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TMI Blog2019 (12) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... een lakhs seventy four thousand eight hundred and twenty only) to debenture holder No. 2, etc. 2. Brief facts of the case, as mentioned in the petition/application, are as follows : (1) M/s. Tierra Farm Assets Co. P. Ltd. (hereinafter referred to as "company") is a company incorporated on March 13, 2012 under the Indian Companies Act, 1956, having registered office at Sadashiv Nagar, Bangalore. It is engaged in the business of food and agriculture with core interest in the managing and development of assets such as land or building or any other immovable assets in connection with food and agriculture business and export of food products. (2) On December 17, 2015 the company decided to issue certain secured non-convertible debentures. To this end, a debenture trust deed was entered into between, inter alia, the company, the debenture trustee (Vistra ITCL (India) Ltd.) and the debenture holder representative (Scient Capital P. Ltd.). The broker of the petitioners informed them about the issue of the debentures. After studying the various provisions of the debenture trust deed and relying on the warranties and representations contained therein, the petitioners subscribed to the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments were defaulted on, the petitioners have addressed correspondence calling upon the company, the debenture trustee and the debenture holders representative to comply with the terms of the debenture trust deed. The petitioners have also been consistent in their demand for redemption of the debentures as stipulated under the terms of the debenture trust deed. (6) As of the date of filing of this application, the following amounts are due and payable. These amounts include the default interest payable, as well as the prepayment penalty (which is triggered if the early redemption is on account of the company's default) : (a) Debenture holder No. 1 : (a) Principal amount of Indian rupees forty-five lakhs (INR 45,00,000). (b) Interest of Indian rupees eight lakhs twenty eight thousand (INR 8,28,000) (payments due on March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018). (c) Default interest (as per clause 5.5 of the debenture trust deed) as of January, 2019 : (i) On the sum of Indian rupees two lakhs seven thousand (INR 2,07,000) due on March 1, 2018 ; Indian rupees twelve thousand four hundred and twenty (INR 12,420) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 : Indian rupees four thousand one hundred and forty (INR 4,140) (months 1-3) + Indian rupees two thousand seven hundred and sixty (month 4). (iv) On the sum of Indian rupees sixty nine thousand (INR 69,000) due on December 1, 2018 : Indian rupees one thousand three hundred and eighty (INR 1,380) (month 1). (v) Prepayment penalty (as per clause 5. 9 of the debenture trust deed) : 3 per cent. of Indian rupees fifteen lakhs (INR 15,00,000) = Indian rupees forty-five thousand (INR 45,000) Total due as of date : Indian rupees eighteen lakhs seventy four thousand eight hundred and twenty (INR 18,74,820). (7) However, despite accepting that the company is in default of its obligations, neither the debenture holders representative nor the debenture trustee have responded to the petitioners' specific request for redemption of the debentures. The debentures are secured by, inter alia, certain mortgaged properties as specified in the debenture trust deed. The petitioners are unaware as to what the status of these mortgaged properties are the debenture trustee and the debenture holders representative, who are supposed to safeguard the interest of the debenture hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company in tranches from time to time as and when investment was made based on project requirements. Scient Capital P. Ltd., is an alternate asset management firm and has invested in the NCDs of the company. (3) The productions in projects were lucrative till 2017, and thus company paid all interest on NCDs from time to time without delay. However, in the early stage of year, 2017, the company shut down its projects due to non-availability of water, which is major requirement for the projects. Therefore, the company's cash flow came down due to shut down of pro jects and booked huge losses for the financial year 2017-18. The company's loss before tax as on March 31, 2018 is Rs. 15.89 crores and thus it could not pay interest on NCDs. Even though total investment proposed by the company was Rs. 50 crores it has not carry out its proposal in entirety due to above reasons. (4) The company has issued several shares/bonds to several people like the petitioners, who are about 200 running into hundreds of shares/ bonds and a list of which is also enclosed to the petition. It could not pay not only to the petitioners herein but also several people as per the list. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) Designing and implementation of the plan approved. (f) Obtaining completion certificate obtaining approvals from such other departments as may be required. In order to complete the aforesaid procedure, the respondent requires a time period of at least 1 (one) year and they started the arbitration and make efforts to safe guard the investment made. The initiation of arbitration proceedings in the meanwhile would be beneficial to the respondent, the applicants and all other investors. (9) Therefore, they have sought permission to go ahead of arbitration to settle the entire issue. 4. Heard Shri Aditya Narayan, learned counsel for the petitioners and Shri K. V. Suresh Kumar Reddy, learned counsel for the respondent. We have carefully perused the pleadings of both the parties and extant provisions of law on the issue and rules made thereunder. 5. The facts as narrated above disclose that it is not case of even the petitioners that the company has resorted to misappropriation/fraud in order to deny the claim of the petitioners. The financial status of the company discloses that the company is suffering substantial losses leading to severe financial distress makin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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