# In the matter of Tulip Star Hotels Ltd. & Ors. vs. Anish Niranjan Nanavaty & Ors.

> NCLAT judgment dated 2023-11-21. Citation: TCN-2023-NCLAT-00067. The case involves a dispute over the rate of interest applicable to the debt of the Corporate…

- **Court:** NCLAT
- **Order date:** 21 Nov 2023
- **Citation:** TCN-2023-NCLAT-00067
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/tulip-star-hotels-ltd-ors-vs-anish-niranjan-nanavaty-ors-25e76f46

## Summary

### Background

The case involves a dispute over the rate of interest applicable to the debt of the Corporate Debtor, V Hotels Ltd. Asset Reconstruction Company (India) Ltd. (ARCIL), the financial creditor, claimed an interest rate of 22%, while the Appellant, M/s Tulip Star Hotels Ltd., challenged this rate, arguing for a lower rate of 14.85%. The Adjudicating Authority (NCLT) initially admitted a Section 7 application filed by ARCIL, observing that the rate of interest would be determined later. The NCLAT set aside the admission order, but the Supreme Court overturned the NCLAT order and upheld the admission order. The Adjudicating Authority then determined the interest rate to be 22%, leading to the current appeal.

## Facts

V Hotels Ltd. (Corporate Debtor) entered into a Term Loan Agreement on 08.03.2002 with a consortium of lenders for INR 129 Crores, with an initial interest rate of 13.50%, later revised to 12.85%. In 2009-10, the banks assigned their debt to Asset Reconstruction Company (India) Ltd. (ARCIL). On 10.02.2011, the Corporate Debtor proposed a settlement to ARCIL, offering to pay INR 150,75,83,970/- with 22% interest. ARCIL issued a Sanction Letter on 28.02.2011, accepting the settlement terms, including a 22% interest rate. A Modification Agreement was executed on 29.09.2011. The Corporate Debtor defaulted, and ARCIL revoked the settlement on 17.06.2013. ARCIL then issued a notice under Section 13(2) of the SARFAESI Act, claiming INR 235,46,34,381/- with 22% interest. The

…

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority correctly determined the rate of interest applicable to the debt …

**Ratio:** The principle is that when a settlement agreement providing for a specific interest rate

…

**Reasoning:** The Adjudicating Authority relied on the letter from the Corporate Debtor dated

…

**Interpretation:** The interpretation is that a revoked settlement agreement cannot be the basis

…

**Application:** The NCLAT applied this principle by holding that since the Settlement Agreement

…

## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** M/s TULIP STAR…
- **Respondents:** V Hotels…; Anish Niranjan…
- **Advocates:** Virender…; Raghav…; +10 more

## Timeline

- **2002-03-08 — Term Loan Ag…**: The Corporate Debtor, V. Hotels ltd., entered into a Term Loan Agreement with a…
- **2009-01-01 — Debt Assi…**: Bank of India, Punjab National Bank, Union Bank of India, and Vijaya Bank assigned their…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/tulip-star-hotels-ltd-ors-vs-anish-niranjan-nanavaty-ors-25e76f46