InfraLive September-15, 2025

DRT Order Exposes Sashidhar www.infralive.com 5 InfraLIVE September 15, 2025 4.43 crore for Packing Credit (PC), Rs 8.01 crore for Post-Shipment Credit (PSC), and Rs 3,878,827 for overdraft. PC amount included interest upto 31.03.2021, for PSC it was upto the respective due dates of the bill, and for overdraft the interest was included @21 per cent per annumfromday one. Packing credit is a pre-shipment finance option that offers working capital to exporters to cover produc- tion and shipping expenses. So, when the recall notice was issued, HDFC's overdue was at Rs 12.82 cr, which of course included interest also. So, the principal amountmust be lower than this. Let us see how this figure jumped at different stages of demand. When HDFC issued a legal notice on Feb 14, 2002, the figure changed to Rs 14.75 crore. Demand towards PC and PSC remained unchanged, but figure of overdraft jumped to 2.31 crore, from Rs 38.79 lakh in a few months only (see scan at pg 10). On April 4, 2002, HDFC filed a case (O.A.No.146/2002) before Debt Recovery Tribunal (DRT)-II, Mumbai against BDL & its directors praying for a money decree for recovery of Rs 14.75 cr with interest till realization (see scan at pg 11). In its judgement of Oct 26, 2004, DRT allowed the application and ordered recovery of Rs 14.75 crore with interest @16 per cent per annum from the date of filing of application till the completion of recovery (scan at pg 12 to 16). In a subsequent order byDRT, the lenders in the consortium were identified and their respective shares from the recovery were decided as in table-1. Thus, HDFC was entitled to receive 8.19 per cent share from the recoveries made by the consortium of banks/lenders. Given that HDFC's entire case centers on col- lecting the dues from the consor- tium, their failure to do so is shock- ing. But, this is not reflected in HDFCBank statement, which shows only three entries. Sr. No. 2 to 4 in table-2 totals about Rs 50 lakhs. This seems particularly unusual since all other members in the consortium settled their dues through auction or One Time Settlement (OTS) route. On Feb 22, 2003, HDFC received Rs 2.04 crore from Export Credit Guarantee Corporation of India (ECGCI) against its insurance claim for default in payment. Even this amount HDFC did not show in its calculations because it claimed that once it recovers the entire money fromBDL (through sales of assets or otherwise), it is under obligation to return themoney back toECGC. In addition, it received about Rs 11.19 crore in 2024 and 2025. Thus, it has received a total of Rs 13.73 crore so far, at least 107 per cent of the principal amount (Rs 12.82 cr maximumas explained earlier). Note: It is pertinent to mention here that HDFC had filed claim with ECGC for Rs 80,052,000 (loan of Rs 4 5 , 8 1 9 , 2 3 7 o f HD F C + R s 34,232,763 of Times Bank acquired by HDFC on 26.2.2000). However, ECGC rejected HDFC’s claim, but admitted claim of Times Bank, 60 per cent of which was paid as per policy subscribed by HDFC. The reason for rejection of HDFC’s claim e begin our storywith the W two orders of DRT on the recovery of dues from Beautiful Diamonds Ltd (“BDL”); the very first order dated October 26, 2004 and the latest order dated July 22, 2025. BDLwas incorporated onDecem- ber 20, 1979 in Mumbai. Later it changed its name to Splendour Gems Ltd (“SGL”). The company was engaged in the polishing and export of diamonds. In 1995, a consortium of 10 banks & lenders, led by Bank of Baroda, sanctioned loan of Rs 135 cr to BDL. HDFC had a meagre 5 per cent share of this loan i.e. Rs 6.75 cr (see scan at pg 7). For the said loan some speci- fied assets of the company were pledged, certain guarantees were obtained from some of its directors, and a corporate guarantee was pro- vided by Beautiful Jewellers Pvt Ltd, a sister concern of BDL. The company was regular in repayments. The banks noticed first sign of sickness on May 21, 2001 when some of the shipments did not take place. On June 16, 2001, Bank of Baroda, on behalf of consortium of banks, issued loan recall notice, which included Rs 12.82 crore of HDFC's dues (see scan at pg 8 & 9). Until June 30, 2001, the banks had givenBDL “standard” health code. The break-up of HDFC dues is: Rs Part-1 DRT Order Exposes Sashidhar Table-1: Share of lenders on recovery from assets sale Sl Lenders % share 1 IARC (Assignee of Bank of Baroda) 19.40 2 IDBI Bank Ltd 12.59 3 State Bank of India 10.10 4 ARCIL (Assignee of Dena Bank) 9.54 5 HDFC Bank Ltd 8.19 6 UCO Bank 6.92 7 Standard Chartered Bank 6.84 8 Union Bank of India 6.10 9 Oriental Bank of Commerce 5.27 10 Axis Bank 4.45 11 Mizuho Corporate Bank 4.25 12 Calyon Bank 3.27 13 City Union Bank 3.08 Total 100.00 Table-2: Payment received by HDFC Sl Date Amount Remarks 1 22.02.2003 2,04,39,658 ECGC claim (see Note) 2 25.05.2005 4,45,190 Sales Tax Matruchaya 3 27.11.2007 41,45,734 Shares from Gala Sale 4 03.03.2008 4,01,713 Innova Sale 5 14.06.2024 3,68,63,000* Kishor & Rajesh to Bank 6 Aug-25 7,50,00,000* Rajesh to Bank Total 13,72,95,295 * Borrowed from family & friends