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of <h1>Tribunal dismisses petition against excessive interest rates, citing Usurious Loans Act.</h1> <h3>Bell Finvest (India) Ltd. Versus Intercon Container Servey And Commodities Pvt. Ltd.</h3> Bell Finvest (India) Ltd. Versus Intercon Container Servey And Commodities Pvt. Ltd. - TMI Issues Involved:1. Default in repayment by the Corporate Debtor.2. Dispute over the interest rate being usurious.3. Application of the Usurious Loans Act, 1918.Detailed Analysis:1. Default in Repayment by the Corporate Debtor:The Petitioner, a Non-Banking Financial Company, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code against the Corporate Debtor for defaulting on a loan repayment amounting to Rs. 58,55,500 as of 20.06.2017. The loan of Rs. 30,00,000 was sanctioned on 19.03.2016 with an interest rate of 24% p.a., payable in advance, and was to be repaid in 8 monthly installments. The Corporate Debtor failed to make any repayments, leading to the issuance of a notice under Sections 433 and 434 of the Companies Act, 1956, on 11.09.2016.2. Dispute Over the Interest Rate Being Usurious:The Corporate Debtor admitted to the debt and default but contested the interest rate as usurious. The Petitioner claimed additional interest of 1% per day on overdue amounts, which compounded the debt significantly. The total due by 20.06.2017 was Rs. 58,58,500, which was more than double the principal amount within a short period. The Corporate Debtor argued that the interest rate forced them to pay more than double the principal amount in less than a year, which they claimed was excessive and unfair.3. Application of the Usurious Loans Act, 1918:The Tribunal examined whether the interest claimed was usurious under the Usurious Loans Act, 1918. The Act allows the court to intervene if the interest is deemed excessive and the transaction substantially unfair. The Tribunal noted that the Petitioner had charged various types of interest, including additional interest of 1% per day, minimum interest, pre-closure charges, and future interest, leading to an effective interest rate of 92% p.a. The Tribunal found these rates to be excessive and substantially unfair.Conclusion:The Tribunal concluded that the interest rates charged by the Petitioner were indeed usurious. It invoked the provisions of the Usurious Loans Act, 1918, to deprecate the claim made by the Petitioner. The Tribunal dismissed the Petition, granting liberty to the Petitioner to approach an appropriate forum for relief.Judgment:The Petition was dismissed on the grounds that the interest claimed over the principal was usurious, with the Tribunal exercising its discretion under the Usurious Loans Act to prevent the Petitioner from claiming excessive interest rates.
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