JUDGMENT

S.B. Sinha, J.-

BACKGROUND FACTS :

Andhra Bank (Respondent No.3) is a nationalized bank. Andhra Bank Financial Services Limited (Respondent No.4) is a company wholly owned by Andhra Bank. Canbank Mutual Fund (CBMF) is a subsidiary company of Canara Bank, another nationalized bank. The Appellant herein is also a subsidiary of Canara Bank. In or about 1989, Canbank Mutual Fund floated an open ended investment scheme known as CANCIGO on an assured return of 12.5 p.a. payable half yearly; the lock in period wherefor was one year. A stipulation was also made to the effect that transfers are not permitted. Hiten P. Dalal (Respondent No.2) was a registered stock broker. Respondent No.3 at his request applied for CANCIGO units of face value of Rs. 11 crores. Similarly, Respondent No.4 also at the request of Respondent No. 2 applied for CANCIGO units of face value of Rs. 22 crores. Indisputably, the payment of application money for purchase of said CANCIGO units was to be made, out of the monies lying in the bank account of Respondent No.2. The Respondent Nos. 3 and 4 complied with said request of Respondent No.2. The CANCIGO certificates received by the Respondent Nos. 3 and 4 were