Hello suyashsngh,
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I understand you are having issues accessing your backed up data after doing a factory reset and downgrading from Windows 8 to Windows 7. I believe the files are still there, but your operating system is different so the recovery operation in Windows 7 is looking for a specific set of files in a specific format and they are not there because the backup was done in Windows 8. You can try and going right to the source on the disc and seeing if you are able to copy the files from the disc itself. Depending on how the backup was performed you may or may not be able to do this.
If you are not able to copy the files you may have to put Windows 8 back on the computer, restore the backed up files and manually copy them to a disc. After you have manually copied them you can put your Windows 7 back and manually copy the files back onto your Windows 7 operating system.
I hope I have answered your question to your satisfaction. Thank you for posting on the HP Forums. Have a great day!