Moon Star Securities Trading &Finance Co. Ltd … Vs Raghuleela Builders Pvt.Ltd
IA/529/2024 IN C.P. (IB)/498(MB)2021
Facts: Application is filed to reject and/or modify and/or reverse Respondent Nos. 2 to 8’s claim for exorbitant and usurious interest and update the list of creditors and voting share of the committee of creditors of the Corporate Debtor to reflect the same.
Issue: Whether the application can be allowed?
Argument:
Applicant:
1. Counsel submitted that claims of Respondent Nos. 2 to 8 have been admitted with exorbitant/extortionate interest rates which is prejudicial to the interest of the Applicant as it has in turn reduced the voting share of the Applicant. It was submitted that though the principal claimed amount of all the Financial Creditors stands admitted fully but it is the admission/grant of the exorbitant interest admitted by the RP which is detrimental to the interest of the Applicant.
2. It was submitted that the exorbitant interest rate on the claims admitted by the RP has substantially increased the voting share of the other Financial Creditors to the detriment of the voting share of the applicant.
Respondent:
1. Counsel submitted that two resolution plans have already been placed before the COC which is in the process of considering the same. In addition, while arguing against the prayer being sought by the Applicant, the Ld. Counsel submitted that the application deserves to be out rightly rejected on the ground of delay
2. Counsel submitted that despite having received a detailed response from Respondent No. 1 on 01.05.2023, the Applicant chose to file the present I.A. in February, 2024 when the Resolution Plans have already been submitted for consideration by the COC. This itself proves that the Applicant was either not vigilant or had waived of his right to raise any objections.
Decision: NCLT granted interim relief.
Rationale:
1. NCLT noted that matter requires further consideration with respect to the exorbitantly high interest and charges admitted in the case of Respondent Nos. 2 to 8 by Respondent No. 1/RP. Particularly when the Transaction Audit Report clearly mentions the rate of interest in case of YBL @ 14.40%.
2. It held that is pertinent to note that the Applicant is a public sector bank which has agitated the issue in the month of April, 2023 and it is in the response of RP dated 01.05.2023 that the admitted interest rate of each of the financial creditors finds mention. In addition, the contention of the Respondent No.1/RP stating that the instant matter of ‘interest and charges’ falls within the ambit of COC is not legally tenable.
Order:
