Hello,
1) HUF being in the capacity of a trust , if no individual member like a Manager entered into as party to the loan would be legally treated as not an individual.However considering that the HUF was only one of the parties the bank ought to have given a concession.
2) Let me quote for your benefit:"In the case reported as (1967) 66 ITR 613 (SC) Ram Laxman Sugar Mills v,Commissioner of Income-Tax, U.P. & Ors. the Hon’ble Supreme Court has categorically held that it is open to the manager of a joint Hindu Family as representing the family to agree to become a partner with another person. The partnership agreement in that case is between the manager and the other person and by the partnership agreement no members of family, except the manager acquires a right or interest in the partnership. The junior members of the family may make a claim against the manager for treating the income or profits received from the partnership as a joint family asset, but they cannot claim to exercise the rights of partners nor be liable as partners. - See more at: http://taxguru.in/corporate-law/huf-cannot-be-a-partner-in-firm-but-it-is-competent-to-the-manager-or-karta-acting-on-behalf-of-the-huf-to-enter-into-a-valid-partnership."
"The Honble Supreme Court observed that a firm is a compendious way of describing the individuals constituting the firm. An HUF directly or indirectly cannot become a partner of a firm because the firm is an association of individuals. Even if a person nominated by the HUF joins a partnership, the partnership will be between the nominated person and the other partners of the firm. It further observed that if a karta or any other member of the HUF joins a partnership, he can do so only as an individual. His rights and obligations vis-à-vis other partners are determined by the Partnership Act and not by Hindu Law. Whatever may be the relationship between an HUF and its nominee partner, in a partnership, neither the HUF nor any member of the HUF can claim to be a partner or connected with the partnership through a nominee. - See more at: http://taxguru.in/corporate-law/huf-cannot-be-a-partner-in-firm-but-it-is-competent-to-the-manager-or-karta-acting-on-behalf-of-the-huf-to-enter-into-a-valid-partnership."