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TMI Blog2014 (9) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... it may think fit against or in relation to the Company to enforce its obligations under these presents. Therefore, a combined reading of the above said provisions would make it clear that it is a trustee, who can represent either on its own or at the instance of the required Bondholders. The appellant has raised a specific plea in the Company Petition that it has been filed both on behalf of the Bondholders as well as in its capacity as a trustee, as there was a breach of covenants and obligations under the Trust deed on the part of the respondents. Furthermore, the authorisation has also been produced. The respondent has not questioned the validity or genuineness of the said authorisation. Therefore, the learned single Judge was not right in rejecting the application on the ground that there was no valid authorisation. The execution of the power of attorney is also not in dispute. As rightly submitted by the learned Senior Counsel, the Company Court ought to have impounded the document and send it to the Collector for re-validation. Even otherwise, a fresh document has been filed by the appellant. The genuineness and authenticity of the said document has not been questione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judge, while rejecting the memo, was pleased to dismiss the Company Petition as not maintainable as there was no authorisation on record and the power of attorney executed by the appellant to the power holder was insufficiently stamped. Challenging the same, the present appeal has been filed. Pending appeal, the appellant has filed an application in M.P.No.1 of 2013 under Order XLI Rule 27 of the Civil Procedure Code seeking to receive certain documents, which include a fresh power deed executed in favour of the power holder and the authorisation letter of 25% of the Bondholders as required under clause 10(1) of the Trust deed dated 27.12.2007. Submission of the appellant: 3. The learned Senior Counsel for the appellant submitted that the fact that 25% of the Bondholders have directed the trustee to take action in accordance with Clause 10.1 of the trust deed is not in dispute. The leaned single Judge ought to have taken the said document into consideration. The memo has also been served on the respondent. Even otherwise as per the avements made in the Company Petition, the trustee is entitled to take action as per the Trust deed dated 27.12.2007 and the offering Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively directed or requested to do so (a) by an Extraordinary Resolution or (b) in writing by the holders of at least one-quarter in principal amount of the Bonds then outstanding and in either case then only if it shall be indemnified and/or secured to its satisfaction against all Liabilities to which it may render itself liable or which it may incur by so doing. 10.2. Only the Trustee may enforce the provisions of these presents. No Bondholder shall be entitled to proceed directly against the Company to enforce the performance of any of the provisions of these presents unless the Trustee having become bound as aforesaid to take proceedings fails to do so within a reasonable period and such failure is continuing. 6. Clause 10 of the Trust deed dated 27.12.2002 speaks about the action, proceedings and indemnification by the trustee representing the appellant as against the respondent. Clause 10.1 deals with the rights of the Bond holders vis-a-vis the duties of the trustee. As per clause 10.1, the trustee is not bound to take any action unless he is directed or requested to do so by an extraordinary resolution or in writing of the holders of atleast one quarter in prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly against the Company, unless the Trustee, having become bound to do so, fails to do so and such failure shall have continued or a period of 60 days and no directions inconsistent with such written request or Extraordinary Resolution have been given to the Trustee during such 60 days period by the holders of a majority in principal amount of the outstanding Bonds. Under the Deed of Trust, the Respondent was constituted as a trustee. Clause 24 stipulates that no individual holder of the bonds would be entitled to proceed directly against the Company. Upon the bonds becoming due and payable, it was for the trustee, namely, the Respondent, to adopt proceedings against the Company to enforce repayment of the bonds together with the premium, if any, and to enforce the provisions of the Deed of Trust. Clause 24 also stipulates that the respondent is not bound to take such proceedings unless it has been so requested by the holders of not less than twenty five per cent of the principal amount of the bonds then outstanding. An individual holder is not entitled to move a proceeding against the Appellant unless the trustee having become bound fails to adopt necessary steps for a stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erious consequences over a running concern and the learned single Judge also has not gone into the merits. Therefore, it is submitted that the matter may be remitted to the learned single Judge leaving open the issues on merit to be decided afresh. 9. We find considerable force in the submission made by the learned counsel for respondent. Admittedly, the learned single Judge has not considered the merits of the case. Therefore, while setting aside the findings rendered by the learned single Judge in the Order dated 23.04.2013 made in Company Petition No.171 of 2012, we do not propose to admit the Company Petition. Instead, we deem it fit to remit the matter back to the learned single Judge to decide the matter on merit after hearing the parties as to whether the Company Petition requires to be admitted and to be followed by appropriate consequential directions. We are also satisfied with the reasons assigned in the Petition filed in M.P.No.1 of 2013 praying for receipt of certain additional documents. 10. For foregoing reasons, the order passed by the learned single Judge dated 23.04.2013 made in Company Petition No.171 of 2012 is hereby set aside and the matter is remitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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