# Casual Vacancy & Removal of Debenture Trustee

## Casual Vacancy in the Office of DT

A casual vacancy (e.g., due to death, resignation, or disqualification) shall be filled by the Board of Directors (BOD) of the company.
If the vacancy arises due to resignation, the BOD must obtain written consent of the majority of debenture holders (in number) prior to filling the vacancy.

## Removal of a Debenture Trustee

A DT may be removed by passing a resolution with the consent of debenture holders holding not less than three-fourths (3/4ᵗʰ) in value of the debentures outstanding.

## Quick Comparison

Event	Approval Required
Filling vacancy (general)	BOD decision
Filling vacancy on resignation	Prior written consent of majority of DH in number
Removal of DT	Consent of DH holding 3/4ᵗʰ in value

Worked example

### Example 1

A DT resigns midway through the debenture term. Before the BOD appoints a successor, the company must obtain written consent of the majority (by number) of debenture holders.

### Example 2

If debenture holders representing 60% of value wish to remove the DT, they cannot — they require 75% in value.

⚠️ Common exam mistakes

Confusing 'majority in number' (for resignation-based vacancy) with 'majority in value' (for removal).
Assuming the BOD can unilaterally remove a DT — removal requires DH consent of 3/4ᵗʰ in value.
Forgetting that prior consent is required before, not after, filling a resignation-vacancy.

Bare-Act text Section 71(5) & Rule 18(2) · Companies Act, 2013 · click to expand

Rule 18(2)(d) of Companies (Share Capital and Debentures) Rules, 2014 — Casual vacancy of debenture trustee shall be filled by the Board of Directors. The trustee may be removed before expiry of term only by resolution of debenture holders holding not less than three-fourths in value.

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Casual Vacancy and Removal of Debenture Trustee

Worked example

⚠️ Common exam mistakes