Question

If interest and borrowed sum are not paid to debenture holders in time, they can take legal action (including winding up) against the company.

Options

• True

• False

Answer 1

True

Explanation:

Debenture holders are creditors; a debenture is the company’s undertaking to repay principal with interest. In the event of default on interest or principal, they may enforce legal remedies against the company, including filing for winding‑up to recover their dues.