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2020 (8) TMI 383 - AT - Insolvency and BankruptcyCIRP process - Financial Creditors or not - whether un-secured Creditors who may avail other remedies to recover their debts, or not - whether the loans advanced by the Appellants are legal in the eye of law and whether they can be treated as unsecured creditors? - HELD THAT:- The stand of the Appellants that the loans were advanced by the individuals to the Corporate Debtor for the business purposes. The Appellants failed to provide any evidence showing that the Corporate Debtor required the loans and Board of the Corporate Debtor decided and resolved in its Board Meetings to take loans @ 3.3%,4% & 5% rates of interest that too from the individuals. In normal course of business, the Company takes loans from the Public Sector Bank or the Private Banks at the rate of interest charged by the Banks or Private institutions - But in the present case, Respondent-Corporate Debtor accepted loans from the individuals with an exorbitant rates of interest and the said advancement of loans by the individuals may be at the behest of Directors in collusion with the individuals. No reasonable person would agree to such transaction hence we say there appears to be collusion. It is admitted position that the Appellants No. 2,3,4,6,7 & 9 have purportedly advanced loans to the Corporate Debtor with exorbitant rates of interest on 04.07.2016, 22.08.2016, 23.08.2016, 10.10.2017, 02.08.2016 and 21.03.2017 which are within period of two years preceding insolvency commencement date i.e., 01.06.2018. Even as per submission of the learned Counsel for the Appellants, these transactions are considered to be Extortionate Credit Transactions and the same needs to be quashed and set aside. The transactions of the Appellants No. 1, 5 & 8 which are prior to two years preceding the insolvency commencement date. However, taking into consideration, the exorbitant rates of interest charged by the Appellants, the said transactions are unconscionable. Thus, keeping in view that the rates of interest which they charged are exorbitant, we are of the view that claim of exorbitant rates of interest is extortionate regarding interest and thus illegal. However, Appellants No. 1,5 & 8 can make their claims for Principal Amount as Unsecured Creditors - appeal disposed off.
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