In Re: M/s. Smile Care Multispecialty Hospitals India Private Limited (Liquidation)

The NCLT, Hyderabad vide order dated 17.12.2019 admitted the Petition i.e. TCP (B) No. 54/7/AMR/2019 in CP(IB)No.370/7/HDB/2018 under Section 7 of the Insolvency Bankruptcy Code, 2016 initiating Corporate Insolvency Resolution Process (CIRP) of M/s. Smile Care Multispecialty Hospitals India Private Limited and appointed Mr. Rachamallu Ramachandra Reddy, as the Interim Resolution Professional (IRP) and take charge of the Corporate Debtor and necessary steps in furtherance of CIRP. First meeting of the CoC was conducted on 20.01.2020 and that the Applicant/IRP was appointed as Resolution Professional.

That the Applicant submitted that, he communicated the Directors of the Corporate Debtor Dr.Y.Sivanagendra Reddy & Dr.Annapareddy Aparna and requested them to handover the assets, accounting records and management of affairs of the Corporate Debtor, but they are not handed over the all assets i.e., CT Scanner, Toshiba Color Doppler, Fully Automatic Analyser, etc., which are worth of Rs.3 Crores were missing, erstwhile Director is saying missing items were sent for repairs and he is unable to show any evidence for the same and they are not cooperated to the Applicant and there is a vide difference in assets reported in Balance Sheet when compared to the Physical Stock available like inventories and trade receivable, etc., and valuers also reported the same and this would decrease the value of asset and it is difficult to get good proposal.

That the Applicant submitted that, the Corporate Debtor wanted to settle the matter under OTS Scheme and submitted proposal to members of CoC i.e., Canara Bank (40% Voting) and Reliance Commercial Finance Ltd (60% voting) and as per directions of the Hon'ble Tribunal the Applicant advised CoC members to discuss the matter and settle with Corporate Debtor, but it could not be settled through OTS and further he conducted CoC on 11.09.2020 and discussed the issues with CoC Members and requested them to decide on course of action either for extension of CIRP or Liquidation and conducted e-voting. In E-voting result is (40% for CIRP Extension and 60% for Liquidation) failed to fulfil the mandatory of 66% voting.

That the Applicant submitted that, he is unable to decide the right course of action and conducted CoC on 15.12.2020 for issuance of fresh Form G for fresh proposals, accepted by the Financial Creditors and issued a fresh Form G on 20.12.2020. Further, the Applicant filed an application before the Adjudicating Authority for extension of 90 days and the same was allowed by the Adjudicating Authority vide order dated 11.01.2021 and the last date of CIRP got extended upto 19.02.2021. In the meanwhile, he noticed that there is change in ratio of voting rights of Financial Creditors i.e., Reliance Commercial Finance Ltd (66.91 % Voting) and Canara Bank (33.09% Voting).

That the Applicant further submitted that, he conducted 7th CoC on 27.01.2021 for liquidation as there were no plans received and no chance of receiving plans. Therefore, the Applicant opened e-voting window on 28.01.2021 at 4 PM to 05.02.2021 (as per request of Canara Bank), in which Reliance Commercial Finance Ltd, participated and voted in favour of Liquidation and Canara Bank not participated in voting but sent their consent mail for liquidation.

Hence the Applicant came up with this application and given his written consent and prayed to appoint him as Liquidator.

The Corporate Debtor i.e. M/s Smile Care Multispecialty Hospitals India Private Limited, Mr. Rachamallu Ramachandra Reddy is appointed as the Liquidator.

He shall issue public announcement stating that Corporate Debtor is in Liquidation.

The Moratorium declared under Section 14 of the IBC 2016 shall cease to operate here from.

Subject to section 52 of the IBC 2016 no suit or other legal proceedings shall be instituted by or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

All powers of the Board of Directors, Key Managerial Personnel and partners of the Corporate Debtor shall cease to have effect and shall be vested in the Liquidator.

The liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code, read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016.

Personnel connected with the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as will be required for managing its affairs.

The Liquidator shall be entitled to such fees as may be specified by the Board in terms of Section 34 (8) of the Code.

This Order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the Liquidation process by the Liquidator.

Copy of the Order shall be furnished to the IBBI, to the Regional Director (South Eastern Region), Ministry of Corporate Affairs; Registrar of Companies & Official Liquidator, Andhra Pradesh, the Registered Office of the Corporate Debtor; and the Liquidator.