# Meeting of Debenture Holders

The Debenture Trustee (DT) is empowered to call a meeting of all debenture holders (DH) when their interests are at stake or when sufficient DH demand it.

## Circumstances in Which a Meeting Shall Be Called

The DT shall call a meeting of all debenture holders when:

1. Requisition by debenture holders — Holders of debentures representing at least one-tenth (1/10ᵗʰ) in value of the issue make a requisition in writing; OR

2. Occurrence of an event of default, breach, or any other event that, in the opinion of the DT, affects the interest of the debenture holders.

## Purpose

Such a meeting provides debenture holders an organised forum to discuss and decide upon protective measures (e.g., enforcement of security, appointment of receiver, restructuring proposals).

Worked example

### Example 1

Debenture holders holding ₹50 crore of debentures out of a ₹400 crore issue (12.5%) requisition a meeting — DT is bound to call it (≥ 1/10ᵗʰ in value).

### Example 2

The company fails to pay interest on the due date. DT, on its own assessment of risk to DH, may call a meeting even without any requisition.

⚠️ Common exam mistakes

Treating the threshold as 1/10ᵗʰ in number rather than in value.
Believing the DT can only act on requisition — it can also act suo motu on events affecting DH interest.
Confusing meeting of debenture holders with general meeting of shareholders.

Bare-Act text Section 71 & Rule 18(3)(g) · Companies Act, 2013 · click to expand

Rule 18(3)(g) of Companies (Share Capital and Debentures) Rules, 2014 — The trustees shall call for a meeting of all the debenture holders on requisition in writing of holders of at least one-tenth in value of debentures, on happening of any event amounting to default, or on happening of any event which in opinion of the trustees affects the interest of the debenture holders.

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