VIJAY KUMAR JALAN Vs. BHARAT HYDROPOWER CORPORATION LTD.

JUDGEMENT

(1.) IN this order, I am considering the application under section 117C of the Companies Act, 1956 ('the Act'), filed by Shri Vijay Kumar Jalan and Smt. Kavita Devi Jalan (joint holders), holding 1,000 convertible debentures in Bharat Hydropower Corporation Ltd. ('the company'), the details of which are given in Annexure A forming part of this order. The brief averments and pleadings made by the applicants are mentioned as under :

(2.) THE applicants, in rejoinder, have submitted that the applicants have no knowledge of the Deed of Assignment or the transfer and vesting of the project in Assam Electricity Board or any other body. Further, such vesting or transfer has no relevance for the purpose of redemption of the debentures in the instant case. In addition, the statement of the company in regard to Guwahati High Court proceeding squarely covers company's acknowledgement of applicants' dues. Moreover, the applicants have no knowledge as to whether the entire compensation was provided to the company or not and such fact is also not relevant and has no connection to the cause of action of the present application. The applicants have further stated that they have no knowledge of the suit being TS No. 439/2004 or Appeal No. RFA 26/2007 before the Guwahati High Court or the SLP No. 5691/2012 or any orders passed thereat. The grievance of the respondent against Assam State Electricity Board for non -compensation is a separate issue/matter altogether and has no connection to the issuance and redemption of debentures. In any event, the respondent -company ought to have created a security and debenture redemption reserve for redemption of debentures which is mandatory to protect the interest of small investors and afford protection to the debenture -holders. As regards the contention of the respondent that the debentures are governed by Companies (Acceptance of Deposits) Rules, 1975, it has been submitted that the public deposits and redeemable debentures are separate aspect in the Act and dealt with in different sections of the Act. The TDS certificates were sent with ulterior motive and to mislead the facts and figures of the matter as no payment was made to the applicants against their debenture certificates. The applicants have denied and disputed all the allegations made in the reply affidavit by the company that the application is not maintainable or is barred by limitation or the subject -matter of the application is beyond jurisdiction of this hon'ble Board.

(3.) I have considered the pleadings and submissions, both oral and written made on behalf of the company as well as the applicants. The facts not in dispute are that 1,000 Convertible Debentures bearing Certificate No. 0112 (Distinctive Nos. 280701 -281700), Registered Folio No. V0003, were issued in joint names of Shri Vijay Kumar Jalan and Smt. Kavita Devi Jalan on 3rd April, 1995 by the respondent -company, viz., Bharat Hydropower Corporation Ltd. As per financial covenants and conditions, the debentures, at the option of the debenture -holders, shall be converted into equity shares of the company for which the Board shall intimate the date fixed by it for such conversion of debenture and shall notify such date at least 15 days in advance by way of written notes addressed to the debenture -holder within 2 years from the date of allotment. The debenture -holder shall have the right to seek redemption thereafter at any time and in that case, interest as stipulated in condition No. 4 of the aforesaid covenants and conditions, shall be payable. It is an uncontroverted fact that the respondent -company neither notified the date of conversion of debentures to equity shares to the debenture -holder nor redeemed the debentures of the applicants. The applicants made necessary application for redemption of such debentures along with interest at the rate of 14 per cent per annum by sending the original Debenture Certificate No. 0112 along with the application which was duly acknowledged to have been received on 11th March, 1996. Thereafter, the applicants had issued another letter dated 21st April, 1997 to the company requesting for redemption of the debentures along with interest thereon and incidentally, such request was made after 2 years from the date of allotment, i.e., beyond the lock -in period for such redemption without any response from the company. The applicants further issued reminder letters dated 9th September, 1998, 6th April, 1999 and 18th May, 2010 to the company, but the company did not respond to such letters nor did make any payments to the applicants on account of redemption of such debentures.