Debenture redemption hearings must include affected creditors where their interests may be impacted by the Tribunal's order.

Section 71(10) of the Companies Act, 2013 requires the Tribunal to hear the parties concerned before ordering redemption of debentures, and Rule 73 of the NCLT Rules, 2016 extends that hearing requirement to any other person interested in the matter. The expression "person interested" is broad enough to include creditors and other affected stakeholders, especially where a redemption order may impact the company's financial position and resolution efforts. A refusal to hear such parties on a narrow reading of the rules creates procedural infirmity, and the redemption order may require reconsideration after hearing all concerned persons.

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Issues: (i) Whether the ICA lenders led by Bank of Baroda were entitled to be heard in the company petition under section 71(10) of the Companies Act, 2013; (ii) whether the rejection of the intervention application and the consequential redemption order were liable to be set aside.

Issue (i): Whether the ICA lenders led by Bank of Baroda were entitled to be heard in the company petition under section 71(10) of the Companies Act, 2013.

Analysis: Section 71(10) requires the Tribunal to hear the parties concerned before directing redemption of debentures. Rule 73(3) and Rule 73(4) of the NCLT Rules, 2016 also require a reasonable opportunity of hearing to the company and any other person interested in the matter. The expression "person interested" in Rule 2(18) is broad enough to include creditors and other concerned persons. Since the ICA lenders were engaged in the resolution process and the redemption order could affect the company's financial condition and implementation of the resolution plan, they were entitled to be heard.

Conclusion: The ICA lenders had a right to be heard in the company petition.

Issue (ii): Whether the rejection of the intervention application and the consequential redemption order were liable to be set aside.

Analysis: The refusal to hear the ICA lenders was based on an unduly narrow reading of the hearing requirement under section 71(10) and Rule 73. As the impugned redemption order was passed without affording hearing to parties whose interests were directly affected, both orders suffered from procedural infirmity. The matter therefore required reconsideration by the Tribunal after hearing all concerned parties.

Conclusion: Both impugned orders were set aside and the matter was remanded for fresh decision after hearing the ICA lenders.

Final Conclusion: The appeals succeeded, the intervention was to be allowed, and the company petition was to be reheard afresh by the Tribunal in accordance with law.

Ratio Decidendi: In proceedings under section 71(10) of the Companies Act, 2013, the Tribunal must afford a reasonable hearing not only to the company but also to any other person interested in the matter, including affected creditors whose financial interests and resolution efforts may be impacted by the redemption order.

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