# In the matter of BSR Super Speciality Hospitals Ltd.

> NCLT judgment dated 2023-11-29. Citation: TCN-2023-NCLT-00520. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 29 Nov 2023
- **Citation:** TCN-2023-NCLT-00520
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bsr-super-speciality-hospitals-ltd-0b6398a5

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against BSR Super Speciality Hospitals Ltd. The petitioner, Ghanshyam Das Rungta Foundation, claimed that the corporate debtor defaulted on its financial obligations arising from a Memorandum of Understanding (MoU) dated 09.01.2018. According to the MoU, the corporate debtor agreed to transfer ownership of its assets, including land and hospital buildings, to the petitioner for a consideration of Rs. 96 crores. The petitioner paid an advance of Rs. 15 crores towards this acquisition. However, the petitioner failed to make the balance payment, leading the corporate debtor to revoke the MoU and forfeit the advance

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## Facts

On 09.01.2018, Ghanshyam Das Rungta Foundation (Petitioner) and BSR Super Speciality Hospitals Ltd. (Corporate Debtor) entered into a Memorandum of Understanding (MoU) for the transfer of the Corporate Debtor's assets, including land and hospital buildings, for Rs. 96 crores. The Petitioner paid Rs. 1.5 crores as an initial advance and a post-dated cheque of Rs. 2.5 crores towards a One-Time Settlement (OTS) proposal for the Corporate Debtor. By 09.05.2018, the Petitioner had paid a total of Rs. 15 crores into the Corporate Debtor's account. The Petitioner sought financial assistance from SREI Infrastructure Finance Limited, which initially agreed but later stopped disbursing funds in November 2018. The Petitioner then approached Edelweiss Asset Reconstruction, which

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## Issues and analysis

### Issue 1: Whether the advance amount paid by the petitioner under the Memorandum of Understanding (MoU) …

**Ratio:** The ratio is that for an advance amount to be considered a financial debt, there must be

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**Reasoning:** The court reasoned that the MoU was conditional upon the petitioner making timely

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**Interpretation:** The interpretation of Section 5(8) of the IBC is that a financial debt must

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**Application:** In this case, the advance amount was paid as part of a conditional MoU for the

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## Parties

- **Judges:** P. Moha…; KAUSHALENDRA…
- **Appellants:** Ghanshyam Das…
- **Respondents:** BSR Super…

## Timeline

- **2018-01-09 — MoU Exec…**: Memorandum of Understanding (MoU) was entered by and between the Petitioner/Financial and…
- **2018-05-09 — Payment by Pe…**: Petitioner paid a sum of Rs.15,00,00,000/- till 09.05.2018 into account of the corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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