Madras HC Slams Actor Vishal | Orders Repayment Of ₹30 Crores With 30% Interest | 'Defendant Breached Loan Terms Without Intimation'
Isabella Mariam
The High Court of Judicature at Madras Single Bench of Justice P.T. Asha decreed a commercial suit filed for recovery of Rs. 30,05,68,137 with 30% interest per annum on the principal sum of Rs. 21.29 crores. The Court held that the plaintiff had fully discharged the loan taken over from a third party on behalf of the defendant and the defendant had breached the loan agreement. It directed that the suit be decreed as prayed for, including costs, and ordered release of Rs. 2.6 crores deposited by a third party towards the plaintiff's dues.
The plaintiff, a reputed film production house, sought recovery of a total sum of Rs. 30.05 crores, which included a principal of Rs. 21.29 crores and interest, from the defendant, a film actor and proprietor of a production company. The plaintiff alleged that it took over a loan originally owed by the defendant to M/s. Gopuram Films represented by Mr. Anbu Chezhian, to facilitate the defendant’s film production.
The plaintiff claimed that four separate transfers amounting to Rs. 21.47 crores were made to M/s. Gopuram Films through NEFT and RTGS transactions in April, May, and August 2019. A loan agreement dated 21.09.2019 was subsequently executed. Under the agreement, the defendant undertook to repay the principal sum with 30% interest. The first tranche of Rs. 7 crores was to be paid before the scheduled release of the defendant’s film 'Thupparivalan II' on 31.03.2020 or by 31.12.2020 if the film was not released.
The plaintiff issued multiple reminders including letters dated 21.08.2020 and 03.09.2020, which were returned unserved. An email dated 18.09.2020 attaching reminder letters and another email dated 12.02.2021 pointing out default were also sent. The plaintiff alleged that despite receiving revenue from another film 'Chakra', the defendant did not make any payments.
The defendant denied liability and claimed that the agreement was signed without reading and the actual sum due to Gopuram Films was only Rs. 12 crores. He argued that no direct payments were made by the plaintiff to him and that Covid-19 triggered the force majeure clause. He also challenged the interest rate as usurious and the suit as premature.
The plaintiff filed a rejoinder with transaction details and argued that the loan was repaid directly to the original lender with the defendant’s knowledge. It relied on ledgers, bank statements, and the agreement’s recitals. The Court examined the terms of the loan agreement and noted that the defendant had failed to notify his inability to repay, as required under Clause 6.
The Court recorded that “It is true that I had entered into the subject agreement dated 21.09.2019 with the applicant/plaintiff in connection with the take over of the finance availed by me from the said Mr. Anbu Chezhian” and “I am always ready and willing to perform my obligations under the subject agreement.” It found that the written statement was inconsistent with these earlier admissions.
The Court stated, “Ex.P.2 and Ex.P.3 clearly establish that the loan of Rs. 21.29 crores was paid in four tranches,” and noted, “The defendant has not produced any proof of repayment either to the plaintiff or to the original lender.”
Regarding the interest, the Court referred to a prior ruling and noted, “The Tamil Nadu Money Lenders Act and the Exorbitant Interest Act do not apply to loans exceeding Rs.10,000 advanced under negotiable instruments.” It concluded that the 30% interest agreed upon was enforceable.
Addressing the force majeure argument, the Court held, “The defendant has not shown that the pandemic prevented repayment or communication. On the contrary, he continued to act in and release films.”
On the question of costs, the Court recorded, “The conduct of the defendant appears evasive… and non-compliant with prior orders. Costs are justified.”
The Court passed a decree in favour of the plaintiff, directing that the suit be allowed in its entirety along with costs.
It further ordered that the sum of Rs. 2.6 crores deposited by Stone Bench Creations Pvt. Ltd. in connection with the suit be released to the plaintiff, inclusive of any interest accrued, and that this amount be treated as part payment towards the dues recoverable from the defendant under the decree.
Advocates Representing the Parties
For the Plaintiff: V. Raghavachari, Senior Counsel for M/s. Hema Srinivasan
For the Defendant: A.K. Sriram, Senior Counsel for M. Arun
Case Title: Lyca Productions Pvt. Ltd. v. Vishal Krishna Reddy
Case Number: C.S. No. 59 of 2021
Bench: Justice P.T. Asha
[Read/Download order]
