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There is some merit in the contention on behalf of the pledgors, that this is not a notice invoking the pledges, but that it is only a general notice to the debtor to repay the amount within a stipulated time and threatening steps for recovery on this failure to repay the loan. There is also merit in the contention that the creditor did not treat this as a notice invoking the pledge, since it went on issuing further notices to the debtor to perform its obligations under the loan Agreements. The margin call notices of November, 2008 issued by the creditor and Ex.C45 dated 12.11.2008, do support this position as one finds the creditor going on calling upon the debtor to top up the security for the loan and to pay the defaulted interest with the threat that the security will be enforced for recovery. The margin call notices and Ex.C45 were not specifically addressed to the pledgors. I am, therefore, included to the view that Ex.C8, assuming it was delivered to the pledgors cannot be treated as a notice specifically invoking the pledge. It appears that the creditor itself did not deem it so in view of the subsequent notices issued by it to the debtor calling upon the debtor to rectify its alleged defaults. At the same time, I also find merit in the contention of the creditor that the debtor had failed to respond at all to any of the notices and in the face of this strange conduct of the debtor, the creditor was justified in proceeding to take further steps. But then, as pointed out by counsel for the pledgors, the only notice claimed to have been sent to the pledgors was Ex.C8 and as far as they are concerned, the question has to be decided based on it.

44. CW1, the Chief Executive Office of the creditor, the only witness examined on behalf of the creditor deposed in his chief examination that on the failure of the debtor to pay the interest on the loan that fell due on 26.09.2008, he intimated the legal team of teh creditor to serve a "Loan Recall Notice to the borrowers" and that he was informed that on 30.09.2008, a Loan recall notice was sent to the borrowers and the pledgors by registered post and U.P.C. He also deposed that on receipt of the recall notice, the debtor paid Rs.5 Crores though it was not enough to revoke the loan recall notice. He also deposed that another notice Ex.C45 dated 12.11.2008 was issued to the debtor in view of the dishonor of two cheques issued by the debtor. He also gave evidence that since no payment was forthcoming, he instructed the concerned team to start sending margin call notices from 18.11.2008 itself. Since the parties did not respond to the recall notice or the margin call notices, he instructed one of his company's brokers to sell the shares pledged. The creditor had received a letter dated 03.03.2010 from the Indian Postal Authorities regarding complaint no.60020022397 stating that the registered letter vide 5166 receipt, was delivered on 22.10.2008. That number related to the notice sent to Indira Anand. He deposed in his oral chief examination that he had made inquiries with the department of post at New Delhi about the registered article nos.4242, 4271, 4272, 4278 and UPC letter dated 16.09.2008. He marked Ex.C49 reply of the postal department. He also marked Ex.C50 written by the postal department, Chennai City South Division and explained why and how he got that information by way of clarification. He explained in cross examination that even after a loan recall notice sent, meaning that the entire loan was being recalled, it may be withdrawn in case the breach of agreement that led to the recall notice is rectified. He also stated that as a matter of practice, the company may continue to send margin call notices inspite of the fact that a recall notice had been issued earlier. He denied the suggestion that Ex.C8 notice was fabricated for the purpose of the arbitration. He referred to Ex.C32 addendum, countersigned by the borrowers to show that the creditor had recalled a sum of Rs.10 crores on 24.01.2008 and Rs.10 crores on 26.02.2008 clearly indicating that the option of sending loan recall notices had been exercised earlier and that inspite of it, the parties were still in discussion.

45. In the cross examination on behalf of the pledgors he asserted that the loan recall notices were sent to all parties before invocation of the pledges. He could not identify who had signed Ex.C8 which he identified as the loan recall notice. He deposed that Ex.C8 referred to breaches in the loan agreement. It was based on default in payment of interest, but he had to admit that the notice did not say that there was default in payment of interest. He stated that the company maintained a data base of dispatches, but he did not know whether it was in electronic form only or there were dispatch registers also. He evaded an answer to the question that in Ex.C8 the creditor had consciously avoided mentioning 'failure to maintain security of appropriate value' by stating that the legal team can answer that question. He denied the suggestion that the creditor had not issued any notice to the pledgors calling upon them to make any payment in terms of the two Facility Agreements and stated that the notice is on record. He also denied the suggestion that the pledgors were not put in notice of any event of default having occurred. To a suggestion that the creditor never called upon the pledgors to top up any security by way of margin call notices, he replied that margin call notices were sent to the debtors as per the terms of the Facility Agreements. His understanding was that the fax number furnished to the creditor was common both to the debtors and the pledgors. He would have to check whether margin call notices were separately issued to the pledgors. To a question by the Arbitrator, he stated that Loan recall notices were sent by RPAD and other means. Margin Call Notices were typically faed or e-mailed.

91. In this context, I must also notice the fact that at 10.30 AM that day, the creditor had issued a notice to the debtor to top up the security by way of a margin call notice. If the pledgors plead that this was a re-assurance to them that sale of balance shares will not take place, in the circumstances they could not be faulted. The issue of margin call notice after receipt of the earlier fax message regarding an order of injunction passed by the High Court atleast would have created an impression in the minds of the debtor and the pledgors that the creditor intended to give them a chance to settle the dues. Though CW1 has stated that even after a notice of recall is issued, routine margin call notices would be issued, the same has not been substantiated with reference to any material and even if accepted, cannot alter the situation in view of the orders of injunction passed by the High Court and the faxes sent to the creditor at 9.15 AM on 19.12.2008.