9911796707
TMI Blog2017 (12) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the same, in furtherance of it, when this Corporate Debtor approached the Petitioner for a loan of Rs. 30,00,000, on the loan application dated 17.03.2016, this Petitioner issued Sanction Letter dated 19.03.2016 with the condition that the rate of interest payable would be @24% p.a. flat rate payable in advance for the entire tenure, after negotiation rate of interest was discounted to 24% as against the applicable rate of 36% p.a. It is being further conditioned that interest amount of Rs. 4,80,000 is payable in advance, EMI amount would be Rs. 3,75,000 p.m. It says that the company has to give corporate guarantee, and the directors have to give personal guarantee. This loan amount shall be paid in 8 months from the first day of disbursement. In case, the Corporate Debtor defaulted in making payment, an additional interest at the rate of 1% per day over and above the interest rate for defaulted/delayed period on the instalment amounts will be charged. Soon after this sanction letter was given, the Corporate Debtor entered into an agreement with the Petitioner on 28-3-2016, incorporating interest rate as mentioned above by confirming that it would forward to lender 8 post-dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point for discussion about debt and occurrence of default, but now point for discussion is as to whether the interest claimed over the principal is usurious or not as stated under the Usurious Loans Act. 8. Looking at the facts of the case and by the submissions of the Petitioner's Counsel, it is an admitted fact that this Petitioner remitted Rs. 4,80,000 towards advance interest as on the date of disbursement itself i.e. 31.03.2016, by this calculation, the principal amount released to the Corporate Debtor is only Rs. 25,20,000. By this remittance, it appears that this Petitioner has already taken out interest @24% p.a. for the entire tenure. Term of loan, as per agreement between them, was repayable in 8 monthly equal instalments from the date of disbursement i.e. 31.03.2016, the payment of first EMI of Rs. 375,000 per month was in fact to be paid by 31.04.2016. According to this agreement, if any delay or default happened in paying monthly instalments, an additional interest @1% per day shall be paid over and above the interest rate for defaulted/delayed period on the instalments due. On the top of it, the Corporate Debtor shall pay prepayment interest @4% on Sanctioned Loan a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e calculations made by the Petitioner, it can be clear 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 liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antially 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 transaction is un ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
