The Court established that the plaintiffs, as financiers, were entitled to recover the principal sum and interest from the defendants, and the interest rate was limited to 9% per annum as per the Moneylenders Act.

JUDGMENT

(Prayer: The suit is filed under Order IV Rule 1 of O.S.Rules read with Order VII Rule 1 Code of Civil Procedure,1908 and Section 2(1)(c)(i) and Section 7 of the Commercial Courts and Commercial Appellate Division of the High Courts Act,2015, praying to direct the defendants to pay the sum of Rs.31,40,06,037/- (Rupees Thirty One Crores Forty Lakhs Six Thousand Thirty Seven only), as on 28.02.2018 as agreed vide letter of undertaking dated 15.03.2015 with interest @ 1.5% per month with monthly rests i.e.19.56% per annum and further interest at 1.5% per month with monthly rests i.e., 19.56% per month on Rs.18,60,00,000/- (Rupees Eighteen Crores Sixty Lakhs only) from the date of presentation of the plaint till the date of realization and to pay the costs of the suit.)

1. The plaintiffs seek recovery of a sum of Rs.31,40,06,037 /- with interest thereon at 19.56% per annum from 28.02.2018 and further interest at 19.56% per annum on Rs.18,60,00,000/- from the date of presentation of the plaint until realization.

2. The suit claim arises out of the financial assistance provided by the plaintiffs to the defendants in relation to the acquisition of land for purposes of construction of a mega shopping mall.

3. In the plaint, the plaintiffs stated as follows. The defendants approached the plaintiffs in course of business and requested the plaintiffs to invest a sum of Rs.9,00,00,000/- for the purposes of enabling the acquisition of lands for construction of a mega mall. As consideration for such investment, the defendants agreed to provide an assured return on investment. In connection therewith, the defendants executed sale agreements and general powers of attorney as per details set out in paragraph 6 of the plaint. The plaintiffs further stated that all the original title deeds relating to immovable properties at Devadhanam and Panayakurichi villages in Tiruchirapalli Taluk and at Perambalur village were deposited with the plaintiffs as security for the investment. According to the plaintiffs, the defendants did not commence construction of the shopping mall until the year 2013. Thereafter, the defendants wanted the plaintiffs to exit the project and entered into two agreements with the plaintiffs for such purpose.

4. Under Memorandum of Agreement dated 27.06.2013(MOA-1), the defendants agreed to pay a sum of Rs.8,25,00,000/- to the plaintiffs after giving credit to the sum of Rs.75,00,000/-, which had been paid on the date of execution thereof. Under Memorandum of Agreement dated 21.05.2014 (MOA-2), the defendants agreed to pay a sum of Rs.9,00,00,000/- as return on investment on or before 31.12.2014. Thereafter, it is stated that the defendants failed to pay the amounts specified in MOA-1 and 2. Instead, the defendants requested the plaintiffs to advance a further sum of Rs.60,00,000/-. The said sum was disbursed by the plaintiffs on 26.12.2014 to Mr.P.K.S.Prasad and P.J.K.Sairam, as per the first defendant's request, and the first defendant executed two promissory notes as security for the said loan and issued two cheques for Rs.50,75,000/- and Rs.10,15,000/-. The first defendant also issued a letter of undertaking dated 26.12.2014 by which he undertook to repay the outstanding principal amount of Rs.8,25,00,000/- with interest thereon and a sum of Rs.9,75,00,000/- towards return on investment on or before 28.02.2015 with further interest thereon. One more letter of undertaking was issued by the first defendant on 15.03.2015 agreeing to discharge the entire liability along with interest at 19.56% per annum with monthly rests. Pursuant thereto, the defendants paid a sum of Rs.1,62,00,000/- by RTGS transfer on 15.04.2015 and promised to pay the remainder within 30 days.

5. According to the plaintiffs, the defendants thereafter fraudulently created a sham company called LSR Properties India Pvt. Ltd., the third defendant herein, and transferred the Devadhanam lands in favour of the third defendant without the consent of the plaint