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75. On 5th June, 1979, shares pursuant to the conversions were allotted to the institutions.

76. Plaintiff's Counsel's statement

77. Before I proceed to discuss the contentions that were pressed, I must record a statement made by Mr. Cooper, learned counsel for the plaintiffs. Mr. Cooper stated that "for the purpose of this suit only

(a) the plaintiffs will not contest that the debenture trust deed dated 31st May, 1979, was void.

(b) the plaintiffs will not rely on any allegation regarding the conduct of the adjourned 33rd annual general meeting or any contention based thereon, as the 1st plaintiff and another have filed a separate suit in respect thereof.

130. Coming as I do to this conclusion, I do not rely upon the documents on record which prima facie establish that it was the right of conversion which was exercised and that conversion took place.

131. It was urged by counsel for defendants that it was not open to the plaintiffs to contend that the shares had really been purchased, in view of their counsel's statement that the plaintiffs would not contend that the debenture trust deed was void, and that this would be the inevitable result of the contention being accepted. As I see it, the manner in which the contention has been put by Mr. Cooper does not constitute a challenge to the validity of the statement, which I have earlier set out, expressly reserves this contention (sic).

189. The constitutional point :

It is the case of the plaintiffs that the phrase "or any institution specified by the Central Government in this behalf" in cl. (b) of the proviso to sub-s. (3) of s. 81 is ultra vires the Constitution by reason of excessive delegation of power to the Central Govt.

It was urged by counsel for the defendants that if this case is accepted the consequence would be to invalidate the option term contained in the debenture trust deed. They relied upon the statement made by counsel for the plaintiffs which says that the plaintiffs would not contend that the debenture trust deed was void and submitted that it was not open to the plaintiffs to advance any argument which would lead to an invalidation of any part of the debenture trust deed.

In the further alternative, Mr. Cooper submitted that, even assuming that the special resolution was required before the issue of the debentures, it did not make the debenture trust deed void in any way. The debenture trust deed remained valid even if the convertibility of the debentures to be issued thereunder was affected. The debenture trust deed was only a supporting document and it was open to the company to pass a special resolution before issuing the debentures themselves and accepting the subscription moneys. The fact that, in the instant case, it was all done on the same day did not alter this position, because the argument proceeded on the footing that everything done had been done bona fide and the transaction was what it had been made out to be.