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 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 purposes
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 Tribunal 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
Tribunal 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.
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