IMPORTANT POINT
The court established that a notice of sale of pledged goods must convey a clear intention to sell, and that the failure to execute an award against a principal debtor does not negate the creditor's right to recover from a guarantor or sub-broker.

JUDGMENT :

R.SUBRAMANIAN, J.

Prayer in O.S.A.No.288 of 2020:

Original Side Appeal filed under Section 13 of the Commercial Courts Act, 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 read with Order XXXVI Rule 9 of the Original Side Rules and Clause 15 of the Letters Patent, praying to set aside the order dated 23.01.2020 in O.P.No.266 of 2014 and thereby set aside the Arbitral Award dated 29.01.2013 in Arbitration Matter (A.M.) No.CM/C-0034/2012 and confirmed by the Appellate Tribunal vide Appellate Arbitral Award dated 25.11.2013 in Arbitration Appeal Matter (A.M.) No.: CM/C-0034/2012.

Prayer in O.S.A.No.289 of 2020: : Original Side Appeal filed under Section 13 of the Commercial Courts Act, 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 read with Order XXXVI Rule 9 of the Original Side Rules and Clause 15 of the Letters Patent, praying to set aside the order dated 23.01.2020 in O.P.No.267 of 2014 and thereby set aside the Arbitral Award dated 29.01.2013 in Arbitration Matter (A.M.) No.CM/C-0038/2012 with respect to dismissing the claims of the appellant which was confirmed by the Appellate Tribunal vide Appellate Arbitral Award dated 25.11.2013 in Arbitration Appeal Matter (A.M.) No.: CM/C- 0038/2012.

These two appeals arise out of the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.

2. The appellant, a share broker and member of the National and Bombay Stock Exchanges, is aggrieved by the orders of the Section 34 Court made in the O.P.Nos.266 and 267 of 2014 dated 23.01.2020, in and by which, the petitions filed by the appellant under Section 34 of the Arbitration and Conciliation Act were dismissed confirming the awards passed by the sole Arbitrator, which were in turn confirmed by the appellate Tribunal constituted under the Bye-laws of the National Stock Exchange of India Limited.

3. O.S.A.No.288 of 2020 is against the order passed in O.P.No.266 of 2014 and O.S.A.No.289 of 2020 is against the order passed in O.P.No.267 of 2014.

The claim of the appellant in O.P.No.266 of 2014 is as follows:-

4. The appellant, which is a member of the National Stock Exchange Limited and the Bombay Stock Exchange Limited is entitled to have subbrokers appointed to carry on transactions on behalf of the appellant. In the course of its business, the respondent an individual expressed his interest to be a sub-broker under the appellant and pursuant to negotiations that took place, the respondent was registered as a sub-broker on 23.01.2006. A certificate to that effect was also issued on the said date. A Stock Broker and Sub-Broker Agreement was entered into between the parties on 13.06.2005, which was followed by a Business Associate Agreement dated 01.04.2006.

5. The respondent set up an office at Ambasamudram, Tirunelveli District to carry out the stock broking and related activities. A Bank Guarantee was furnished on 16.06.2005, which was followed by an Agreement of Pledge of Stocks, Shares and other Securities on 02.04.2007, where certain shares were pledged with the appellant.

6. Though things were normal and the business was carried on to the benefit of both the parties, in 2008 the turn over of the respondent went down drastically, due to the global meltdown and certain issues cropped up on the distribution of commission between the parties. This resulted in termination of the Business Associate Agreement with effect from 29.02.2012. In the light of the said situation, the respondent sent a letter on 01.02.2012 informing the appellant that he is desirous of terminating the Business Associate Agreement and requiring the appellant to settle all the accounts as per the Stock Exchange Rules. The appellant sent a reply on 16.02.2012 accepting the termination and claiming that the respondent was liable to pay a sum of Rs.5,09,817.31/-. The documents relating to cancellation were also forwarded to the respondent.

7. The respondent on 20.02.2012 sent a reply stating that as per