CHENNAI: The Madras High Court, on Monday, inquired whether actor-producer Vishal was prepared to be declared insolvent during a hearing on his appeal against a repayment order obtained by Lyca Productions.
The case pertains to a financial arrangement under which Lyca Productions repaid a loan of Rs 21.29 crore, which Vishal had borrowed for his company, Vishal Film Factory, from film financier Anbuchezhian's Gopuram Films.
Under the agreement, Lyca held the rights of all films produced by Vishal's company until the entire amount was recovered. Lyca later alleged that the terms had been violated and that films were released without settling the dues.
The company moved the Madras High Court seeking recovery of the amount. A single judge subsequently directed Vishal to repay Rs 21.29 crore with 30 per cent annual interest.
Challenging this order, Vishal filed an appeal before a division bench comprising Justices SM Subramaniam and Mohammed Shaffiq. During the hearing, the bench asked whether Vishal could deposit a specified sum with the court.
Senior counsel AK Sriram, appearing for Vishal, described the loan as Rs 15 crore and argued that repaying it with a 30 per cent interest was unlawful as the interest component alone exceeded Rs 40 crore. Contrary to Lyca's claims, Vishal was not a wealthy individual, the counsel submitted.
The bench then asked, "If so, are you prepared to be declared insolvent?"
The judges also remarked that charging 30 per cent interest was excessive and that such practices could not be permitted.
The division bench stayed the single judge's repayment order and directed Vishal to deposit Rs 10 crore with the court. Lyca was told to file its counter, and the matter got adjourned for four weeks.