When debentures are issued for public subscription involving a large number of debenture holders it is not feasible to create a separate charge in favour of thousands of debenture holders. So the most common practice of securing them is to execute a Trust Deed conveying the property of the Co to trustees & declaring trust in favour of debenture holders. trust deed normally grants the trustees a charge over the Co’s property, contains terms & conditions on the debentures & defines the rights of the debenture holders & the Co. A Debenture Trust Deed is a document created by a company as security that is issued by the company to protect the interest of a denture holder, where trustees are appointed. In order to raise funds from the general public, companies can create security in the form of shares known as debenture stock.  A trustee is usually appointed in such situations to serve as an intermediary between the company and the debenture holder.  Debenture trustee is a person who safeguards the interest of debenture holders and serves as a liaison between the issuer company and the debenture holders. The concept of debenture trustees was evolved due to the difficulties being faced by an issuer company while dealing with each debenture holder separately for obtaining their consent on various matters and carrying out compliances when the debentures were issued to multiple debenture holders. In order to overcome this practical difficulty, the need for a single point of contact was felt, which would deal with the issuer company and perform its duties on behalf of numerous debenture holders as per the directions given by the debenture holders in terms of the provisions of the debenture trust deed.

Rights/Remedies of D.H

• As per Rule 18, debenture trustee shall communicate promptly to the debenture holders defaults with regard to payment of interest or redemption of debentures & action taken by the trustee.
• He will appoint a nominee director on the board of the Co in the event of two consecutive defaults in payment of interest to the debenture holders or default in the redemption of debentures.
• S 71, when a Co fails to redeem the debentures on the date of maturity or fails to pay interest on the debentures when it is due, the Tribunal may direct or order the Co to redeem the debentures forthwith .S 71(10).
• If any default is made in complying with the order of the tribunal every officer of the Co who is in default shall be punishable with imprisonment which may extend to 3 yrs or with fine which shall not be less than 2 lakh rupees but which may extend to 5 lakh rupees or with both.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.