MOVIE DESK: HC Flags Vishal’s Insolvency Issue; Interim Stay on Laika Loan Order
In a dramatic turn at the Madras High Court, actor and producer Vishal Krishna Reddy faced pointed questions about his financial standing during a hearing on a long-standing loan dispute with Lyca Productions.
The bench, led by Justices S.M. Subramaniam and Mohammed Shaffiq, challenged whether Vishal would consider declaring bankruptcy amid claims he isn’t as wealthy as portrayed.
This came as the court scrutinized the steep 30 percent annual interest tacked onto the original debt.
Scrutiny on Steep Interest Charges
The judges voiced strong reservations over the 30 percent interest rate, labeling it excessive and potentially usurious under Tamil Nadu’s Prohibition of Charging Exorbitant Interest Act, 2003.
They emphasized that such rates exploit borrowers, regardless of their consent driven by urgent needs.
Vishal’s counsel highlighted how the interest alone had ballooned to over Rs 40 crore, far outstripping the principal of Rs 21.29 crore.
A key precedent from 2010, which allowed up to 33 percent for large loans, was cited by the lower court but now faces fresh review.
The bench made it clear: no one, rich or otherwise, should endure what they termed a “loot” through inflated charges.
Roots of the Film Financing Feud
The conflict traces back to 2021, when Vishal’s production house, Vishal Film Factory, borrowed Rs 21.29 crore from financier Anbuchelian’s Gopuram Films to fund projects.
Lyca Productions later assumed the debt, securing an agreement that Vishal would hand over distribution rights for his films until full repayment.
Trouble brewed when Vishal allegedly released several films without honoring the rights transfer, prompting Lyca to sue for breach.
In June 2025, a single judge ordered repayment of Rs.30.05 crore, including the controversial interest from February 2021.
Temporary Relief and Road Ahead
Responding swiftly, the Division Bench imposed an interim stay on the single judge’s directive, but with a condition: Vishal must deposit Rs.10 crore into a court account bearing interest. This move balances immediate relief against accountability.
The hearing wrapped with a notice issued to Lyca, whose counsel pegged the total liability at Rs.54 crore today.
Adjourned for four weeks, the case now pivots on deeper probes into fair lending practices in Tamil cinema, promising broader implications for the industry.