Q.The position of a debenture-holder in relation to the company is that of its ________. (A) Owner
(B) Creditor
(C) Employee
(D) Customer

A debenture-holder has lent the company money against a certificate of debt, so the relationship is one of lending, not ownership, employment, or trade.

A debenture, defined under Section 2(30) of the Companies Act, 2013, is a certificate acknowledging that the company has borrowed a stated sum of money from the person holding it, on a promise of fixed interest and eventual repayment. Lending money to a company, rather than contributing capital to become its part-owner, is exactly what makes the lender a creditor of it.

(A) Owner is incorrect: ownership of a company belongs to its shareholders (members), not its debenture-holders — the clearest statutory proof being Section 71(2) of the Companies Act, 2013, which bars any debenture from carrying voting rights at all, whereas an owner votes at general meetings.

(B) Creditor is correct: the debenture-holder has lent the company money and is owed fixed interest plus eventual repayment, and is repaid ahead of every class of shareholder on winding up.

(C) Employee is incorrect: an employee renders service to the company for a salary under a contract of employment, an entirely different relationship from lending money against a debenture.

(D) Customer is incorrect: a customer buys goods or services from the company, an unrelated commercial relationship carrying no debt or ownership dimension.

Students occasionally choose 'Owner' by loosely associating any investment in a company with ownership, without distinguishing a share (ownership capital) from a debenture (loan capital) — a debenture-holder's complete lack of voting rights under Section 71(2) is the clinching proof it is not ownership.