs, current and future simple interest @8.00%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 defendant no. 2 in execution proceedings if not 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 defendant nos. 1, 2, 4 & 5. 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 . 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 01.09.2026.

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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: 17.08.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Hdfc Bank Limited v. M/S Sara Retail and Others

Case brief

What is this about?

What did the court decide?

Hdfc Bank Limited v. M/S Sara Retail and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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