# In the matter of Indus Biotech Private Limited IA No.3597-2019
in CP (IB) No.3077-2019

> NCLT judgment dated 2020-06-09. Citation: TCN-2020-NCLT-01211. Kotak India Venture Fund-I filed a Company Petition under Section 7 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 9 Jun 2020
- **Citation:** TCN-2020-NCLT-01211
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/indus-biotech-private-limited-ia-no3597-2019-in-cp-ib-no3077-2019-3964d03c

## Summary

### Background

Kotak India Venture Fund-I filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Indus Biotech Private Limited, alleging failure to redeem Optionally Convertible Redeemable Preference Shares (OCRPS) as per the Share Subscription and Shareholders Agreement (SSSA) dated 20.07.2007. Indus Biotech filed an Interlocutory Application (IA No.3597/2019) seeking referral of the dispute to arbitration based on an arbitration clause in the SSSA. The dispute arose from disagreements over the calculation and conversion formula for the preference shares into equity shares during a proposed Qualified Initial Public Offering (QIPO). Kotak Group entities sought a higher percentage

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## Facts

In 2007-08, Kotak Private Equity Group showed interest in subscribing to the share capital of Indus Biotech Private Limited. The Kotak Group consisted of Kotak India Venture Fund-I, Kotak India Venture (Offshore) Fund, Kotak Mahindra Investments Limited (later transferred to Kotak Securities Limited), and Kotak Employees Investment Trust. Indus Biotech entered into separate Share Subscription & Shareholders Agreements (SSSAs) with each of the four Kotak Group entities. The terms and conditions of the four SSSAs were materially identical. The Kotak Group subscribed to a share capital of ₹27,00,00,000/-, including equity and preference share capital. The Petitioner subscribed to equity shares and Optionally Convertible Redeemable Preference Shares (OCRPS) issued by

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## Issues and analysis

### Issue 1: Whether the dispute regarding the redemption of Optionally Convertible Redeemable Preference Shares …

**Ratio:** The principle of 'generalia specialibus non derogant' dictates that a special law

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**Reasoning:** The NCLT reasoned that the core of the dispute centered on the valuation of shares, the

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**Interpretation:** The interpretation of Section 8 of the Arbitration & Conciliation Act,

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**Application:** In this case, the NCLT applied the ratio by determining that the dispute

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## Parties

- **Judges:** Rajasekh…; Ravikumar…; +1 more
- **Respondents:** Indus Biotech…; Kotak India…

## Timeline

- **1996-01-01 — Arbitration &…**: Application under section 8 of the…
- **2007-07-20 — Share Subscription and Shareholders Agreement…**: SSSA dated 20.07.2007 between Indus…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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