Heard finally by consent of the parties.

2. The Petitioners (original-Respondent Nos. 1, 4 and 5) have challenged award dated 13 July 2011 passed by the sole Arbitrator (Respondent No.4), under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act) and Section 84 of the Multi-States Co-operative Societies Act, 2002 (for short, MSCS Act).

3. The operative part of the impugned award is as under:-

“AWARD

1) I, Suresh B. Pawar, Arbitrator, under Section 84 of the Multi State Co-operative Societies Act, 2002 do hereby declare that the Applicant Bank is entitled to recover from the Opponents, jointly and severally a sum of Rs.15,80,25,186.54 with interest thereon @ 12.50% p.a. from 01.08.2010 till realization of claim. Hence, all Opponents do pay jointly and severally to the Disputant Bank Rs.15,80,25,186.54 with costs of Rs.25,000/-and interest thereon @ 12.50% p.a. from 01.08.2010 till realization of claim.

2) The applicant Bank is entitled to dispose of the mortgaged as well as hypothecated securities of all Opponents to recover the dues.

3) Amount if any, paid by the Opponents or recovered by the Applicant Bank by any means after filing of this arbitral proceedings, be appropriated towards this claim.”

4. On 19 September 2007, the Board of Directors of Original Applicant Bank accepted the membership of (original Respondent Nos. 1 to 5) now, Petitioner Nos. 1 to 3 and Respondent Nos. 2 and 3. On 8 October 2007, Petitioner No.1 applied for loan of Rs.9.00 crores for setting up of hotel project and Respondent Nos. 2 and 3 and Petitioner Nos. 2 and 3, stood as guarantors. Out of Rs.9.00 crores, Rs.7.10 crores were sanctioned as Long Term Loan and Rs.1.90 crores sanctioned as hypothecation loan. On 7 November 2007, Petitioner Nos. 1 to 3 and Respondent Nos. 2 and 3, executed the loan documents agreeing to repay the loan as per the terms and conditions mentioned in the sanction letter. Petitioner No.1 also submitted the resolution of the Board of Directors accepting the terms and conditions of the loan and authorizing Respondent No.3 and Petitioner No.2, to execute all the documents on behalf of Respondent No.1 as per sanction letter.

On 6 May 2008, Petitioner No.1 applied for additional term loan of Rs.80.00 lakhs for purchase of shop No.18, 18A and 18B at Mahesh Residency Kandivli (West), Mumbai 67. On 29 May 2008, the Applicant sanctioned the additional loan of Rs.80.00 lakhs against the mortgage of shop No.18, 18A and 18B at Mahesh Residency Kandivli (West). On 31 May 2008, Petitioner Nos. 1 to 3 and Respondent Nos. 2 and 3, executed all the loan documents as required as per sanction letter. On 29 January 2009, Petitioner No.1 again applied for additional Term Loan of Rs.4.00 crores and O.D. Facility of Rs.25.00 lakh for meeting escalation of cost of hotel project and for setting up of ice-cream parlor. On 28 February 2009, the Board of Directors of the original Applicant sanctioned additional term loan of Rs.4.00 crores and O.D. facility of Rs.25.00 lakhs.

The hotel and related projects proceeded in part, but could not continue successfully for long.

5. On 8 December 2009, Petitioner No.1 invited offers by paper advertisement for sale of hotel, but could not be sold. On 6 August 2010, Respondent No.1 Bank issued recall notice under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, SARFAESI, Act). On 18 August 2010, by reply letter Petitioner No.1 admitted the liability and sought time for repayment.

6. On 26 August 2010, statement of claim filed before the learned Arbitrator under Section 84 of the MSCS Act. On 26 August 2010 the order of attachment before judgment was passed. On 14 December 2010, the Receiver came to be appointed by consent of the parties. On 15 January 2011, letter by Petitioner No.1 proposing to sell hotel to repay loan and appreciating the co-operation extended by Respondent No.1. On 28 April 201