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Issues: Whether the applicants were entitled to redemption of the debentures with interest under Section 117C(4) of the Companies Act, 1956, and whether the objections based on limitation, maintainability, and jurisdiction were sustainable.
Analysis: The debentures were issued in joint names, the request for redemption was made after the expiry of the contractual lock-in period, and the company did not act on the redemption requests or make payment. The company's objections that the application was defective because it was affirmed by one joint holder, barred by limitation, or beyond jurisdiction were rejected. The application by any holder of debentures was held to be competent under Section 117C(4). The claim for redemption had been lodged within the relevant period after the lock-in period, and the company's silence could not defeat the claim. Section 117C(4) was treated as a beneficial provision applicable to pending debentures, and the departmental circular was relied upon to support that view.
Conclusion: The application was maintainable, the objections were rejected, and the company was directed to redeem the debentures by paying the principal amount with interest due in accordance with the terms of issue.
Ratio Decidendi: Section 117C(4) confers a remedy on debentureholders to seek redemption of debentures pending redemption, and such beneficial provision must be applied to protect investors where the company fails to honour the redemption obligation.
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