# In the matter of Medirad Tech India Limited

> NCLT judgment dated 2023-08-09. Citation: TCN-2023-NCLT-02123. The case involves an application (IA No. 2750/ND/2022) filed by Hemalata Hospitals Limited…

- **Court:** NCLT
- **Order date:** 9 Aug 2023
- **Citation:** TCN-2023-NCLT-02123
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/medirad-tech-india-limited-4eb05ab8

## Summary

### Background

The case involves an application (IA No. 2750/ND/2022) filed by Hemalata Hospitals Limited (HHL) under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 11 of NCLT Rules, 2016, seeking to set aside the termination of a Service Agreement dated 01.09.2006, a Lease Agreement dated 31.12.2013, and a Supplementary Agreement dated 01.01.2014. These agreements were terminated by the Resolution Professional (RP) of Medirad Tech India Limited, the Corporate Debtor. The underlying Company Petition (IB)-1243/ND/2018 was filed by India SME Asset Reconstruction Company Limited against Medirad Tech India Limited under Section 7 of IBC, 2016, which was admitted on 08.12.2021, initiating the Corporate Insolvency Resolution Process (CIRP). HHL claims the

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## Facts

The Corporate Debtor, Medirad Tech India Limited, is the absolute owner of Hemalata Hospitals & Research Centre. A Service Agreement dated 01.09.2006 was entered into between the Corporate Debtor and Hemalata Hospitals Limited (HHL), where HHL would manage the hospital. A Lease Agreement dated 31.12.2013 was also entered into, leasing the hospital to HHL for an annual rental of Rs. 9,00,000. A Supplementary Agreement dated 01.01.2014 amended the Lease Agreement. India SME Asset Reconstruction Company Limited initiated CIRP against Medirad Tech India Limited under Section 7 of IBC, which was admitted on 08.12.2021. The Resolution Professional (RP) terminated the Service Agreement, Lease Agreement, and Supplementary Agreement on 30.05.2022, citing hindrances to the

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) acted legally in terminating the Service Agreement dated …

**Ratio:** The legal principle applied is that related party transactions cannot be undertaken or

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**Reasoning:** The court reasoned that the CoC, instead of approving the continuation of the related

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**Interpretation:** The interpretation is that the RP's actions are valid if the CoC consents to

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**Application:** In this specific case, the CoC consented to the termination of the agreements.

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## Parties

- **Judges:** SH. BACHU VENKAT…; SH. L. N.…
- **Appellants:** Hemalata Hospitals…
- **Respondents:** Medirad Tech…; Sh. Siba Kumar…

## Timeline

- **2006-09-01 — Service Agr…**: Service Agreement entered into between the Corporate Debtor and Hemalata Hospitals…
- **2013-12-31 — Lease Agr…**: Lease Agreement entered into between the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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