Guarantee by the Governor of Welfare State to Industrial Bank Ltd. for payment of the value of the debentures of X Co. Ltd.
… … …
Whereas the Rehabilitation Scheme for X Co. Ltd. (hereinafter called the company) submitted inter alia by the Government of Welfare State was accepted by the Hon’ble High Court.
And whereas in pursuance of the Rehabilitation Scheme dues of Rs. 2 crores are to be paid by the company to the Industrial Bank Ltd. (hereinafter called the bank) by issue of debentures to the bank for the amount carrying 12% interest per annum.
And whereas these debentures will be convertible into equity capital as soon as the first dividend is declared by the company.
And whereas the bank expressed difficulty in accepting the terms of issue of debentures by the company unless guaranteed by the Governor of Welfare State (hereinafter called the government) and the government agreed to give such guarantee.
Now therefore the government hereby guarantee to the bank the payment of the debentures issued to the bank by the company for the sum of Rs. 2 crores carrying interest at 12% per annum on the conditions as follows:
1. At any time after the company shall have made default for more than 30 days in the payment of the said principal sum or any interest government shall on demand pay the same to the bank the holder of the debentures.
2. The debenture-holder, without exonerating the government may grant time or any other indulgence to the company and may assent to modification of its rights and may accept or make any composition or arrangement with the company.
3. In order to give full effect to this guarantee the debenture-holder shall be entitled to act and treat as if the government was the principal debtor to the debenture holder in respect of the moneys hereby guaranteed and the government hereby waives all its suretyship or other rights, if any, which are inconsistent with any of the provisions of this guarantee.
4. Under no circumstances it shall be necessary for the debenture-holder to take any steps or proceedings for enforcing its rights against the company before enforcing this guarantee against the government.
5. The principal sum or any interest covered by this guarantee shall be due and payable by the government to the debenture-holder on demand after notice/s requiring payment of the same shall have been delivered or sent through the post by registered letter addressed to the Secretary to the Government, Ministry of Industries.
In witness whereof this guarantee has been executed for and on behalf of the Governor of Welfare State by Mr. ……………………., Secretary Industries Department this 5th day of July 2000.
For and on behalf of the Governor of Welfare State
Secretary, Ministry of Industries
Government of Welfare State