The decision will have far reaching ramifications as it would expedite the loan recovery process.
HDFC Bank has challenged the Bombay High Court judgement in a debt recovery case in which it was held that an insolvency notice cannot be issued on the basis of a recovery certificate issued by a Debt Recovery Tribunal.
The case relates to recovery of Rs 29 crore (Rs 290 million) from Kishore K Mehta of Lilavati Hospital in Mumbai.
The insolvency proceedings against individual defaulters are similar to winding up procedures against companies. In both the cases, the court-appointed receivers take charge of the assets and auction the same to recover dues.
The apex court bench headed by Justice S H Kapadia has issued notice to Mehta and had earlier stayed the High Court ruling which dismissed the HDFC Bank's appeal.