The case relates to recovery of Rs 29 crore 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 Banks appeal.
Seeking permission to initiate insolvency proceedings against defaulters, HDFC Bank said Beautiful Diamonds (now known as Splendour Gems) had availed credit facilities running into crores of rupee from a consortium of 15 banks and financial institutions, including HDFC, SBI, UTI Bank, IDBI Bank and others.
Mehta and other directors had executed personal guarantee besides equitable mortage by deposit of title deeds.
As guarantors failed to make the payment, the bank had moved DRT against the company and its guarantors claiming recovery certificate for more than Rs 14.75 crore with further interest at the rate of 16 percent per annum from the filing of the application till realisation, the petition said. However, Mehta had moved the high court seeking setting aside of the insolvency notice issued against him by DRT on the ground that the Indian Solvency Act did not permit it.