Debenture Certificates are issued under the common seal of the company. The debenture certificate is a document, which certifies that the holder is the creditor of the company to the limit of a number of debentures multiplied by the face value of each debenture. For eg: if the certificate states 100 debentures of Rs. 100/- each, then holder having the certificate is entitled to get Rs. 10,000/- from the company at the time of redemption of such debentures by the company.
Thus, with the help of this certificate the holder get the repayment of principal sum at the fixed date and the payment of interest at the fixed rate.
Time of issuing a certificate: The certificate is to be issued to the holder within three months of the allotment of debentures or debenture stock and within two months after the application for the registration of the transfer of any such debenture or debentures stock. The certificate is to be delivered in accordance with the procedure laid in section 53 of the companies Act, 1956.
The Company Law Board has the power to extend the period within which the debentures certificate may be delivered to a further period not exceeding nine months if it is satisfied that it is not possible for the company to deliver the certificate within the said period.
Penalty: if default is made in the delivery of debenture certificate within the said time then every officer of the company who is in default shall be punishable with a fine which may extend to Rs. 500/- per day and imprisonment for a term which may extend to two years.
A notice may be served to a company for making good the default. If it fails to do so within 10 days of the service of the notice, the Company Law Board may on an application made by the aggrieved person, will make an order directing the company and any officer of the company to deliver the securities within the period mentioned in the order. The order contains the information regarding all the costs incidental to the application shall be borne by the company or by the officer of the company who is in default.
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