1. The applicant is a non-banking financial company incorporated in India. It makes investments in various businesses in India and abroad in the form of securities including shares, stocks and debentures. For the purpose of funding its business activities in India, the applicant proposes to borrow money from LMCC USA by issuing fully convertible Bonds under the foreign direct investments schemes. A "Bond Subscription Agreement" was, therefore, entered into between the applicant and LMCC (referred to as ‘investor’). As per the Agreement, the Bonds (with the face value of Rs. 10 each) are convertible into equity shares at the end of 5 years from the date of the issue unless extended for a further period of 5 years in which case the conversion would take place at the end of 10 years. Applicant submits that by virtue of conversion there will be constructive payment of borrowed money to the Bondholder. The interest on the bonds is payable by the applicant in rupee currency in cash on half yearly basis irrespective of the fact that the applicant makes profits or not. The rate of interest is specified in the amended Agreement. The applicant further submits that as per the Agreement,