TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 1270
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.... brief averments and pleadings made by the applicants are mentioned as under: (i) On being asked to pay the entire sum together with interest due towards redemption of debenture to the applicants, the company has stated as follows: The entire assets of the company were taken over by the Board on 1st December, 1996, the respondent-company could not and was neither in a position to repay the said debentures. (ii) The above statement made by the company is misleading because the undertaking of "Karbi Langpi Project" (with all assets and liabilities under the said project) of the company has been acquired under Bharat Hydropower Corporation Ltd. (Acquisition of Transfer of Undertaking Act, 1996) and accordingly, neither the company has been acquired nor the entire assets of the company were taken over under the said Act of 1996. The balance sheet of the company would show that the debentures continued to remain a liability of the company and the company has acknowledged the obligation, in fact, the balance sheet for the year ended 31st March, 2011 and the annual return for the financial year 2011-12, filed on 25th September, 2012, also indicate that the company has been....
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.... such debentures are redeemed. From the language used in the aforesaid text, the provisions of section 117C are having retrospective effect, because it speaks about issue of debentures after the commencement of this Act, means after commencement of the Act and not after the amendment of the Act in 2000 effective from 13th December, 2000. It was mandatory to create DRR by the company after 13th December, 2000, even if the debentures had been issued prior to that date which the company has failed to do. Thus, non-creation of DRR is not a tool in the hands of the company to defeat the provisions of section 117C, but it is an additional default committed by the company. (viii) As regards the allegation of the respondent-company that the present application is barred by limitation, it has been submitted that the liability to pay to the debenture holders on redemption appears in the books of account of the company, i.e., the balance sheet for the year ended 31st March, 2011 and the list of debenture holders filed with the annual return dated 25th September, 2012 (financial year 2011-12). The company has nowhere in their reply stated that the company has written off its liability on a....
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....eiving an express request to that effect from debenture holders. If the company does not receive specific request within 31st December, 1996, the debentures would automatically convert into equity shares of ₹ 10 each at any time after 1st January, 1997, but before 31st March, 1997. (iii) The applicants never sought redemption of the debentures by the said date. The applicants, however, sent a letter intimating consent to redeem the debentures dated 24th December, 1996, which was received by the company on 4th January, 1997. The company had duly redeemed the debentures of several debenture holders who had sought early redemption by 31st December, 1996. (iv) On 30th November, 1996, the State of Assam promulgated the BHPCL (Acquisition and Transfer of Undertaking) Ordinance, 1996 (Ordinance) acquiring the project of the company. The Ordinance was subsequently replaced by BHPCL (Acquisition and Transfer of Undertaking) Act, 1996 (BHPCL Act). However, writ petitions were filed by the company before the hon'ble High Court of Assam, challenging the legality and validity of Ordinance and BHPCL Act. The learned Single Judge of hon'ble High Court at Assam had passed an orde....
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....B on 23rd March, 2005 for relief under section 117C of the Act. Thus, a clear case of forum shopping can be deduced from the chain of events put forth above. (viii) Section 117C of the Act was inserted into the statute book only with effect from 13th December, 2000 and by that time, the claim of the applicants was already time barred. Section 117C cannot apply to debentures issued before the insertion of the law and under no circumstance can apply to such matters which were already time barred at the time of insertion of the law. The applicants cannot come to the hon'ble CLB for passing of order for payment of debentures in the instant case, particularly because the applicants have clearly lost their right to seek redemption. (ix) The present claims of the applicants are barred by limitation under Part X, article 113 of the Limitation Act which provides that "The period of limitation will be three years from the date when the right to sue accrues for any suit for which no period of limitation is provided elsewhere in this Schedule". (x) In Thirumalai Chemicals Ltd., the hon'ble Supreme Court of India stated that "Statutes of limitation are, thus, retros....
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..../2005, CP No. 257/2005 and CP No. 258/2005 were all issued on 3rd April, 1995 and the offer of redemption vide notice dated 4th October, 1995 (redemption notice) has been sent to all debenture holders of the company indicating the intention of the company to redeem the convertible debentures with effect from 1st November, 1995, on receiving express request to that effect from debenture holders. In the redemption notice it has also been indicated that if the company does not receive any specific request within 31st December, 1996, the debentures would automatically convert into equity shares of ₹ 10 each at any time after 1st January, 1997, but before 31st March, 1997. One of the applicants sent letter to redeem the debentures dated 24th December, 1996 which was received by the company on 4th January, 1997 and this was clearly beyond the due date fixed for intimation to the company for redemption of debentures. The other two applicants had sent then letters to the respondent-company by registered post with A/D in March 1997 expressing their intention to redeem the concerned debentures. Similarly, the company has also failed to convert the impugned debentures into equity shares....
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....Company Affairs, relied by both sides, is very pertinent and resolves the issue in no uncertain terms by indicating as under: Section 117C will apply to debentures issued and pending to be redeemed and as such DRR is required to be created for debentures issued prior to 13th December, 2000 and pending redemption subject to clarifications issued herein. Further, it has been held in the said decision of CLB, quoted supra, "that the provisions of section 117C(4) being analogous to section 58A(9) of the Act and section 45QA(2) of the RBI Act, 1934 as amended by RBI amendment Act, 1997, are beneficial provisions intended to protect the interest of debenture holders. Such a provision, in my view, should be exercised in favour of aggrieved investors". The above view taken by CLB cannot be lost sight of and the interest of the aggrieved debenture holders deserves to be protected by invoking the provisions of section 117C(4) of the Act. 5. Learned practising company secretary, authorised representative of the respondent-company has submitted that the applications are barred by limitation because of the following reasons: In Part-X, article 113 of the Limitation Act, 1963, it....