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Madras HC Questions Exorbitant Interest
25 Nov
Summary
- Court questions 30% interest legality on filmmaking loans.
- Actor Vishal ordered to deposit 10 crore pending appeal.
- Interest demand examined under TN Prohibition Act.
The Madras High Court is scrutinizing the legality of a 30% interest rate demanded on a loan for film production. A division bench questioned whether such a high rate, even if contractually agreed upon, contravenes the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003. This legal examination follows an order directing actor Vishal to pay 21.29 crore plus interest to Lyca Productions.
During the proceedings, actor Vishal's counsel stated he was not a wealthy individual. The bench directed Vishal to deposit 10 crore towards the disputed amount while his appeal is heard. The court observed that the interest rate appeared excessively high and noted that such exploitation would not be permitted.
Previously, a single judge had ordered Vishal to pay 21.29 crore with 30% interest to Lyca Productions, which had settled a loan Vishal initially took from Gopuram Films. Lyca had sued Vishal for failing to repay and attempting to alienate film rights, which were held as security.
