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CS Executive · Company Law and Practice · Debt Instruments - Concepts

Mehta Bank Ltd, a body corporate, holds debentures of Orient Paper Ltd. How can it be represented at a meeting of the creditors of Orient Paper Ltd held under a provision in the trust deed?

The bank can authorise a person by resolution of its directors or other governing body to represent it at the creditors' meeting. Under Section 113, that representative may exercise the same rights as an individual debenture-holder could, including voting by proxy and postal ballot.

  1. ABy its Board resolution authorising a person to act as representative, who has the same rights as the body could exercise as an individualCorrect
  2. BOnly by a proxy appointed by the trustee
  3. CIt cannot attend as it is not an individual
  4. DOnly through its Managing Director automatically

Explanation

Section 113(1)(b) allows a body corporate that is a creditor, including a debenture-holder, to authorise by resolution of its directors or governing body a person to represent it at creditors' meetings, including those under a trust deed. Under 113(2) that person has the same rights as an individual holder. The other options are not supported.

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