It has been observed that the term debenture is not a technical term.
Under Section 2 (1) of the Companies Act debenture includes “debenture stock, bonds and any other securities of a company whether constituting a charge on any assets of the company or not.”
In the words of Lindley J. in British India Co. V. I.R.C. “I do not find
anywhere any precise definition of it. We know that these are various kinds of instruments commonly called debentures. You may have mortgage debentures which are charges of some kind on property. You may have debentures which are bonds. You may have a debenture which is nothing more than an acknowledgment of indebtedness…it is a statement two directors that the company will pay a certain sum of money and will also pay interest…”
In the words of Chitty J. in Levy V Abercolis Slate and Slab “The term itself imports a debt-
an acknowledgment of a debt…”
In modern commercial usage debenture denotes an instrument issued the company
providing for the payment of or acknowledging the indebtedness of the company.
The term is also used to describe the instrument creating the transaction.
Debentures may be issued as:
Secured and unsecured
Redeemable and irredeemable
Registered and bearer
Convertible and non-convertible