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2017 (12) TMI 1384 - Tri - Insolvency and BankruptcyCorporate insolvency process - interest claimed over the principal - Held that:- By seeing the loan transaction, one thing is clear that most of the interest rates charged are not heard of, at least we have not come across of charging 1% interest per day on defaulted amount, the Petitioner multiplied interest rates, with different nomenclature such as additional interest, minimum interest, future interest, prepayment interest. May be, the Debtor entered into an agreement agreeing for paying all these interests but for this Court, it appears as usurious, since there is a law in existence giving discretion to this Bench to discourage claiming interest at fleecing rates is usurious in nature. Therefore, since it is a Code came in to existence to deal with distress situation of the company, this Bench is not expected to permit to allow the companies like this fleecing whatever left in the company in the name of interest, if claims of this nature are allowed, the other creditors who are genuinely entitled to have their say in CoC will also get affected. It is not for the first time, this Bench applying this proposition, in the past various High courts in cases in between Sri Balasaraswathi Ltd., v. A. Parameswara Aiyar [1955 (11) TMI 15 - HIGH COURT OF MADRAS] decided interest rates are usurious wherever the rates are felt excessive, therefore, since the average rate of interest over the principal has come to 92% per annum, this Bench invoked discretion given under the Usurious Loans Act to deprecate the claim made by this Petitioner. In view of the reasons aforementioned, this Bench hereby holds that the interest claimed over the principal is usurious, therefore, this Petition is hereby dismissed with liberty to the Petitioner to approach before appropriate Forum.
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