Tribunal Rules in Favor of Debenture Holders: Company Ordered to Repay with Interest

The Tribunal found in favor of the applicants, categorizing them as debenture or deposit holders. The respondent company failed to redeem debentures or repay deposits on time. The Tribunal ordered the company to repay the debentures with interest within 15 days. The order excludes debentures not yet matured and applies specifically to M/s Prism Industrial Complex Limited under the Tribunal's jurisdiction.

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Issues Involved:
1. Redemption of fully paid-up secured redeemable non-convertible debentures.
2. Non-compliance with Tribunal's previous orders.
3. Siphoning off company funds.
4. SEBI's order restraining the promoters/directors.
5. Legal definitions of debenture and deposit under the Companies Act, 2013.
6. Tribunal's power under Sections 71(10) and 73(4) of the Companies Act, 2013.

Issue-wise Detailed Analysis:

1. Redemption of Fully Paid-Up Secured Redeemable Non-Convertible Debentures:
The applicants invested in fully paid-up secured redeemable non-convertible debentures issued by the respondent company. The dates of redemption for these debentures have passed, and the applicants have approached the respondents for redemption, but the debentures have not been redeemed. The applicants have sent notices through counsel demanding payment, failing which they would initiate legal proceedings.

2. Non-Compliance with Tribunal's Previous Orders:
The Tribunal had previously directed the respondent company to prepare a plan for the payment of maturity deposit amounts in a time-bound manner and to furnish a concrete plan detailing their assets and proposed modes of payment. The company was also directed to surrender the passports of its directors and was restrained from leaving the country without prior permission. Despite these orders, no concrete plan has been submitted by the respondent company.

3. Siphoning Off Company Funds:
The applicants contend that the respondent company has sufficient capital to pay off the dues but is deliberately withholding payments. They allege that the respondents are siphoning off funds to other ventures and companies illegally.

4. SEBI's Order Restraining the Promoters/Directors:
The Securities and Exchange Board of India (SEBI) issued an order on 25.04.2016 restraining and prohibiting the promoters/directors from buying, selling, or dealing in the securities market until four years after the completion of refunds to the investors.

5. Legal Definitions of Debenture and Deposit under the Companies Act, 2013:
The judgment references Sections 2(30) and 2(31) of the Companies Act, 2013, which define "debenture" and "deposit." A debenture includes any instrument evidencing a debt, whether constituting a charge on the assets of the company or not. A deposit includes any receipt of money by way of deposit or loan but excludes certain categories as prescribed in consultation with the Reserve Bank of India.

6. Tribunal's Power under Sections 71(10) and 73(4) of the Companies Act, 2013:
Section 71(10) empowers the Tribunal to direct a company to redeem debentures and pay the principal and interest due when the company fails to do so. Section 73(4) allows the depositor to apply to the Tribunal for an order directing the company to pay the sum due or for any loss or damage incurred due to non-payment.

Judgment:
The Tribunal found that the applicants fall within the category of either debenture holders or deposit holders. The respondent company failed to redeem the debentures or repay the deposits on the maturity date. The Tribunal allowed the petition and directed the respondent company to repay the debentures along with interest within 15 days from the receipt of the order. However, the order does not apply to debentures that have not yet reached their maturity date. The order specifically applies to M/s Prism Industrial Complex Limited, registered under the Companies Act, 1956, under the jurisdiction of this Tribunal.

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