( 1 ) THE order dated 25/8/1993 and 26/8/1993 is challenged in Co. A. 27/93 by Ms. Pramod Gupta and Mr. Sanjay Gupta, hereinafter called respondents 2 and 3 as per the array of parties in the application filed by the ANZ Grindlays Bank, hereinafter called the `bank , before the Company Law Board. In Co. A. 6/94, the Bank has filed the appeal challenging the order passed by the Company Law Board dated 15/3/1994 and 16/3/1994. In Co. A. 8/94 the order dated 15/3/1994 and 16/3/1994 passed by the Company Law Board is challenged by respondents 2 and 3.

( 2 ) BEFORE adverting to the rival contentions of the parties in the application filed by the Bank before the Company Law Board, out of which the three appeals had arisen, the facts culminating in the filing of the Company Petition filed by the Bank under Section 111 of the Companies Act, 1956, hereafter called the `1956 Act , and the filing of the appeals have to be noticed.

( 3 ) THE genesis, as it were, of the present dispute was the purchase of bonds by respondents 2 and 3 issued by the National Hydro Electric Power Corporation Limited, hereinafter called the `nhpc Ltd . The bond was purchased which had the face value of Rs. 9,06,34,000 with interest warrants payable on the 31st of March and the 30th of September of each year. The interest warrants were issued by the NHPC Ltd. by way of post dated cheques payable, as stated above, on the 31st of March and the 30th of September every year. The interest warrants are detachable from the bond and the each of the interest warrants/post dated cheque is a negotiable instrument independently.

( 4 ) ON the 17/3/1992, respondents 2 and 3 sold the bond with one interest warrant which was payable on the 31/3/1992 to the Bank. The letter reads as under:- "enclosed herewith 90,634 (% NHPC bonds of Rs. 9,06,34,000. 00 (Rs. NINE CRORE SIX LACS THIRTY FOUR THOUSAND ONLY ). You are requested to sell the same @ 74. 30, and issue a bankers check favouring Citi Bank with a covering note that credit has to be given to the A/c of Mr. Sanjay Gupta with Citi Bank.

PLEASE receive the same and acknowledge. "

( 5 ) THE impugned bond was given to the Bank with one interest warrant which was for Rs. 40,78,530. 00 and the post dated cheque was given to the Bank. On the 18/3/1992, the Bank sold the bond with one interest warrant purchased by it to M/s. Fairgrowth Financial Services Limited for a consideration of Rs. 8. 50 crores, that is, nearly about Rs. 2 crores over and above the consideration for which it was purchased on the 17/3/1992 by the Bank. On the 30/3/1992, M/s. Fairgrowth Financial Services Limited sold the bond and the interest warrant to M/s. Fairgrowth Investments Limited for a consideration of Rs. 8. 75 crores. It may be noticed here that both these companies were under the control of Mr. Harshad Mehta.

( 6 ) ON the same date, M/s. Fairgrowth Investments Limited wrote to the NHPC Ltd. for registering the transfer of the bond with one interest warrant. The NHPC Ltd. complied with the requested. By this process, M/s. Fairgrowth Investments Limited became entitled to the payment of the amount mentioned in the bond and encashed the interest warrant/post dated cheque for Rs. 40,78,530. 00. As a matter of fact, on the 31/3/1992, M/s. Fair Growth Investments Limited encashed the post dated cheque and received Rs. 40,78,530. 00. On the 1/4/1992, M/s. Fairgrowth Investments Limited sold the bond to M/s. Fairgrowth Financial Services Limited for a consideration of about Rs. 8. 50 crores. It may be noticed that as M/s. Fairgrowth Investments Limited had received the amount mentioned in the interest warrant/post dated cheque, no interest warrant was subject matter of transfer by M/s. Fair Growth Investments Limited to M/s. Fiar Growth Financial Services Limited. The bonds and the bond alone were the subject matter of this transfer.

( 7 ) BY the 1/4/1992, M/s. Fair Growth Financial Services Limited became the holder of the bond by virtue