Allowed

Hdfc Bank v. Bhagyanagar Foods

DRT31 Jul 2026OA/88/2023

Case brief

AI extract

What is this about?

The DRT-II at Hyderabad allowed the bank's recovery application against a corporate borrower and its proprietor for a default in a cash credit facility. The court rejected defenses of fraud and procedural default due to the lack of documentary evidence from the defendants.

What did the court decide?

Directing the defendants to jointly and severally pay the outstanding sum of Rs. 6.13 crores with future interest and costs, entitled to proceed against mortgaged assets.

Hdfc Bank versus Bhagyanagar Foods — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD DATED THIS THE 31ST DAY OF ]ULY, 2026 PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), M.A. PRESIDING OFFICER

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Original Application No: 88 OF 2023

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HDFC Bank Limited, Department for Special Operations, Hyderabad, H.No.6-3-246 &. 6-3-2441 A, 3rd Floor, Desk No: 0196, Roxana Palladium, Road No.1, Banjara Hills, (Besides Virinchi Hospital) Hyderabad-500 034, Rep., by its Authorized Officer

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Applicant

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Versus

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M/s Bhagyanagar Foods, Rep. by its Proprietor, Mr. Raghu Pajjuri, Age: Major, Occ: Business, Door No.-4-122/2/1, Sy No-817/1, Turkayamjal Village, Turkayamjal, Near Sagar Road, Hyderabad- 501510, Telangana State.

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AISo At: M/s Bhagyanagar Foods B-2-LOB/S, G N Reddy Godown, Opp Central Grammer School, Hastinapuram, Hyderabad- 50007 4, Telangana State

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Mr. Raghu Pajjuri S/o Ram Rajesham Pajjuri, Age: Major, Occ: Business, Door No: t6-10-L/2, Race Course Road, Old Malakpet, Hyderabad- 500036, Telangana State

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Also at:

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Mr. Raghu Pajjuri S/o Ram Rajesham Pajjuri, Age: Major, Occ; Business,

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OA No.88/2023

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8-6- lO7 6191,^{Venkatramana ColonY,} Vaishalinagar, Hastinapuram,^{Saroor Nagar,} K.V. Rangareddy-500079,^{Telangana State}

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Mrs. Lasya^{PriYa Pajjuri,} W/o Mr. Paijuri^Raghu, Age: Major, Occ:^Business, B-6-LO7 6l 91,^{Venkatramana ColonY,} Vaishalinagar,^{Hastinapuram, Saroor Nagar,} K.V. Rangareddy-500079,^{TelanganaState'} ... Defendants

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: M/s. M. V. Kini Counsel for the^APP|icant Counsel for^Defendants : Mr. P. Ramachandran

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:: ORDER::

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The Applicant^{Bank filed the presentOA for the recovery of a sum of} Rs. 6,13,17,992.42^{ps as on 21.12.2022 from defendant Nos' 1 to 3 with} future interest @^{18o/o p.a. with monthly rests form the date of application} till the date of^{realisationalong with costs, and in default, sale of oA} schedule moveable^{and immoveable assets/ properties'}

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2.TheavermentsoftheApplicantBank,asstatedintheoA,inbrief, arethatDefendantNo.l,aproprietaryconcernrepresentedbyDefendant No,2 as its^{proprietor, had initially availeda Cash Credit facility of Rs'} 40.00 lakhs in^{the year 2009 for working capital requirements' Itis} contended that, at^{the request of the defendants,the credit facilitieswere} periodically renewed, enhanced^{and restructuredfrom time to time'} ultimately aggregating^{to Rs. 7.10 crores under CashCredit'Working} CapitalTermLoan,GECLandGECLExtensionfacilities.Theapplicant further asserts that^{the defendants securedthe loan via creationof an} equitablemortgageovertheimmovablepropertiesofDefendantNo.3aS security for the due^{repaymentof the facilities. Defendants committed} defaults in repayment,^{resulting in the loan accounts b-eingclassifiedas} @o*

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oA No.88/2023

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NPA on 18.08.2022. Thereafter, the applicant issued a demand notice under Section 13(2) of the SARFAESI Act on 03.t2.2022 demanding payment of the outstanding dues. As the defendants failed to discharge their liability, the applicant instituted the present OA seeking recovery of its dues by enforcement of the mortgaged properties.

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Defendant No.2 filed a written statement contesting the maintainability of the OA both on facts and in law, seeking its dismissal at the threshold. Defendant No.2 is the proprietor of Defendant No.1 concern, however, the day-to-day affairs were managed by one Sri Satyam, who allegedly obtained the defendants' signatures on several blank documents, which were subsequently filled up by the applicant Bank without their knowledge or consent. The defendants further contend that the loan account was regularly serviced till March 2020 and that the COVID-19 pandemic adversely affected their business. It is alleged that Sri Satyam fraudulently obtained additional COVID-relief and other credit facilities in the defendants' name and misappropriated the loan proceeds, while the applicant Bank failed to exercise due diligence. The defendant also dispute the genuineness of certain signatures on the loan documents and contend that the applicant Bank classified the loan account as a NpA without granting an opportunity to regularise or restructure the account. It is further contended that the statutory demand notice under Section 13(2) of the SARFAESI Act was never served upon them and that the applicant Bank was aware that the secured assets were already encumbered in favour of other banks. On these grounds, the defendant prays for dismissal of the oA.

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In order to prove its case, Applicant Bank examined by Mr. Srikanth Sukhavasi, Senior Manager as AW- 1 and marked 104 documents through them as Exhibits A-1 to A-104.

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OA No.BB 12023

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In order to substantiate his defence, znd defendant Mr. Raghu Pajjuri, examined 1't defendant as well as himself as DW-1 and marked no documents.

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Heard learned counsel for the applicant. The right of defendants to adduce evidence stood forfeited on 23.01.2026 after affording ample opportunities. Perused the written arguments filed by the applicant and also perused the material^placed on record.

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Learned Counsel for the applicant^places reliance upon^{Exs.A-1 to} Exs.A-104 marked through applicant evidence^(AW-1) as^proof of^{claim of} the bank and submitted that the applicant bank^{is entitledfor recovery of} the outstanding amount together^{with future interest and costs and} invoking the mortgage/ hypothecation deed

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B. The point that arises for consideration^is:-

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Whether the Applicant Bank is entitled^{for the OA claim} aga i nst the Defenda nts?

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According to the learned^{counselfor the applicantBank, the} defendants had availed the^{cash credit facilitiesand committed defaultin} repayment despite repeated^{demands.Although the defendantsfiled a} written statement and evidence^{affidavitalleging fraud by one Sri Satyam,} obtaining of signatures on^{blank documents,wrongfulclassificationof the} loan account as a NPA,^{and non-serviceof the demand notice under Section} 13(2) of the SARFAESI^{Act, no documentary evidence was producedin} support of the said^{pleas. A perusal of Exs. A-3 to A-5 & Exs. A.43 to 48,} Exs. A-81 & A-82, marked^{through the evidenceof O.X.establishthe}

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OA No.88/2023

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sanction and renewal of the credit facilities and the terms governing the transaction. Ex. A-104, being the statement of account maintained in the ordinary course of business, evidences the outstanding liability. Exs. A-74, A-85 and A-94 are security documents, Exs. A-102 is the acknowledgement of debt executed by defendants. Various agreements/ supplementary agreements executed by defendants are made available on record. These documents cannot be disputed without any valid/ rebuttal evidence. Apart from making bald assertions, defendants did not adduce any documentary evidence contradicting Exs. A-1 to A-104. The defendants did not choose to take steps to cross examine AW-1 at appropriate time. They sought to reopen OA for cross examination when OA had been posted for orders. Accordingly, this Tribunal dismissed 1A.No.57412026 on 27.07.2026. tn these circumstances, the uncontroverted testimony of A.W.1, read with the documentary evidence on records as Exs. A-1 to A-104, sufficiently establishes the applicant's claim. Accordingly, the Original Application deserves to be allowed, holding the defendants jointly and severally liable to pay the outstanding dues together with future interest and costs in accordance with law.

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In the result, the present Original Application No.88/2023 is allowed as under: -

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(i) The defendants are jointly and severally liable to pay to the Applicant Bank a sum of Rs. 6,13,17,992.42 ps with future interest rate @ 13olo p.a. simple from the date of application till the date of realization;

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(ii) the OA claim is secured by way of mortgage of properties and hypothecation of assets as described in Schedules lfua.x

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OA No.BB 12023

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i:1 Ir nitlr,, lli: fl!!r,' li, ll., ll;l li trl Irl lii;: lii,, lli i llr r ii:j ,l

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annexed to the OA and applicant bank is entitled^to proceed against the same for realisation of dues;

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(iii) the applicant is entitled to proceed against the^person and properties of the defendants for realization of^its dues; and

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(iv) the applicant bank is entitled for the costs;

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The Applicant Bank is directed to file Cost Memo within^{2 weeks from} the date of receipt of this Order.

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Issue Recovery Certificate accordingly.

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Communicate a copy of this order to the^parties concerned.

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(Dictated to the steno, corrected, signed and pronounced by me in the open^{court on this the} 31" day of July, 2026)

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ESHWAR KOTHE) PRESIDING OFFICER

Hdfc Bank v. Bhagyanagar Foods

Case brief

What is this about?

What did the court decide?

Hdfc Bank v. Bhagyanagar Foods

Case brief

What is this about?

What did the court decide?

What the court decided

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