Point of Law : Once upon receipt of amount by appellant in terms of NOC title deeds of property of respondent no.9 have been released the mortgage does not subsist anymore.

JUDGMENT :

1. Present appeal has been preferred under the provisions of Section 37(2) (b) of the Arbitration and Conciliation Act, 1996 against the interim order dated 28.12.2021 passed by the learned Arbitrator.

2. Appellant, M/s Indiabulls Housing Finance Limited is a Public Limited Company incorporated under the Companies Act, 1956 and is engaged primarily into the leading business especially home loan, loan against property, etc. Respondent no.9-Zee Entertainment Enterprise Limited is a company incorporated under the Companies Act, 1956 and is an Indian mass media company owned by Essel Group (respondent no.2) and it has interests in television, print, internet, film, mobile content and allied businesses.

3. Present appeal is directed against the interim order dated 28.12.2021 passed by the learned Arbitrator vide which application filed by the appellant (claimant therein) under the provisions of Section 17 of the Arbitration and Conciliation Act, 1996 praying to restrain respondent no.9 from going ahead with its Scheme of Arrangement with Sony Pictures Networks India Pvt. Ltd. and Bangla Entertainment Private Limited, was rejected.

4. The institution of the appeal rests upon four Agreements dated 13.12.2016 executed between appellant and respondent nos. 1, 3, 4 & 5 along with respondent no.2 (henceforth referred as Borrowing Respondents) as co-borrower in each of the agreement for the loan amount of Rs.726,00,00,000/-. The details of the loan amounts are as under :

5. For the repayment of the abovesaid loan amount, certain documents were entered into between the appellant and the respondents other than the Borrowing respondents which are as under :

a. Pledge agreement dated 14.12.2016 between appellant and respondent nos.10 to 17 wherein the said respondents pledged a part of their equity shares as security for the repayment of loan.

b. Deed of hypothecation dated 02.01.2017 between appellant and respondent nos.1, 3, 4, 5, 6, 7 and 8 in respect of the land admeasuring 71.98575 acres situated at villages Kherka Musalman, Nuna Majra & Sarai Aurangabad, Tehsil Bahadurgarh, District 38, Jhajjar, Haryana.

c. Deeds of Guarantee dated 09.01.2017 between appellant and respondent nos.6, 7 and 8 guaranteeing to be jointly, severally and co-extensively liable to pay the amount along with interest, default interest, costs, etc.

d. Declaration and acknowledgment agreements dated 18.08.2017 by respondent nos.1, 3, 4, 5, 6, 7 & 8 in favour of appellant wherein said respondents deposited the title documents of the mortgaged property situated at Jhajjar.

6. It is averred in the petition that in terms of Clause 2.2 of the Loan Agreement(s), it was obligatory upon the Borrowing Respondent(s) to create such security in favour of the appellant/lender to its satisfaction. However, in complete contradiction and defiance of the terms of the Loan Agreement(s) the Borrowing Respondents failed to maintain/create the adequate security.

7. At the hearing, Mr. Vineet Malhotra, learned counsel appearing on behalf of appellant submitted that in aforesaid circumstances, the appellant issued a ‘Notice for non-maintenance of the security cover Securities and payment of funds’ on 14.11.2018 to respondent nos.1 to 5 directing them to maintain/create adequate security in terms of Clause-4 of the Loan Agreement(s) and pay the default interest in terms thereof. Accordingly, respondent nos.1 to 5 were called upon to pay the appellant a sum of Rs.287,85,49,976/- or pledge additional shares to the sum of Rs.341,82,78,097/-. Appellant also issued a letter to the Borrowing respondents on 15.11.