2002 (10) TMI 425 - HC - Companies Law

Summary

Issues Involved:
1. Whether the petitioners are Noteholders.
2. Whether the petitioners are debenture holders or holders of any security as contemplated by the Companies Act.
3. Whether the petitioners are creditors u/s 439(1)(b) of the Companies Act.
4. Whether the petitioners have any enforceable claim in view of clause 6, condition No. 13 of the Note.

Summary:

Issue 1: Whether the petitioners are Noteholders
The court held that the petitioners were indeed Noteholders. The petitioners were beneficial owners of the Global Notes offered by the appellant company. The company had recognized the concept of New Beneficial Owners of the debts representing the amounts which they had in their respective accounts. The court noted that the very nature of the Global Notes did not require the company to know the names and debt amounts of individual Noteholders like the petitioners.

Issue 2: Whether the petitioners are debenture holders or holders of any security as contemplated by the Companies Act
The court held that the Notes in question fit into the definition of "debentures" as per section 2(12) of the Companies Act. The Notes were marketable securities and thus fell under the category of debentures. The court rejected the contention that the Notes were not marketable in India and therefore not debentures. The court emphasized that the definition of securities in section 2(h) of the Securities Contracts (Regulation) Act, 1956, which includes rights or interests in securities, was incorporated by reference under section 2(45AA) of the Companies Act.

Issue 3: Whether the petitioners are creditors u/s 439(1)(b) of the Companies Act
The court held that the petitioners, as beneficial owners of the Notes, were creditors within the meaning of section 439(1)(b) of the Companies Act. The court noted that the petitioners were entitled to receive payments of principal and interest on the Notes, and thus had a pecuniary claim against the company. The court also recognized that the petitioners were creditor-beneficiaries of the trust created by the Trust Deed and could enforce their claims against the company.

Issue 4: Whether the petitioners have any enforceable claim in view of clause 6, condition No. 13 of the Note
The court held that clause 13 of the conditions of the Notes did not preclude the petitioners from filing winding up proceedings. The court noted that the winding up proceedings were not merely for the enforcement of the terms of the Trust Deed and the Notes, but were based on statutory grounds under sections 433(e) and 433(f) of the Companies Act. The court emphasized that no term of agreement could override the statutory provisions enabling creditors to present a winding up petition. The court also noted that the Trustee had refused to intervene in the winding up proceedings, stating that it was a matter between the company and the Noteholders.

Conclusion:
The court dismissed the appeals, upholding the maintainability of the winding up petitions filed by the petitioners. The court also directed that the Trustee be impleaded as a party to the proceedings to assist the company court.