The Hon’ble Supreme Court of India (“Supreme Court”), in the matter of BPL Limited v. Morgan Securities and Credits Private Limited, has delivered a landmark judgment reinforcing the sanctity of commercial contracts and the doctrine of party autonomy. The Supreme Court held that in transactions between sophisticated commercial entities, a high rate of interest (36% p.a. with monthly rests) triggered by a default cannot be characterised as unconscionable or penal, provided it serves a legitimate business interest of the lender.
The article was authored by Harshavardhan Abburi, Partner, JSA, and Phanindranath Chowdary Ponneganti, Associate, and was published in Mondaq.
Click here to read the full article.
