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TMI Blog2020 (11) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to pay its stake holders. Since the issue is not exclusively confined to the Petitioners, as several similarly situated stake holders, as per the list enclosed to the Petition, the efforts being by the Company like to explore the possibility of settlement, refer the matter to Arbitration, selling properties of the Companies, are appropriate/plausible steps to be pursued so as to find solution to the entire issue. 6. The basic facts as contended by the Petitioners, prima facie, are not in dispute. While deciding an Application/Petition filed U/s 71(10) Companies Act, 2013 R/w 73 of NCLT Rules, 2016, the Tribunal has to consider financial status of Company, the interest of all stake holders etc., before ordering to repay the outstanding standing exclusively in respect of Petitioners. We are convinced with the reasons furnished by the Company for its failure to redeem debentures, pay interest of NCDs in question. Therefore, it would be just and proper to grant six months' time tentatively to the Company to explore all possibilities of settlement of the claims of the Petitioners alongwith all similarly situated claimants. 7. In the result, by exercising powers conferred on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 2018 and December 2018 (as of the date of filing). However, the Company failed and neglected to make such payments. Upon the failure of the Company to make the interest payments on schedule, the Petitioners started addressing correspondence to their Broker, the Debenture Holders Representative, the Debenture Trustee and the Company. The Petitioners have been diligently following up with the Company and the various other entities involved in the issue of the debentures. Right from the time, the interest payments were defaulted on, the Petitioners have addressed correspondence calling upon the Company, the Debenture Trustee and the Debenture Holders Representative to comply with the terms of the Debenture Trust Deed. The Petitioners have also been consistent in their demand for redemption of the debentures as stipulated under the terms of the Debenture Trust Deed. (6) As of the date of filing of this Application, the following amounts are due and payable. These amounts include the default interest payable, as well as the prepayment penalty (which is triggered if the early redemption is on account of the Company's default): a) Debenture Holder No. 1: a. Principal amount of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thousand (INR 69,000/-) due on 01.06.2018: Indian Rupees Four Thousand One Hundred and Forty (INR 4,140/-) (months 1-3) + Indian Rupees Eight Thousand Two Hundred and Eighty (INR 8,280/-) (months 4-6) + Indian Rupees Four Thousand One Hundred and Forty (INR 4,140/-) (month 7). iii. On the sum of Indian Rupees Sixty-Nine Thousand (INR 69,000/-) due on 01.09.2018: Indian Rupees Four Thousand One Hundred and Forty (INR 4,140/-) (months 1-3) + Indian Rupees Two Thousand Seven Hundred and Sixty (INR 2,760/-) (month 4). iv. On the sum of Indian Rupees Sixty Nine Thousand (INR 69,000/-) due on 01.12.2018: Indian Rupees One Thousand Three Hundred and Eighty (INR 1,380/-) (month 1). v. Prepayment penalty (as per clause 5.9 of the Debenture Trust Deed): 3% of Indian Rupees Fifteen Lakhs (INR 15,00,000/-) + Indian rupees Forty-Five Thousand (INR 45,000/-) Total due as of date: Indian Rupees Eighteen Lakhs Seventy Four Thousand Eight Hundred and Twenty (INR 18,74,820/-)." 3. The Appellants stated that despite being in default neither the Debenture Holders Representative nor the Debenture Trustee have responded to the Petitioners' specific request for redemption of the debentures. Desp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of principal and interest due thereon' when a Company has failed to pay interest on debentures when it is due. The Learned Counsel further contended that no particulars were pleaded or provided by the 'Respondent Company' regarding any efforts made towards settlement either by way of Arbitration or sale of properties and that the case of the 'Respondent Company' has been considered by NCLT as the gospel truth, without any binding dictum, in the absence of which, the Appellants and the individual Debenture Holders would suffer. 5. The main issue which arises for consideration is whether the provisions under Section 71(10) of the Companies Act 2013 was adhered to by NCLT while disposing of the Petition. 6. It is the main contention of the Learned Counsel appearing for the Appellant that NCLT did not specifically address to 'the prayer for repayment' but rather gave a direction to explore all possibilities of settlements of claims of Petitioners and granted six months' time, which is ultra vires to Section 71(8) and Section 71(10) of the Companies Act, 2013. 7. Despite service of notice, there was no representation from the 'Respondent Company'. Notice was issued on 12.02.2020 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than two lakh rupees but which may extend to five lakh rupees, or with both. 71 (12) A contract with the company to take up and pay for any debentures of the company may be enforced by a decree for specific performance." 10. It is significant to mention that Section 71(11) of the Companies Act, 2013 speaks of 'Penalty for Default'. Section 71(12) provides 'a contract with a Company to take up & pay for any debentures of the Company may be enforced by a decree of 'Specific Performance' '. As a matter of fact, Section 73 of the NCLT Rules, 2016 relates to 'Applications' under Section 71(9), 71(10), 73(4) and Section 74(2) & Section 76(2) of the Companies Act, 2013. It is relevant to mention that the relief for 'Specific Performance' is allowed as a 'rule' when there is no other relief which would meet the circumstances of the given case. In Mamta Kothari V/s. Bharat Hydro Power Corporation Ltd. (2015) 129 SCL, Section 117(4) of the 1956 Companies Act (equivalent to Section 71 of the Companies Act, 2016) has been discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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