COMPANIES ACT - 1963 (ACT 179)

    Section - 92 - Trustees for Debentureholders

    (1) Whether or not debentures are secured by a charge over the company's property they may be secured by a trust deed appointing trustees for the debentureholders.

    (2) It shall be the duty of such trustees to safeguard the rights of the debentureholders and, on behalf of and for the benefit of the debentureholders, to exercise the rights, powers, and discretion conferred upon them by the trust deed.

    (3) Charges securing the debentures may be created in favour of the debentureholders by vesting them in the trustees.

    (4) Any provision contained in a trust deed or in any contract with the holders of debentures secured by a trust deed shall be void in so far as it would have the effect of exempting a trustee thereof from, or indemnifying him against, liability for any breach of trust or failure to show the degree of care and diligence required of him as trustee having regard to the powers, authorities or discretion conferred on him by the trust deed:

    Provided that nothing herein contained shall be deemed to invalidate any release otherwise validly given in respect of anything done or omitted to be done by a trustee on the agreement to such release, of a majority of not less than three-fourths in value of the debentureholders present in person, or where proxies are permitted, by proxy at a meeting summoned for the purpose.

    (5) Notwithstanding any provisions in the debentures or trust deed the Court may, on the application of any debentureholder or of the Registrar, remove any trustee and appoint another in his place if satisfied that such trustee has interests which conflict or may conflict with those of the debentureholders or that for any reason it is undesirable that such trustee should continue to act:

    Provided that where any such application is made by a debentureholder the Court, if it thinks fit, may order the applicant to give security for the payment of the costs of the trustee and may direct that the application shall be heard in chambers.

    (6) When a trustee dies or retires, the Registrar, at any time prior to the appointment of another trustee in his place in accordance with any provision to that effect in the trust deed, may appoint another trustee in his place.