The Nagpur Bench of the Bombay High Court has set aside a trial court order that had required two borrowers to deposit 50% of the loan amount before defending a recovery suit filed by HDFC Bank. The Court observed that the borrowers had raised “genuine and substantial” issues-primarily concerning a collapsed housing project and the bank’s direct loan disbursal to the developer.
Background
Sanjay and Sneha Trivedi had booked a rowhouse in the Sahara Prime City project near Wardha Road, Nagpur. They paid part of the consideration and later sought a housing loan for the balance amount. Due to a financial arrangement between Sahara Prime City and the lender, the loan of ₹35 lakh was sanctioned, but most of it-₹24.66 lakh-was directly released to the developer.
Read also:- Karnataka High Court Quashes Rape FIR Against Bengaluru Man: Judge Rules Relationship
However, the project ran into serious trouble. Construction stalled, legal disputes mounted, and eventually, the houses were never built. Despite this, the Trivedis continued paying EMIs for more than three years, amounting to over ₹8.3 lakh in interest alone. After the project collapsed, they approached the State Consumer Commission for relief.
Meanwhile, the bank declared their account a non-performing asset, issued notices, took symbolic property possession, and filed a summary suit for recovery in 2018. When the Trivedis sought permission to contest the suit, the trial court allowed it only on the condition that they deposit 50% of the claimed amount.
Read also:- Gauhati High Court Upholds Nagaland's Right to Exclude Army Officer's Daughter from State MBBS
Court’s Observations
Justice Prafulla S. Khubalkar emphasized that the petitioners had clearly raised triable issues and genuine defenses. The Court noted that the loan was released straight to the developer, and the project had never materialized, leaving the borrowers at a double loss—house gone, yet repayments demanded.
The bench observed, “The defence set up by the petitioners cannot be considered lacking in bona fides. The loan was disbursed directly to Sahara Prime City, which has not been impleaded as a defendant.”
The Court further pointed to Supreme Court precedent that when a defendant presents a fair or reasonable defense in a summary suit, unconditional leave to defend should ordinarily follow. Conditions like heavy deposits are permissible only where the defense appears doubtful or malafide.
Read also:- Supreme Court Suspends Sentence of Man Convicted for Father's Death, Citing Five Years
Here, the Court found the borrowers’ position rooted in genuine circumstances-not delay tactics.
Decision
Setting aside the trial court’s conditional order, the High Court granted the Trivedis unconditional leave to defend in the recovery suit. The Court held:
- The petitioners had raised substantial and arguable defenses.
- Imposing a requirement to deposit 50% of the claim was unjustified.
With this, the writ petition was allowed and the bank’s recovery suit will now proceed to be contested fully on merits.
The matter ends at the Court’s decision itself.
Case Title: Sanjay & Sneha Trivedi vs. HDFC Bank Ltd. - Unconditional Leave to Defend Granted in Sahara Prime City Loan Dispute
Court: Bombay High Court, Nagpur Bench
Judge: Justice Prafulla S. Khubalkar
Case Type: Writ Petition under Article 227 of the Constitution
Date of Judgment: 16 October 2025
