2022 (3) TMI 1498 - HC - SEBI

Convening a meeting of seven debenture holders to consider the Resolution Plan approved by the ICA lenders - meeting put to vote such resolution as may be necessary in terms of the Debenture Trust Deed - HELD THAT - Having considered the submissions, it would be appropriate following the law laid down by this Court in Rajkumar Nagpal 2021 (10) TMI 1311 - BOMBAY HIGH COURT to grant ad-interim relief in terms of prayer clause (c). Accordingly, Defendant No.2 is directed to call meeting of the seven Debenture Holders under the three Debenture Trust Deeds within two weeks of this order. The calling, conducting and voting at such meetings shall be governed by the terms of the respective Debenture Trust Deeds. At such meetings, the second Defendant will place for consideration and approval of the beneficial owners or debenture holders the settlement offer / compromise / arrangement / Resolution Plan approved by ICA lenders on 19th June, 2021 and put to vote such Resolution Plan. It is made clear if there is any further or later or supplementary trust deed, then the provisions of that supplementary trust deed will also be taken in to account.

Summary

Issues:
1. Ad-interim relief sought for convening a meeting of debenture holders to consider a Resolution Plan.
2. Interpretation of Debenture Trust Deed clauses regarding the calling and conducting of meetings.
3. SEBI circular's impact on the calling and conduct of debenture holder meetings.
4. Applicability of the law laid down in a previous court decision regarding the governance of debenture holder meetings.
5. Direction for Defendant No.2 to call a meeting of debenture holders within two weeks.

Analysis:
1. The applicants/plaintiffs sought ad-interim relief for convening a meeting of debenture holders to consider a Resolution Plan approved by ICA lenders. The relief was granted, directing Defendant No.2 to call a meeting within two weeks, as per the Debenture Trust Deed clauses.

2. The interpretation of Debenture Trust Deed clauses was crucial in determining the procedure for calling and conducting meetings. The court referred to relevant clauses providing powers to sanction compromises or arrangements, emphasizing the need to follow the Trust Deed's provisions for debenture holder meetings.

3. The impact of a SEBI circular on debenture holder meetings was discussed, with the court emphasizing that the Debenture Trust Deed must be adhered to for calling and conducting meetings. A previous court decision supported this stance, dismissing the argument that SEBI resolutions should govern meetings.

4. The court applied the law laid down in a previous decision, upholding the importance of the Debenture Trust Deed in governing debenture holder meetings. This decision directed Defendant No.2 to call and conduct the meeting in accordance with the Trust Deed's provisions.

5. Finally, Defendant No.2 was directed to call a meeting of debenture holders within two weeks, following the law laid down by the court in a previous judgment. The terms of the respective Debenture Trust Deeds were to govern the calling, conducting, and voting at such meetings, ensuring compliance with the legal framework.