The court upheld the Arbitral Tribunal's authority to determine issues based on pleadings and material before it, and emphasized the importance of establishing claims through recognized channels such as stock exchanges.

JUDGMENT

Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition under Section 34 of the Arbitration & Conciliation Act, 1996 (hereafter the `A&C Act') impugning the Arbitral Award dated 18.12.2021 (hereafter the `impugned award') delivered by the Arbitral Tribunal comprising of a Sole Arbitrator.

2. In terms of the impugned award, the Arbitral Tribunal has awarded a sum of Rs.10,22,32,677.56/-, in favour of the respondent. The same includes the principal amount of Rs.5,85,13,784.07/-; interest at the rate of 15.5% per annum quantified at Rs.2,84,86,453.12/-; pendente lite interest at the rate of 5% per annum quantified at Rs.1,25,14,440.37/-; and costs including arbitral fee quantified at Rs.27,18,000/-.

3. The petitioner had availed certain financial facilities from the respondent in terms of two separate loan agreements (hereafter referred to as the `First Agreement' and `Second Agreement' respectively). In terms of the First Agreement dated 19.10.2012, the respondent had advanced a loan for a sum of Rs.15,00,00,000/- (Rupees Fifteen Cores) on interest at the rate of 14% per annum with a further stipulation of levy of penal interest at the rate of 2% in the event of default. In terms of the Second Agreement dated 28.01.2013, the respondent had granted an additional loan for a sum of Rs.15,00,00,000/- (Rupees Fifteen Crores) on interest at the rate of 14.5% per annum with a further stipulation of penal interest at the rate of 2% per annum in the event of default.

4. The loans advanced by the respondent in terms of the First Agreement and Second Agreement were, inter alia, secured by pledge of equity shares including unencumbered equity shares of the petitioner held by its Directors/Promoter Shareholders.

5. The petitioner claims that in addition, it had also mortgaged two plots of land located at Khandala, Maharashtra by depositing title deeds of the said properties with the respondent.

6. In respect of the First Agreement, several documents were executed, inter alia, to secure the facility extended by the respondent. The same included the Share Pledge Agreement dated 28.01.2013 between the respondent, the petitioner, Mr Shreyas Doshi, Ms Geeta Doshi, Mr Kirtilal Doshi, Ms Suman Doshi and Ms Anjali Pradeep Mehra for creating a pledge over the unencumbered shares of the petitioner company, in favour of the respondent. In addition, the said individuals also executed other Agreements such as Deed of Guarantee, Undertaking-cum-Indemnity and Declarations. The concerned persons also executed irrevocable Powers of Attorney to enable the respondent company to deal with the shares pledged. Similar documents were also executed in respect of the Second Agreement. The shares of other listed companies were also pledged to secure the loan advanced by the respondent to the petitioner. The loans granted were renewed in terms of the Letter of Renewal dated 15.01.2014. The term of the loan under the Second Agreement was extended for a further period with interest at the rate of 15.5% per annum with the stipulation of penal interest at the rate of 2% per annum in the event of default.

7. Undisputedly, in terms of the Agreements between the parties, the petitioner was required to maintain a margin at the rate of 50%; that is, 200% of the asset coverage in respect of the securities pledged with the respondent. It is not disputed that in the event the value of the securities fell below the margin as agreed, the petitioner was required to take steps to pledge further securities or to make sufficient payment to ensure that the security cover is maintained.

8. The Arbitral Tribunal noted that the petitioner had continued to service the loans by paying interest regularly till the month of December, 2014. However, there were certain delays in making payments thereafter. After the month of June, 2015, the petitioner stopped making payments resulting in accumulation of overdue interest.

9. By a notice dated 01.09.2015, the responde