TaxTMI 
TaxTMI 
2020 (9) TMI 509
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....f engineering services and supplied engineering goods to the Corporate Debtor on the basis of four purchase orders issued by them. The petitioner delivered the goods to the Corporate Debtor and raised four invoices to the extent of Rs. 13,26,644/- from 23/01/2018 to 06/03/2018 on the Corporate Debtor. The petitioner also claimed interest to the extent of Rs. 4,53,826/- as on 25/07/2019 on the delay in payment at the rate of 24% per annum. The invoices were raised in the name of Sunshine Housing Pvt Ltd and subsequently the name of the Corporate Debtor was changed to Sivana Realty Pvt. Ltd. 3. The petitioner submits that a demand notice under Section 8 of the Code in Form 3 was sent on 26/07/2019 demanding the above said amount and the same was returned with an endorsement as "Not available" and "No office on this address". Subsequently, the petitioner, on 06/08/2019 sent the demand notice to the Corporate Debtor by E-mail. However the Corporate Debtor neither replied nor paid any amount after the receipt of notice by E-mail. Hence this petition. 4. The Corporate Debtor filed reply to the petition and raised the following contentions. : a. The present management (Vira....
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....le for any of the liabilities including secured and unsecured borrowings, inter corporate deposits, loans from shareholders, debenture holders, loans from associates or any other deposits or loans taken from any person or entity prior to the date of execution of this settlement and that the responsibility for the fulfilment of any commitment or repayment or payment or clearance or settlement of such deposits or loans taken by [the Respondent] prior to the date of execution of this Settlement shall be completely and unconditionally borne by the Sunshine Group at its own risk and costs, which the Sunshine Group hereby unconditionally agrees to." (Clause 9.5) "Sunshine Group hereby confirms that no personal/corporate guarantees of Vira Group have been furnished to any of its Lenders as a security for due repayment of the finance assistance availed by them and shall at all times indemnify and keep indemnified Vira Group from and against any and all losses, cost, expenses, damages, claims, liabilities which may arise out of or as a result of breach of the aforesaid representation." (Clause 10.1) e. The erstwhile management of the Corporate Debtor had ....
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....aulted amount is usurious in nature and hence the entire amount claimed by the petitioner has to be set aside relying on the provisions of Section 3 & 4 of the Usurious Loans Act, 1918 which provides as below: - "Re-opening of transaction. Notwithstanding anything in the Usury Laws Repeal Act, 1855 (28 of 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 any sum which it considers to be repayable ....
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.... (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 1 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 (4 of 1882 ). 5. In support of the Contention that this Tribunal can apply the Usurious Loans Act, 1918 to the proceedings under the Code relying on the following judgments:- a. Union of India v. R Gandhi, President, Madras Bar Association (2010 (11) SCC 1) - to emphasize the point that NCLT is akin to a court of law and not a mere adjudicating authority. b. Bhadu & Ors v. Ganpati &Anr ("Bhadu Case") (AIR 1931 NAG 25) - to say that courts have power in ....
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....as below: "Heard learned counsel for the appellant and perused the relevant material. We are not inclined to interfere with the order impugned in the appeal. The same is, accordingly, dismissed. However, it will be open for the appellant to press the issue of rate of interest and application of the Usurious Loans Act, before the National Company Law Tribunal, if so advised." 7. As far as the above contention of the Corporate Debtor that NCLT as an Adjudicating Authority to decide on the applicability of Usurious Loans Act, 1918 to this proceeding is concerned, we are of the firm view that the invoices provide for 24 % interest on delayed payments and the same is not excessive or exorbitant considering the present market conditions. Hence the said request of the Corporate Debtor is rejected. 8. The contentions of the Corporate Debtor that in view of the settlement entered into between the Vira Group and sunshine Group, the Corporate Debtor herein is not liable for the amount claimed in this petition based on the Clause 9.5 of the settlement memo dated 31/10/2018. We are unable to accept the contention of the Corporate Debtor that the Corporate debtor is not l....