TMI Blog2017 (12) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - C.P. NO. 1153/I&BP/2017 - - - Dated:- 15-11-2017 - MR. B.S.V. PRAKASH KUMAR AND MR. V. NALLASENAPATHY, JJ. For The Petitioner : G. Aniruth Purushothaman and Vinit J. Mehta, Advs. For The Respondent : Vinit D. Jaule Adv. and Arun Deshpande, PCS ORDER B.S.V Prakash Kumar, Member (J) 1. It is Company Petition filed by the Petitioner namely Bell Finvest (India) Ltd. u/s 7 of Insolvency and Bankruptcy Code against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to make any of the instalments as agreed by the Corporate Debtor, it has been said that Corporate Debtor is liable to pay additional interest @1% per day on overdue outstanding amount which was in arrears since 30.04.2016 aggregating to arrears of additional interest amounting to ₹ 13,72,500 up to 10.09.2016. According to the interest rate agreed between them, as per this notice, the Corporate Debtor is liable to pay ₹ 48,62,500 as on 11.09.2016. By the time this Company Petition has been filed i.e. by 20.06.2017, the total due payable by the Corporate Debtor to the Petitioner has become ₹ 58,58,500 which is more than double to the principal amount within one year two months twenty days. 5. The Petitioner has filed all the requisite documents to show that loan has been taken by the Corporate Debtor and thereafter the Corporate Debtor defaulting in making repayment as agreed by the Corporate Debtor. 6. The Counsel appeared on behalf of the Corporate Debtor has stated that it is no doubt that the Corporate Debtor availed loan from the Petitioner herein and thereafter could not make payment of single instalment to the Petitioner owing to the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te EMI Amt. Amt. Red. Late Days Additional Interest up to 10/09/2016 Cheque Retd Charges 1 30/04/2016 Nt Red. 375000 0 134 502500 0 2 30/05/2016 Nt Red. 375000 0 104 390000 0 3 30/06/2016 Nt Red. 375000 0 73 273750 0 4 30/07/2016 Nt Red. 375000 0 43 161250 0 3 30/08/2016 Nt Red. 375000 0 12 45000 0 6 30/09/2016 Nt Red. 375000 0 0 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear to anybody that interest rates are usurious therefore whether this Bench can interfere in respect to the claim made by the Petitioner or not. To decide as to whether interest rates are usurious or not, it is imperative to read the sections 3 and 4 of the Usurious Loans Act, 1918, which are follows: 3. (1) Notwithstanding anything in the Usury Laws Repeal Act, 1855, where, in any suit to which this Act applies, whether heard ex parte or otherwise, the Court has reason to believe :- (a) that the interest is excessive; and (b) that the transaction was, as between the parties thereto, substantially unfair, the Court may exercise all or any of the following powers, namely, may, (i) re-open the transaction, take an account between the parties, and relieve the debtor of all liability in respect of any excessive interest; (ii) notwithstanding any agreement, purporting to close previous dealings and to create a new obligation, re-open any account already taken between them and relieve the debtor of all liability in respect of any excessive interest, and if anything has been paid or allowed in account in respect of such liability, order the creditor to repay and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y unfair. (3) This section shall apply to any suit, whatever its form may be, if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan [or for the redemption of any such security]. (4) Nothing in this section shall affect the rights of any transferee for value who satisfies the Court that the transfer to him was bona fide, and that he had at the time of such transfer no notice of any fact which would have entitled the debtor as against the lender to relief under this section. For the purposes of this sub-section, the word notice shall have the same meaning as is ascribed to it in section 4 of the Transfer of Property Act, 1882. (5) Nothing in this section shall be construed derogating from the existing powers or jurisdiction of any Court. 4. On any application relating to the admission or amount of a proof of a loan in any insolvency proceedings, the Court may exercise the like powers as may be exercised under section 3 by a Court in a suit to which this Act applies. 11. By reading these two provisions, if Court is of the view that interest changed is excessive and the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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