Section 15 in Securities And Exchange Board Of India (Debenture Trustees) Regulations, 1993
15. Duties of the debenture trustees.
- [(1) It shall be the duty of every debenture trustee to-(a)satisfy itself that the prospectus or letter of offer does not contain any matter which is inconsistent with the terms of the issue of debentures or with the trust deed;(b)satisfy itself that the covenants in the trust deed are not prejudicial to the interest of the debenture holders;(c)call for periodical status/performance reports from the issuer company within 7 days of the relevant board meeting or within 45 days of the respective quarter whichever is earlier;(ca)[ supervise the implementation of the conditions regarding creation of security for the debentures and debenture redemption reserve, wherever applicable;](d)communicate promptly to the debenture holders defaults, if any, with regard to payment of interest or redemption of debentures and action taken by the trustee therefor;(e)appoint a nominee director on the Board of the company in the event of :(i)two consecutive defaults in payment of interest to the debenture holders;or(ii)default in creation of security for debentures;or(iii)default in redemption of debentures.(f)ensure that the company does not commit any breach of the terms of issue of debentures or covenants of the trust deed and take such reasonable steps as may be necessary to remedy any such breach;(g)inform the debenture holder immediately of any breach of the terms of issue of debentures or covenants of the trust deed;(h)ensure the implementation of the condition regarding creation of security for the debentures, if any, and debentures redemption reserve;(i)ensure that the assets of the company issuing debentures and of the guarantors, if any, are sufficient to discharge the interest and principal amount at all times and that such assets are free from any other encumbrances except those which are specifically agreed to by the debenture holders;(j)do such acts as are necessary in the event the security becomes enforceable;(k)call for reports on the utilization of funds raised by the issue of debentures;(l)take steps to convene a meeting of the holders of debentures as and when such meeting is required to be held;(m)ensure that the debentures have been converted or redeemed in accordance with the terms of the issue of debentures;(n)perform such acts as are necessary for the protection of the interest of the debenture holders and do all the other acts as are necessary in order to resolve the grievances of the debenture holder;(o)take possession of trust property in accordance with the provisions of the trust deed;(p)to take appropriate measures for protecting the interest of the debenture holders as soon as any breach of the trust deed or law comes to his notice;(q)ascertain and satisfy itself that :-(i)in case where the allotment letter has been issued and debenture certificate is to be issued after registration of charge the debenture certificates have been dispatched by the body corporate to the debenture holder within 30 days of the registration of the charge with the Register of Companies;(ii)debentures certificates have been dispatched to the debenture holder or debenture have been credited in the demat accounts of the debentures holder in accordance with the provisions of the Securities and Exchange Board of India (Debenture Trustee) Regulation, 1993, Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulation, 2008, Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 and any other regulation issued by the Board;(iii)interest warrants for interest due on the debentures have been dispatched to the debenture holders on or before the due dates;(iv)debenture holders have been paid the monies due to them on the date of redemption of the debentures;(r)inform the Board immediately of any breach of trust deed or provision of any law, which comes to the knowledge of the trustee.Explanation. - The communication to the debenture holders by the debentures trustee as mentioned in these regulation may be made by electronic media, press-release and placing notice on its website;(s)exercise due diligence to ensure compliance by the body corporate with the provisions of the Companies Act, Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement), Regulation, 2015 the listing agreement of the stock exchange or the trust deed or any other regulation issued by the Board pertaining to debt issue;(t)In case where listed debt securities are secured by way of receivables/ book debts it shall obtain the following-(i)In Quarterly basis-(a)Certificate from the Director/ Managing Director of the issuer company certifying the value of the book debts/ receivables;(b)Certificate from an independent chartered accountant giving the value of book debts/ receivables.(ii)On Yearly basis-(a)Certificate from the statutory auditor giving the value of book debts/ receivables.][Substituted by Notification No. SEBI/LAD-NRO/GN/2017-18/011, dated 13.6.2017 (w.e.f 29.12.1993)](1A)[ The debenture trustee shall:(a)obtain reports from the lead bank regarding progress of the project;(b)monitor utilisation of funds raised in the issue;(c)[ obtain a certificate from the issuer' Statutory Auditor:(i)in respect of utilisation of fund during the implementation period of the project; and(ii)in the case of debentures issued for financing working capital at the end of each accounting years.]](2)A debenture trustee shall call or cause to be called by the body corporate a meeting of all the debenture holders on-(a)a requisition in writing signed by at least one-tenth of the debenture holders in value for the time being outstanding; or(b)the happening of any event, which constitutes a default or which in the opinion of the debenture trustees affects the interest of the debenture holders.(3)[ No debenture trustee shall relinquish its assignments as debenture trustee in respect of the debenture issue of any body corporate, unless and until another debenture trustee is appointed in its place by the body corporate.(4)A debenture trustee shall maintain the networth requirements as specified in these regulations on a continuous basis and shall inform the Board immediately in respect of any shortfall in the networth and in such a case it shall not be entitled to undertake new assignments until it restores the networth to the level of specified requirement within the time specified by the Board.(5)A debenture trustee may inspect books of account, records, registers of the body corporate and the trust property to the extent necessary for discharging its obligations.] [Inserted by S.O. 763(E0, dated 4.7.2003]
