# In the matter of Orchid Pharma Limited MA-87-IB-2018 In CP-540-IB-2017

> NCLT judgment dated 2019-02-06. Citation: TCN-2019-NCLT-04980. The Resolution Professional (RP) filed an MA against Hospira Healthcare India Private Limited…

- **Court:** NCLT
- **Order date:** 6 Feb 2019
- **Citation:** TCN-2019-NCLT-04980
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/orchid-pharma-limited-ma-87-ib-2018-in-cp-540-ib-2017-094dfe7b

## Summary

### Background

The Resolution Professional (RP) filed an MA against Hospira Healthcare India Private Limited (Hospira), Kailasam Raghavendra Rao (Managing Director), and Orchid Health Care Limited, alleging undervalued transactions defrauding creditors under Sections 45, 49, and 66 of the Insolvency and Bankruptcy Code (IBC). The RP's application was triggered by observations made by a forensic auditor regarding discrepancies in the holdback money related to a Business Transaction Agreement (BTA) between Hospira and Orchid Pharma Limited. The BTA, dated August 29, 2012, involved Hospira acquiring one of Orchid's corporate debtor units. A portion of the consideration was retained as hold-back money to meet contingencies. The RP alleged that Hospira did not furnish details regarding

…

## Facts

Orchid Pharma Limited was undergoing Corporate Insolvency Resolution Process (CIRP). Hospira acquired one of the corporate debtor units at Aurangabad and Sholinganallur, in that transaction pursuant to a Business Transaction Agreement (BTA) dated 29th August, 2012 for a consideration of USD 202,500,000 (in ₹1350crores), ₹105Crores has been retained as hold-back money to meet the contingencies as stated in the BTA raised during the enforcement of agreement between Hospira and the Corporate Debtor. The Resolution Professional (RP) filed an application alleging that Hospira did not furnish details regarding the disbursement of ₹79.15 crores of the holdback amount, which was shown as written off in the books of the corporate debtor. The RP claimed that the transaction

…

## Issues and analysis

### Issue 1: Whether the Transaction constitutes undervalued transaction defrauding creditors violating Section …

**Ratio:** Section 45 of the IBC deals with undervalued transactions, and Section 49 deals with

…

**Reasoning:** The NCLT observed that the transaction took place in 2012, and payments to third parties

…

**Interpretation:** The sections require a clear intention to defraud creditors, which must be

…

**Application:** In this case, the NCLT found that the RP had not presented sufficient evidence

…

## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** The Resolution…
- **Respondents:** Orchid Pharma…; M/s. Hospira…

## Timeline

- **2012-08-29 — Business Transaction…**: Hospira and Orchid Pharma Limited entered into a Business Transaction Agreement (BTA) for…
- **2014-07-03 — SICOM NO…**: SICOM issued a no-objection certificate to Orchid for the sale of assets to Hospira,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 45 — Avoidance of undervalued transactions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-45)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/orchid-pharma-limited-ma-87-ib-2018-in-cp-540-ib-2017-094dfe7b