Debenture redemption reserve requirement compels companies to fund redemption; tribunal can order redemption and penalise officers for default. Companies issuing debentures must create a debenture redemption reserve funded from profits and limited to redemption use; they must pay interest and redeem as per issue terms. If redemption fails at maturity, the Tribunal may order immediate redemption by payment of principal and interest, and officers defaulting on such orders face imprisonment and daily fines. Notes indicate substitution of the Tribunal for the Company Law Board and specify the application form and fee.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Debenture redemption reserve requirement compels companies to fund redemption; tribunal can order redemption and penalise officers for default.
Companies issuing debentures must create a debenture redemption reserve funded from profits and limited to redemption use; they must pay interest and redeem as per issue terms. If redemption fails at maturity, the Tribunal may order immediate redemption by payment of principal and interest, and officers defaulting on such orders face imprisonment and daily fines. Notes indicate substitution of the Tribunal for the Company Law Board and specify the application form and fee.
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