law: Companies (Amendment) Act, 2000
  48.
  
  Insertion of new sections 117A, 117B and 117C.-
  After
  
  section 117 of the principal Act, the following sections shall be inserted,
  
  namely:-
  "117A.
  
  Debenture trust deed.-
  (1)
  
  A trust deed for securing any issue of debentures shall be in such form and
  
  shall be executed with in such period as may be prescribed.
  (2)
  
  A copy of the trust deed shall be open to inspection to any member or debenture
  
  holder of the company and he shall also be entitled to obtain copies of such
  
  trust deed on payment of such sum as may be prescribed.
  (3)
  
  If a copy of the trust deed is not made available for inspection or is not
  
  given to any member or debenture holder, the company and every officer of the
  
  company who is in a default, shall be punishable, for each offence, with fine
  
  which may extend to five hundred rupees for every day during which the offence
  
  continues.
  117B.
  
  Appointment of debenture trustees and duties of debenture trustees.-
  (1)
  
  No company shall issue a prospectus or a letter of offer to the public for
  
  subscription of its debentures, unless the company has, before such issue,
  
  appointed one or more debenture trustees for such debentures and the company
  
  has, on the face of the prospectus or the letter of offer, stated that the
  
  debenture trustee or trustees have given their consent to the company to be so
  
  appointed:
  Provided
  
  that no person shall be appointed as a debenture trustee, if he-
  (a)
  
  beneficially holds shares in the company;
  (b)
  
  is beneficially entitled to moneys which are to be paid by the company to the
  
  debenture trustee;
  (c)
  
  has entered into any guarantee in respect of principal debts secured by the
  
  debentures or interest thereon.
  (2)
  
  Subject to the provisions of this Act, the functions of the debenture trustees
  
  shall generally be to protect the interest of holders of debentures (including
  
  the creation of securities within the stipulated time) and to redress the
  
  grievances of holders of debentures effectively.
  (3)
  
  In particular, and without prejudice to the generality of the foregoing
  
  functions, a debenture trustee may take such other steps as he may deem fit-
  (a)
  
  to ensure that the assets of the company issuing debentures and each of the
  
  guarantors are sufficient to discharge the principal amount at all times;
  (b)
  
  to satisfy himself that the prospectus or the letter of offer does not contain
  
  any matter which is inconsistent with the terms of the debentures or with the
  
  trust deed;
  (c)
  
  to ensure that the company does not commit any breach of covenants and
  
  provisions of the trust deed;
  (d)
  
  to take such reasonable steps to remedy any breach of the covenants of the
  
  trust deed or the terms of issue of debentures;
  (e)
  
  to take steps to call a meeting of holders of debentures as and when such
  
  meeting is required to be held.
  (4)
  
  Where at any time the debenture trustee comes to a conclusion that the assets
  
  of the company are insufficient or are likely to become insufficient to
  
  discharge the principal amount as and when it becomes due, the debenture
  
  trustee may file a petition before the Company Law Board and the Company Law
  
  Board may, after hearing the company and any other person interested in the
  
  matter, by an order, impose such restrictions on the incurring of any further
  
  liabilities as the Company Law Board thinks necessary in the interests of
  
  holders of the debentures. 117C. Liability of company to create security and
  
  debenture redemption reserve.-
  (1)
  
  Where a company issues debentures after the commencement of this Act, it shall
  
  create a debenture redemption reserve for the redemption of such debentures, to
  
  which adequate ten amounts shall be credited, from out of its profits every
  
  year until such debentures are redeemed.
  (2)
  
  The amounts credited to the debenture redemption reserve shall not be utilised
  
  by the company except for the purpose aforesaid.
  (3)
  
  The company referred to in sub-section (1) shall pay interest and redeem the
  
  debentures in accordance with the terms and conditions of their issue.
  (4)
  
  Where a company fails to redeem the debentures on the date of maturity, the
  
  Company Law Board may, on the application of any or all the holders of
  
  debentures shall, after hearing the parties concerned, direct, by order, the
  
  company to redeem the debentures forthwith by the payment of principal and
  
  interest due thereon.
  (5)
  
  If default is made in complying with the order of the Company Law Board under
  
  sub-section (4), every officer of the company who is in default, shall be
  
  punishable with imprisonment which may extend to three years and shall also be
  
  liable to a fine of not less than five hundred rupees for every day during
  
  which such default continues.".