f7bab07902f2a26f48d9ddf17790e42f

ORDER (Per: Bench)

(i)

To pass an order that the Liquidation Process of the Corporate Debtor M/s Smilecare Multi Speciality Hospitals India Private Limited has been closed as the Corporate Debtor is sold as a going concern to Dr. Malladhi Varahagiri Reddy in Liquidation as per Regulation 45 (3) (a) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the Liquidator be relieved from the liquidation process.

(ii)

To pass an order or direction that the board of directors of the Corporate Debtor should be reconstituted as per Companies Act, 2013 by inducting individuals recommended by the Successful Bidder/ Purchaser as Directors of the Corporate Debtor and direct the Registrar of Companies to do all such acts deeds and things that are necessary to appoint the individuals recommended by the Successful Bidder/ Purchaser, in order to enable the Company to file relevant returns required by applicable law.

(iii)

To pass an order or direction that the status of the Corporate Debtor in the RoC records as active from the status of Liquidation.

(iv)

To pass an order/s that all the existing shares (held by the erstwhile Promoter Group as well as other shareholders) of the Corporate Debtor shall be extinguished without any consideration, and the rights and liabilities arising out of the same shall also be extinguished.

(v)

To pass an order or direction that on and from the Date of Acquisition/ Sale Certificate Date, all the claims or demands made by, or liabilities or obligations owned or payable to any actual or potential creditors, Financial Creditors, Operational creditors, Workmen & Employees of the Corporate Debtor including the Government dues both Central, State and local authorities (including but not limited to liabilities, interest and penalties, duties, etc. on account of income-tax, tax deduction at source, tax collection at source, goods and services tax, custom duty, value added tax, services tax, wealth-tax, cess, DGFT dues, Property taxes, FEMA, RBI regulations/ guidelines etc.) whether direct or indirect, whether admitted or not, due or contingent, asserted or unasserted, crystallized or uncrystallized, known or unknown, secured or unsecured, disputed or undisputed in relation to any period prior to the Date of Acquisition will be written off in full and shall stand permanently extinguished.

(vi)

To pass an order or direction that all the cases pending/decreed against the Corporate Debtor by any court and/or Tribunal and/or any quasi-judicial authority will not be enforceable against the Successful Bidder/Purchaser or the Corporate Debtor.

(vii)

To pass an order or direction that the successful Bidder/Purchaser gets all rights, title and interest in the whole and every part of the Corporate Debtor with all the assets of the Corporate Debtor without any security interest, encumbrance, claim, counter claim, or any demur, into the Purchase.

(viii)

To pass an order or direction that all subsisting consents, licenses, approvals, rights, entitlements, benefits and privileges whether under law, contract, lease or license, granted in favour of the Corporate debtor or to which the Corporate Debtor is entitled or accustomed to, shall, notwithstanding any provision to the contrary in their terms, be deemed to continue without disruption for the benefit of the Corporate Debtor, and all additional licenses, registrations and consents to operate required by the Corporate Debtor should be made available immediately.

(ix)

To pass an order or direction that the Corporate Debtor shall have a right to review and terminate any contract that was entered into prior to the Liquidation Order date.

(x)

To pass an order or direction that the Successful Bidder/ Purchaser is having right over the receivables of the Corporate Debtor and right to recover any amount due to the Corporate Debtor from any third party including past buyers, any related parties of the Corporate Debtor as mentioned in the audited financial statements and there shall be no set off of any such amounts recoverable by the Corporate Debtor against any amount paid by the Corporate Debtor or any liability discharged, satisfied or extinguished pursuant to this sale.

(xi)

To pass an order or direction that the Corporate Debtor is entitled to brought forward losses, if any subject to the permission of the appropriate authority under the provisions of Income Tax Act, 1961.

i.

The Financial Creditor i.e., M/s. Reliance Commercial Finance Limited filed application under Section 7 of the Code for initiation of the Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor, which was admitted vide order dated 17.12.2019 in TCP (IB)/54/7/AMR/2019 and appointed Mr. Rachamallu Ramachandra Reddy as Interim Resolution Applicant (“IRP”) of the Corporate Debtor and he was appointed as Resolution Professional (“RP”) in the 1st CoC meeting held on 20.01.2020.

ii.

That in the said Company Petition the RP, Mr. Rachamallu Ramachandra Reddy filed an IA No.18/2021 under Section 33 of the Insolvency and Bankruptcy Code, 2016 for seeking liquidation of the Corporate Debtor viz. M/s. Smilecare Multi Speciality Hospitals India Pvt Ltd., and vide order dated 10.05.2021 an order of Liquidation of the Corporate Debtor was passed, wherein the Applicant was confirmed to act as “Liquidator”.

iii.

As a consequence, the Applicant was made a public announcement, calling the stakeholders to submit their claims as on the liquidation commencement date, whereby claims were received and the same has been verified by the Applicant. Further, the Applicant has prepared and submitted the list of Stakeholders as per Regulation 31 of the IBBI (Liquidation Process) Regulations and Stakeholders’ Consultation Committee (SCC) was constituted as per Regulation 31A of the Liquidation Process Regulations, 2016.

iv.

That the Applicant in compliance with the Regulation 13, 34 and 15 of Liquidation Process Regulations, prepared the Preliminary Report and Asset Memorandum and Progress Reports at the end of every quarter as per the timelines stipulated therein has submitted to this Tribunal.

v.

That the secured financial creditor (Reliance Commercial Finance Limited) and Canara Bank has relinquished its security interest in favour of the Applicant.

vi.

That the Applicant filed an application i.e., IA(IBC)/94/2023 in the captioned CP, U/s 35 (n) of the IBC r/w Regulation 44 (2) & 47A of IBBI (Liquidation Process) Regulations, 2016 for exclusion of lockdown period in computing the Liquidation period U/r 47A and for extension of Liquidation period u/r 44 (2) of IBBI Liquidation Process Regulations, 2016 and the same has allowed by this Tribunal vide order dated 27.03.2023.

vii.

Further, the Applicant has conducted Stakeholders Consultation Committee meetings i.e., 1^st SCC meeting on 17.08.2021, 2^nd SCC meeting on 30.10.2021, 3^rd SCC meeting on 13.12.2021, 4^th SCC meeting on 06.01.2022 & 5^th SCC meeting on 22.03.2022. As advised by the SCC, the Applicant has issued the following Sale Notices:

Date of Sale Notice	Date of Auction	Asset put for sale	Reserve Price Rs. In Lakhs	Result
06.11.2021	06.12.2021	Company as a going concern	222.16	Failed auction
14.12.2021	30.12.2021	Company as a going concern	166.62	Failed auction
13.01.2022	27.01.2022	Company as a going concern	150.00	Successful

viii.

That in the 4^th SCC meeting dated 06.01.2022, it was resolved to issue third sale notice with Revision in Reserve Price for sale of assets of Corporate Debtor as a going concern and the same was published on 13.01.2022 in “Prajashakti” Telugu Newspaper Visakhapatnam Edition and “Financial Express” English News Paper Hyderabad edition with a Reserve Price of for an amount of Rs.1,50,00,000/- (Rupees One crore fifty lakhs only) with an EMD amount of Rs.15,00,000/- (Rupees Fifteen Lakhs) for inviting Expression of Interest from the Prospective Bidders and the last date for submission of Bids and EMD was 22.01.2022 and E-Auction Dated 27.01.2022 and E-Auction Process information document uploaded with IBBI website and in “bankauctions.in” website. In response to the said sale notices issued, the Applicant has received one bid from Dr. Maldi Varahagiri Reddy. He has participated in e-auction dated 27.01.2022 at 11.30 PM to 12 Noon and made bid of an amount of Rs.1,50,22,718/- for the Corporate Debtor to purchase Corporate Debtor as a going concern and he has declared as Successful Bidder and issued Letter of Intent (LOI) dated 27.01.2022 and the Successful Bidder has paid the following amounts:

Particulars	Amount in Rs,	Date of Receipt
EMD amount	Rs. 15,00,000/-	22.01.2022
25% of total bid amount	Rs. 22,50,000/-	28.01.2022
Balance amount	Rs. 96,00,000/-	09.03.2022
Balance amount along with interest for 7 days	Rs. 16,50,000/- Rs. 22,718/-	10.03.2022
Total	Rs. 1,50,22,718

Further, on 10.03.2022, the Liquidator has issued Sale certificate and handed over the management of Corporate Debtor to the successful bidder.

ix.

That the Applicant distributed the total realized amount to the Stakeholders in the order of priority as per Section 53 of the Code, the distribution is mentioned herein below for reference and convenience;

“Regulation 45: Final report prior to dissolution.

(3)

The liquidator shall submit an application along with the final report and the compliance certificate in Form H to the Adjudicating Authority for-

(a)

Closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern; or

(b)

for the dissolution of the corporate debtor, in cases not covered under clause (a)”.

“Since the decision to sell the Corporate Debtor as a going concern is taken by the Liquidator in consultation with the creditors/stakeholders and the proceeds from the sale of assets are going to be utilized for distribution to the creditors in the manner specified under Section 53 of the Code, all the creditors of the Corporate Debtor get discharged and assets are transferred free of any encumbrances. We are of the considered view that it is a fit case to grant certain reliefs in favour of the purchaser.”

'4. We are of the view that the Adjudicating Authority is empowered to consider any application filed by the Liquidator or Successful Auction Purchaser, which may arise with regard to terms and conditions of the auction sale or sale as a going concern as per the Liquidation Regulation. We, thus, are of the view that ends of justice be served in giving liberty to the Appellant to file an appropriate application before Adjudicating Authority, which may arisen from the terms and conditions of the auction sale or sale as a going concern, which may be considered by Adjudicating Authority. The Appeal is disposed of liberty aforesaid."

ORDER