Mr. Jain, Section 9(2) uses the words 'decree or order'. The Code of Civil Procedure defines 'decree' as a formal expression of adjudication by a court. The DRT is not a court. How can its recovery certificate be called a decree?

My Lord, the Insolvency Act does not define 'decree' or 'order'. It does not restrict the term to decrees of civil courts. The legislature deliberately omitted the phrase 'of any court' from Section 9(2), whereas Section 9(1)(e) and (h) use that phrase. This indicates a conscious decision to give a wider meaning to 'decree or order' in Section 9(2). The DRT is a statutory tribunal with all the trappings of a court. It has the power to summon witnesses, enforce attendance, examine on oath, and compel production of documents. Its orders are binding and enforceable. The recovery certificate is the functional equivalent of a civil court decree. Moreover, the 2016 amendment to Section 19(22A) of the RDB Act deems a recovery certificate to be a decree or order, which is a clear legislative recognition of this equivalence. We submit that even before the amendment, a recovery certificate was a decree or order for the purposes of Section 9(2).

But the High Court relied on Paramjeet Singh Patheja, where this Court held that an arbitral award is not a decree or order. How is a DRT recovery certificate different from an arbitral award?

My Lord, the distinction is crucial. An arbitrator is a private adjudicator chosen by the parties. An arbitral award is not a decree of a court. The DRT, on the other hand, is a statutory tribunal established by Parliament to exercise judicial power. It is a substitute for the civil court for recovery of debts due to banks. Its recovery certificate is issued after a full adjudication, akin to a civil court decree. Paramjeet Singh Patheja was concerned with an arbitral award, not a statutory tribunal's order. The Court in that case also noted that the Insolvency Act must be strictly construed. Strict construction does not mean that it should be construed in a manner that defeats its purpose. The DRT is part of the judicial system, and its orders must be treated as orders of a court for the limited purpose of Section 9(2).

What about the 2016 amendment? It deems a recovery certificate to be a decree for insolvency proceedings. Does that apply to the present case? The certificate here was issued in 2004.

My Lord, the amendment is clarificatory in nature. It does not create a new right; it merely declares what the law always was. The fact that Parliament found it necessary to insert this provision for abundant caution does not mean that the position was different earlier. In any event, even if the amendment is considered prospective, the Court can still hold that a recovery certificate was always a decree or order under Section 9(2) because the DRT exercises judicial power. The amendment should be read as a legislative affirmation of the existing position. However, if the Court is of the view that the amendment is prospective, then in this case, it may not apply. We submit that the amendment is clarificatory and should be applied retrospectively, or at least the Court should declare the law as it always was.

The respondent also says that the notice itself was quashed, so the proceedings did not fructify. Even if the 2016 amendment applies, it refers to 'initiation of insolvency proceedings'. The notice was quashed, so the proceedings were never initiated. How do you get around that?

My Lord, the notice was quashed by the High Court on the basis of the Paramjeet Singh Patheja decision. If this Court holds that a recovery certificate is a decree or order, then the notice was validly issued, and the High Court's order quashing it was erroneous. The question of whether the proceedings were 'initiated' would then be moot. The stage of initiation is not a separate requirement; it is the issuance of the notice itself that constitutes the initiation of the proceedings. If the notice was valid, the proceedings were validly initiated. We submit that the High Court's order should be set aside, and the notice should be restored.

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Recovery Certificate Is a Decree or Order — (2026) INSC 688

A recovery certificate issued by the DRT under the RDB Act, 1993 is a statutory order that is equivalent to a decree, and Parliament's deliberate omission of the phrase 'of any court' in Section 9(2)…

H.D.F.C. Bank Limited v. Kishore K. Mehta (Dead) Through L.Rs. — (2026) INSC 688

Core Argument

Key Precedents

Paramjeet Singh Patheja v. ICDS Ltd. (2006) 13 SCC 322 — The appellant argues this case is distinguishable as it dealt with an arbitral award, not a statutory tribunal's order.
Sundaram Finance Ltd. v. Ashok D. Soniminde — This Court doubted Paramjeet Singh Patheja, indicating that the issue is not settled.

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