STANDARD MEDICAL AND PHARMACEUTICALS LTD Vs. ANITA KHATOR

JUDGEMENT

(1.) These appeals arise out of common order passed by the District Forum in O. P Nos.916 to 918 of 1994, whereby it directed the opposite party to pay the redemption amount due with subsequent interest on non convertible redeemable debentures.

(2.) It is not in dispute that two complainants in all the O. Ps. are the holders in all 15% fully paid up non-convertible redeemable debentures of the face value of Rs.100/- each as evidenced by three certificates issued with distinctive numbers. According to the terms of issue of debentures, they were allotted on 15.2.86 under cumulative interest scheme in which interest would be compounded half yearly and the principal amount for the time being outstanding and the accumulated interest thereon as on 30th June and 31st December, 1986 till the debentures were redeemed. They were redeemable at par in three equal instalments of Rs.30/-, Rs.30/- and Rs.40/- after the expiry of 7th, 8th and 9th year from the date of allotment i. e. from 15.2.86. The first and second instalment of Rs.30/- and Rs.30/- stood redeemed after the expiry of 7th, 8th year from the date of their allotment. Alleging that the opposite party had neither paid the interest nor redeemed the first and second instalments, three complaints were filed seeking a direction to the opposite party i. e. M/s. Standard Medical and Pharmaceuticals Ltd. , Hyderabad to pay the amount due according to the terms and conditions of debentures.

(3.) The opposite party admitted the issue of debentures and its terms and conditions, but pleaded that the debenture holders at their meeting held on 18.11.92 and20.11.92 decided to give an option to all the holders of fully paid up non/- convertible redeemable debentures to send an intimation in the prescribed format from those debenture holders who do not wish to exercise their option for conversion and that non-receipt of any such option not to opt for conversion will be treated as their consent for conversion. According to the opposite party the Company sent through its circular dated 20.11.92 the option format to the complainants, but as the complainants did not return the option formats opting to non-conversion, the debentures standing in the name of the complainants stood converted into shares and therefore the complainants were entitled only for the cumulative interest due till the date of conversion and sent a cheque for the interest till 1.12.94. As the debentures were converted into shares, as the accumulated interest was sent the complainants are not entitled for any relief of redeeming the debentures.