Supreme Court Holds DRT Recovery Certificate Cannot Form Basis for Insolvency Notice Under Presidency Towns Insolvency Act

Case Snapshot

Case Name: H.D.F.C. Bank Limited v. Kishore K. Mehta (Dead) Thr. LRs.

Citation: 2026 INSC 688

Bench: Justice Dipankar Datta

Date of Judgment: July 13, 2026

Area of Law: Insolvency Law, Banking Law, Debts Recovery Tribunal

The Judgment in One Line

A recovery certificate issued by a Debts Recovery Tribunal under the pre-amended RDB Act is not a "decree or order" under Section 9(2) of the Presidency Towns Insolvency Act, 1909.

Why This Judgment Matters

This judgment clarifies the scope of Section 9(2) of the Presidency Towns Insolvency Act, 1909, holding that it does not permit insolvency notices based on recovery certificates from Debt Recovery Tribunals. The Court relied on the wider ratio in Paramjeet Singh Patheja v. ICDS Ltd., which held that only decrees or orders of courts, not arbitral awards, can form the basis of insolvency proceedings. The judgment also interprets the 2016 amendment to the RDB Act (Section 19(22A)) as prospective, not retrospective, meaning pre-2016 recovery certificates cannot support insolvency proceedings. This provides clarity to banks and financial institutions on the scope of recovery mechanisms.

Background

The original respondent was a director of a company that availed credit facilities from a consortium of banks, including HDFC Bank, secured by personal guarantees. Upon default, the bank approached the Debt Recovery Tribunal, Mumbai, which issued a recovery certificate for ₹14.74 crores a

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