O R D E R

1. These petitions under Section 9 of the Arbitration and Conciliation Act, 1996 1 assail the validity of recall notices dated 10

1 The 1996 Act

November 2022 issued by the respondent. The petitioners seek a restraint against all coercive action that may be taken by the respondent pursuant to the aforenoted recall notices including and extending to the invocation of guarantees furnished by the petitioners and taking any steps for disposal of valuable securities which were furnished by the petitioners under the loan agreements.

2. Since the facts in all the petitions were common and the challenge was raised against identical recall notices, the Court for the purposes of brevity proposes to notice the facts as they exist on the record of O.M.P.(I) (COMM.) 368/2022 and on which arguments were addressed by learned senior counsels.

3. From the record it transpires that the said petitioner was extended credit facilities in the shape of a term loan of Rs. 25 crores in 2019. The rights and obligations of parties in connection therewith came to be embodied in a Loan Agreement dated 16 August 2019. For the purposes of securing repayment of the aforesaid loan, the petitioners also created securities which stood specified in Schedules I and III of the aforesaid Loan Agreement.

4. The petitioners assert that while initially and for several years they continued to service the loan regularly, on account of the Covid- 19 pandemic, their businesses came to be adversely impacted. In view of the aforesaid, the petitioners appear to have applied for a One Time Settlement2 with the respondent. The terms of the OTS which were ultimately agreed upon came to be recorded in a letter of 01

2 OTS

September 20213 and which provided for the petitioners liquidating the entire loan by payment of an amount of Rs.10,69,04,446/- along with interest @ 11.62% per annum payable on a monthly basis on or before 31 January 2023. It would be pertinent to refer to the relevant parts of the said communication and the same is extracted hereinbelow: -

―We state that as on September 30, 2021, an amount of INR 188248848/- (Indian Rupees Eighteen Crores Eighty Two Lakhs Forty Eight Thousand Eight Hundred Forty Eight only) (the "Outstanding Amount") is outstanding and payable to the Lender. However, as per discussions with the Borrower, we confirm that upon the receipt of INR 106904446/- (Indian Rupees Ten Crores Sixty Nine Lakhs Four Thousand four Hundred Forty Six only) (the "Said Amount") plus an interest of 11.62% per annum payable on a monthly basis ("p.a/p.m") on INR 106904446/- or the amount that remains outstanding out of the Said Amount with effect from October 1, 2021 till the date of actual payment of the Said Amount, on or before January 31, 2023 ("Final Payment Date"), the above referred Loan shall stand closed and the Lender will issue a no dues certificate to the Borrower. It is however clarified that in the event that the Borrower is able to make payment of only a part of the Said Amount by the Final Payment Date (excluding the interest costs as mentioned above) on or prior to January 31, 2023, then the same proportion of the Outstanding Amount as on September 30, 2021 shall stand repaid and the portion of the Outstanding Amount together with interest of 11.62% p.a/p.m and related amounts thereon shall remain payable and outstanding. The proportion of the Outstanding Amount payable (along with interest of 11.62% p.a/p.m) post January 31, 2023 in case of a part payment is illustrated numerically below:‖

5. The petitioners assert that pursuant to the issuance of the OTS letter they continued to make “regular periodical payments to the respondent as per the prevailing practice between the parties”. They further assert that these payments were duly accepted by the

3 OTS letter

respondent without any demur or protest. The petitioner also relies upon a certificate dated 05 December 2022 issued by an independent auditor and asserts that the details of payments which w