Who can appoint Debenture Trustee?
Creation of security means mortgaging or charging the property in favor of Debenture Trustee for the benefit of debenture holders. This is an incidence of ownership of property and creation of security has to be done by the owner of the property. However, the debenture holders are beneficiaries and they have no access to mortgaged property. The Debenture Trustee holds the secured property on behalf of issuer of security and for benefit of debenture holders. In the event of default by the issuer of security, the Debenture Trustee will have the power and authority to bring the secured property to sale following the procedure in the Transfer of property Act, 1882 and the proceeds of sale will have to be applied to redeem the debentures. This is one of the onus conferred on the Debenture Trustee by the aforesaid regulation. Effective use of this power is possible if it is included in the Debenture Trustee Agreement and a suitable power of attorney is executed by the issuer of debentures in
