# In the matter of Indus Biotech Private Limited Vs. Kotak India Venture (Offshore) Fund

> SC judgment dated 2021-03-26. Citation: TCN-2021-SC-00059. The case involves a dispute between Indus Biotech Private Limited (the petitioner) and Kotak India…

- **Court:** SC
- **Order date:** 26 Mar 2021
- **Citation:** TCN-2021-SC-00059
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/indus-biotech-private-limited-vs-kotak-india-venture-555e52ca

## Summary

### Background

The case involves a dispute between Indus Biotech Private Limited (the petitioner) and Kotak India Venture (Offshore) Fund (the respondent) and others, concerning the conversion of Optionally Convertible Redeemable Preference Shares (OCRPS) into equity shares. The dispute arose when Indus Biotech decided to make a Qualified Initial Public Offering (QIPO), but SEBI regulations prevented companies with outstanding convertible securities from doing so. The respondents, who had subscribed to OCRPS in Indus Biotech, sought to convert their shares, leading to a disagreement over the calculation and conversion formula. The respondents claimed entitlement to 30% of the total paid-up share capital, while Indus Biotech contended they were entitled to only 10%. Kotak India

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## Facts

Indus Biotech Private Limited decided to make a Qualified Initial Public Offering (QIPO). Kotak India Venture (Offshore) Fund and others had subscribed to Optionally Convertible Redeemable Preference Shares (OCRPS) in Indus Biotech. SEBI regulations prevented companies with outstanding convertible securities from making a QIPO. A dispute arose between Indus Biotech and the respondents regarding the calculation and conversion formula for the OCRPS into equity shares. The respondents claimed entitlement to 30% of the total paid-up share capital, while Indus Biotech contended they were entitled to only 10%. Kotak India Venture initiated Corporate Insolvency Resolution Process (CIRP) against Indus Biotech under Section 7 of the Insolvency and Bankruptcy Code (IBC) before

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## Issues and analysis

### Issue 1: Whether the dispute between Indus Biotech and Kotak India Venture is arbitrable, considering the …

**Ratio:** The Supreme Court relied on the principle that a dispute is non-arbitrable when a

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**Reasoning:** The Court reasoned that since the petition under Section 7 of the IBC had not yet been

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**Interpretation:** The Court interpreted the interplay between Section 7 of the IBC and Section 8

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**Application:** The Court applied the principle to the facts of the case, noting that the NCLT

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## Parties

- **Judges:** S. A. B…; A.S. BO…; +1 more
- **Respondents:** Indus Biotech…; Kotak India…

## Timeline

- **2007-07-20 — Share Subscription and…**: Execution of Share Subscription and…
- **2007-07-12 — Share Subscription and…**: Execution of Share Subscription and…

## 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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