ARBAPPL/75/2025 of Mr. Ajay Jain Vs Banka Bioloo Limited on 10 July 2026

ORDER:

The instant Arbitration Application has been filed by the applicant under Section 1l (4) (5) & (6) of the Arbitration and Conciliation Act' 1996 (forshortthe'Act')seekingforappointmentofanArbitratortoadjudicate upon the disputes that have arisen between the applicants and the respondents pursuant to the share Swap Agreement dated 25 '03 '2022'

2. Heard Ms.M.Supraja, leamed counsel representing Mr'K'Prithvi Reddy' learned counsel for the applicants; and Ms Havilah Spurthi' leamed counsel appearing on behalf of Mr.Raja Shekar Rao Salvaji' leamed counsel for the respondents. \

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3. Ms.Havilah Spurthi. learned counsel appearing on behalf of Mr.Raja Shekar Rao Salraji. learned counsel for the respondents, submitted that respondents hare approached and engaged them as counsel. However, they have no1 come forwarded and given Vakalat. Ilence, they withdrew themselvcs fiom appearing this case. The Arbitration Application is pending consideration since 2025. l'hc respondents are dull' served. In view ol the same. this Court proceeded lunhcr to decide the application.

4. Thc brieltacts leading to filing of the instant case is that the applicants herein ucrc previousll- operating respondent No.2-Oompany. viz.. Ilnzotech Solution t'rivate I-imited. a Ciompany incorporated under the provisiotrs of the Companics Act. 1 956 on 26.04.2006, which is an lrngineeling, Procurement and Construction compan)' and which is engaged in the business of providing $,ater. se\vagc and e{Tluent treatment solutions through modem technologies and cquipmcnt. -fhe applicants herein together own 24,6'7.528 Equity Shares aggrcgating to 55.89% o1' the paid-up Share Capital of respondent No.2- Companl on firlll diluted hasis. Whereas. respontlent No.1-Company, viz.. Banka Bioloo l-imited. is a cornpany incorporated under the provisions of the Companies Act. 1956 on 31.08.2012. and which is engaged in the busincss of providing Water. Sanitation and H1'giene infrastructure, human waste management solutions and othcr scrr ices on turnkel basis.

5. On 25.03.2022, a Share Swap Agreement was got executed by respondent No.1 for commercial acquisition of respondent No 2-Company' Vide Clause 2 of the said Agreement, the applicants and other shareholders of respondent No.2-Company sold t00% of their equity shares in respondent No.2-Company for a total purchase consideration of Rs 4'33'23'6981' payable through allotment/swapping of 5,65.462 Equity Shares of respondent No'l - Company, which are equivalent to 5'5% of its pre-money fully paid-up equity share capital to Applicants herein and other shareholders'

6. It is the case of the applicants that despite fulfrlling all obligations tunder the agreement. including transferring equity shares and resigning as directors ol respondcnt No.2-Company, the respondent managements have failed to honour its terms. Further. respondent managements have not complied with Clause 8.3.1, which required it to remove the applicants names tom personal guarantces given to banks and financial institutions' nor have they pai<l the compensation outlirled in Clause 8'3'2 of the agreement' The disputes leading to arbitration arise from the respondents' thilure to pay a total sum of approximatety Rs.89,04,498/- under various heads' including Part C- Indebtedness to Seller Promoter No.l, outstanding salary dues to applicant No. I as former Managing Director of respondent No'2-company ln view of these disputes, on 03.05 2024, the applicants issued a noticc ttnder Section 21

\- Page 4 ol l0 of the Act. invoking arbitration clause and nominated an Arbitrator on their behall'to settle thc dispLrtes as required under Cause 11.2.2 of the agreement. Ho\ever. thc respondents. vide their reply dated 24.05.2024, relilsed the Arbitrator nonrir.ntccl by the applicants and did not nontinate an1'Arbitrator ou its behall-. lhercfore. the applioants filed the instant application seeking to nominatc Arbitlatol s haring preriously tried to invoke arbitration lacilitated under Clause i l .l ol the Agreemcnt.

7. lt is the case ol' the applicants that the) uere previousll operating respondent No.2 company i.c.. linzotech Solution Private [,imited incorporated under thc provisions ol the Companies Act. 1956 {fbr short "the Act"). on 26.04.2006. *hich is an Engineering. Procurement and Construction ("lrPC") compan\ engaged in thc'business of providing \\'ater. sewage antl efl'luent treatnrent solutions through rnodern technologies ancl equipmertt. The Applicants k)setlrer ouned 2J.(r7.528 equitl shares aggregating to -55.89% ol the paid-up Shar'.- ( apital of rcspondent No.2-company on firlly diluted basis- Fr-rrther Rcspondcnt No.I i.e. Banka Bioloo Limited. is a compan) incorporatcd under thc prorisions of the Act on 31.08.2012 and is currentll' engaged in the business ol providing Water. Sanitation and Hygiene infrastructure. hunran \\aste management solutions and sen,ices on turnker bas is.

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8. It is further case of tho applicants that on 25'03'2022, a Share Swap Agreement was executed for the commercial acquisition of respondent No'2 company by respondent No.l-company. Accordingty, vide Clause 2 of the agreement. the applicants and other share holders of respondent No 2- company sold 100% of their equiq shares in respondent No'2-companl' for a purchase consideration of Rs.4,3 3,23,698/-, payable through the allotment/swapping of 5.65.462 equity shares of respondent No l-company' which are equivalent to 5.5% ol its pre-money fully paid-up equity share capital to Applicants and other shareholders. g. It is further case of the applicants that despite having relinquished all control, ownership and management responsibilities in respondent No'2- company, the applicants are continuing to face severe hardship and harassment due to respondents cument management negligence, breach of agreement dated 25.03.2022 and inaction. It is submitted that in furtherancc to such terms of the agreement, respondent No.1 had successfully concluded the acquisition of respondent No.2 company which is now a wholly owned subsidiary of lcspondent No. I comPanY. I0. It is further case of the applicants that as per Clause 8'3'2 of the agreement. upon mutual discussion it was agreed that applicant No l would rl- work as Managing Dircctor of respondent No.2-company and would receive a monthll salary of Rs.2.50.000.i- alter said company got acquired by respondcnt No.1. Consequentll. applicant No. I continued workins for' respondcnt \o.3-companl' from 01.04.2022 to 31.03.2022 i.e. lor a period ol l2 months. IIo*erer. rcspondents fhiled to pav the agrecd salary and despite repeated lc(lLrests failecl to clear thc entire dues irrcluding other employment related er pen ses till drte I l. lt is lirrther case ol'the applicants that respondents have lurther violated Clause 8.i.1 of the asreeurent. b1 thiling to replace the applicants personal guarantces gi\,en to banks and financial institutiotrs on behalf of respondenl No.2 companl. l)espite trro lears and repeated requests. no steps have been takcn resLrlting in persistcnt harassment and threats lrom financial institutions. 11.. It is lirrther casc ol-the applicants that sel'eral obligations outlined in the agrcemenl <laLed 15.01.1022 remain unfulfllled ro date and disputes have arisen betriccn the parties more speciticalll for r,iolation of Clause I ofPart C under the hcading "Parl C.-lndebtedness to Sellcr Promoter No.1" of the Agreement rrhich imposcs an obligation on respondent No.1 to pay an alnount ol Rs.30.00.000 - to\\ards repa)'ment of loan to Seller Promoter No.l i.e. Applicant No. I herein. Irurthermore. Clause 3 ol'Part C of the agreement -- specifies a sum of Rs.20,00,000/- to be paid to Applicant No 1 along with unpaid salaries, other expenses, interest etc., However, none of the above mentioned payments have been made to the applicants' Further, respondent No.1 is yet to transfer more than one lakh shares to respondent No'1 company to the applicants.

13. It is further case of the applicanrs that even after fulfilling all the contractual obligations, the applicants were not paid the due amount as specified in 'Part C' of the agreement and the payments remain outstanding resulting breach of contracts. That the applicants on numerous occasions' both orally and vide a legal notice dated 0l .11-2023, demanded that the respondents fulfill the terms of the agreement dated 25.03.2022 and settle all due amounts. However, respondents in their reply notice dated 18'11 '2023 ' admitted and assured to replace the applicants personal guarantees granted to banks and financial institutions'

14. In view of the disputes atbresaid, the applicants issued a notice under Section 2l of the Act to the respondents on 03'05'2024 invoking arbitration as contemplated under Clause 11 of the agreement and nominated Prof Dr'K V'S' Sarma (Professor of Law at NALSAR University of Law' Hyderabad and former Vice Chancellor of MNLU Aurangabad) as their nominee Arbitrator or

!- as a Sole Arbitrator lbr adjudicating the disputes betwcen the parties and requcsted respondents to consent the nomination of applicants Arbitrator or nominate an Arbitrator on its behalf. Flowever, on 24.05.2024, respondents through their reply rcfused to accept the nomination of Arbitrator and also did not nominate anl Albitralor on its behalf either.

15. Dissatisfied. the applicants invoked Clause 11 of the Agreement dated 25.03.2022 referring to Clause I 1 .2.3. which provided for reference to Arbitration. Meanu hilc. to the surprise ol applicants, respondent No. 1 had proposed to sell shares of respondent No.2-Company vide Agenda Notice dated 16.07.2024. rr.hich raised serious concem about the respondent's intent to deliberatel) avoid repaymcnt of due amounts. Accordingly, the applicants got filed an Arbitration Application under Section 9 of the Arbitration and Conciliation Act. 1996 before the lll Additional Chief Judge, City Civil Courl, at Hl derabad r idc Arb.O.P.No.77 ol 2024 r,r,ith a prayer to grant injunction againsl rcspondents not to alienate. and also to sorutinize the shares of respondent-Companies until the a-rbitration proceedings are concluded. However. since both applicants and respondent-Company have agreed vide Clause I 1.2.2. of the Agreement dated 25.03.2022 to settle all the disputes arising out of the Agrccrnent b) way of arbitration and as per clause I t.2.3, the -- parties have also agreed the place of Arbitration as 'Hyderabad" they have approached this Court. by hting the instant Arbitration Application' I6. On 25.04.2025, notice uas ordered' and learned counsel appearing on behalf ol the respondents enterecl appearance and sought adjournrnent to flle fttlstlat in the matter 11 . Perused the record

18. flaving heard the contentions put forth on either side and also taking into the oonsideration the nature of dispute' there seems to be a clear dispute raised by either partl which needs to be decided by a learned Arbitrator by invoking Clausc I 1.2 2 of the Sn'ap Agreement dated 25'03 2022 entered into helrveen the applicants and respondents Therefore' this Court is of the considercd opinion that the instant arbitration application can be alloued by lcferling the matter to a sole arbitratot' Accordingll'. this Cou( appoints Mr' M' Rajender' retired District Judge, resident of Villa No'142' Keerthi Richmonrl Villa' Sun City' Hyderabad - 500 086, as the sole Arbitrator to resolve the dispute between t9 the partic's.

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20. Neecllcss to statc that both parties are at libert) to raise all clainrs and counter-clainrs hefirre the sole albitrator who in tum shall condur;t the albitration procecdings ir accordance rvilh prorisicrns of the Act. l'he rcnue of iLrbitration shall he tlccided mutualll' b1' the palties subject to consullation and agreenrcnt lf tht: learncd Arbitrator. The lec payable to the learned Arhitrator shall also bc decided nrutually' b)' the parties in oonsultation and agrcerrent $ ith the learncd Arbitrator 2I . The A r bitration Application stands allo*,ed as above. No costs As a scrlu.'1. rrisccllaneous petitions. pending il'any. shall starrtl closed. SD/. K.SRINIVASA RAO JOINT REGISTRAR //TRUE COPY// SECTION OFFICER

To, Sa/KA '1. Sri ltzl Rajender retired District Judge, resident of Villa No. '142, Richmond Villa, Sun City. Hyderabad - 500 086 (By Messenger)(Along with a Copy of affidavit and material papers)

2. One CC to Sri K Prithvi Reddy, Advocate [OPUC]

3. One CC to Sri Raja Shekar Rao Salvaji, Advocate [OPUC]

4. Two CD Copies Keerthi Special D G-

HIGH COURT DATED: 1010712026

ORDER

ARBAPPL.No.75 ol2O25 ALLOWING THE ARBITRATION APPLICATION WITHOUT COSTS --a 1Y1 t o , -.)) 2 0 tut 2026 ?.1 l't . I's. ... .t. \.r t:.' ..1t -,/ -.,;/

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