M. S. SHAH, J. ( 1 ) THESE three Company Petitions are filed by fifteen different Companies incorporated under the laws of the State of Delaware in the United States of America or under laws of British Virgin Islands or under the law of Cayman Islands. The petitions are under the provisions of Sections 433, 434 and 439 of the Companies act, 1956 (hereinafter referred to as "the Act" or "the companies Act") for winding up Essar Steel Ltd. , a company registered under the Act and having its registered Office at Surat within the territorial jurisdiction of this Court. This judgment only deal with the preliminary objections raised on behalf of the respondent Company against maintainability of these petitions. ( 2 ) THOUGH not customary, looking to the length of the judgment, the Court would like to state at the outset how the Court has proceeded - ( 21 ) IN view of the aforesaid decisions, the Court finds considerable substance in the submission made by Mr chidambaram for the petitioners that once the definition of "securities" as contained in Section 2 (h) of the SCRA is incorporated in Section 2 (13) read with Section 2 (45aa) of the Companies Act, while considering the meaning of expression "holder of debenture", there is no occasion to refer to the interpretation of the definition of the term "securities" for the purposes of SCRA which is enacted for the purpose of regulating sale and purchase of securities at Stock Exchanges in India. We are concerned only with the scope and ambit of the expressions "debenture" and "securities" for the limited purpose of a winding up petition under Sections 433 and 434 read with Section 439 of the Companies Act. ( 22 ) THE expression "debenture" by itself is notdefined in any statutory provision except the one contained in section 2 (12) of the Act. Since that definition is not self-explanatory, one has to turn to the judicial pronouncements explaining the meaning of the expression "debenture". In Levy vs. Abercorris Slate and slab Company, (1887) 37 Ch D 260, "debenture" has been defined as a document which either creates a debt or acknowledges it, and any document which fulfils either of these conditions is a "debenture". In Laxman Bharmanji vs. Emperor, AIR (33) 1946 Bom. In Levy vs. Abercorris Slate and slab Company, (1887) 37 Ch D 260, "debenture" has been defined as a document which either creates a debt or acknowledges it, and any document which fulfils either of these conditions is a "debenture". In Laxman Bharmanji vs. Emperor, AIR (33) 1946 Bom. 18, the Division Bench of the Bombay High Court adopted the meaning given by chitty, J. In the aforesaid decision, the Division Bench has held that for determining what is and is not a debenture, we are not bound to hold that an instrument is a debenture because it is called a debenture by the company issuing it, nor to hold that it is not a debenture because it is not so called by the company. We must look at the substance of the instrument itself. The debentures are the acknowledgment of debt, the promise to return it, they may form a series bearing consecutive numbers and all the holders get an equal chance to partake in the annual distribution of prizes out of the net interest realized by the Company. There may be a mortgageage debenture or a simple debenture which does not create any charge on any of the assets of the Company. In CIT, Kerala vs. Cochin Refineries Ltd. , 1982 tax. LR 1981, a Division Bench of the Kerala High Court defined it as under :-"a debenture is certainly a document which either creates a debt or acknowledges it. While it may usually be one of a series, it need not necessarily be so". In the facts of that case, the Cochin Refineries ltd.-assessee was a Public Limited Company which entered into agreements with financiers in the United States called Loan and Note purchase agreements. According to the agreements, the assessee-Company was to authorize issuance and sale of 12 million U. S. dollars as 5-3/4 secured Notes series A and the borrowing of 6 million U. S. dollars at the same rate but known as secured notes Series b. The notes were to be issued and secured by a deed of trust and mortgage between the assessee-Company and the first National City Bank as the Trustee and the creditors. The notes would be dated, would mature and would bear interest which shall be payable on such terms and provisions as provided in the mortgage deed. The notes would be dated, would mature and would bear interest which shall be payable on such terms and provisions as provided in the mortgage deed. The agreement defined the term "notes" as the Note authenticated and delivered under the said indenture, it being intended that the expression shall have the same meaning as "debentures" under the Indian Law. After considering the definition of "debenture" in section 2 (12) of the Companies Act and various authorities, the Court held that the notes issued as per the aforesaid agreements were debentures. ( 23 ) A perusal of the aforesaid authorities clearly indicates that debentures are an acknowledgment of a debt or promise to return it and to make distribution of interest out of the net income realised by the issuer company. They may or may not create a charge on the properties of the Issuer-Company. They may or may not form a part of a series. The notes in the instant case fit into this definition of the expression "debentures". As already indicated in paras 5. 6 and 15 hereinabove, there is one global note and there are different persons having a share in it. The issuer Company-Essar has promised to return the amounts governed by the global note at the maturity date in 2005 and it also promised to pay interest thereon on quarterly basis. All the ingredients of a debenture are, therefore, fully satisfied and there is no reason why the notes cannot be treated as debentures as contemplated by the provisions of sub-section (2) of section 439 of the act. The second preliminary objection must, therefore, fail. ( 24 ) PRELIMINARY Contention No. 3 In any case, the petitioners are not creditors as the petitioners cannot give a valid discharge. 24. 1 Mr Sundaram for the respondent has vehemently submitted that even if the petitioners are noteholders and even if the notes are treated as debentures, still the petitioners cannot be considered to be creditors within the meaning of Section 439 (1) (b) of the Act. Sub-section (2) of Section 439 does not automatically elevate the debenture holder to the status of a creditor under Section 439 (1) (b) unless the debenture holder is a creditor in his own right. Sub-section (2) of Section 439 does not automatically elevate the debenture holder to the status of a creditor under Section 439 (1) (b) unless the debenture holder is a creditor in his own right. Only that person can be treated as a creditor under Section 439 (1) (b) of the Act who can give a valid discharge to the company from whom the amount is claimed. On the basis of the clauses in the Trust Deed and the conditions of the Note, it is submitted that only a trustee can give a valid discharge and, therefore, only the trustee is a creditor who can file a winding up petition under Section 439 (1) (b) of the Act. In support of the aforesaid contention, strong reliance is placed on the decision of the Apex Court in harinagar Sugar Mills Co. Ltd. vs. M. W. Pradhan, Court receiver, High Court, Bombay, (1966) 36 Comp. Cases 426 wherein the Supreme Court held that creditor means a person to whom a debt is payable; If the debtor pays him the debt, the debtor must get the full discharge. Reliance is also placed on the decision of the Apex Court in Howrah Trading Co. Ltd. vs. CIT, Calcutta, AIR 1959 sc 775 , and the two decisions of Chancery Division in Re dunderland Iron Ore Co. Ltd. , (1909) Ch D 446 (452) and in Re Uruguau Central and Hygueritan Railway Co. of Monte video, (1879) Ch B 372. 24. 2 Mr Sundaram has also submitted that if there is no covenant between the Company and the debenture holder, the debenture holder is not a creditor. Reliance is placed on the decision of the Bombay High Court in Narotamdas trikandas Toprani vs. Bombay Dyeing and Mfg. Co. Ltd. , (1990) 68 Comp. Cases 300 in support of the said contention. Mr Sundaram has referred to the following clause in the Trust Deed for the New Notes A Series and B series (page 149) to lay the foundation for this contention :-"2. 2 Covenant to Pay : The Issuer will. . . . . . on any due date when the Notes or any of them become due to be redeemed unconditionally pay to or to the order of the Trustee in New York City in U. S. dollars. . . . . . . . . 2 Covenant to Pay : The Issuer will. . . . . . on any due date when the Notes or any of them become due to be redeemed unconditionally pay to or to the order of the Trustee in New York City in U. S. dollars. . . . . . . . . the principal amount of the Notes becoming due for redemption on that date and will. . . . . . until such payment. . . . . . unconditionally so pay to or to the order of the Trustee interest on the principal amount of the Notes. . . . . . 2. 3 Discharge: Subject to Clause 2. 4, any payment to be made in respect of the Notes by the Issuer or the Trustee may be made as provided in the Conditions and any payment so made will (subject to Clause 2. 4) to the extent be a good discharge to the Issuer or the Trustee, as the case may be. " (emphasis supplied by Mr Sundaram)CLAUSE 2. 4 of the Trust Deed provides that at any time after an event of default or a potential event of default has occured, the Trustee may by notice in writing to the Issuer and the Agents, require the Agents, to act as Agents of the Trustee to hold all the Notes to the order of the Trustee and by notice in writing to the issuer require it to make all subsequent payments in respect of the Notes to or to the order of the Trustee and not to the Principal Paying Agent. It is submitted that in the instant case there is no direct covenant between the respondent and the so-called noteholders as the payment of principal as well as interest is to be paid to the trustee or through their paying agent and not directly to the noteholders. ( 25 ) ON the other hand, Mr Chidambaram, learned counsel for the petitioners has made the following submissions :-25. 1 Reference is made to the averments made in (page 372) the reply affidavit that the interest has been paid to the petitioners and other noteholders. ( 25 ) ON the other hand, Mr Chidambaram, learned counsel for the petitioners has made the following submissions :-25. 1 Reference is made to the averments made in (page 372) the reply affidavit that the interest has been paid to the petitioners and other noteholders. Apart from that the very concept of the global note is that the note is issued in favour of one person, but the others are the beneficial owners of the respective portions purchased by them and, therefore, condition No. 7 also contemplates receipt of the interest by the noteholders. 25. 2 The very important object of insertion of sub-section (2) in Section 439 was to remove the obstacles placed by the old decisions of the Chancery Division which prevented debenture holders from suing the Company on the ground that they had no privity of contract with the company. Sub-section (2) of Section 439 makes the debenture holder a creditor by the very deeming provision contained in sub-section (2 ). Therefore, there will be no question of examining whether the petitioners will get complete discharge or not. 25. 3 Strong reliance is placed on the following decisions in support of the petitioners submissions :- (i) Bachharaj Factories Ltd. vs. Hirjee Mills Ltd. , (1955) 25 Comp. Cases 227 (248,249) (ii) Sholapur Spinning and Wvg. Co. Ltd. (1965) 35 Comp. Cases 165 (167,168) (iii) Calcutta Safe Deposit Co. Ltd. vs. Ranjit Mathurdas Sampat, (1971) 41 Comp. Cases 1063 (1071-1073 ). 25. 4 Without prejudice to the above submissions, it is submitted that the petitioners can give an effective discharge of the debt owed to the petitioners, because the petitioners will simply transfer the notes held in their accounts in favour of the respondent-Company. Once this happens the Issuer of the Notes and the holder of the notes will be the same person, to the extent of such Notes and consequently there will be an effective discharge. Clauses 7. 12 and 9. 15 (pgs. 154 and 158 respectively) of the trust deed do contemplate that the issuer can hold its own notes. 26. 0 Statutory Provisions and Clauses in the Trust Deed26. 1 Sections 439 (1) (b) and 439 (2) read as under :-"439. Clauses 7. 12 and 9. 15 (pgs. 154 and 158 respectively) of the trust deed do contemplate that the issuer can hold its own notes. 26. 0 Statutory Provisions and Clauses in the Trust Deed26. 1 Sections 439 (1) (b) and 439 (2) read as under :-"439. Provisions as to applications for winding up - (1) An application to the Court for the winding up of a company shall be by petition presented, subject to the provisions of this section, -. . . . . . . . . . . . . . . (b) by any creditor or creditors, including any contingent or prospective creditor or creditors; or. . . . . . . . . . . . . . . 439 (2 ). A secured creditor, the holder of any debentures (including debenture stock), whether or not any trustee or trustees have been appointed in respect of such and other like debentures, and the trustee for the holders of debentures, shall be deemed to be creditors within the meaning of clause (b) of sub-section (1 ). "26. 2 The Trust Deed for each series of Notes has common clauses and the terms and conditions for the individual definitive notes are also incorporated in the terms and conditions of the Global Notes. Clause 2. 2 in the Trust deed reads as under :-"2. 2 Covenant to Pay : The Issuer will by 10. 00 a. m. (New York City time) on any date when the Notes or any of them become due to be redeemed unconditionally pay to or to the order of the trsutee in New York City in U. S. dollars in immeditely available funds the principal amount of the NOtes becoming due for redemption on that date and will (subject to the Conditions) untill such payment (both before and after judgment) unconditionally so pay to or to the orde rof the Trustee interest on the principal amount of the Notes outstanding as set out in the Conditions subject to Clause 2. 5 provided that (1) payment of any sum due in respect of the Notes made to the Principal Paying Agent as provided in the Agency Agreement shall, to such extent, satisfy such obligation except to the extent that there is failure in its subsequent payment to the relevant Noteholders under the Conditions and (2) a payment made after the due date or pursuant to Condition 9 will be deemed to have been made when the full amount due has been received by the Principal Paying Agent or the Trustee and notice to that effect has been given to the Noteholders (if required under Clause 7. 9), except to the extent that there is failure in the subsequent payment to the relevant Noteholders under the Conditions. The Trustee will hold the benefit of this covenant and the other covenants of the Issuer under this Trust Deed on trust for itself and the Noteholders according to their respective interests. " (emphasis supplied) ( 26 ) HAVING heard the learned counsel for the parties, it appears to the Court that sub-section (2) of Section 439 refers both to the holder of any debenture as well as to the trustee as creditors within the meaning of Section 439 (1) (b ). The Parliament intended to enlarge the class of persons who can present a winding up petition. By enacting the provisions of sub-section (2) of Section 439 in the Companies Act, 1956, the Parliament did intend to do away with the hardship caused to the debenture holders by the decisions of the Courts of Chancery Division especially the principle laid down in the leading case of re. Uruguay Central and Hygueritas Railway Company of monte Video (Supra) that a debenture holder did not have an immediate right of action for money lent or for money due because the Company is liable to pay the trustees under the deed and, therefore, the Company cannot be sued twice over. The reasoning of the Chancery Courts was as under :-"allowing the debenture holder to sue the Company would require the Company to face two actions, one by the trustees and the other by the holder of the coupon; it does not appear that it was the intention of the parties which, after all, is the governing rule in deciding questions of equitable debt, to create a debt for which the holder of the coupan could sue directly. Hence, the holder of the coupon (note or debenture) is not a creditor either at law or in equity within the meaning of the Companies Act. ( 27 ) WHILE agreeing with the above reasoning that the company need not be made to face two actions, the result could be achieved, without violating any ones sense of justice or without sacrificing interest of any party, by simply evolving the principle that in an action by a debenture holder against the Company, the trustee is a necessary party. After all, the provision permitting a debenture holder, (not having any privity of contract with the Company) to move an action for the enforcement of his beneficial interest is a mere codification of an equitable principle permitting beneficiary under a contract to enforce his equitable right. This principle was evolved in order to obviate the hardship otherwise caused to the beneficiary (i. e. the debenture holder in such cases) this codification was, however, not intended to inflict the avoidable hardship on the Company of facing two actions one from the debenture holder and the other from the trustee. The equity requires THAT hardship to the company to be avoided by requiring the trustee to be joined as a necessary party in an action by a debenture holder against the Company. There is nothing in the provisions of Section 439 or for that matter in any other provision of the Companies Act which can dissuade the court from reading this principle into the provisions of sub-section (2) of Section 439 of the Act that in an action by a debenture holder against the Company, the trustee is a necessary party; though the converse would not be true, because in an action by the trustee, the trustee sues the Company in its own right as a covenanting party. ( 28 ) IT is also necesary to note that Jessel, Master of the Rolls opened the judgment in the Uruguay case (supra) with the following words :-"i am not satisfied that the plaintiff is a creditor. ( 28 ) IT is also necesary to note that Jessel, Master of the Rolls opened the judgment in the Uruguay case (supra) with the following words :-"i am not satisfied that the plaintiff is a creditor. I should have been very glad if I had received more assistance from Mr Buckley in his argument as to the rights of a person under a deed to which he is not a party, than he has given me; but in the absnece of any authority I am not prepared to hold that this form of document, this bond, makes the person who holds the bond, or who holds the coupon, a creditor either at law or in equity. " (emphasis supplied)MR Buckleys arguments for the petitioners are to be found on page 379 of the report :-"if the Respondents contention is right, a bondholder cannot get paid, or sue for his debt, without the instrumentality of the trustees; but it cannot have been the intention that a bondholder should only sue through the trustees; it must have been intended that he should have a direct security as against the company to whom the money advanced was paid. No authority is to be found in which the rights of a holder of a bond of this kind have been defined, but whatever may be the bondholders strict rights at law, I submit that in equity the amount secured to him by the bond should be considered as a loan to the company, and that he is therefore entitled to be considered a creditor of the company. "in the aforesaid case, therefore, apart from recording its dissatisfaction with inadequate assistance received from the learned counsel for the couponholder the chancery Court did not dismiss the winding up petition on the ground that a coupon holder is not a creditor, the court went on to consider on merits that the petition by a holder of 600 pound coupon was opposed by the rest of the coupon holders to the amount of 142,700 pounds who had instructed the Companys counsel to appear for them as well. It was specifically on this ground "the second ground" - that the Chancery Court exercised its judicial discretion by refusing the order for winding up. It was specifically on this ground "the second ground" - that the Chancery Court exercised its judicial discretion by refusing the order for winding up. It is, therefore, clear that the possible principle of the coupon or bond holder suing the Company and joining the trustee as a necessary party - respondent was neither suggested nor explored. This Court, therefore, feels no hesitation in evolving the above principle. It must, however, be made clear that this principle laying down that the trustee is a necessary party in a winding up petition or any other proceeding taken out by a debenture holder against the Company is applicable where there is no direct covenant between the company and the debenture holder and the covenants are between the Company and trustee. This principle is, therefore, not applicable where there is a direct covenant between the Company and the debenture holder. ( 29 ) BEFORE concluding the issue, the Court would deal with the submissions made by Mr Sundaram for the respondent-Company and the authorities cited by him. 30. 1 Mr Sundaram would, however, submit that sub-section (2) of Section 439 can be invoked only by those debenture holders on whom the trust deed confers any right or only those debenture holders with whom the company has any direct covenant. Mr Sundaram submitted that in Sholapur Spinning and Wvg. Mills Ltd. (supra) and other cases relied upon by Mr Chidambaram, there were debenture certificates directly issued by the issuer company to the debenture holders and, therefore, there were direct covenants between the company and the debenture holders. On the other hand, in the instant case, the covenants are only between the issuer Company i. e. the respondent Company on the one hand and the trustee on the other hand without any covenant with the noteholders. The argument may sound attractive, because in the the instant case there is no direct covenant between the respondent Company and the noteholders. Still, however, the respondents argument cannot be accepted for two reasons. In the first place, tenders of old Notes (Due 1999) pursuant to the procedure prescribed in the Exchange offer and the acceptance thereof by the Company constituted a binding agreement between the Company and the Old Noteholders upon the terms and subject to the conditions of the Exchange Offer and consent solicitation. In the first place, tenders of old Notes (Due 1999) pursuant to the procedure prescribed in the Exchange offer and the acceptance thereof by the Company constituted a binding agreement between the Company and the Old Noteholders upon the terms and subject to the conditions of the Exchange Offer and consent solicitation. This aspect, with the relevant quotation from page 115 of the paper book, has already been pointed out in para 16 of this judgment. Secondly, even if that agreement is to be treated only as an agreement for exchange of notes and even if the trust deed and the form of the Notes and terms and conditions thereof are to be treated on their own without reference to the Exchange Offer, clause 2. 2 of the trust deed quoted in para 26. 2 of this judgment makes it clear that the covenants made by the Issuer to the trustee are for the benefit of the trustee as well as the Noteholders according to their respective interest. In Narotamdas Trikandas Toprani vs. Bombay Dyeing and Mfg. Co. Ltd. , (1990) 68 Comp Cases 300, it has already been held that although the remedy to enforce the securities may vest in the trustees, the debenture holders, as beneficiaries, would be entitled to enforce covenants which are for their benefit although they may not be directly parties to the covenants. The right of a beneficiary under a trust to enforce contracts which are for his benefit is recognized under our law as laid down by the Supreme Court in M. C. Chacko vs. State Bank of travancore, AIR 1970 SC 504 . In Narottamdas (Supra), the bombay High Court has also held that in view of the express provision now contained in Section 439 (2) of the companies Act, 1956, there can be no doubt that a debenture holder is a creditor of the Company for the purpose of presenting a winding up petition. 30. 2 Reliance placed by the learned counsel for the respondent Company on the same case i. e. Narotamdas trikandas Toprani (Supra) is misconceived. 30. 2 Reliance placed by the learned counsel for the respondent Company on the same case i. e. Narotamdas trikandas Toprani (Supra) is misconceived. In the said bombay case, Honble Mrs Justice Sujata Manohar held that where the debenture holder sues the Company or takes steps against the Company for recovery of his money claim under the debenture certificate, he is entitled to do so, but the situation is different when the suit is for some other reliefs like maintenance of securities by the Company for the protection of debenture holders. The instant case falls in the former category and not in the latter category. 30. 3. Reliance placed by Mr Sundaram on the principles laid down in Buckley on the Companies Act as quoted in bechharaj Factories Ltd. (Supra) does not carry the case of the respondent-Company any further as what was laid down there was the principle of the English law that a debenture holder can present a petition only where there is a direct covenant between the Company and the debenture holder. As already indicated above, where the debenture holders are claiming their beneficial rights under a trust, under the Indian law it has already been held that the beneficiaries can take action against the Company. 30. 4 Mr Sundaram has heavily relied on the decision in harinagar Sugar Mills co. Ltd. , (1966) 36 Comp. Cases 426. The question there was whether the Receiver was a creditor or not. It was on account of absence of any deeming provision (unlike Section 439 (2)) which required the Apex court to consider the question whether the Receiver had the right to file a winding up petition. It was in that context that the Apex Court examined the question and held that in view of the statutory provisions in India, there is statutory assignment of debts in favour of the Receiver and, therefore, the question examined under the English law whether the Receiver has the right to sue for debts transferred to him by voluntary assignment does not arise. The Apex Court held that whether the assignment is statutory or voluntary, the Receiver has a right to sue for the debts and to file a winding up petition. 30. 5 Mr Sundaram also placed strong reliance on the decision of the Apex Court in Howrah Trading Co. Ltd. Vs. The Apex Court held that whether the assignment is statutory or voluntary, the Receiver has a right to sue for the debts and to file a winding up petition. 30. 5 Mr Sundaram also placed strong reliance on the decision of the Apex Court in Howrah Trading Co. Ltd. Vs. CIT, AIR 1959 SC 775 , which was a case under the income-tax Act. The controversy there arose in the following context :-Transfers of shares of a Company take place either by a fully executed document where both the transferror and transferee sign the forms or by blank transfers. However, when the question of paying the dividend declared by the Company arises, the Company recognizes no person except one whose name is on the register of members on the record date. If a shareholder had already signed a transfer form before the record date and transferred his shares, but the transfer form duly filled in is not presented before the company before the record date, the company will pay the dividend only to that shareholder whose name is on the register of the Company as on the record date and the dividend will not be paid to the transferee. Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer and among these equities is the right of the transferee to claim the dividend declared and paid by the Company to the transferor who is treated as a trustee on behalf of the transferee. The Apex Court held that these equities, however, do not touch the Company, because only the shareholder whose name is found on the register of members on the record date can give the Company a valid discharge. The transferee whose name is not on the register of members cannot make any claim against the Company, if the transferor retains the money in his own hands and fails to pay it to the transferee. Mr Sundaram invoked this principle in support of his submission that only the trustee can give a valid discharge and not the noteholders, just as only the transferor having his name on the register of members on the record date can give a valid discharge and not the transferee, even if the transferor had transferred the shares before the record date, but the transfer was not registered with the Company. The submission overlooks the fact situation in the present case. In the Howrah Trading case, the transfer of shares was never registered with the Company before the record date, hence only the transferor whose name was on the register onthe relevant date was entitled to be paid the dividend in his own right as the Company knew nothing about the transaction between the transferor and transferee. In the instant case, under the Trust Deed itself the trustee gets the payments not for itself but on behalf of the Noteholders (who have their respective accounts with the concerned sub-custodians or agencies) as on the record date. Clause 2. 2 of the Trust Deed quoted in para 26. 2 hereinabove recognizes this situation which is, therefore, within the knowledge of the Company. The relevant portion of clause 2. 2 bears repetition :-"the Trustee will hold the benefit of this covenant and the other covenants of the Issuer under this Trust Deed on trust for itself and the Noteholders according to their respective interests. "in view of the above caluse, it makes no difference whether or not the respondent-Company knows about the names and debt amounts of individual noteholders like the petitioners because the very nature of the Global note does not require such details to be made known to the respondent-Company. ( 30 ) ANOTHER important aspect which is required to be noticed at this stage is that the trustee have invoked clause 9 and declared the event of default on account of the non-payment of interest after 31. 1. 2001. After filing of the present winding up petitions, the respondent-Company addressed letter dated 5. 2. 2002 to the trustee making grievance against the petitioners having approached this Court in disregard of the terms and conditions of the offer under which the global note was issued by the respondent-Company. In reply thereto, trustee-JP Morgan in their letter dated 19. 2. 2002 have not contended that the petitioners are not noteholders nor have the trustees contended that any payment to the noteholders would not give the respondent-Company a valid discharge. If the trustees had stated or contended that the monies should be paid directly to the trustee and not to the noteholders, it would have been a valid defence for the respondent-Company to urge that the noteholders did not have a right to give a valid discharge. If the trustees had stated or contended that the monies should be paid directly to the trustee and not to the noteholders, it would have been a valid defence for the respondent-Company to urge that the noteholders did not have a right to give a valid discharge. The aforesaid conduct on the part of the trustee, therefore, supports the petitioners case that they have a right to give a valid discharge for the debts in question. ( 31 ) IN view of the above discussion, the third preliminary contention as such fails, but with a clarification that in a petition by a noteholder, against the Issuer-Company, the trustee is a necessary party. Preliminary Contention No. 4 Even if the petitioners are creditors, they do not have any enforceable claim in view of clause (6), condition No. 13 providing for enforceability of any claim. ( 32 ) MR Sundaram for the respondent-Company vehemently submitted as under :-33. 1 Even if the petitioners are creditors, the petitioners have no right to present a winding up petition so long as they do not have a presently enforceable right in law. The petitioners are precluded by condition No. 13 of the terms and conditions of the offer from bringing any action against the respondent-Company unless they can show that the trustee was required by 20% of the noteholders to take action against the Company but has failed to do so within a reasonable time, then only at least 20% of the notesholders can file a petition. Condition No. 13 reads as under :-"13. Enforcement At any time after the Notes become due and payable, the trustee may, at its discretion and without further notice, institute such proceedings against the Issuer as it may think fit to enforce the terms of the Trust Deed and the Notes, but it need not take any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least one-fifth in principal amount of the Notes outstanding, and (b) it shall have been indemnified to its satisfaction. No Noteholder may institute proceedings directly against the Issuer unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing. "33. No Noteholder may institute proceedings directly against the Issuer unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing. "33. 2 The object of issuing a global note to one person and others getting their share in it under the terms and conditions to which they are parties (which contain the aforesaid express condition No. 13), is to ensure that when or if 75% of the note holders in value are prepared to give time to the Issuer Company for repaying the debt, a small minority of noteholders is not to be permitted to frustrate the negotiations between the noteholders as a class on the one hand and the Issuer Company on the other hand. As stated in the reply affidavit and the additional affidavit dated 19. 3. 2002, the petitioners hold only 4% debt of the respondent-Company. The respondent-Company is negotiating the restructuring process with the lenders (through a stearing committe) who fall in three groups (i) indian Public Financial Institutions like IDBI, ICICI etc. , (ii) Indian Banks who have provided the working capital and (iii) the foreign lenders like the Floating rate Noteholders and two foreign banks. The petitioners had purchased the notes with open eyes knowing fully well these terms and conditions which preclude the noteholders from instituting proceedings directly against the respondent Company, unless the trustee having been directed by the requisite number of noteholders to do so, fail to institute such proceedings. 33. 3 Even if the petitioners are claiming their statutory right, such a statutory right is not available to any person in vacuum. There has to be a fact situation and contractual basis conferring rights and imposing duties on the parties and the right to file a winding up petition does not obliterate these rights and duties which are a part of the contract. 33. 4 Just as a creditor cannot present a winding up petition on the basis of a time barred debt because the debt is not enforceable, similarly the present petitioners do not have any right to present the petitions because the debt is presently not enforceable by them. 33. 4 Just as a creditor cannot present a winding up petition on the basis of a time barred debt because the debt is not enforceable, similarly the present petitioners do not have any right to present the petitions because the debt is presently not enforceable by them. In support of the contention that the winding up petition cannot be presented on the basis of a time barred debt which is not enforceable, the learned counsel relied on the following decisions of the Karnataka, Patna and madras High Courts :- (i) Hariom Firestock Ltd. Vs. Sunjal Engineering Pvt. Ltd. (1999) 96 Comp Cases 349 (ii) Ferro Alloys Corporation Ltd. vs. Rajhans Steel Ltd. , (2000) 99 Comp Cases 426. (iii) Vijayalakshmi Art Productions vs. Vijaya Productions Pvt. Ltd. , (1997) 88 Comp Cases 353. ( 33 ) ON the other hand, Mr Chidambaram, learned counsel for the petitioners urged that -34. 1 The petitioners are not seeking to enforce the right under the contract or the trust deed but the petitioners by filing the present petitions are enforcing their statutory rights under the provisions of the companies Act i. e. for winding up the respondent-Company. In support of the said submission, strong reliance has been placed on the following decisions :- (i) Hind Mercantile Corporation P. Ltd. vs. JH Rayner and Co. Ltd. , (1971) 41 Comp Cases 548. (ii) ITC Agro Tech Ltd. vs. Asha Agro Industries Ltd. , (1998) 4 Comp. LJ 18. On the basis of the aforesaid decisions, it is submitted that the right to file a winding up petition statutorily conferred upon the petitioners cannot be taken away by an agreement between the Company and the trustee. The Company Court has merely to determine whether the debt is due and payable and whether the Company has neglected to pay the same and whether the defence taken up by the company is bona fide. 34. 2 The objection being raised on behalf of the respondent-Company may be available to it in a civil suit for enforcement of the trust deed and the obligations contained therein, but this defence is not available in a winding up petition filing of which is a statutory right of the petitioners as noteholders. 34. 2 The objection being raised on behalf of the respondent-Company may be available to it in a civil suit for enforcement of the trust deed and the obligations contained therein, but this defence is not available in a winding up petition filing of which is a statutory right of the petitioners as noteholders. Strong reliance has been placed on the decision of the Apex Court in Haryana telecom Ltd. vs. Sterlite Industries (India) Ltd. , (1999) 5 SCC 688 wherein it is laid down that any claim in a petition for winding up is not for money. The petition filed under the Companies Act would be to the effect that the Company has become commercially insolvent and, therefore, should be wound up. The power of a Company court to order winding up of a Company is, therefore, entirely different from the power of the Civil Court to pass a decree for a definite sum of money. 34. 3 The learned counsel has relied on the letter dated 19. 2. 2002 from JP Morgan to the advocates of the respondent-Company with reference to the present petitions stating that -"clause 6, condition 13, this enforcement is only in relation to the Trust deed and the notes. The current petition is not concerning the enforcement of the Trust Deed or the Notes. What is being sort is evidence that the notes are due and owing which constitutes the basis of a debt upon which a winding up petition is presented. The Trustee does not agree with your point that there is no privity of contract between the Company and the individual noteholders, nor is the Trustee a creditor. The Trustee does not have the ability or the intention to restrain the Noteholders from proceeding with the Legal proceedings initiated by them against the Company. " ( 34 ) IN rejoinder, Mr Sundaram, learned counsel for the respondent-Company has submitted that the statutory provisions contained in section 439 (2) are not and were not intended to be in derogation of the rights of the creditors as a class. It is also submitted that the interpretation of the Trustee cannot decide the vital legal issues involved in the preliminary contentions. ( 35 ) BEFORE examining the rival submissions, it is necessary to have a close look at the two relevant clauses of the terms and conditions of the Global Note. It is also submitted that the interpretation of the Trustee cannot decide the vital legal issues involved in the preliminary contentions. ( 35 ) BEFORE examining the rival submissions, it is necessary to have a close look at the two relevant clauses of the terms and conditions of the Global Note. The back of form of DTC Global Notes - Series A held by the depository Trust Company states as under :-"the terms and conditions of the Notes, identical to the Terms and Conditions to be inserted on the individual Definitive Notes, will be inserted". These terms and conditions inserted on the individual definitive notes are to be found at Annexure "h" to the petition and for the purpose of the preliminary contention No. 4, we are concerned with clauses 9, 12 (a) and (d), 13 and 14 in Schedule 2 (Terms and Conditions of notes) which read as under :-"9. Events of Default If any of the following events occurs the Trustee at its discretion may, and if so requested by holders of at least one-fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary resolution shall (in each case subject to being indemnified to its satisfaction), give notice to the Issuer that the Notes are, and they shall immediately become, due and payable at their principal amount together with accrued interest : (a) Non-Payment : the Issuer fails to pay any principal or interest on any of the Notes when due; or (b ). . . . . . . . . . . . . Clause 12 of this conditions provides for the quorum and majority required for passing extraordinary resolutions. The special quorum and majority for such resolutions are meant for special categories of subjects-e. g. (i) to modify the maturity of the Notes or the dates on which interest is payable in respect of the notes and (ii) to reduce or cancel the principal amount of, or interest on or to vary the method of calculating the rate of Interest on, the Notes. This clause further provides as under :-"any Extraordinary Resolution duly passed shall be binding on all Noteholders (whether or not they were present or represented at the meeting at which such resolution was passed ). This clause further provides as under :-"any Extraordinary Resolution duly passed shall be binding on all Noteholders (whether or not they were present or represented at the meeting at which such resolution was passed ). An Extraordinary Resolution is defined in the Trust Deed to mean a resolution passed at a duly convened meeting of Noteholders by a majority of at least 75% of the votes cast. ""13. Enforcement At any time after the Notes become due and payable, the trustee may, at its discretion and without further notice, institute such proceedings against the Issuer as it may think fit to enforce the terms of the Trust Deed and the Notes, but it need not take any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least one-fifth in principal amount of the Notes outstanding, and (b) it shall have been indemnified to its satisfaction. No Noteholder may institute proceedings directly against the Issuer unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing. 14. Indemnification of the Trustee The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility. The Trustee and its parent, subsidiaries and affiliates are entitled to enter into business transactions with the Issuer and any entity related to the Issuer without accounting for any profit. " ( 36 ) AN analysis of the aforesaid conditions reveals the following scheme :-A. Notice of Default (i) When the Issuer fails to pay any principal or interest on any notes when due, the trustee at their discretion may give notice to the Issuer that the Notes are, and they shall immediately become, due and payable at their principal amount together with accrued interest (hereinafter called the "notice of Default" ). (ii) If the holders of atleast one-fifth in principal amount of the Notes then outstanding request the Trustees to give such Notice of Default, the Trustees shall give such notice to the Issuer. (ii) If the holders of atleast one-fifth in principal amount of the Notes then outstanding request the Trustees to give such Notice of Default, the Trustees shall give such notice to the Issuer. (iii) If the noteholders holding not less than ten percent in principal amount of the Notes for the time being outstanding request for an extraordinary meeting, the Trustee shall convene such a meeting or on their failure, such noteholders holding atleast ten percent of the principal amount as aforesaid, shall convene a meeting where there shall be quorum consisting of a clear majority of the notes in value outstanding at that time and by a three-fourth majority of the noteholders in value present at the meeting pass an extraordinary resolution requiring the Trustee to issue such a Notice of Default. B. Enforceability Thereafter i. e. after the notes became due and payable upon the notice of event of default before the date of maturity or upon maturity of the notes, if the amounts remain unpaid, whether principal or interest, any of the following courses of action can be adopted:- (i) The Trustee may at their discretion and without further notice institute such proceedings against the Issuer, as the Trustee may think fit to enforce the terms of the trust deed and the notes. (ii) The Trustee shall take the proceedings for enforcing the terms of the trust deed and the notes, if so requested in writing by noteholders holding atleast one-fifth in principal amount of the notes outstanding. (iii) The Trustee shall take the proceedings for enforcement of the terms of the trust deed and the notes, if so directed by an extraordinary resolution i. e. at a meeting with a quorum of mroe than 50% of the noteholders in value, if the resolution is passed by 75% or more of the noteholders in value present at the meeting. Condition 13, however, does not stop there, but it proceeds to state in unmistakable terms as under :-"no noteholder may institute proceedings directly against the Issuer unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing. " ( 37 ) HAVING carefully considered the rival submissions, the Court finds that there is some substance in the objection raised by Mr Sundaram but it cannot be upheld in its entirety. " ( 37 ) HAVING carefully considered the rival submissions, the Court finds that there is some substance in the objection raised by Mr Sundaram but it cannot be upheld in its entirety. In the first place, it is necesssary to appreciate the similarity as well as the dissimilarity between the proceedings for winding up under the Companies act and the suit proceedings before the Civil Court for recovery of money. While it is true that the proceedings are different, the difference lies in the nature of the remedy and not in the nature of the claim. In the civil suit if the plaintiff establishes his case, the civil court will pass a decree for a definite sum of money with interest during pendency of the suit and also after the date of the decree till payment or realization. On the other hand, in a winding up petition if the petitioner is able to establish the claim, the Court after exercising its discretion will admit the petition, advertise it and after giving an opportunity of hearing to all the creditors, and other affected parties, decide whether to wind up the Company or not. If the Company is ordered to be wound up, the Official Liquidator will be required to sell all the assets of the Company and pay the creditors and workers out of the sale proceeds. ( 38 ) HOWEVER, before the Company Court can pass an order for winding up or the Civil Court can pass a decree for a sum of money, the petitioning-creditor or the plaintiff will have to establish his claim. The claim in both the cases arises from a contract. If the debtor has promised to return the money alongwith interest on cumulative interest basis after a period of 5 years, and a creditor files a suit for recovery of money after one year from the date of the contract, the Civil Court would dismiss the suit on the ground that the creditor has no presently enforceable claim against the defendant. Similarly, if on the same set of facts, another creditor were to file a winding up petition, on a defence being taken up, the Company Court would also have to dismiss the winding up petition on the ground that the petitioning-creditor does not have a presently enforceable claim. Similarly, if on the same set of facts, another creditor were to file a winding up petition, on a defence being taken up, the Company Court would also have to dismiss the winding up petition on the ground that the petitioning-creditor does not have a presently enforceable claim. In both the cases, the question to be considered is whether the creditor has a presently enforceable claim. Similarly, if the creditor were to file a suit for recovery of a time barred debt or he were to file a winding up petition on the basis of a time barred debt, the same result would ensue. ( 39 ) THE nature of the winding up proceedings has been well explained by the Karnataka High Court in AV Krishna vs. Karnataka Leasing and Commercial Corporation Ltd. , (1995) 83 Comp. Cases 764 as under :-"when a company is sought to be wound up because the company is unable to pay its debts, the cause of action arises as and when the companys commercial insolvency is disclosed or it is realized that the company is commercially insolvent or it is unable to pay its debts. This cause of action can be taken advantage of by any one of the creditors or the entire body of creditors. Section 439 (1) (b) of the Act clearly discloses this principle which says that an application for the winding up of the company shall be by petition presented by any creditor or creditors, includings any contingent or prospective creditor or creditors (other provisions are not necessary here ). Thus, the Act itself recognizes the right of any creditor or creditors to invoke the jurisdiction of the Court seeking the winding up of a company by a single petition. The effect of a winding up order is brought out by section 447 which says :"an order for winding up a company shall operate in favour of all the creditors and of all the contributors of the company as it it had been made on the joint petition of a creditor and a contributory. "therefore, when a winding up petition is entertained and considered, the order made by the Court ultimately would enure to the benefit of all the creditors and contributories. "therefore, when a winding up petition is entertained and considered, the order made by the Court ultimately would enure to the benefit of all the creditors and contributories. In fact, the procedure contemplated before making such an order includes a mandatory procedure of an advertisement of the company petition so that other creditors or contributories may participate in the proceedings. A petition for winding up under Section 433 (e) of the Act certainly is a petition by and on behalf of the class of creditors having regard to thenature of the procedings and the effect of the ultimate order that may be made by the Court. " (emphasis supplied) ( 40 ) KEEPING in mind the above nature of the winding up proceedings, the Court has carefully considered that the object of condition No. 13 is that a small minority of the noteholders cannot be permitted to enforce their claim against the Issuer Company directly. It is not that the majority noteholders can render the minority noteholders remedyless. It appears that even after the notice of event of default is given by the trustee, if the trustee do not on their own discretion take any action to enforce the trust deed, the following remedies are provided to the noteholders:- (i) 20% noteholders (in value) may require the trustee to take proceedings for enforcement of the rights under the trust deed and if the trustee fail to do so within a reasonable time, the noteholders can themselves institute proceedings against the Company. (ii) If the holding of the noteholders in value is less than 20%, they can still require the trustee to convene a meeting of the noteholders and on failure of the trustee, 10% noteholders in value can themselves convene a meeting of the noteholders and if the noteholders pass an extraordinary resolution at such meeting directing the trustee to institute proceedings for enforcement of the rights under the trust deed, the trustee are bound to institute the proceedings and if they do not do so within a reasonable time, the noteholders themselves may institute such proceedings. It appears that the rationale of the provision placing a limited restriction on the noteholders directly instituting proceedings against the Issuer Company is that if the noteholders having 75% or more in value are prepared to modify the dates on which the interest or principal is payable in respect of the notes or cancel interest, they get an opportunity to have an extraordinary meeting of the noteholders convened and then the noteholders as a class will take decision. Of course, if the noteholders having 20% or more of the value require the trustee to institute proceedings for enforcement of the terms of the trust deed and the notes, the trustee will have to institute proceedings within a reasonable time, failing which the noteholders themselves will have a right to institute such proceedings. On the other hand, if the terms of the notes are to be varied, atleast 75% of the noteholders in value present at the meeting (with a quorum of atleast 75% of the noteholders in value outstanding) will have to pass an extraordinary resolution to that effect. The object of the condition is that noteholders having at least 20% principal amount of the notes outstanding as on the relevant date are permitted to institute procedings for enforcement after giving a reasonable time to the Trustee, or noteholder having at least 10% principal amountof the notes are permitted to convene an extra ordinary meeting of all the noteholders. During this reasonable period or at the extraordinary meeting, the final decision can be taken by the noteholders as a class, but any decision to vary the terms of the notes can only be taken by not less than 75% noteholders in value present at the meeting (with a quorum of not less than 75% of noteholders in value outstanding), which decision will bind all the noteholders. . ( 41 ) IT is true that in Vijayalakshmi Art Productions vs. Vijaya Productions Pvt. Ltd. , (1997) 88 Comp. Cases 353, the Madras High Court has held that winding up proceedings under Section 433 (4) of the Companies Act cannot be the subject matter of an arbitration agrement and that that view is also now confirmed by the Apex Court in Haryana Telecom Ltd. , (Supra ). It is also true that in itr Agro Tech Ltd. (1998) 4 Comp. It is also true that in itr Agro Tech Ltd. (1998) 4 Comp. Cases 18, the Allahabad high Court has held that the right to file a winding up petition cannot be obliterated by an agreement between the parties. The Company Court has to determine whether debt is due and whether the Company is unable to pay the same and whether the defence taken in the winding up petition was bona fide and likely to succeed on a point of law. However, in the instant case, the defence of the respondent-Company is not that condition No. . 13 regarding enforceability obliterates or takes away the right of any creditor to file a winding up petition. It is their case that just as a litigant filing a suit against the Government is required to give a notice under section 80 of the Civil Procedure Code, once the mechanism under condition No. 13 is followed, the creditor can exercise its right of presenting a winding up petition. ( 42 ) THE letter dated 19. 2. 2002 of the trustee only indicates the interpretation which the Trustee have placed on the relevant conditions and that interpretation proceeds on the basis that the petition for winding up is not the same thing as the proceedings for enforcement of the trust deed and notes. However, as already pointed out above, whether it is a winding up petition or a suit for recovery of money, condition No. 13 provides that no noteholder may institute proceedings directly against the issuer unless the Trustee, having become bound so to proceeed, fail to do so within a reasonable time and such failure is continuing. ( 43 ) MR Sundaram submits that the condition is not challenged and it is not a void condition or could be treated as a condition contrary to public policy because the whole purpose of a global note is to issue one Note in favour of one person and others can have their respective shares in that Note, but the noteholders are expected and required to act as one entity subject to the exceptions stated in condition No. 13. ( 44 ) THERE seems to be a little snag here. ( 44 ) THERE seems to be a little snag here. while 20% of the Noteholders can certainly require the Trustee to institute proceedings against the Issuer-Company for enforcement of the trust deed and the notes, but if the meeting of the noteholders is convened, an extraordinary resolution asking the trustee to institute such proceedings can be passed only by a special majority i. e. by 75% or more in value of noteholders passing an extraordinary resolution at the meeting where atleast the noteholders with a clear majority in value are present at such meeting. This is the combined reading of conditions 12 and 13 of Clause 6 in Schedule 1 to the trust deed read with clauses 5 and 18 in Schedule 3 to the Trust Deed (provisions for meeting of noteholders to the trust deed (pg. 193-196) ). In other words, even when all the notehodlers are present at a meeting (after thenotice of defaults has been issued by the trustee) to consider what action should be taken by the trustee against the Issuer which has defulated in payments, alteast 75% in value of the noteholders present and voting will have to pass a resolution for instituting proceedings against the defaulter-issuer. In other words, even 51% of the noteholders in value outstanding will not be able to pass a resolution requiring the trustee to take action. Hence, the right of the creditors as a class to file winding up petition cannot be allowed to be defeated by such a provision in the Terms and Conditions. This Court is of the view that such a onerous condition would be in derogation of the statutory right of the creditors under sections 433, 434 and 439 of the Companies Act, 1956. But that part of condition No. 13 providing that the trustee at their own discretion may institute proceedings against the Company or that 20% of the noteholders in value can require the trustee to institute proceedings against the Company cannot be said to be in derogation of the statutory right of the noteholders under the aforesaid provisions of the Companies Act, 1956, when one considers the nature of the Global Note which represents a single debt owed by the Company to the Global noteholder and to the persons having a share in the same (paras 5. 6 (A) and 5. 7 (i) of this judgment ). 6 (A) and 5. 7 (i) of this judgment ). This aspect is, however, not required to be considered at this stage as so far even the noteholders with 20% holding have not come forward with a grievance that their request to proceed for instituting the proceedings against the respondent Company has not been heeded to. It is not the case of the petitioenrs that they hold not less than 20% pricipal amount of the notes outstanding. The figures given by the respondent-Company indicate that the holding of the petitioners in FRNs is 16. 98%. 21. 03. 2001 ( 45 ) AT this stage Mr Abhishek Sexena with Mr Mihir joshi, for the petitioners submit that the figures of the holding of the petitioners in the FRNs at less than 20% was given only on 19th March, 2002 and, therefore, the petitioners may be granted some time to show that the petitioners holding in the FRNs is more than 20%. ( 46 ) MR KS Nanavati with Mr Keyur Gandhi, learned counsel for the respondent-Company submit that in view of the fact that the petitioners do not have 20% in value of the notes and in view of the finding being given by the court that the Trustee is a necessary party, the petitions are required to be dismissed. ( 47 ) IT appears to the Court that even if the noteholders were to come with a case that they have 20% holding in the FRNs, the trustee would be a necessary party to such a petition because in the first place the trustee can confirm whether the petitioning creditors-FRN holders have 20% holding as contemplated by condition No. 13 and also the Trustee would be in a position to state whether the noteholders holding 75% or more in value of the principal amount of the notes outstanding have decided to modify or are in the process of modifying, the maturity date of the notes or the dates on which the interest is payable in respect of the notes or any other decision of special nature as contemplated by condition No. 12 of the terms and Conditions of the offer. CONCLUSIONS ( 48 ) IN view of the above discussion, the Court comes to the following conclusions :- i (i) Preliminary contention No. 1 is overruled. It is held that the petitioners are noteholders. CONCLUSIONS ( 48 ) IN view of the above discussion, the Court comes to the following conclusions :- i (i) Preliminary contention No. 1 is overruled. It is held that the petitioners are noteholders. (ii) Preliminary contention No. 2 is also overruled. It is held that the petitioners are debenture holders. (iii) As regards preliminary contention No. 3, it is held that though the winding up petitions filed by the petitioners as debenture holders are maintainable, the trustee is a necessary party in such proceedings. (It is clarified that this principle that the trustee is a necessary party will not apply where there are direct covenants between the Company and the debenture holders ). (iv) Although there is some substance in contention No. 4 urged on behalf of the respondent Company that the provisions of Condition No. 13 cannot be altogether ignored, condition No. 13 will not affect the maintainability of the winding up petitions in the context of the locus standi of the petitioners, as the conditions specified in Section 433 (a), 434 and 439 (1) (b) and 439 (2) are satisfied, and (as per the discussion in paras 27 to 29 hereinabove), once the trustee is joined as a necessary party - respondent to these petitions between the noteholders and the respondent Company. II The Court does not hold that the petition is liable to be thrown out in the absence of the petitioners having 20% notes in value because once the trustee is a necessary party and under Condition No. 13, the trustee in its own discretion can institute proceedings against the Company; without driving the trustee to filing a separate petition, the Court would like to await the stand of the trustee even if the petitioenrs do not have 20% holding. If the trustee does not support the petitioning-creditors, but the petitioners have holding of 20% or more of the notes in value, the Court would proceed to hear the petitioners, the Company and the Trustee on merits for deciding whether to admit the petitions. III But if neither the trustee is ready to support the petitions, nor do the petitioners have holding of 20% of the notes in value, in the context of the nature of the Global Note which represents a single debt and the object underlying clause No. 13, the Court would apply the enforceability clause. III But if neither the trustee is ready to support the petitions, nor do the petitioners have holding of 20% of the notes in value, in the context of the nature of the Global Note which represents a single debt and the object underlying clause No. 13, the Court would apply the enforceability clause. O R D E R S ( 49 ) SINCE it is only now that it is being held that though the petitioners are creditors and, therefore, the petitions would be maintainable, but the trustee is a necessary party and that in the absence of the trustee the petitions could be dismissed, the petitioners are required to be given an opportunity to rectify this defect and, therefore, some time is required to be given to join the trustee as a party. After the trustee is joined as a party respondent in these petitions, the Court will on the next date of hearing consider the question of applicability of Condition No. 13 (enforceability) in light of the stand which may be taken up by the trustee and/or depending on the petitioners holding in the value of the notes outstanding as indicated above. ( 50 ) WHILE overruling the four preliminary contentions raised by the respondent-Company, Essar Steal Limited, the court holds that the trustee for the FRNs (Due 2005) Series A and Series B is a necessary party to the present proceedings but since the affidavit containing the figures of holding of the petitioners in the FRNS was served on the petitioners only on the 19th March and since the finding that the trustee is a necessary party is being rendered only now, the further hearing of this petition is required to be adjourned to 6th April, 2002. .

GRAMERCY EMERGING MARKET FUND v. ESSAR STEEL LIMITED