Loan Default Case: Madras HC Temporarily Prohibits Actor Vishal From Releasing His Movies

The Madras High Court has recently barred Tamil actor and film producer Vishal Krishna Reddy from releasing any films until he deposits a ₹15 crore interest-bearing fixed deposit in connection with a case filed by Lyca Productions to recover ₹21.29 crore from him.

A Bench of Acting Chief Justice T Raja and Justice D Bharatha Chakravarthy dismissed Vishal’s appeal contesting a March 2022 High Court decision passed by a single-judge of the HC directing the actor to open such a fixed deposit with a nationalised bank.

According to the lawsuit, Vishal borrowed ₹21.29 crores from a third party in 2019. Lyca agreed to take over that debt in exchange for Vishal repaying the principal amount to Lyca with interest of 30%.

Lyca, on the other hand, filed a case before the High Court, alleging Vishal had failed to repay the money.

Vishal’s counsel, on the other hand, told the Bench that Lyca had agreed to take over the debt, but had never actually discharged it on his behalf.

Lyca’s counsel told the Court that the single-judge’s order was passed after reviewing both parties’ bank statements and determining that Lyca had paid ₹21.29 crore towards discharging Vishal’s debt.

The Division Bench agreed that the single-judge’s ruling was legally correct. As a result, the Court stated that Vishal’s appeal had no merit.

However, it stated that the single-judge should have included an injunction clause if Vishal did not comply with its order. As a result, the order needed to be modified to that effect, it stated. Vishal was thus prevented from releasing his films until he made the required fixed deposit.

“Thus, there shall be a clause (iv-a) to the effect that, failing compliance with the above direction, there shall be an injunction against the defendant from releasing in any manner in cinemas or OTT platforms or in any mode whatsoever all or any of the feature films/film projects produced or financed by the defendant in any manner whatsoever, pending disposition of the suit. As a result, while we do not believe the appeal has merit, it is essential to include the above default clause in the order,” the ruling stated.