K. Ramamoorthy, J. ( 1 ) THE writ petitioner was working as Chief Manager with the first respondent. The petitioner was removed from service by an order dated 24. 10. 1996 by the General Manager. The petitioner preferred an appeal and that was dismissed by the Chairman-Managing Director by an order dated 26. 6. 1997. Challenging those orders the petitioner has filed the present writ petition. ( 2 ) ACCORDING to the petitioner that he had served in the first respondent-Bank for about 38 years with all sincerity and devotion to duty. The petitioner was promoted as a Senior Management Grade, Scale IV Post i. e. the post of Chief Manager on 1. 10. 1986. ( 3 ) ON 2. 2. 1993, a chargesheet Was issued. On 4. 11. 1993, a supplementary to the charge-sheet dated 2. 2. 1993 was issued. On the basis of the charges the inquiry was conducted. The Inquiry Officer submitted his report but no date has been given. ( 4 ) MR. S. C. Aggarwala, the learned Senior Counsel appearing for the petitioner brought to my notice the details about the ultimate conclusion arrived at by the Inquiry Officer. The Inquiry Officer had given the summary and the same reads as under: CHARGE I (a) Charge is not proved. (b) Charge is proved to the extent that party had just 98. 760 KW electricity power connection against the requirement of 400 KW. (c) Charge is not proved. (d) Charge is not proved. (e) Charge is proved. (f) Charge is proved to the extent that availability of the requisite margin with the party was not ensured. (g) Charge is proved to the extent that working capital facilities were considered on the basis of annual capacity of 9000 MT/pa as against actual installed/licensed capacity of 3900 MT/pa. Other part of the charge is not proved. (h) Charge is proved. (i) Charge is proved to the extent that availment in CC (Book Debt) was allowed without procuring inventories of Book Debts from the party. (j) Charge is proved. CHARGE II (a) Charge is proved. (b) Charge is proved. (c) Charge is proved. (d) Charge is not proved. (e) Charge is not proved. (f) Charge is not proved. (g) Charge is proved to the extent that stock reports were not got prepared to ensure proper control on operation of Cash Credit (P) Account. (j) Charge is proved. CHARGE II (a) Charge is proved. (b) Charge is proved. (c) Charge is proved. (d) Charge is not proved. (e) Charge is not proved. (f) Charge is not proved. (g) Charge is proved to the extent that stock reports were not got prepared to ensure proper control on operation of Cash Credit (P) Account. CHARGE III (i) Charge is not proved. (ii) Charge is not proved. (iii) Charge is not proved. (iv) Charge is not proved. (v) Charge is proved to the extent that charged officer did not ensure fixing of repayment schedule and instalments. (vi) Charge is proved. (vii) Charge is proved. (viii) Charge is proved. (ix) Charge is proved. (x) Charge is not proved. (Concluding Part) Charge is not proved. ARTICLE OF CHARGES Article I Charge is proved. Article II Charge is proved. Article III Charge is proved to the extent that pre-sanction safeguards/postsanction follow-up were not observed/exercised. The other part of the charge of jeopardy to Bank s interest is not proved. ( 5 ) THE learned Senior Counsel for the petitioner Mr. S. C. Aggarwala, formulated the following points: (I) There is no evidence to sustain the charges against the petitioner; (II) The conclusion arrived at by the Disciplinary Authority and the Appellate Authority is perverse and no reasonable person properly instructed in law would come to the conclusion arrived by the Inquiry Officer, Disciplinary Authority and the Appellate Authority; (III) The Bank itself had admitted that the petitioner had not committed any offence; 589 (IV) The Appellate Authority refused to give personal hearing to the petitioner which would vitiate the order of the Appellate Authority; (V) Very crucial documents which were necessary for establishing the case, were not furnished to the petitioner. (VI) The first respondent had committed breach of mandatory provisions in Regulations 6 (5) (iii) of the Punjab National Bank Officer Employee s (Discipline and Appeal) Regulations, 1977. ( 6 ) I shall now take Charge No. 1 (b ). The said charge reads as under :- CHARGE No. 1 (b) He did not ensure availability of requisite power supply before sanctioning the Term Loan. The viability of the project was based on power to be generated through a Diesel Generator Set. It was not a viable proposition resulting in increase in cost and consequent break-down of the Unit. The said charge reads as under :- CHARGE No. 1 (b) He did not ensure availability of requisite power supply before sanctioning the Term Loan. The viability of the project was based on power to be generated through a Diesel Generator Set. It was not a viable proposition resulting in increase in cost and consequent break-down of the Unit. As per sanction note Diesel Generator Set of 300 KW was proposed to be utilised as an alternate arrangement of power supply but the electric power available with the party was just 98. 760 KW against the actual requirement of 400 KW. According to the petitioner, the loan was sanctioned on 13. 3. 1990 and 14. 3. 1990. The petitioner had made the following endorsement in the document which is produced as Annexure P-11 which would evidence the sanctioning of the loan: The unit was visited in the 1st week of March, 1990. It is quite encouraging that the party is fastly working. The above proposed facilities are sanctioned subject to the above referred terms and conditions and also that payment be released in case of T/l to the suppliers. The working capital facilities to be released in stages, after ensuring that machinery is ready for production activity. Sd/.- Y. K. Singha - Chief Manager dt : 14. 3. 1990 ( 7 ) THE Inquiry Officer in his report has stated that "presenting Officer has not produced any document or oral evidence to establish the required power load to run the size of the Unit the party was possessing except quoting the Inspector s objection appearing in his Inspection Report dated 16. 2. 1991 (P-62)". ( 8 ) THE Inquiry Officer has also said "however, this requirement of 400 KW has also not been contested by the Defence". This Ex. P-62, the Inspection Report was 11 months after sanctioning of the loan. The charge is that the petitioner had not taken into account the power load requirement. The first respondent was aware that the borrower had a Diesel Engine Generator. The Inquiry Officer had noticed from the crucial points "there has been no difference of opinion that Steel Rolling Mills, can be run exclusively on power generated through diesel engine". Therefore when the constituent had diesel engine generator, no complaint can be made against the action of any officer sanctioning loan. The Inquiry Officer had noticed from the crucial points "there has been no difference of opinion that Steel Rolling Mills, can be run exclusively on power generated through diesel engine". Therefore when the constituent had diesel engine generator, no complaint can be made against the action of any officer sanctioning loan. It was argued by the first respondent-Bank before the Inquiry Officer that if a Steel Rolling Mills must work on generator that would affect the profitability of the product. The Inquiry Officer dealt with this aspect squarely by saying however if Steel Rolling Mills being run primarily on power generated through diesel engine whether is cost effective and profitable in comparison to it being run on electricity power supply having no adverse effect on this profitability. The Presenting Officer has not substantiated the charge through any authentic data . ( 9 ) THE Inquiry Officer has referred to the evidence of Shri Nirmal Dass Public Witness - 4 who had stated that the use of diesel engine as a permanent source of power is more costly resulting in adverse effect on the profitability. The Inquiry Officer has also referred to the material produced by the petitioner based on calculations on CAS data, the sanction note dated 13. 3. 1990 and 14. 3. 1990, accordingly the Inquiry Officer depicts that the unit will run on both power connections and diesel engine power in case of power failures. The fact that the party had the capacity to run the Steel Rolling Mills on generator by using diesel engine is not disputed. The fact that during the relevant period the generator had affected the supply of diesel cannot be disputed by anybody. The Inquiry Officer without applying his mind to the relevant facts had rendered the findings as under: In the backdrop of above, the charge stand proved to the extent that the unit was proposed to be utilised as an alternate arrangement of power supply but the electric power available with the party was just 98. 760 KW against the actual requirement of 400 KW. The other part of the charge has not been substantially proved. ( 10 ) THE Disciplinary Authority has not at all adverted to this aspect in his order. The Appellate Authority has also not discussed at all and has simply affirmed the order of the Disciplinary Authority. The learned Senior Counsel Mr. The other part of the charge has not been substantially proved. ( 10 ) THE Disciplinary Authority has not at all adverted to this aspect in his order. The Appellate Authority has also not discussed at all and has simply affirmed the order of the Disciplinary Authority. The learned Senior Counsel Mr. S. C. Aggarwala, submitted that on the basis of Exh. 62 inspection report dated 16. 2. 1991 which was II months after the sanctioning of the loan, which does not in any way affect the decision making process of the Sanctioning Authority, no conclusion can be arrived at that there was any lapse on the part of the petitioner. There is absolutely no evidence at all against the petitioner to sustain this charge. The reasoning given by the. Inquiry Officer is no reason at all in the eyes of law. ( 11 ) CHARGE No. l (e) is to be dealt with Charge No. l (e) reads as under: Charge l (e) He failed to take cognizance of the fact that the Directors of the Company were not experienced in the line. ( 12 ) THE concerned officer while sanctioning the loan had taken into account the persons Incharge of the Company and their capacity to employ persons for running the Steel Rolling Mills. The Inquiry Officer in his report had stated that only Ex. P-35 and Ex. P-36 had been relied upon by the persons to substantiate this charge. Ex. P-35 dated 26. 2. 1990 is the loan application by the Company to apply for the loan. Ex. P-36 is the dated 13. 3. 1990/14. 3. 1990 is the sanctioning note. There is a technical report with reference to M/s. Balwant Steel Rolling Mills prepared by the Bank. In that inspection report it is stated : Male Directors of the Company have got sufficient business experience in the line and appear managerially, competent to handle business affairs of the unit. Shri Raj Kumar Bansal is reported to have 24 years experience in the line. He is also interested in trading concern having its name and style as M/s. Hari 0m Steel Traders. To manage various aspects of the unit like technical, financial and marketing etc. the party has proposed to employ technically skilled persons and managerially qualified personnel to assist Directors in managing overall affairs of the unit efficiently. He is also interested in trading concern having its name and style as M/s. Hari 0m Steel Traders. To manage various aspects of the unit like technical, financial and marketing etc. the party has proposed to employ technically skilled persons and managerially qualified personnel to assist Directors in managing overall affairs of the unit efficiently. In view of these, overall managerial aspects of the unit can be considered as satisfactory. ( 13 ) THE officers who had prepared the technical report have also considered the experience by the persons and the management of the Company. The Technical report had also taken into account the business experience of the Directors of the Company. ( 14 ) MR. S. C. Aggarwala, the learned Senior Counsel for the petitioner, submitted that the officers who had prepared the technical report which has been accepted by the Bank had focussed their attention to the business experience of the Directors of the Company and that has not been considered by the Inquiry Officer, Disciplinary Authority and the Appellate Authority and therefore, the findings given by the Inquiry Officer is wholly perverse and the Disciplinary Authority and the Appellate Authority had not at all discussed the matter and therefore, their orders also are vitiated and they are liable to be set aside. ( 15 ) MR. A. K. Sikri, the learned Senior Counsel for the Bank submitted, that the Inquiry Officer though candidly stated that there are two documents available with the Presenting Officer i. e. Ex. P-35 and Ex. P-36, which he had observed is sufficient in law to sustain the charge. The Enquiry Officer had stated: Loan application form is expected to contain all the relevant and material information regarding the applicant-firm which becomes the basis for taking decision on the applicant s request. Under item No. 5 on page 2 of the loan application form (Ex. P-35), it is mentioned by the applicants; themselves that they have experience in trading of products proposed to be manufactured which is sufficient proof of their not having requisite experience in the manufacturing of the proposed product. Moreover, marketing is only one of the aspect (though important) of the entire project of a manufacturing of the proposed product. P-35), it is mentioned by the applicants; themselves that they have experience in trading of products proposed to be manufactured which is sufficient proof of their not having requisite experience in the manufacturing of the proposed product. Moreover, marketing is only one of the aspect (though important) of the entire project of a manufacturing of the proposed product. ( 16 ) THIS is no reason at all when a person who is a trader is desirous of running a Steel Rolling Mills, the Directors of the Company should be the persons who can work in the Steel Rolling Mills or they should be technically qualified, the reason given by the Inquiry Officer is totally unreasonable and it is contrary to the norms. I have no hesitation holding that the view taken by the Inquiry Officer, Disciplinary Authority and the Appellate Authority is absolutely perverse and it cannot be sustained in law. No person properly instructed in law would take the view. ( 17 ) CHARGE No. 1 (f), according to the Inquiry Officer is partly proved, the charge reads as under: CHARGE l (f): He did not ensure availability of the requisite margin with the party. The party had NWC of Rs. 1. 27 lac as per provisional Balance Sheet as at 5. 3. 90 and Rs. 3. 67 lacs as at 31. 3. 1990 against required NWC of Rs. 13. 47 lacs. ( 18 ) THE Inquiry Officer has referred to the case of the Bank which is in the following terms: PRESENTING Officer referred documents marked Exs. P-37 to P-42,53,62, D-50,109 to prove the charge. Ex. P-37 - Dr. (Transfer) Voucher dated 14. 3. 90 for Rs. 6. 00 lacs -T/l A/c of above party. Ex. P-38 - Dr. (Transfer) Voucher dated 14. 3. 90 for Rs. 7. 00 lacs - T/l A/c of above party. Ex. P-39 - Cr. (Transfer) Voucher dated 14. 3. 90 for Rs. 6. 00 lacs - HO Gobind Garh Mandi for issue of draft fvg. Aman Machinery and Electric Co. Ex. P-40 - Cr. (Transfer) Voucher dated 14. 3. 90 for Rs. 7. 00 lacs - for issuing Cash Order fvg. G. D. Industries. Ex. P-41 - Dr. (Transfer) Voucher dt. 29. 3. 90 for Rs. 1. 60 lacs - T/l A/c of above party. Ex. P-42 - Transfer Credit Voucher C/c A/c M/s. Balwant Steel Rolling Mills - Rs. 1,60,000. P-40 - Cr. (Transfer) Voucher dated 14. 3. 90 for Rs. 7. 00 lacs - for issuing Cash Order fvg. G. D. Industries. Ex. P-41 - Dr. (Transfer) Voucher dt. 29. 3. 90 for Rs. 1. 60 lacs - T/l A/c of above party. Ex. P-42 - Transfer Credit Voucher C/c A/c M/s. Balwant Steel Rolling Mills - Rs. 1,60,000. 00 Ex. P-53 - Cr. unsigned dated 10. 3. 90 on M/s. Balwant Steel Rolling Mills. Ex. P-62 - IR dated 16. 2. 91 Appendix c item No. 15. Ex. D-50 - Balance Sheet as on 5. 3. 90 of M/s. Govind Iron Mills Pvt. Ltd. Ex. D-109 - Balance Sheet as on 29. 9. 90 of M/s. Balwant Steel Rolling Mills (Prop. Gobind Iron Mills Pvt. Ltd.) As per the contention of Presenting Officer, share application money amount i. e. Rs-13. 54 lacs shown in the Balance Sheet dated 5. 3. 90, (Ex. D-50) the basis of processing/sanction of loan to the party on 14. 3. 90 cannot be treated as share capital until the shares are allotted as the same was held as custodian by the Company on behalf of the applicants. Hence no capital was available on 5. 3. 90. Even as per Balance Sheet dated 24. 9. 90 (Ex. D-109) the paid up capital of the Company is Rs. 10,000. 00 only. Hence, Company has no funds of its own to meet the margin requirements for the credit facilities sanctioned by the charged officer. Even if, share application money is considered as capital of the Company, the Company did not have sufficient liquid funds even to meet the margin requirements of the Term Loan what to say about Hyp. and Pledge Limit. Presenting Officer tried to justify his plea by the following calculations: (Amount rounded to Rs. in Lacs) 1. Value of proposed Machinery to be 19. 75 financed as per Project Report (Ex. P-47 ). 2. Stipulated Margin as per sanction note 25% (Ex. P-36 ). 4. 94 3. Term Loan sanctioned 14. 60 4. Balance amount to be met by the Company 5. 15 including Margin. Whereas as per Balance Sheet dated 5. 3. 90 (Ex. D-50) the availability of margin position is as under: 1. Share Application Money (Considering 13,54,000. 00 it as share paid-up capital ). 2. Fixed assets. 11,35,574. 00 3. Security with PSEB 90,675. 00 4. Pre-Operating Exp. 91,681. Balance amount to be met by the Company 5. 15 including Margin. Whereas as per Balance Sheet dated 5. 3. 90 (Ex. D-50) the availability of margin position is as under: 1. Share Application Money (Considering 13,54,000. 00 it as share paid-up capital ). 2. Fixed assets. 11,35,574. 00 3. Security with PSEB 90,675. 00 4. Pre-Operating Exp. 91,681. 00 5. Amount available as Margin against required 36,070. 00 margin of Rs. 5. 15 lacs in Term Loan only (l- (2+3+4)) Further, Presenting Officer pleaded that only a sum of Rs. 6. 00 lacs and Rs. 7. 00 lacs were released to the debit of Term Loan A/c of the party as against Rs. 7. 10 lacs and Rs. 9,92,652. 00 being the full cost of Machinery proposed to be financed without recovering the proportionate margin in each case. It was contended that the Machines were not fully paid and seller can claim the balance amount from the Bank. Besides, payments to the suppliers have not been made as per established practice and Bank s guidelines i. e. by means of Draft/cash Order as the case may be, as a sum of Rs. 1. 60 lacs was credited to party s C/c A/c after debiting its Term Loan A/c at their (party s) request on account of "being balance amount of Term Loan". It is termed as "accommodating Loan" as the same was neither towards cost of Machinery nor for reimbursement of Machinery purchased by the Company. Shri L. L. Nirwan (DW-3) the then Manager (Loans) at BO Civil Lines, Ludhiana deliberately avoided to answer the question on this score (Q. No. 471 on page 216 EPR ). It is further contended that Branch after verifying the record, has certified that No Proforma Bill/pacca Bill Invoice is available in the Branch s record. Unattested quotations produced by the charged officer are not available in Branch record and charged officer has also not disclosed the source from where these have been procured. None amongst the witnesses testified these quotations. Quotation No. AMEC/89-90/258 dated 17. 7. 89 of Aman Machinery and Electric Co. and quotation dated 5. 5. 89 of Khalsa Boaring Corporation are not even addressed to anyone. Unstamped Receipt available on branch record on letter pad do not speak out Bills (Bill No. , date, amount etc.) for which the payment was received by the party. Amount of Rs. 6. 7. 89 of Aman Machinery and Electric Co. and quotation dated 5. 5. 89 of Khalsa Boaring Corporation are not even addressed to anyone. Unstamped Receipt available on branch record on letter pad do not speak out Bills (Bill No. , date, amount etc.) for which the payment was received by the party. Amount of Rs. 6. 00 lacs as per receipt was received by the so-called seller from the borrowing Company and not from the bank. Fixed assets, if any, of the Company cannot be treated as margin as the facilities were sanctioned for specific purpose i. e. for purchase of Machinery and for working capital and not for financing the entire project (Ex. P-36) Landa Cir. No. 63 dated 11. 11. 93 (Ex. D-58) produced by defence was not in force at the time of sanction/release of loan in March, 1990. ( 19 ) THE learned Senior Counsel for the petitioner submitted that the Bank refused to furnish the necessary documents to the petitioner to show that the party had applied for enhancement of the loan and the Zonal Office had directed to prepare the feasibility report. According to the learned Senior Counsel there are three volumes of documents relating to sanction of loan. Volume I is the file relating to pre-sanctioning of loan. Volumes II and III would relate to post sanction period which would contain the necessary files. These files were not made available to the petitioner and this would prove that absolutely nothing wrong was pointed out by anybody relating to the sanctioning of the loan. And as a matter of fact, the request of the party for enhancement of loan was considered and, necessary reports were directed to be prepared. Ultimately no doubt the enhancement was not granted and that is not relevant. In para 45 in the counter affidavit the Bank would state : That the contents of para 50 are wrong and denied and the submissions made hereinbefore are reiterated. It is further submitted that the Inquiring Authority did not commit any error of irregularity when he asked the Presenting Officer to make a submission in respect of the documents demanded by the petitioner in order to decide the relevancy of the same. It is further submitted that all those documents which were found relevant by the Inquiring Authority and which were available were produced in the enquiry proceedings. It is further submitted that all those documents which were found relevant by the Inquiring Authority and which were available were produced in the enquiry proceedings. The Bank would crave leave to refer to the enquiry proceedings at the appropriate stage. ( 20 ) ACCORDING to the learned Senior Counsel for the petitioner para 51 had not been disputed. The learned Senior Counsel for the petitioner referred to para 81 of the writ petition wherein it is stated: 81. The petitioner submits with great respect that at every stage of the impugned proceedings, Enquiring Authority, the respondent 4 herein, has had been irreparably and although prejudicating the defence by unlawful, malafide, capricious, whimsical, fanciful and illegal withholding of "best evidence" and this aspect wholly vitiated the impugned departmental proceedings. For example, detail of some of such documents which have been unlawfully withheld by the respondents, is respectfully given herebelow : (a) the petitioner requested for allowing him to adduce in the enquiry, Vols. II and III of the correspondence files of the questioned borrower maintained at the Branch but despite repeated tearful, lamentable and humble submissions to the Domestic Tribunal holding the impugned enquiry, the same files/documents were malafidely not provided. These files alongwith relevant documents also contained Balance Sheet as on 31. 3. 1991 which clearly proves that the party had introduced funds sufficient to meet margin requirement and thereby the Change-1 (f) and II could have been outrightly and absolutely disproved . Had these documents/files been allowed to be adduced in the impugned enquiry, the Enquiring Authority could not have held the alleged charge as proved. (b) not only the aforesaid documents were said to be not available by the Presenting Officer, they were withheld even when at Pages 50 of the Enquiry Proceeding Register, the availability of the documents was proved. (c) Bills/invoices in respect of machinery, purchased by the Questioned Borrower, were malafidely withheld by the Presenting Officer by saying that the said documents are not available. It is really extremely painful that the said documents were not ordered to be produced even when the petitioner on page 208 of Enquiring Proceedings Register has proved the existence of the said document. In answer to Q. 432/433, Shri L. L. Nirwan (Witness) confirmed the existence of said bills. It is really extremely painful that the said documents were not ordered to be produced even when the petitioner on page 208 of Enquiring Proceedings Register has proved the existence of the said document. In answer to Q. 432/433, Shri L. L. Nirwan (Witness) confirmed the existence of said bills. Had these documents not withheld by the Domestic Tribunal, Custodian of Records, the Enquiring Authority could not have held proved alleged Charges - ll (a) and n (c ). Similarly office copy of the Refinance Claim was very much in existence in Vol. II file and malafidely and illegally withheld by Domestic Tribunal and Custodian of Recordsand taking undue advantage of this crucial situation, the Enquiring Authority unreasonably and malafidely held on page 23 of impugned Enquiry Report that "the defence did not produce either the original or carbon copy of the Refinance Claim prepared/lodged, the copies of correspondence addressed; to the party on this score in support of its conclusion". These findings can not pass the test laid down by the Hon ble Supreme Court of India in National Insurance Company v. Jugal Kishore ( AIR 1988 SC 719 Para 10), wherein it has been held that it is the duty of the Custodian of Records to produce the documents. It is piteously submitted that the documents are invariably in the custody and control of the respondent-Bank and it was beyond supervening limit of the impossibility to bring those documents on record by the petitioner unless and except they were provided by the Custodian of Records at the requisition of the Enquiring Authority in accordance with Regulations 6 (10) (b) (iv), 6 (12) of Discipline Regulations. Under the clouds of these malafide exercises, the Enquiring Authority held Charge-1 (h) as proved on page 24 of the impugned Enquiry Report. For, the whole impugned process of imposing penalty is vitiated. ( 21 ) THE learned Senior Counsel for the petitioner submitted that in reply to this para the Bank had not given any reason as to why the documents could not be produced. Para 81 is dealt with by the Bank in its counter in para 69. Para 69 reads as under: THAT the contents of para 81 are wrong and denied. It is denied that the Inquiring Authority acted with a prejudiced mind. Para 81 is dealt with by the Bank in its counter in para 69. Para 69 reads as under: THAT the contents of para 81 are wrong and denied. It is denied that the Inquiring Authority acted with a prejudiced mind. It is further submitted that all relevant documents which were demanded by the petitioner and which were available with the Bank were produced on the record of the enquiry proceedings and the allegation by the petitioner that the documents were unlawfully withheld is denied. ( 22 ) THE learned Senior Counsel relied upon the judgment of the Supreme Court reported in State of Madhya Pradesh v. Chintaman Sadashiva Waishampayan, AIR 1961 SC 1623 the employee concerned in an inquiry should be given all the necessary documents by the department concerned. In para 10 their Lordship had observed: MR. Khaskalam has strenuously contended before us that in not supplying the copies of the documents asked for by the respondent the Enquiry Officer was merely exercising his discretion, and as such it was not open to the High Court to consider the propriety or the validity of his decision. In support of this argument he has referred us to the decision of the Patna High Court in Dr. Tribhuwan Nath v. State of Bihar, AIR 1960 Pat. 116 . In that case of public officer wanted to have a copy of the report made by the anti-corruption department as a result of a confidential enquiry made by it against the said officer; and the Enquiry Officer had rejected his prayer. When it was urged before the High Court that the failure to supply the copy of the said report constituted a serious infirmity in the enquiry and amounted thereby to a denial of a reasonable opportunity to the public officer the High Court repelled the argument, and held that the officer was not entitled to a copy of the report unless that report formed part of the evidence before the Enquiry Commissioner and was relied upon by him. "when however, the report was not at all exhibited in the case, nor was it referred to nor relied upon by the Commissioner", said the High Court, "there was no meaning in contesting it, and consequently absence of opportunity to meet its contents involved no violation of constitutional provisions". "when however, the report was not at all exhibited in the case, nor was it referred to nor relied upon by the Commissioner", said the High Court, "there was no meaning in contesting it, and consequently absence of opportunity to meet its contents involved no violation of constitutional provisions". In our opinion, this decision cannot assist the appellant s case because, as we have already pointed out, the documents which the respondent wanted in the present case were relevant and would have been of invaluable assistance to him in making his defence and crossexamining the witnesses who gave evidence against him. It cannot be denied that when an order of dismissal passed against a public servant is challenged by him by petition filed in the High Court under Art. 226 it is for the High Court to consider whether the constitutional requirements of Art. 311 (2) have been satisfied or not. In such a case it would be idle to contend that the infirmities on which the public officer relies flow from the exercise of discretion vested in the Enquiry Officer. The Enquiry Officer may have acted bona fide but that does not mean that the discretionary orders passed by him are final and conclusive. Whenever it is urged before the High Court that as a result of such orders the public officer has been deprived of a reasonable opportunity it would be open to the High Court to examine the matter and decide whether the requirements of Art. 311 (2) have been satisfied or not. In such matters it is difficult and inexpedient to lay down any general rules; whether or not the officer in question has had a reasonable opportunity must always depend on the facts in each case. The only general statement that can be safely made in this connection is that the departmental enquiries should observe rules of natural justice and that if they are fairly; and properly conducted the decisions reached by the Enquiry Officers on the merits are not open to be challenged on the ground that the procedure followed was not exactly in accordance with that which is observed in Courts of Law. As Venkatarama Aiyar, J. has observed in Union of India v. T. R. Varma, 1958 SCR 499 at p. 507: (S) AIR 1957 SC 882 at p. 885) "stating it broadly and without intending it to be exhaustive it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party, and that no materials should be relied on against him without his being given an opportunity of explaining them". It is hardly necessary to emphasise that the right tocross-examine the witnesses who give evidence against him is a very valuable right, and if it appears that effective exercise of this right has been prevented by the enquiry office by not giving to the officer relevant documents to which he is entitled, that inevitably would be that the enquiry had not been held in accordance with rules of natural justice. That is the view taken by the High Court, and in the present appeal which has been brought to this Court under Art. 136 we see no justification for interfering with it. In this connection it would be relevant to refer to the decision of this Court in Khem Chand v. Union of India, 1958 SCR 1080 at p. 1096: ( AIR 1958 SC 300 at p. 807) where this Court has emphasised the importance of giving an opportunity to the public officer to defend himself by cross-examining the witnesses produced against him. ( 23 ) THE learned Senior Counsel for the petitioner submitted that the findings report by the Inquiry Officer on Charge No. 1 (g), (h), (i) and (j) cannot at all be sustained because there is absolutely no evidence to sustain those charges. ( 24 ) THE learned Senior Counsel for the petitioner submitted that the Bank itself had admitted that there were no irregularities of sanctioning of loan. He referred to Annexure P-45 at page 288 of the typed set, is the application making claim on insurance filed by the Bank. This was on 29. 3. 1993 just a month after the framing of the charges against the petitioner. He referred to Annexure P-45 at page 288 of the typed set, is the application making claim on insurance filed by the Bank. This was on 29. 3. 1993 just a month after the framing of the charges against the petitioner. In the relevant Column at page 289, the Bank had observed: THAT the loss in respect of the credit facilities under claim has not arisen on account of any negligence in the observance of the necessary safeguards and procedures in regard to appraisal, supervision and follow-up of the credit facility or any dishonesty on the part of any of our employees or owing to decisions taken by them contrary to or in contravention of the instructions issued by us or the Corporation. ( 25 ) AT page 292 in Column 14 (c) the Bank had clearly admitted that they have taken all safeguards. Column 14 (c) is as under: WHETHER in regard to advances under claim the credit institution had observed all the necessary safeguards at: (a) Pre-sanction stage Yes (b) Post-sanction stage Yes ( 26 ) THE Inquiry Officer has not dealt with this aspect at all. In dealing with the inquiry report in his explanation to the Disciplinary Authority the petitioner had clearly stated "that the Inquiry Officer has not taken any cognizance of the fact that the Bank had already lodged claim with the DICGC in the account of M/s. Balwant Steel Rolling Mills which declares that no responsibility whatsoever devolves upon him for the alleged irregularities with reference to the account of the said party". ( 27 ) THE Disciplinary Authority observed : THE plea of Shri Singla that Enquiry Officer did not take cognizance of the fact that the Bank had already lodged claim with Dl and CGC and as such no responsibility developed upon him is also not maintainable as lodging of claim by Bank with DICGC/fcgc does not mean that disciplinary proceedings cannot be initiated against erring officials. ( 28 ) THE Appellate Authority had observed: LODGING of claim with DICGC does not absolve the erring official from the irregularities committed by him. The contention raised by the appellant in this regard is not tenable. ( 28 ) THE Appellate Authority had observed: LODGING of claim with DICGC does not absolve the erring official from the irregularities committed by him. The contention raised by the appellant in this regard is not tenable. ( 29 ) THE Disciplinary Authority and the Appellate Authority, accordingly to the learned Senior Counsel for the petitioner had not at all considered the legal effect of the admission on the part of the Bank when claim was made that the Bank had taken all safeguards and there were no irregularities in sanctioning of the loan and that would vitiate the decision of the Disciplinary Authority and the Appellate Authority. The learned Senior Counsel submitted deliberately post sanctioning files were not produced before the Inquiry Officer. According to the learned Senior Counsel, the Bank knew that if those volumes were produced no offence can be made out against the petitioner and the stand of the petitioner would vindicate. The learned Senior Counsel for the petitioner referred to Annexures 22, 26, 27 and 29. According to the learned Senior Counsel, the petitioner was not even allowed to go to the Zonal Office. ( 30 ) IN Annexure P-27, the Bank had taken very curious stand. In reply to the letter dated 19. 2. 1993 from the petitioner to the Senior Manager of the Personnel Division had written stating : REF : PL : DAC : 2137 dated: 6. 3. 93 Shri Y. K. Singla, Chief Manager, BO : Sabzi Mandi, Delhi. Charge sheet dated 2. 2. 93 served upon you. Please refer to your letter dated 19. 2. 93 wherein you have sought permission from the Disciplinary Authority for consulting the relevant files at Zonal Office, Ludhiana as well as the concerned records at BO : Civil Lines, Ludhiana. Further, you have also requested for extension of time for submission of your statement of defence upto 20. 3. 93. The matter was placed before the General Manager, the Disciplinary Authority who has since accepted to your request and has allowed you time upto 20. 3. 93, for submission of your statement of defence, failing which the matter shall be considered ex-parte, by him. However, your request for grant of permission for consulting the concerned file at Zonal Office, Ludhiana has not been acceded to by the Disciplinary Authority. You are as such requested to submit your statement of defence positively upto 20. 3. 3. 93, for submission of your statement of defence, failing which the matter shall be considered ex-parte, by him. However, your request for grant of permission for consulting the concerned file at Zonal Office, Ludhiana has not been acceded to by the Disciplinary Authority. You are as such requested to submit your statement of defence positively upto 20. 3. 93. ( 31 ) THE Disciplinary Authority had refused to give permission to the petitioner to see the files without assigning any reasons. This is contrary to the established principle of fair play and justice is the submissions of the learned Senior Counsel. The learned Senior Counsel also referred to the letter dated 2. 4. 1993 from the Senior Manager on the same tone. The letter reads as under : REF: PL:dac:2137 dated: 6. 3. 93 Shri Y. K. Singla, Chief Manager, BO; Sabzi Mandi, Delhi. Charge Sheet dated 2. 2. 93 OA served upon you. Please refer to your letter dated 17. 3. 93 requesting to permit you to consult relevant files at Zonal Office, Ludhiana and also to extend time for submission of your statement of defence for 2 weeks. The matter was placed before General Manager, the Disciplinary Authority who has permitted you time upto 15. 4. 93 to submit your statement of defence. Further, your request for consulting the concerned files at Zonal Office, Ludhiana has not been acceded to by the Disciplinary Authority. As such, we would request you to submit your statement of defence positively by 15. 4. 93 after consulting the relevant records at the concerned branch only. ( 32 ) THE learned Senior Counsel for the petitioner submitted that if those files were made available to the petitioner he would have been able to show to the Inquiry Officer the feasibility report and other noting by the officers concerned of the Zonal Office to show that there is absolutely no transgression of any rules in sanctioning of the rules. The learned Senior Counsel submitted that if the loan was not sanctioned in accordance with the rules, the application for enhancement would have been straightaway rejected and that is one of the facts which would show that there was no violation of any rules at the time of sanctioning of the loan. The learned Senior Counsel submitted that if the loan was not sanctioned in accordance with the rules, the application for enhancement would have been straightaway rejected and that is one of the facts which would show that there was no violation of any rules at the time of sanctioning of the loan. The learned Senior Counsel submitted that admission made by the Bank while making the claim had not been given the due attention by the Inquiry Officer, the Disciplinary Authority and the Appellate Authority. The reason given by the Disciplinary Authority and the Appellate Authority, that the fact claim had been made by the Bank would not absolve the petitioner is absolutely misconceived and no authority properly instructed in law having regard to the inference drawn from what had been admitted by the Bank would take the view. ( 33 ) THE learned Senior Counsel for the petitioner submitted that the Bank had committed violation of mandatory provisions in the regulations. Regulation 6 (5) (iii) reads as under: 6 (5) (III) a list of documents by which and list of witnesses by whom the articles of charge are proposed to be substantiated: ( 34 ) IN this, the learned Senior Counsel submitted that Regulation 5 (iii) had been infringed by the Bank. ( 35 ) IN para 40 in the writ petition, the petitioner had alleged: THE petitioner submits with great respect that in accordance with statutory duty/ function, the Disciplinary Authority, respondent 3 herein, has not forwarded the Lists of Documents by which and List of Witnesses by whom the charges were proposed to be substantiated. Regulation 6 (5) (iii) of Discipline Regulations is reproduced hereunder : " (5) The Disciplinary Authority shall, where it is not the Inquiring Authority forward to the Inquiring Authority : (i) XXX (ii) XXX (iii) a list of documents by which and list of witnesses by whom the Articles of Charge are proposed to be substantiated. " ( 36 ) ACCORDING to the learned Senior Counsel for the petitioner in para 35 of the counter, the Bank had not denied the position. " ( 36 ) ACCORDING to the learned Senior Counsel for the petitioner in para 35 of the counter, the Bank had not denied the position. In para 35 of the counter, it is stated: "in reply to para 40 it is submitted that the documents relied upon by the Bank in support of the allegations in the charge sheet as well as list of witnesses were placed on the record of the enquiry proceedings by the Presenting Officer who was appointed by the Disciplinary Authority only. Also the Presenting Officer in reply to the question at page 9 of the enquiry proceedings has stated that the Annexures were received by him from the Disciplinary Authority. It is further submitted that copies of the documents placed on the record were also provided to the petitioner and he was also provided an opportunity to inspect the said documents, as is apparent from the proceedings dated 23. 12. 1994 of the enquiry record. In view of this it is denied that there has been any violation of Regulation 6 (5) (iii) of Danda Regulations as alleged or otherwise. In any case it is further submitted that no prejudice can be said to have been caused to the petitioner on this score. It is further submitted that the case law cited under para under reply is not attracted to the facts and circumstances of the present case and the Bank places its reliance on the decision of the Hon ble Supreme Court in the case of State Bank of Patiala and Others v. S. K. Sharma. " ( 37 ) THE stand taken by the Bank in para 35 of the counter is not sustainable, was the argument of the learned Senior Counsel as great prejudice has been caused to the petitioner. According to the learned Senior Counsel, the sine qua non for proceeding with the inquiry on the charges against an officer is compliance with the Regulation. The object of the Regulation is to protect officers from being unnecessarily being harassed by the superior officers. The purpose of the Regulation is that the delinquent officer should know the case he is to meet, the document is to consider, witnesses he is to face so that he could fully prepare himself to substantiate his position. That is a basic right given to the officers and that cannot be denied by the Bank. The purpose of the Regulation is that the delinquent officer should know the case he is to meet, the document is to consider, witnesses he is to face so that he could fully prepare himself to substantiate his position. That is a basic right given to the officers and that cannot be denied by the Bank. According to the learned Senior counsel for the petitioner, it is a mandate of the Regulations and that cannot be ignored by the Bank. In this case, the charge-sheet was given on 10. 2. 1993. The petitioner submitted his explanation on 10. 9. 1993. The Presenting Officer sought to produce the list on 23. 4. 1994 and that is not a compliance with the mandatory provisions which is referred to above. ( 38 ) I find considerable force in the arguments of learned Senior Counsel for the petitioner and the non-compliance with the Regulation 6 (5) (iii) has completely vitiated the whole proceedings. ( 39 ) THE learned Senior Counsel referred to various irregularities alleged to have been committed by the petitioner dealt with in paras 39,40,42,43,50,64, 71,72,74,77 and 81. According to the learned Senior Counsel, it is not necessary to deal with each of them and it is thus only to highlight that the whole approach by the Inquiry Officer, Disciplinary Authority and the Appellate Authority was completely perverse and cannot be sustained in law. ( 40 ) THE learned Senior Counsel for the petitioner submitted that the Appellate Authority did not give a personal hearing in the matter. In the view I have taken it is not necessary to deal with in this point. The learned Senior Counsel submitted that the Bank had acted with malice in law and therefore, the entire proceedings are vitiated. The learned Senior Counsel stated that in paras 15 to 21 in the writ petition the necessary averments were made in the writ. Paras 15 to 21 are as follows: "15. The petitioner submits with great respect that the impugned departmental actions are grounded upon enmity which the petitioner earned on account of refusal to recommend unviable and risky proposal of a Bank Guarantee for Rs. Paras 15 to 21 are as follows: "15. The petitioner submits with great respect that the impugned departmental actions are grounded upon enmity which the petitioner earned on account of refusal to recommend unviable and risky proposal of a Bank Guarantee for Rs. 50 lacs desired to be issued by the petitioner's Controlling Authority, i. e. , the then Zonal Manager of the respondent-Bank which is the only consideration for the respondent-Bank to take impugned actions against the petitioner, and therefore, all the impugned actions are liable to be quashed by this Hon'ble Court as the purpose of taking the impugned actions travel beyond the scope of the statute which creates the disciplinary power. It is a case of fraud on power and the impugned disciplinary proceedings can not withstand the dictum laid down by a Constitution Bench of the Hon'ble Supreme Court of India in Partap Singh v. State ofPunjab (reported in AIR 1964 SC 72 ). 16. The petitioner submits with great respect that in the month of July, 1991, the then Zonal Manager, Ludhiana of the respondent-Bank, Shri R. G. Pun desired that the petitioner should recommend a non-viable Bank Guarantee in sum of Rs. 50 lakhs in favour of M/s. 0m Prakash and Co-Lottery Agency, Ludhiana. Shri 0m Prakash, who was the Proprietor of said Lottery Agency was father of son-in-law of the said Zonal Manager Mr. Pun's sister-in-law. Since the recommendation sought by the said Zonal Manager on the unworkable proposal (devoid of any merit whatsoever) was forced to be given, the petitioner was extremely reluctant in putting his recommendation on the said proposal but when the said Zonal Manager threatened the petitioner of dire consequences, and he was also the immediate superior of the petitioner, on 19. 7. 1991, the petitioner was forced to put his recommendation on the said proposal for issuance of Bank Guarantee to the tune of Rs. 15 lakhs. It was not at all a viable proposal since was contrary to all banking norms and detrimental to respondent Bank's interest. That is why, the said vindictive Zonal Manager, managed to get the loan proposal of the said client prepared and processed at the Zonal Office itself instead of routing it through Branch which is the first essential postulate/requirement of sanctioning a banking facility including the Bank Guarantee to any customer of the respondent-Bank. 17. That is why, the said vindictive Zonal Manager, managed to get the loan proposal of the said client prepared and processed at the Zonal Office itself instead of routing it through Branch which is the first essential postulate/requirement of sanctioning a banking facility including the Bank Guarantee to any customer of the respondent-Bank. 17. The petitioner submits with great respect that it is a matter of unimpeachable record that the aforesaid proposal was directly prepared and entertained by the officials of the Zonal Office at the Zonal Office itself and even without the knowledge and recommendation of the Petitioner it was sanctioned on 18. 7. 1991 by the Zonal Manager. In order to fill the mouth of the file, in highly irregular manner, the said Zonal Manager obtained recommendation of the petitioner after one day of its sanctioning on 19. 7. 91 which the petitioner grudgingly made. As duty bound, the petitioner lodged a strong protest against the detrimental functioning of the said Zonal Manager to the higher Authorities of the respondent-Bank. Since the petitioner agitated this act of the said Zonal Manager, there was he and cry in the respondent-Bank. 18. The petitioner submits with great respect that inspite of the fact that respect that inspite of the fact that the aforesaid party should not have been given a Bank Guarantee even for Rs. 1, as in accordance with banking norms, there were no such merits to have obliged the said Party, the said Zonal Manager outrightly wanted to unduly oblige the party, knowing fully well that Guarantee for Rs. 1 should not be given. Somehow or the other, going totally out of the way and lending norms, contrary to the respondent-Bank's interest, the said vindictive Zonal Manager gave sanction of Bank Guarantee for Rs. Fifteen Lakhs. This type of dishonest functioning of the Zonal Manager was telephonically reported by the petitioner to the higher Authorities which earned to the petitioner a severe wrath of the Zonal Manager who also was provoked even by good assistance to him by the Petitioner. A copy of the said Sanction Order dated 18. 7. 1991 of the Zonal Manager is annexed herewith and marked as 'annexure P-14'. A copy of the said Sanction Order dated 18. 7. 1991 of the Zonal Manager is annexed herewith and marked as 'annexure P-14'. It is necessary to mention here that the terms and conditions stipulated even in the said Sanction Order by the Zonal Manager, clearly evidence that the said proposal was not at all viable even then the Zonal Manager going totally out of the way sanctioned to the said client Bank Guarantee for Rs. 15 lakhs. 19- The petitioner submits with great respect that for the aforesaid faithful and bona fide actions of the petitioner, the said Zonal Manager developed an enmity as a result of which in order to settle the scores, he made a sinister scheme to ruin the career of the petitioner so that under the garb of deceptive innocuousness he could satisfy his grudge against the petitioner and as such practically for all purposes, the impugned departmental action is the baby of the said sinister scheme of the Zonal Manager and this humble, poor and down-trodden Petitioner is the victim of the said sinister scheme, therefore, the impugned actions are liable to be set aside by this Hon'ble Court on this single ground as well. 20. The petitioner submits with great respect that for the aforesaid happenings, the vindictive Zonal Manager misused and abused his official position and took undue advantage of a system and practice prevalent in the respondent-Bank of mechanically issuance of the Charge Sheets on the basis of the reports of the Zonal Managers. As per the prevalent practice in the respondent-Bank, all the Charge Sheets including the impugned Charge Sheet and supplementary to it herein, are being issued on the basis of a Tabular Proforma submitted by the immediate superiors of delinquents and on the basis of the informations contained in such type of Tabular Proformas, the Disciplinary Authorities are-mechanically signing the Charge Sheet prepared by their subordinates. 21. The petitioner submits with great respect that taking undue advantage of the aforesaid vulnerable and deleterious prevalent practice and/or procedure in the respondent-Bank, the said vindictive Zonal Manager, in order to wreck his vengeance, chalked-of a fraudulent device and managed to get prepared a fraudulent Tabular Proforma. In the said Tabular Proforma, the Zonal Manager knownably, incorporated all sorts of fraudulent, misleading and nonest matters with a view to settling his grudges against the petitioner. In the said Tabular Proforma, the Zonal Manager knownably, incorporated all sorts of fraudulent, misleading and nonest matters with a view to settling his grudges against the petitioner. Normal procedure prevalent in the respondent-Bank with regard to disciplinary cases of similarly circumstanced/ situated Chief Managers inevitably postulates that the said Tabular Proforma should be got signed by the delinquents so that the matters reflecting out of it should be authenticated before it is furnished to the Disciplinary Authority. Pertinently submitted, in the case of the petitioner, the Tabular Proforma was kept as "guarded secret" which by itself depicts malafides on the part of the said vindictive Zonal Manager, who is the Chief Architect of the impugned actions. It is necessary to mention here that the vindictive Zonal Manager exhibited extreme haste that he didnot put even date on the Tabular Proforma which is the only foundation of impounded Charge Sheet dated 2. 2. 1993. A copy of the said undated and unsigned Tabular Proforma is annexed herewith and marked as 'annexure P-15'. " ( 41 ) IN dealing with this in reply to para 17 the Bank had stated: "that the contents of para 21 are wrong and denied. It is submitted that Shri Singla was served with Tabular Proforma in respect of irregularities committed by him in respect of loan account of M/s. Balwant Steel Rolling Mills to which he had submitted his reply. Further, he was served with Tabular Proforma in respect irregularities/lapses in the loan accounts of Shri N. D. Awasthi and Mrs. Vijay Awasthi. However, despite having been granted sufficient opportunity he did not submit any reply to the said Tabular Proforma. In any case it is submitted that under the provisions of the Danda Regulations it is not at all essential that an officer employee should be given Tabular Proforma before service of charge sheet upon him for his alleged acts of misconduct under the Conduct Regulations. " ( 42 ) ANNEXURE P-15 is the document, a tabular statement which should have been given to the petitioner in this case. According to the learned Senior Counsel for the petitioner, such a document was never furnished to the petitioner and not was produced at the time of inquiry which has been filed as Annexure P-15 are completely fabricated by the Bank and the petitioner had not made anything in writing in that tabular statement. According to the learned Senior Counsel for the petitioner, such a document was never furnished to the petitioner and not was produced at the time of inquiry which has been filed as Annexure P-15 are completely fabricated by the Bank and the petitioner had not made anything in writing in that tabular statement. Column I is the observations by the Bank. Column 2 is a column Delinquent Officer. Column 3 the views and recommendations by the Bank. According to the learned Senior Counsel for the petitioner this tabular statement was prepared by the Bank just for the purpose of inquiry and instead of denial by the petitioner no material had been produced by the Bank to show that it was ever sent to the petitioner for remarks and the petitioner made any such remarks in the tabular report. The presenting officer at the time of inquiry stated "are you prove it on the basis of the record produced in the inquiry in due course, further though technically there is no comments of the CO appearing on tabular proforma Annexure D-104 but it was based on the reply/letter submitted by the EO. I will refer this document at appropriate stage" ( 43 ) THIS statement of the Presenting Officer is extracted by the petitioner in his rejoinder. Therefore the present officer admitted that the tabular statement was not sent to the petitioner for signatures. The learned Senior Counsel for the petitioner referred to para 17 of the counter affidavit of the Bank wherein it submitted "that Sh. Singla was served with Tabular Proforma in respect of irregularities committed by him in respect of loan account of M/s. Balwant Steel Rolling Mills to which he had submitted his reply. Further he was served with Tabular Proforma in respect of irregularities lapses in the loan accounts of Shri N. D. Awasthi and Mrs. Vijay Awasthi". ( 44 ) THEREFORE, a wrong statement had been made in the counter affidavit about furnishing of Tabular Proforma as required under the Regulation. I am clearly of the view that there is absolutely no evidence against the petitioner of anyone of the charges levelled against him. Vijay Awasthi". ( 44 ) THEREFORE, a wrong statement had been made in the counter affidavit about furnishing of Tabular Proforma as required under the Regulation. I am clearly of the view that there is absolutely no evidence against the petitioner of anyone of the charges levelled against him. This is a clear case of no evidence and the order passed by the Disciplinary Authority, order passed by the Appellate Authority are perverse and no person properly instructed in law would take the view that has been taken by those Authorities. ( 45 ) THE learned Senior Counsel for the petitioner submitted that having regard to the charges and the way in which the inquiry had been conducted the punishment imposed is excessive. The learned Senior Counsel referred to Annexures P-1 to P-10 where the merits of the petitioner had been recognised and the certificate had been issued. The learned Senior Counsel submitted that the Bank had not lost anything and the value of the security given is ample and the money due could be recovered from the parties The learned Senior Counsel referred to the valuation certificate given by the Architects and Engineers (Regd.) Ludhiana wherein it is stated : It is certified that the valuation of the Industrial property situated at G. T. Road, Near Raja Vanaspati, 10642. 0 sq. yards belonging to M/s. Govind Iron Mills Pvt. Ltd. and M/s. Hariom Steel Traders is reasonably assessed in our considered opinion according to the present fair market value as Rs. 3,30,08,000. 00 only. ( 46 ) THE learned Senior Counsel submitted that the Disciplinary Authority and the Appellate Authority had acted unreasonable fashion in imposing punishment of removal which comes in mischief of the Article 14 of the Constitution of India. The learned Senior Counsel relied upon the judgment of the Supreme Court in Ex. Naik Sardar Singh v. Union of India and Ors. , AIR 1992 SC 41 ( 47 ) IN para 5 their Lordships of the Supreme Court had observed: In Council of Civil Service Union v. Minister for Civil Service, (1984)3 All ER 930a 950 Lord Diplock said : "judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropriety. This is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of 'proportionality' which is recognised in the administrative law of several of our fellow members of the European Economic Community. . . . "this principle was followed in Ranjit Thakur v. Union of India, (1987) 4 SCC 611 : ( AIR 1987 SC 2386 ), where this Court considered the question of doctrine of proportionality in the matter of awarding punishment under the Army Act and it was observed thus (at p. 2392 of AIR): "the question of the choice and quantum of punishment is within the jurisdiction and discretion of the Court-Martial. But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias. The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is the Court-Martial, if the decision of the Court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction. Irrationality and perversity are recognised grounds of judicial review. "in Bhagat Ram v. State of Himachal Pradesh. (1983) 2 SCC 442 : ( AIR 1983 SC 454 ), this Court held as under (at p. 460 of AIR): "it is equally true that the penalty imposed must be commensurate with the gravity of the misconduct, and that any penalty disproportionate to the gravity of the misconduct would be violative of Article 14 of the Constitution. " ( 48 ) THE learned Senior Counsel for the Bank Mr. A. K. Sikri referred to the judgments of the Supreme Court for the proposition that this Court cannot reappraise the evidence. The learned Senior Counsel referred to Union of India and Others v. Upendra Singh, (1994) 3 SCC 357 . The Supreme Court reaffirmed its view that judicial review is not directed against the decision but is confined to the decision making process. The learned Senior Counsel referred to Union of India and Others v. Upendra Singh, (1994) 3 SCC 357 . The Supreme Court reaffirmed its view that judicial review is not directed against the decision but is confined to the decision making process. The learned Senior Counsel referred to Government of T. N. and Another v. A. Rajapandian, (1995) I SCC 216. In this case, the respondent before the Supreme Court was working as Sub Inspector Police in the State of Tamilnadu. He was promoted to the post of Inspector in the year 1977. Disciplinary proceedings were initiated against him and ultimately he was dismissed from service on 7. 2. 1994. He challenged the order before the High Court of Madras by filing a writ petition was transferred to the Tamilnadu Administrative Tribunal after its formation. The Tamilnadu Administrative Tribunal set aside the order of dismissal on the ground that the evidence was not sufficient to prove the charges against the Inspector. The Supreme Court held: "the Administrative Tribunal reached different conclusions from the Inquiring Authority on its own evaluation of the evidence. The Tribunal fell into patent error and acted wholly beyond its jurisdiction. "the Supreme Court had referred to Union of India v. Sardar Bahadur, (1972)4 SCC 618 and Union of India v. Parma Nanda, (1989) 2 SCC 177 . ( 49 ) THE learned Senior Counsel then referred to judgment in B. C. Chaturvedi v. Union of India and Others, (1995) 6 SCC 749 = JT 1995 (8) SC 65. The appellant before the Supreme Court was dismissed from service by order dated 29. 10. 1986. That order was challenged before the Central Administrative Tribunal. The Tribunal after appreciating the evidence upheld all the charges as having been proved but came to the conclusion that the order of dismissal was disproportionate to the office committed and modified the punishment into one compulsory retirement. The appellant challenged the findings given by the Tribunal and the Union of India filed an appeal before the Supreme Court convassing the power of the Tribunal to interfere with the punishment imposed by the Disciplinary Authority. In para 12, the Supreme Court held: "judicial review is not an appeal from a decision but a review of the manner in which the decision is made. In para 12, the Supreme Court held: "judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the Court. When an inquiry is conducted on charges of misconduct by a public servant, the Court/tribunal is concerned to determine whether the inquiry was held by a competent officer or whether rules of natural justice are complied with. Whether the findings or conclusions are based on some evidence, the Authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the Authority accepts that evidence and conclusion receives support therefrom, the Disciplinary Authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/tribunal in its power of judicial review does not act as Appellate Authority to reappreciate the evidence and to arrive at its own independent findings on the evidence. The Court/tribunal may interfere where the Authority held the proceedings against the delinquent officer in a manner inconsistent with the rules of, natural justice or in violation of statutory rules prescribing the mode of inquiry or where- the conclusion or finding reached by the Disciplinary Authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached, the Court/tribunal may interfere with the conclusion or the finding, and mould the relief so as to make it appropriate to the facts of each case. " ( 50 ) IN paragraph 18 the Supreme Court posited: "a review of the above legal position would establish that the Disciplinary Authority, and on appeal the Appellate Authority, being fact-finding Authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the Disciplinary Authority or the Appellate Authority shecks the conscience of the High Court/tribunal, it would appropriately mould the relief, either directing the Disciplinary/appellate Authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof. "hansaria, J. concurring with the view taken by K. Ramaswamy, J. held : "i am in respectful agreement with all the conclusions reached by learned brother Ramaswamy, J. This concurring note is to express my view on two facets of the case. The first of these relates to the power of the High Court to do "complete justice", which power has been invoked in some cases by this Court to alter the punishment/penalty where the one awarded has been regarded as disproportionate, but denied to the High Courts. No doubt. Article 142 of the Constitution has specifically conferredthe power of doing complete justice on this Court, to achieve which result it may pass such decree or order as deemed necessary; it would be wrong to think that other courts are not to do complete justice between the parties. If the power of modification of punishment/penalty were to be available to this Court only under Article 142, a very large percentage of litigants would be denied this small relief merely because they are not in a position to approach this Court, which may, inter alia, be because of the poverty of the person concerned. It may be remembered that the framers of the Constitution permitted the High Courts to even strike down a parliamentary enactment, on such a case being made out, and we have hesitated to concede the power of even substituting a punishment/penalty, on such a case being made out. What a difference! May it be pointed out that Service Tribunals too, set up with the aid of Article 323-A have the power of striking down a legislative act. What a difference! May it be pointed out that Service Tribunals too, set up with the aid of Article 323-A have the power of striking down a legislative act. The aforesaid has, therefore, to be: voided and I have no doubt that a High Court would be within its jurisdiction to modify the punishment/penalty by moulding the relief, which power it undoubtedly has, in view of a long line of decisions of this Court, to which reference is not deemed necessary, as the position is well- settled in law. It may, however, be stated that this power of moulding relief in cases of the present nature can be invoked by a High Court only when the punishment/penalty awarded shocks the judicial conscience. "hansaria, J. further held : "what has been stated above may be buttressed by putting the matter a little differently. The same is that in a case of a dismissal. Article 21 gets attracted, and, in view of the interdependence of fundamental rights, which concept was first accepted in the case commonly known as Bank Nationalisation case (Rustom Cavasjee Cooper v. Union of India, (1970) I SCC 248, which thinking was extended to cases attracting Article 21 in Maneka Gandhi v. Union of India, (1978) 1 SCC 248 = AIR 1978 SC 597 , the punishment/penalty awarded has to be reasonable; and if it be unreasonable. Article 14 would be violated. That Article 14 gets attracted in a case of disproportionate punishment was the view of this Court in Bhagat Ram v. State of H. P. , (AIR 1983 S. C. 454) also. Now if Article 14 were to be violated, it cannot be doubted that a High Court can take care of the same by substituting, in appropriate cases, a punishment deemed reasonable by it. "hansaria, J eventually observed : "i had expressed my unhappiness qua the first facet of the case, as Chief Justice of the Orissa High Court in paras 20 and 21 of Krishna Chandra Pallai v. Union of India ( AIR 1992 Ori 261 (FB), by asking why the power of doing complete justice has been denied to the High Courts. I feel happy that I have been able to state, as a Judge of the Apex Court, that the High Courts too are to do complete justice. This is also the result of what has been held in the leading judgment. I feel happy that I have been able to state, as a Judge of the Apex Court, that the High Courts too are to do complete justice. This is also the result of what has been held in the leading judgment. " . ( 51 ) MR. J. C. SETH, the learned counsel for the NHPC Ltd. , submitted that the notified person under the Act was the holder/owner of the bonds on the relevant date, and, therefore, the claim of the Bank could be dealt with only by the Special Court and the order of transfer made by the Company Law Board is perfectly valid. Mr. J. C. Seth, the learned counsel for the NHPC Ltd. , did not advance any arguments on the scope of the interest warrants. Mr. V. P. Singh, the learned senior counsel for the NHPC Ltd. , appearing in Co. A. 27/93, submitted that the NHPC Ltd. being a public authority would abide by the decision rendered by this Court. ( 52 ) THE points that arise for consideration in these appeals are: 1. Whether the Bank could made any claim to the interest warrants held by respondents 2 and 3 and whether that could be subject matter of petition under Section 111 of the 1956 Act filed by the Bank? 2. Whether the claim of the Bank to the bonds for Rs. 9,06,34,000. 00 under Section 111 of the 1956 Act could be transferred to the Special Court under the 1992 Act? 3. Whether the Co. A. 27/93 has become infructuous? ( 53 ) IT is not necessary to dilate upon the facts once over again. In the petition under Section 111 of the 1956 Act, the Bank has put forth the case that the NHPC Ltd. should register its name in its books as the holder of the bonds and the interest warrants, except the one transferred by the Bank to M/s Fair Growth Financial Services Limited, and the other interest warrants should be given to the Bank and the proceeds thereof must go to the Bank. ( 54 ) WHEN the Bank filed the petition under Section 111 of the 1956 Act before the Company Law Board, respondents 2 and 3 had taken exception to the maintainability of the petition with reference to the interest warrants. ( 54 ) WHEN the Bank filed the petition under Section 111 of the 1956 Act before the Company Law Board, respondents 2 and 3 had taken exception to the maintainability of the petition with reference to the interest warrants. ( 55 ) WITHOUT giving any decision on the question of maintainability in respect of the interest warrants, the Company Law Board passed an order on the 26th of August, 1993 which had already been extracted. ( 56 ) THAT was challenged, as noticed above, by respondents 2 and 3 in Co. A. 27/93. ( 57 ) ON the 12th of August, 1993, this Court passed the following order:- "co. A. 27/93 Notice to the respondents to show cause as to why the appeal be not admitted, returnable on 11th November, 1993. CA. Nos. 1548 and 1549/93 Notice for 11th November, 1993. In the meantime, the operation of the impugned order shall remain stayed. Record of the Company Law Board be also sent for the next date. " ( 58 ) ON the 11th of November, 1993, this Court passed the following order in the appeal: "co. A. 27/93 Mr. G. K. Gupta has brought the record of the Company Law Board and the same be kept. Respondent No. 2 is directed to deposit all the interest money accrued till date (lying in the Bank) in this court in the name of Registrar by or before 16th Nov. , 93. Reply on behalf of respondent No. 1 may also be filed by 16th Nov. , 93. Reply on behalf of respondent No. 2 has been filed and the same is taken on record. The matter be relisted on 17th Nov. , 1993. Order Dasti. " ( 59 ) ON the 17th of November, 1993, by consent of the parties, this Court passed the following order:- "co. A. 27/93 During the course of arguments, it is agreed by the counsel for the parties that the matter pertaining to jurisdiction of the Company Law Board and the maintainability of the petition filed by the Bank against the present appellant be decided by the Company Law Board first. A. 27/93 During the course of arguments, it is agreed by the counsel for the parties that the matter pertaining to jurisdiction of the Company Law Board and the maintainability of the petition filed by the Bank against the present appellant be decided by the Company Law Board first. In view of this agreement between the counsel for the parties, directions are hereby given to the Principal Bench of Company Law Board to hear the question of its jurisdiction and maintainability of the petition by the Bank qua the present appellant on 25th November, 1st and 2nd December, 1993 and give its decision on the preliminary objections by or before 9th December, 1993. Matter will be taken up on 10th December, 1993. As regard the amount deposited by respondent No. 2 in the name of the registrar of this Court, let the Registrar deposit the same in the form of FDR with the Uco Bank, Delhi High Court for a period of 46 days. File of Company Law Board be sent by Special Messenger latest by tomorrow. " ( 60 ) AGAIN on the 14th of December, 1993, the parties, by consent, invited the Court to pass an order, and the order reads as under:- "co. A. 27/93 It is agreed between the parties that the arguments on the question of maintainability as well as jurisdiction will be concluded and that the decision by the Company Law Board should be available by or before 10. 1. 1994. In case the Company Law Board decides the question of jurisdiction and maintainability against the appellant then the application filed by the respondent herein, asking for the interim relief be decided by the Company Law Board after hearing the parties by or before 20. 1. 1994. Matter be listed before this Court on 27. 1. 1994 for disposal. " . ( 61 ) THE Company Law Board had not at all appreciated the orders issued by this Court and had proceeded on the basis that the only question to be decided was the transfer of the proceedings to the Special Court. ( 62 ) THE case of respondents 2 and 3 before the Company Law Board was that the petition under Section 111 of the 1956 Act by the Bank was not competent in so far as it related to the interest warrants held by them. ( 62 ) THE case of respondents 2 and 3 before the Company Law Board was that the petition under Section 111 of the 1956 Act by the Bank was not competent in so far as it related to the interest warrants held by them. In other words, the Bank had no right to the interest warrants. The notified person under the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance No. 10 of 1992 and Act No. 27 of 1992 to make any claim to the interest warrant. The Bank resting its case on the transfer of the bonds from M/s Fairgrowth Financial Services Limited cannot lay its hands on the interest warrants held by respondents 2 and 3. It was submitted that the Bank cannot claim what its vendor, M/s Fair Growth Financial Services Limited, did not convey or transfer to the Bank. The learned senior counsel, Mr. L. R. Gupta, submitted that the projection of the right to the interest warrants by the Bank was absolutely unsustainable. ( 63 ) THE points raised in the appeals do not involve any detailed investigation into facts. There were broadly two aspects of the matter before the Company Law Board. One was the right of respondents 2 and 3 to the interest warrants held by them as against the claim of the Bank. The other aspect was the dispute between the NHPC Ltd. and the Bank about the right of the Bank to get its name in the books of the NHPC Ltd registered in view of the fact that in the records of the NHPC Ltd the bonds are registered in the name of the notified person, and, therefore, the petition under Section 111 of the 1956 Act should be dealt with by the Special Court. ( 64 ) THE Company Law Board should have addressed itself to this question. When that has not been done, in Co. A. 27/93 this Court can go into that question. It is well settled that an appeal is a continuation of the original proceedings. All the points before the original authority/court are at large before the appellate court/appellate authority. If the matter involves recording of evidence, to ascertain facts to give findings on the issues, the appellate authority/court would normally remit the matter back to the original authority or call for a finding when recording of evidence is necessary. All the points before the original authority/court are at large before the appellate court/appellate authority. If the matter involves recording of evidence, to ascertain facts to give findings on the issues, the appellate authority/court would normally remit the matter back to the original authority or call for a finding when recording of evidence is necessary. In some cases, the appellate court itself can record evidence as provided in Order 41 Rule 27 of the Civil Procedure Code. ( 65 ) IN the instant case, the Court has to consider the scope of the bonds and the interest warrants. It does not involve any investigation into facts and it was not argued before this Court that unless evidence is recorded, the question mooted out cannot be decided by this Court in the appeals. ( 66 ) MR. J. C. SETH, the learned counsel appearing for the NHPC Ltd. in Co. A. 6/94, was an officer working in the NHPC Ltd. , and he had a very vital role to play in formulating the scheme for issuing the bonds. The learned counsel for the NHPC Ltd. , Mr. J. C. Seth, explained the circumstances in which the NHPC Ltd. decided to issue bonds to mobilise resources and how the subject was studied in detail, and the NHPC Ltd. had taken into consideration the law in the United States of America and in the United Kingdom and other democratic countries where rule of law reigns supreme. Mr. J. C. Seth, the learned counsel for the NHPC Ltd. , produced the notification issued on the 17th of December, 1986 under Section 108 of the 1956 Act. The same is as under:- "transfer not to be registered except on production of instrument of transfer 108. Mr. J. C. Seth, the learned counsel for the NHPC Ltd. , produced the notification issued on the 17th of December, 1986 under Section 108 of the 1956 Act. The same is as under:- "transfer not to be registered except on production of instrument of transfer 108. (1) A company shall not register a transfer of shares in, or debentures of, the company, unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company along with the certificate relating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of the shares or debentures: Provided that where, on an application in writing made to the company by the transferee and bearing the stamp required for an instrument of transfer, it is proved to the satisfaction of the Board of directors that the instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost, the company may register the transfer on such terms as to indemnity as the Board may think fit: Provided further that nothing in this section shall prejudice any power of the company to register as shareholder or debenture-holder any person to whom the right to any shares in, or debentures of, the company has been transmitted by operation of law. (1a) Every instrument of transfer of shares shall be in such form as may be prescribed, and-- (a) every such form shall, before it is signed by or on behalf of the transferor and before any entry is made therein, be presented to the prescribed authority, being a person already in the service of the Government, who shall stamp or otherwise endorse thereon the date on which it is so presented, and (b) every instrument of transfer in the prescribed form with the date of such presentation stamped or otherwise endorsed thereon shall , after it is executed by or on behalf of the transferor and the transferee and completed in all other respects, be delivered to the company,-- (i) in the case of shares dealt in or quoted on a recognised stock exchange, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of the presentation of the prescribed form to the prescribed authority under clause (a) or within [twelve] months from the date of such presentation, whichever is later; (ii) in any other case, within two months from the date of presentation. (1b) Notwithstanding anything contained in sub-section (1a), an instrument of transfer of shares, executed before the commencement of section 13 of the Companies (Amendment) Act, 1965 (31 of 1965), or executed after such commencement in a form other than the prescribed form, shall be accepted by a company,-- (a) in the case of shares dealt in or quoted on a recognised stock exchange, at any time not later than the expiry of six months from such commencement or the date on which the register of members is closed, in accordance with law, for the first time after such commencement, whichever is later; (b) in any other case, at any time not later than the expiry of six months from such commencement. (1c) Nothing contained in sub-sections (1a) and 1 (B) shall apply to-- (A) any share-- (i) which is held by a company in any other body corporate in the name of a director or nominee in pursuance of sub-section (2), or as the case may be, sub-section (3), of section 49, or (ii) which is held by a corporation, owned or controlled by the Central Government or a State Government, in any other body corporate in the name of a director or nominee, or (iii) in respect of which a declaration has been made to the Public Trustee under section 153 B, if-- (1) the company or corporation, as the case may be, stamps or otherwise endorses, on the form of transfer in respect of such shares, the date on which it decides that such share shall not be held in the name of the said director or nominee or, as the case may be, in the case of any share in respect of which any such declaration has been made to the Public Trustee, the Public Trustee stamps or otherwise endorses, on the form of transfer in respect of such share under his seal, the date on which the form is presented to him, and (2) the instrument of transfer in such form, duly completed in all respect, is delivered to the-- (a) body corporate in whose share such company or corporation has made investment in the name of its director or nominee, or (b) company in which such share is held in trust, within two months of the date so stamped or otherwise endorsed; or (B) any share deposited by any person with-- (i) the State Bank of India, or (ii) any scheduled bank, or (iii) any banking company (Other than a scheduled bank) or financial institution approved by the Central Government by notification in the Official Gazette (and any such approval may be accorded so as to be retrospective to any date not earlier than the 1st day of April, 1966), or (iv) the Central Government or a State Government or any corporation owned or controlled by the Central Government or a State Government, by way of security for the repayment of any loan or advance to, or for the performance of any obligation undertaken by, such person, if-- (1) the bank, institution, Government or corporation, as the case may be, stamps or otherwise endorses on the form of transfer of such share-- (a) the date on which such share is returned by it to the depositor, or (b) in the case of failure on the part of the depositor to repay the loan or advance or to perform the obligation, the date on which such share is released for sale by such bank, institution, Government or corporation, as the case may be, or (c) where the bank, institution, Government or corporation, as the case may be, intends to get such share registered in its own name, the date on which the instrument of transfer relating to such share is executed by it; and (2) the instrument of transfer of such form, duly completed in all respects, is delivered to the company within two months from the date so stamped or endorsed. (C) any share which is held in any company by the Central Government or a State Government in the name of its nominee, except that every instrument of transfer which is executed on or after the 1st day of October, 1966, in respect of any such share shall be in the prescribed form] (2) In the case of a company having no share capital, sub-section (1) shall apply as if the references therein to shares were references instead to the interest of the member in the company. ( 67 ) THE amount under bonds and the interest warrants are tax free. Mr. J. C. Seth, the learned counsel for the NHPC Ltd. , submitted that the scope of the bonds and the interest warrants is the same as is in the United States of America. The learned counsel for the NHPC ltd. , Mr. J. C. Seth, submitted that the interest warrants which are given in the form of post dated cheques are independently negotiable. ( 68 ) THE Company Law Board had observed in its order: "the preliminary objections raised by respondents No. 2 and 3 could not be decided in isolation without looking into the facts of the case, as it is a mixture of Law and facts. The mixed questions of law and facts in this case are - (a) whether the interest warrants are separable from the bond certificate; (b) whether there was an agreement between ANZ and respondents 2 and 3 earlier to purchase and (c) whether the Company Law Board is divested of the power available u/s 111 (6) (c) with regard to incidental or consequential orders particularly relating to interest warrants in this case. " The Company Law Board had not properly appreciated the ratio laid down in Major Khanna Vs. Dhillon (AIR 1964 SC 1497) and that would not apply to the facts of this case. The Company Law Board was bound to follow the directions issued by this Court on 17. 11. 93 which was on the basis of consent of the parties. Dhillon (AIR 1964 SC 1497) and that would not apply to the facts of this case. The Company Law Board was bound to follow the directions issued by this Court on 17. 11. 93 which was on the basis of consent of the parties. The following observation of the Company Law Board is not at all sustainable in law:- "we may also note, in passing, that the contention of respondents No. 2 and 3 has all along been that the petition is not maintainable and falls within the jurisdiction of the Special Court, which issue we have been examining but has become infructuous in view of the Ordinance. " In the light of these broad facts, I am unable to accept the contention of Mr. V. N. Koura, the learned senior counsel for the Bank, that Co. A. 27/93 has become infrcutuous. ( 69 ) HAVING regard to the fact that five years had elapsed since the proceedings commenced, I do not want to go into the question whether the Company Law Board was justified in not acting in accordance with the orders passed by this Court. For, that is not going to serve any purpose, and an order of remittal would only prolong the litigation and that would not benefit any of the parties in the litigation. ( 70 ) THIS straightway takes me to take to the scope of the bonds and the interest warrants. A copy of the bond is on record. The terms and conditions make it clear that the bonds and the interest warrant are distinct and disparate. The interest warrants are negotiable without any reference to the bonds. The date of issue of the bonds is 11. 12. 1987. The date of redemption is 11. 12. 1997. It is stated in the Bond Certificate: "this is a negotiable security and should be preserved". The names of the holders are mentioned in the certificate and they are respondents 2 and 3. The rate of interest is 9% (Tax Free ). Distinctive numbers are mentioned in the bond certificate as 10619665 to 10710298. Number of bonds is mentioned in the Bond Certificate as 90,634. Value of the bonds mentioned in the Bond Certificate is Rs. 9,06,34,000. 00. It is also stated in the Bond Certificate: "post dated half yearly due interest warrants are attached and form part of this certificate. Distinctive numbers are mentioned in the bond certificate as 10619665 to 10710298. Number of bonds is mentioned in the Bond Certificate as 90,634. Value of the bonds mentioned in the Bond Certificate is Rs. 9,06,34,000. 00. It is also stated in the Bond Certificate: "post dated half yearly due interest warrants are attached and form part of this certificate. Balance due interest will be paid on redemption. " ( 71 ) THE bonds and the interest warrants are detachable. Clause 4 of the Terms of Bonds reads as under:- "interest income on bonds carrying 13% interest will qualify for exemption under Section 80 (L) of The Income Tax Act, 1961 as per Government Notification No. 7607/ (F ). No. 1781/247/87-IT (A1) dated 3rd November'87 and on bonds carrying 9% interest will qualify for exemption under Section 10 CL 15) of Income Tax Act, 1961 vide Government Notification No. 7606/ (F ). No. 178/247/87-IT (A1) dated 3rd November'97. These bonds qualify for Wealth Tax exemption under Section 5 (1) (xvie) of The Wealth Tax Act, 1957 as per Government Notification No. 328/101/87-WT dated 4th November, 1987. Income tax deduction at source from the interest accruing to the bond_____ is exempted under Section 193 of the Income Tax Act, 1961 vide Govternment Notification No. 7604/fno. 275/99/87-IT (B) DATED 22. 10. 1987. The Company, if requested, will certify the ownership of bonds which are registered with it at the relevant time, to avail of tax benefits, the transferee will have to approach the Company within 60 days of the transfer for registration. " ( 72 ) IT is made clear in clause 5 of the Terms of Bonds that the bond is freely transferable by endorsement and delivery by the transferor making an endorsement on the bond by signing as per the specimen signatures in the Corporation's record, at the place indicated in the bond and delivery thereof. The transferee should also put his signature thereon. ( 73 ) THE interest warrants also are independently negotiable by endorsement and delivery. The Bank had purchased the bonds and one interest warrant and, therefore, this position cannot be disputed by the Bank. ( 74 ) MR. The transferee should also put his signature thereon. ( 73 ) THE interest warrants also are independently negotiable by endorsement and delivery. The Bank had purchased the bonds and one interest warrant and, therefore, this position cannot be disputed by the Bank. ( 74 ) MR. L. R. GUPTA, the learned counsel for respondents 2 and 3 referred to a few provisions of the Negotiable Instruments Act, 1881, hereafter called the 1881 Act, for the purpose of showing that the interest warrants issued in the form of post dated cheques are independently negotiable and it is a settled position of law that the negotiable instruments are transferred by delivery and endorsement. In the instant case, according to the learned counsel for the respondents 2 and 3, the amount due had been exempted from tax and also stamp duty, which is not in dispute. ( 75 ) SECTION 6 of the 1881 Act defines cheque in the following terms:- "cheque".--A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. N O T E Cheque defined.--A cheque is a kind of bill of exchange and must be drawn in accordance with the requirements of Section 5 supra. It must be signed by the maker, must contain an unconditional order for payment of a certain sum of money, to or to the order of a specified person or to the bearer and must specify the banker upon whom it is drawn. Cheques differ from other forms of bills of exchange in two important respects: (1) they are drawn on a banker, and (2) are payable immediately on demand. " ( 76 ) SECTION 13 of the 1881 Act defines what is a negotiable instrument. The same is as under:- "negotiable instrument".--[ (1) A "negotiable instrument" means a promissory note, bill of exchange or cheque payable either to order or to bearer. ] Explanation (i ).--A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words, prohibiting transfer or indicating an intention that it shall not be transferable. ] Explanation (i ).--A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words, prohibiting transfer or indicating an intention that it shall not be transferable. Explanation (ii ).--A promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last endorsement is an endorsement in blank. Explanation (iii ).--Where a promissory note, bill of exchange or cheque either originally or by endorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option. [ (2) A negotiable instrument may be payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. ] N O T E Receipt of army pension.--A receipt for an army pension bearing the following endorsement at foot: "this receipt must be presented for payment by a London Banker, but, may be negotiated in the country or abroad, and is to be left by the banker at the Pay-mater-General's office one day for examination" is not a negotiable instrument. " ( 77 ) SECTION 14 of the 1881 Act gives the meaning of negotiation and the same reads as under:- "negotiation.--When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiated. " ( 78 ) THE bond itself makes it clear that it is transferable by delivery and endorsement and no other formalities are required. ( 79 ) SECTION 15 of the 1881 Act explains what is endorsement. The reads as under:- "indorsement.--When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the "indorser". N O T E Consideration for indorsement.--An indorsement may be valid, though there is no consideration for the transfer. Even there be consideration, it need not be stated in the indorsement, for, the law presumes consideration for every indorsement or transfer. " ( 80 ) THE person whose name is mentioned in the negotiable instrument is holder and that is defined in Section 8 of the 1881 Act in the following terms:- "holder.--The "holder" of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction. " . ( 81 ) THE fact that respondents 2 and 3 are the holders of the bonds and payees in the post dated cheques is not in dispute. ( 82 ) SECTION 46 of the 1881 Act explains what is delivery and the same reads as under:- "delivery.--The making, acceptance or indorsement of a promissory note, bill of exchange or cheque is completed by delivery, actual or constructive. As between parties standing in immediate relation delivery to be effectual must be made by the party making, accepting or indorsing the instrument, or by a person authorised by him in that behalf. As between such parties and holder of the instrument other than a holder in due course, it may be shown that the instrument was delivered conditionally or for special purpose only, and not for the purpose of transferring absolutely the property therein. A promissory note, bill of exchang A promissory note, bill of exchange or cheque payable to order is negotiable by the holder by indorsement and delivery thereof. N O T E Escrow. Under the English law a deed may be delivered conditionally to a person other than the obligee but not to the obligee himself. A deed thus delivered is called an escrow. But the `term' escrow is also applied loosely to denote a bill delivered conditionally. " ( 83 ) SECTION 47 of the 1881 Act speaks of negotiation by delivery and the provision is as under:- "negotiation by delivery.--Subject to the provisions of Section 58, a promissoryote, bill of exchange or cheque payable to bearer is negotiable by delivery thereof. But the `term' escrow is also applied loosely to denote a bill delivered conditionally. " ( 83 ) SECTION 47 of the 1881 Act speaks of negotiation by delivery and the provision is as under:- "negotiation by delivery.--Subject to the provisions of Section 58, a promissoryote, bill of exchange or cheque payable to bearer is negotiable by delivery thereof. Exception.--A promissory note, bill of exchange or cheque delivered on condition that it is note to take effect except in a certain event is not negotiable (except in the hands of a holder for value without notice of the condition) unless such even happens. Illustrations (a) A, the holder of a negotiable instrument payable to bearer, delivers it to B's agent to keep for B. The instrument has been negotiated. (b) A, the holder of a negotiable instrument payable to bearer, which is in the hands of A's banker, who is at the time the banker of B, directs the banker to transfer the instrument to B's credit in the banker's account with B. The banker does so, and accordingly now possesses the instrument as B's agent. The instrument has been negotiated, and B has become the holder of it. " ( 84 ) SECTION 48 of the 1881 Act refers to negotiation by endorsement. The same is as under:- "negotiation by indorsement.--Subject to the provisions of Section 58 a promissory note, bill of exchange or cheque [payable to order], is negotiable by the holder by indorsement and delivery thereof. ( 85 ) SECTION 50 of the 1881 Act lays down what is the legal effect of endorsement and the same reads as under:- "effect of indorsement.--The indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein with right of further negotiation; but the indorsement may, by express words, restrict or include such right, or may merely constitute the indorsee an agent to indorse the instrument or to receive its contents for the indorser, or for some other specified person. Illustration B signs the following indorsements on different negotiable instrument payable to bearer: (a) "pay the contents to C only. " (b) "pay C for my use. " (c) "pay C or order for the account of B. " (d) "the within must be credited to C. " (e) "pay C. " (f) "pay C value in account with the Oriental Bank". " (b) "pay C for my use. " (c) "pay C or order for the account of B. " (d) "the within must be credited to C. " (e) "pay C. " (f) "pay C value in account with the Oriental Bank". (g) "pay the contents to C, being part of the consideration in a certain deed of assignment executed by C to the indorser and others. " These indorsements do not exclude the right of further negotiation by C. Indorsee of promissory note; Right to claim full amount under promissory note.--The indorsee of the promissory note executed by A in favour of B should be entitled to the amount under the promissory note and not the amount which he might have been proved to have actually paid for the indorsement or assignment of the promissory note in his favour by B. " ( 86 ) THE 1881 Act clearly states that who would be entitled to the payment under the negotiable instrument. Section 78 of the 1881 Act provides:- "to whom payment should be made.--Subject to the provisions of Section 82, clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor, be made to the holder of the instrument. " ( 87 ) THEREFORE, the position that the holders of the interest warrants would be entitled to the payment thereof cannot be a matter of any debate in the light of the provisions of the statute governing the issue. ( 88 ) IT is in the above backdrop, as it were of the legal position, the transaction between respondents 2 and 3 and the Bank has to be appreciated. The Bank purchased the bonds and one interest warrant from respondents 2 and 3 for a consideration of Rs. 6,70,27,919. 52. Before entering into the transaction, the Bank must have had legal advice and must have studied the terms and conditions and must have noted the negotiable character of the bonds and the interest warrants, and the Bank being a foreign Bank is well versed with the scope of bonds and interest warrants and securities and the Bank has the knowledge of the transaction prevailing in other parts of the globe. ( 89 ) BEARING in mind the above position, the interest warrants are to be dealt with by what is called the Las Merchant. ( 89 ) BEARING in mind the above position, the interest warrants are to be dealt with by what is called the Las Merchant. This was the subject matter of debate before the Supreme Court of the United States. In 1869, i. e. , 130 years ago, in the case of "the City of Aurora Vs. Charles W. West and Joseph Torrence", 74 US 42, the Supreme Court of the United States, perhaps for the first time, dealt with the point. The facts, as noticed by the Supreme Court of the United States, are: "fifty bonds, of $1,000 each, were issued by the Corporation defendants on the first day of January, 1852, in payment of a subscription of $50,000, previously made by the order of the Common Council of the City, to the capital stock of the Ohio and Mississippi Railroad Company. Authority to subscribe for such stock, and to issue such bonds, under the conditions therein specified, is conferred upon the Corporation by the 18th section of their charter. Said bonds were negotiable, and were made payable in twenty-five years from date, with interest at six per cent. per annum. Interest warrants or coupons were attached to the several bonds, for the payment of each year's interest, till the principal of the bonds should fall due. " ( 90 ) IN that case, the plaintiffs became the holders for value of all the bonds together with the coupons attached thereto and the defendants having failed and neglected to pay the interest, the plaintiffs brought an action of assumpsit to recover the amount of the unpaid interest as represented in the respective coupons for the period mentioned therein. Assumpsit is an action brought upon promise. The whole basis of the action was the promise mentioned in the interest warrants. ( 91 ) DEFENDANTS in the action raised several pleas. The plaintiff had obtained decrees in two Courts of competent jurisdiction on different set of interest coupons attached to the same 50 bonds. ( 92 ) THE Lower Court rendered judgment for the plaintiffs in the sum of $10,534. 50. ( 93 ) THE defendants tendered, what is called, a bill of exceptions. The Federal Rules of Civil Practice in the United States provide for such a procedure. ( 92 ) THE Lower Court rendered judgment for the plaintiffs in the sum of $10,534. 50. ( 93 ) THE defendants tendered, what is called, a bill of exceptions. The Federal Rules of Civil Practice in the United States provide for such a procedure. Bill of exception used to be a formal statement in writing mentioning all the objections or exceptions taken by a party during the trial of a cause and to the decisions or rulings or the instructions of the Trial Judge stating the objections with the facts and circumstances on which it was founded and in order to ensure its accuracy signed by the Judge. It is stated to have now been abolished. This digression became necessary to explain the bill of exceptions. ( 94 ) COMING to the case, the submission on behalf of the defendants was that in the Former Cities the plea of want of consideration was not taken, and, therefore, it was not considered and thus it would be open to the defendants to point out by way of defence, and the judgement rendered earlier would not preclude the defence from raising the plea of want of consideration. That was not accepted by the Lower Court and the decision of the Lower was confirmed by the Supreme Court of the United States. Dealing with the coupons, the Supreme Court of the United States posited: Bonds and coupons like these, by universal usage and consent, have all the qualities of commercial paper. Mercer Co. v. Hackett, 1 Wall. ,83 [68 U. S. ,xvii. , 548]; Meyer v. Muscatine, 1 Wall. , 384[68 U. S. , XVII. ,564]. Coupons are written contracts for the payment of a definite sum of money, on a given day, and being drawn and executed in a form and mode for the very purpose that they may be separated from the bonds, it is held that they are negotiable, and that a suit may be maintained on them without the necessity of producing the bonds to which they were attached. Knox Co. v. Aspinwall, 21 How. ,544[62 U. S. , XVI. , 210]; While v. Railroad, 21 How. , 575 [62 U. S. , XVI. , 221]; Mccoy v. Co. of Wash. , 7 Am. Law Reg. , 193; Pars Bills and N. , 115. Knox Co. v. Aspinwall, 21 How. ,544[62 U. S. , XVI. , 210]; While v. Railroad, 21 How. , 575 [62 U. S. , XVI. , 221]; Mccoy v. Co. of Wash. , 7 Am. Law Reg. , 193; Pars Bills and N. , 115. Interest as a general rule, is due on a debt from the time that payment is unjustly refused, but a demand is not necessary on a bill or note payable on a given day. Vose v. Philbrook, 3 Story, 336; Hollingsworth v. Detroit, 3 Mclean, 472. Being written contracts for the payment of money, and negotiable because payable to bearer and passing from hand to hand, as other negotiable instruments, it is quite apparent on general principles that they should draw interest after payment of the principal is unjustly neglected or refused. Delafield v. Stephens, 2 Hill, 177; Williams v. Sherman, 7 Wend. , 112. Where there is a contract to pay money on a day fixed, and the contract is broken, interest, as a general rule, is allowed, and that rule is universal in respect to bills and notes payable on time 2 Pars. , Bills and N. , 393. Governed by that rule this court, in the case of Gelpcke v. Dubuque, 1 Wall. , 206 [68 U. S. , XVII. , 525], held that the plaintiff, in a case entirelyanaloguous, was entitled to recover interest. Thompson v. Lee Col, 3 Wall. , 332 {70 US. , XVIII. , 178]. Necessity for remark upon the other exceptions is superseded by what has already been said in respect to the plaintiff's demurer. Judgment affirmed, with costs. " ( 95 ) ON the 11th of January, 1875, the Supreme Court of the United States gave its opinion in "luther C. Clark V. Iowa City", 87 US 427. The case arose out of an action for the recovery of money due on ten coupons for $50 each, payable to bearer on the 1st of January, 1860. The coupons had been cut from the bonds issued by the defendant in the action to the Mississippi and Missouri Railroad Company. The action was commenced in the month of January, 1874. The main defence was one of limitation. The coupons had been cut from the bonds issued by the defendant in the action to the Mississippi and Missouri Railroad Company. The action was commenced in the month of January, 1874. The main defence was one of limitation. What was stated was that by the laws of Iowa, the period of limitation for commencement of action upon bonds and coupons was ten years and the action having commenced beyond the period mentioned in the statute from the date of accrual of cause of action, the action was liable to be dismissed. The Court noticed the following facts:- "in 1856, Iowa City issued certain bonds in sums of $500 each, payable to bearer in the City of New York, on the first of January, 1876, with annual interest at the rate of ten per cent. a year, payable on the first day of January of each year. For the different instalments of interest, coupons were annexed. " ( 96 ) REGARDING the characteristics of bonds and coupons, the Court observed: Most of the bonds of municipal bodies and private corporations in this country are issued in order to raise funds for works of large extent and cost, and their payment is, therefore, made at distant periods, not unfrequently beyond a quarter of a century. Coupons for the different installments of interest are usually attached to these bonds, in the expectation that they will be paid as they mature, however distant the period fixed for the payment of the principal. These coupons, when severed from the bonds, are negotiable and pass by delivery. They then cease to be incidents of the bonds, and become in fact independent claims; they do not lose their validity, if for any cause the bonds are cancelled or paid before maturity; nor their negotiable character; nor theilee Co. , 3 Wall. , 327, 18 L. ed. , 177; Aurora City v. West, 7wall. , 105 19 L. ed. , 50; see, also, Co. of Beaver v. Armstrong, 44 Pa. St. , 63, and Bk. v. R. Co. , 8 R. I. , 375. " ( 97 ) ON the 18/4/1881, the Supreme Court of the United States decided the case in "town of Walnut Vs. J. H. Wade", 103 US 526. , 105 19 L. ed. , 50; see, also, Co. of Beaver v. Armstrong, 44 Pa. St. , 63, and Bk. v. R. Co. , 8 R. I. , 375. " ( 97 ) ON the 18/4/1881, the Supreme Court of the United States decided the case in "town of Walnut Vs. J. H. Wade", 103 US 526. The facts of that case could be briefly stated thus: This suit was brought upon one thousand and ten coupons for $10 each, representing the annual interest on these hundred and twenty one bonds for the sum of $100 each, purporting to be executed by the plaintiff in error. It was claimed that said bonds were issued in aid of the Illinois Grand Trunk Railway Company, and in payment of stock in that company subscribed for by the plaintiff in error and delivered to it. The coupons bore the following numbers: from 1 to 200 incisive, 258, and from 281 to 400 inclusive, and were cut from bonds bearing corresponding numbers. Before final judgment in the court below, the defendant in error took a nonsuit as to all coupons sued on, bearing numbers from 301 to 400 inclusive and withdrew the same from consideration by the court, and left, as the cause of action, only those coupons which bore numbers under 301. The declaration set out a copy of one of the coupons sued on, and averred that all the others were of the same tenor and effect, except as to their numbers and date of payment respectively. The copy was as follows: "no. 251. Series 4, due January 1, 1875 for $10] $10] WALNUT TOWNSHIP [no. 251. Railway bond Interest warrant Supervisor of Walnut Township, pay to bearer, January 1st, 1875, ten dollars, at the office of the State Treasurer, Springfield, Illinois. WM. SANDERS, TOWN CLERK. " ( 98 ) THE Court noticed the findings given by the Lower Court in respect of the coupons. It is stated: "that the coupons offered in evidence and upon which judgment is rendered in this case were cut from bonds of said issue numbered from one to three hundred. " ( 99 ) THE Lower Court accepted the claim of the plaintiff. The defendant challenged the validity of the Act to amend an Act entitled an Act to incorporate the Illinois Grand Trunk Railway. The Act was upheld by the Court. " ( 99 ) THE Lower Court accepted the claim of the plaintiff. The defendant challenged the validity of the Act to amend an Act entitled an Act to incorporate the Illinois Grand Trunk Railway. The Act was upheld by the Court. Regarding the coupons, the Court held: "the form of the coupons does not change their nature. They are evidences of the sums due for interest on the bonds. The fact that they are made payable at a particular place does not make a presentation for payment at that place necessary, before a suit can be maintained on them. Wallace v. Mcconnell, 13 Pet. , 148; Irvine v. Withers, 1 Stew. , 234; Montgomery v. Elliott, 6 Ala. , 701. The second and third grounds of objection are answered by the decision of this court in Clark v. Iowa City, 20 Wall. , 583 [87 U. S. , XXII. , 427], where it is said: "coupons for installments of interest when severed from bonds are negotiable, and pass by delivery. They then cease to be incidents and become in fact independent claims; and they do not lose their validity if, for any cause, the bonds are canceled or paid before maturity, nor their negotiable character, nor their ability to support separate actions. " See, also, Aurora v. West, 7 Wall. , 82 [74 u. s. , XIX. , 42]; Thompson v. Lee Co. , 3 Wall. , 327 [70 U. S. , XVIII. , 177]" ( 100 ) ON the 6/3/1882, the Supreme Court of the United States decided the case in "john J. Stewart Vs. Town of Lansing", 104 U. S. 866. It is not necessary to advert to the facts of that case, except to the extent that it is necessary for focussing the point involved. The facts of that case are: "on the 30/3/1874, a suit was brought in the name of Stewart, the present plaintiff in error, in the Circuit Court of the United States for the Northern District of New York, to recover the coupons due July 1, 1873, averring his ownership thereof. On the 20th of July, 1872, Manassah Bailey brought suit in the same court to recover the coupons of July 1, 1872. On the 20th of July, 1872, Manassah Bailey brought suit in the same court to recover the coupons of July 1, 1872. In each of the suits the defenses were that the bonds and coupons were issued without the authority of law, and that the plaintiffs respectively were not bona fide holders. The suits were tried together, and upon the same evidence, so far as applicable. In both cases it was decided that the bonds were invalid, and in that of Bailey, judgment was given for the defendant, because it had not been satisfactorily shown that he was a bona fide holder. In the Stewart Case, however, the court used this language in its opinion: "the suit of Stewart differs from the one by Bailey, in that it appears that the bonds were pledged as collateral in February, 1873, to Elliott, Collins and Co. , of Philadelphia, and sold by them after consultation with the officers of the railroad company. Elliott, Collins and Co. were holders for value before maturity, and their sale to satisfy the pledge conveyed their title to the purchaser. Whether the plaintiff was the purchaser from them directly or not is not clear, but, however this may be, he succeeds to all the rights of Elliott, Collins and Col, and occupies the position of a bona fide purchaser. As against a bona fide holder of the coupons, none of the defenses interposed are tenable. " Acting on this principle, the court gave judgment in favour of Stewart for the coupons he held. " . ( 101 ) RELATING to the negotiability of the bonds and the warrants, the Court observed:- "we have often held that coupons detached from bonds are negotiable instruments, and capable of separate ownership and transfer. Clark v. Iowa City 20 Wall. , 589 [87 U. S. , XXII. , 429]" ( 102 ) THE Supreme Court of the United States, it can be noticed, followed the earlier case which had already been dealt with by it. ( 103 ) ON the 6/3/1882, the Supreme Court of the United States decided the case in "town of Koshkonong Vs. Oscar A. Burton", 104 U. S. 886. , 429]" ( 102 ) THE Supreme Court of the United States, it can be noticed, followed the earlier case which had already been dealt with by it. ( 103 ) ON the 6/3/1882, the Supreme Court of the United States decided the case in "town of Koshkonong Vs. Oscar A. Burton", 104 U. S. 886. The facts, as noticed by the Court, are: The object of this action, which was commenced on the 12th day of May, 1880, is to recover the amount due on bonds, with interest coupons attached, issued on the first day of January, 1857, by the Town of Koshkonong, a municipal Corporation of Wisconsin, pursuant to authority, conferred by an Act of the Legislature of that State. They were made payable to the Chicago, St. Paul and Fond du Lac Railroad Company or its assigns, on the first day of January, 1877, at the American Exchange Bank, in the City of New York, with interest at the rate of 8 per cent per annum, payable semi-annually, on the presentation of the interest warrants at that bank on the first day of each July and January, until the principal sum should be paid. Of the bonds in suit, with their respective coupons, Burton became the owner by written assignment from the railroad company, indorsed upon the bonds, under dated of Nover 16, 1857. None of the coupons have ever been detached from the bonds nor paid, except those maturing July 1, 1857, and January 1, 1858. The coupons are all alike, except as to dates of maturity. They are complete instruments, capable of sustaining separate actions, without reference to the maturity or ownership of the bonds. [knox Co. v. Aspinwall}, 21 How. ,539 [62 U. S. , XVI. , 208]; [clark v. Iowa City], 20 Wall. , 583 [87 XXII. , 427]; [amy v. Dubuque], 98 U. S. , 473 [xxv. , 230]. The following is a copy of the one last due: "the Town of Koshkonong will pay to the holder thereof, on the first day of January, 1877, at the American dollars, being for half yearly interest on the bond of said Town No. 22, due on that day. S. R. Crosby, Clerk. " The main question is, whether the action, as to coupons maturing more than six years prior to its commencement, is not barred by the Statute of Limitation of Wisconsin. S. R. Crosby, Clerk. " The main question is, whether the action, as to coupons maturing more than six years prior to its commencement, is not barred by the Statute of Limitation of Wisconsin. The court below, being of opinion that no part of plaintiff's demand was barred, gave judgment for the principal of the bonds, with interest from the first day of January, 1877, at the stipulated rate of 8per cent per annum until paid, and also for the amount of each coupon in suit, with interest from its maturity at the rate of 7 per cent per annum; the latter being the rate established by the local law in the absence of a special agreement by the parties. The present writ of error questions the correctness of that judgment, as well because it overrules the defense of limitation to coupons maturing more than six years before the commencement of this action, as because it allows interest upon the amount of each coupon from its maturity. " ( 104 ) DEALING with the contentions of the defendant relating to plea of limitation, the Court held: "the Statutes of Wisconsin, in force when the bonds and coupons were issued, provided that "all actions of debt founded upon any contract or liability, not under seal" (except such as are brought upon the judgment or decree of some court of record of the United States, or of a State or Territory of the United States), shall be commenced within six years after the cause of action accrued, and not afterwards; and that all personal actions on any contract, not otherwise limited by the laws of the State, shall be brought within twenty years after the accruing of the cause of action. R. S. Wis. , 1849, secs. 14-22, pp. 644, 645. We remark that the foregoing provisions, without substantial change of language, were taken from the Statutes of the Territory of Wisconsin, adopted in 1839. Further; that the revision of 1849 did not, in terms, prescribe any limitation to actions upon sealed instruments. They were, therefore, embraced by the limitation of twenty years as to personal actions on contracts not covered by other provisions. The revision of 1849 was superseded by one made in 1858, which went into operation on the first day of January, 1859. They were, therefore, embraced by the limitation of twenty years as to personal actions on contracts not covered by other provisions. The revision of 1849 was superseded by one made in 1858, which went into operation on the first day of January, 1859. By the latter, as modified by an Act, passed in 1861, civil actions, other than for the recovery of real property, were required to be commenced within the following periods: actions upon judgments or decrees of courts of record of the State, and actions upon sealed instruments when the cause of action accrued in the State, within twenty years, R. S. Wis. , 1858, ch. 138, sec. 15; actions upon the judgments or decrees of courts of record of any State or Territory of the United States or of courts of the United States, and actions upon sealed instruments, when the cause of action accrued out of the State, within ten years, lb. , sec. 16; and actions upon contracts, obligations or liabilities, express or implied, excepting those mentioned in sections 15 and 16, within six years; the time to be computed, in each case, from the date where the cause of action accrued. Gen. Laws, Wis. , 1861, p. 302. The revision of 1858 also contained the general clause that, "in any case where a limitation or period of law, prescribed in any of the Acts hereby repealed, (which included the revision of 1849), for the acquiring of any right or barring of any remedy, or for any other purpose, shall have begun to run, and the same or any similar limitation is prescribed in the Revised Statutes, the time of limitation shall continue to run, and shall have the like effect, as if the whole period had begun and ended under the operation of the Revised Statutes. " 1b. , ch. 191, sec. 13, p. 1038. Thus stood the law of the State until the 9th day of March, 1872, a little over fifteen years after these bonds and coupons were issued, when an Act was passed entitled `an act to Limit the Time for the Commencement of Actions against Towns, Counties, Cities and Villages on Demands Payable to Bearer. 191, sec. 13, p. 1038. Thus stood the law of the State until the 9th day of March, 1872, a little over fifteen years after these bonds and coupons were issued, when an Act was passed entitled `an act to Limit the Time for the Commencement of Actions against Towns, Counties, Cities and Villages on Demands Payable to Bearer. ' It provides that "no action brought to recover any sum of money, on any bond, coupon, interest warrant, agreement or promise in writing, made or issued by any town, county, city or village, or upon any installment of the principal or interest thereof, shall be maintained in any court, unless such action shall be commenced within six years from the time when such sum of money has or shall become due, when the same has been or shall be made payable to bearer or to some person or bearer, or to the order of some, or to some person or his order; Provided, That any such action may be brought within one year after this Act shall take effect; Provided, further, That this Act shall in no case be construed to extend the time within which an action may be brought under the laws heretofore existing. " Gen. Laws, Wis. , 1872, p. 56. Our attention has also been called to certain sections in the revision of the Statutes of Wisconsin of 1878, which went into operation on the first day of November of that year, superseding that of 1858, as well as the Act of 1872. Those sections contain, in substance, the clauses first quoted from the revision of 1858, with the modifications made by the Act of 1872. R. S. Wis. , 1878, pp. 1015, 1016. Those sections contain, in substance, the clauses first quoted from the revision of 1858, with the modifications made by the Act of 1872. R. S. Wis. , 1878, pp. 1015, 1016. It is to be observed in this in this connection, for it has some bearing upon what we shall presently say, that section 4220 of the revision of 1878, in terms, prescribed twenty years as the limitation for "an action upon a sealed instrument when the cause of action accrues within this State, except those mentioned in section 4222," while the latter section embraces, among others, "an action upon any bond, coupon, interest warrant, or other contract for the payment of money, whether sealed or otherwise, made or issued by any town, county, city village or school district in this State;" thus indicating that the framers of the revision of 1878 regarded municipal securities for the payment of money, as belonging to the class of sealed instruments. We observe, also, that the revision of 1878 contains a provision in reference to those cases in which limitation had commenced to run, similar to that already quoted from the revision of 1858. R. S. ,1878, sec. 4984; R. S. , 1858, p. 1038. " ( 105 ) THE Court further, explaining the provisions and their impact on the case before it, observed: "from the foregoing summary, it will be seen that, by the local law, when the bonds in suit were issued, all civil actions for debt, founded on contract or liability, not under seal (except actions upon judgments or decrees of some court of record of the United States or of a State or Territory), could be brought within six years after the cause of action accrued and not afterwards; while such actions, if founded on contract or liability, under seal, would not be barred until twenty years after the cause of action accrued. If, as contended by plaintiff, the question of limitation is to be determined exclusively by the revision of 1849, in force when the bonds were issued; and if, as is further insisted, an action on municipal bonds and coupons, such as are here in suit, is, within the meaning of that revision, "founded on contract or liability not under seal," it is clear that, without reference to the Statute of 1872, this action is barred as to all coupons maturing more than six years before its commencement, whether such coupons were separated or not from the bonds to which they were originally attached. This, upon the authority of Amy v. Dubuque, 98 U. S. , 470 [xxv. , 228], with the doctorines of which we are entirely satisfied. We there said, construing the Statutes of Iowa, upon the subject of limitation, that suits upon unpaid coupons, such as those in suit, might be maintained in advance of the maturity of the principal debt; that "upon the non-payment at maturity of each coupon, the holder had a complete cause of action. In other words, he might have instituted his action to recover the amount thereof at their respective maturities. From that date, therefore, the statute commenced to run against them. * * * Upon principle, his failure or neglect to detach the coupon and present it for payment at the time when, by contract, he was entitled to demand payment could not prevent the statute from running. " But we are inclined to the opinion, although uninformed upon the subject by any direct decision of the Supreme Court of the State, to which our attention has been called, that municipal bonds and coupons were regarded by the framers, both of the revision of 1849 and that of 1858, as, alike, sealed instruments to which the limitation of twenty years was applicable. The word "bond" at common law (and even now as a general rule), imports a sealed instrument. The word "bond" at common law (and even now as a general rule), imports a sealed instrument. And although, under some circumstances, a municipal corporation issuing and delivering bonds and coupons, in aid of railroad enterprises, may be liable thereon, notwithstanding they are unattested by its corporate seal, we are satisfied that the Legislature of Wisconsin intended, by the revision of 1849, as well as that of 1858, to prescribe the same limitation for actions upon such obligations, as was, in terms, prescribed for actions upon what, technically or in common legal parlance, are denominated sealed instruments. If this interpretation of the revision of 1849 and 1858 be correct, it would follow that this action was not, at the passage of the Act of 1872, barred by limitation as to any of the coupons in suit. Twenty years had not then expired form the maturity of any of them. " ( 106 ) ON the 22nd of January, 1883, the Supreme Court of the United States decided the case in "town of Thompson, In the County of Sullivan Vs. Orlando Perrine", 106 U. S. 298. In that case, the action was brought in the Court below to enforce the payment of certain coupons amounting to a sum of $8,890 with interest alleged to be due and unpaid. The trial Court decreed the suit. The Supreme Court of the United States referred to the judgment in Thompson v. Perrine, 103 U. S. ,806 {xxvi. , 612] and noted the effect of judgment on the facts of the case. The Court observed: "in Thompson v. Perrine, 103 U. S. ,806 [xxvi. , 612], we affirmed a judgment of the Circuit Court of the United States for the Southern District of New York, against the Town of Thompson, in that State, for the amount of certain coupons of bonds, executed in behalf of that Town, by virtue of the provisions of an Act passed May 4, 1869, and amended April 1, 1869. Those Acts, as will be seen from the statement of the former case, authorised the Town of Thompson, in aid of the construction of a railroad from Monticello, New York, to Port Jervis, in the same State (a majority of its taxpayers, appearing upon the last assessment roll and representing a majority of the taxable ptock, the local auorities exchanged them directly with the railroad company for stock. This, according to certain decisions of the highest court of New York, was in violation of the Act giving authority to issue the bonds. But, by an Act passed April 28, 1871 (previous to which time the bonds had been issued and delivered), that exchange for stock was, in express terms, ratified and confirmed. And the controlling question in the former case was as to the constitution in the former case was as to the constitutional validity of the latter statute. In Horton v. Thompson, 71 N. Y. , 513, decided January, 1878, the Court of Appeals of New York held that, as the taxpayers had only consented to an issue of bonds, the proceeds of the sale of which should be invested in stock, it was beyond the power of the Legislature to validate bonds, which, in violation of the Act under which they were issued, were not sold but were directly exchanged for stock, of which fact all purchasers had notice from the recitals of the bonds themselves. That adjudication, it was contended, was binding upon this court. But to that proposition we declined to give our assent and stated, with some fullness, the reasons why this court could not give to the decision in Horton's Case the effect claimed for it by the Town. " ( 107 ) THE Court expressed the view: "we held, for reasons which need not be repeated, that it was within the constitutional power of the Legislature of New York to pass the curative Statute of April 28, 1871, and that from the moment it was enacted, if not before the bonds, by whomsoever held, whether by the railroad company or others, became binding obligations upon the Town, as much so as if they had originally been sold and the proceeds invested in stock of the railroad company, as required by the Acts under which they were issued. " ( 108 ) CURATIVE Statute is explained in Black Law Dictionary in the following terms:- "a law, retrospective in effect, which is designed to remedy some legal defect in previous transactions. A form of retrospective legislation which reaches back into the past to operate upon past events, acts or transactions in order to correct errors and irregularities and to render valid and effective many attempted acts which would otherwise be ineffective for the purpose intended. A form of retrospective legislation which reaches back into the past to operate upon past events, acts or transactions in order to correct errors and irregularities and to render valid and effective many attempted acts which would otherwise be ineffective for the purpose intended. " ( 109 ) THE Court observed that the point raised in that case was covered by the judgment in Thompson v. Perrine, 103 U. S. ,806 {xxvi. , 612]. The Supreme Court of the United States proceeded to hold: "that decision controls the present case, for the latter, in its essential features,, differs from the former only in the circumstance of the time when Perrine acquired title to the coupons in suit. Those heretofore sued on were purchased by him in 1875, while those now in suit were purchased by him in 1878, when they were overdue, and after the decision in 71 N. Y. was announced. Counsel for the Town now insist that this court should follow the ruling in that case, at least as to holders of coupons or bonds who purchased after Horton v. Thompson was decided; and they suppose that this court placed its former decision upon the ground, mainly, that Perrine purchased the bonds there in suit before the Court of Appeals declared the Act to be unconstitutional. But in this view we do not concur. The reference, in the former case, to the date when Perrine purchased, was to illustrate the injustice which would be done were we, in opposition to our own view of the law, to follow the ruling of the the state court made after he purchased; a decision which, with entire respect for the state court, was held not to be in harmony with its former decisions. What we decided was, that the curative statute was within the limits of legislative power, and that, at least from its passage, the bonds, by whomsoever held, whether by the railroad company or others, became enforceable obligations of the Town. Mitchell v. Burlington, 4 Wall. , 274,275[71 U. S. ,xviii. , 3552]; TAYLOR V. YPSILANTI, 105 U. S. , 60 [xxvi. , 1008]; Ohio L. and T. Co. v. Debolt, 16 How. , 433. " ( 110 ) ANOTHER point taken was that the plaintiff was an assignee within the meaning of the Judiciary Act of 1789 and within the meaning of the Act of March 3, 1875. , 3552]; TAYLOR V. YPSILANTI, 105 U. S. , 60 [xxvi. , 1008]; Ohio L. and T. Co. v. Debolt, 16 How. , 433. " ( 110 ) ANOTHER point taken was that the plaintiff was an assignee within the meaning of the Judiciary Act of 1789 and within the meaning of the Act of March 3, 1875. The Court noticed the contentions in the following terms:- "there is, however, one point made in this case not made in the former one, and which it is our duty to notice. It is, that this action is excluded by statute from the jurisdiction of a Circuit Court of the United States. The 11th section of the Judiciary Act of 1789 declares that no district or circuit court shall "have cognizance of any suit to recover the contents of any promissory note or other chose in action in favor of an assignee, unless a suit might have been prosecuted in such court to recover the said contents if no assignment had been made, except in cases of foreign bills of exchange. " 1 Stat. at L. , 73; R. S. , sec. 629. The provision in the Act of March 3, 1875 [18 Stat. at L. , 470], is: "nor shall any circuit or district court have cognizance of any suit founded on contract in favor of an assignee, unless a suit might have been prosecuted in such court to recover thereon if no assignment had been made, except in cases of promissory notes negotiable by the law merchant, and bills of exchange. " It is not claimed that the words "assignee' and "assignment," as found in the Act of 1875, have any meaning different from that attached to the same words in the Act of 1789, or in section 629 of the Revised Statutes. But the contention of counsel is that the coupons in suit, being detached from the bonds and overdue when Perrine purchased them, were dishonored and, therefore, not negotiable by the law merchant; consequently, it is claimed, they are not within the exception of promissory notes negotiable by the law merchant, but are embraced by the general inhibition upon suits founded on contract where the assignor himself could not have sued in the circuit court. " ( 111 ) THE Court did not accept the contentions. The Court held: "this position cannot be sustained. " ( 111 ) THE Court did not accept the contentions. The Court held: "this position cannot be sustained. It is an immaterial circumstance that the coupons, when purchased by Perrine, were detached from the bonds. And the bonds not having then matured, the coupons, though overdue, had not lost the quality of negotiability by the law merchant. This result must follow from the principles announced in Cromwell v. Sac Co. , 96 U. S. , 58 [xxiv. , 686]. Further, and apart from any consideration of the question as to the negotiability, according to the law merchant, of these coupons, Perrine is not an assignee within the meaning of the Act of 1875, nor of the previous statutes relating to the same subject. Giving the words, assignee and assignment, their broadest signification and conceding that, in some cases, the holder of a promissory note may become such in virtue alone of an assignment; yet, according to the established construction of the Judiciary Act of 1789, the right of the holder of a promissory note or bond, payable to a particular person or bearer, to sue in his own name, did not depend upon the citizenship of the named payee or of the first or any previous holder; this, because, in all such cases, the title passed by delivery and not in virtue of any assignment. In Bullard v. Bett, 1 Mason, 243, Mr. Justice Story said that to bring a case within the exception contained in the 11th section of the Act of 1789, "the action must not only be founded on a chose in action, but it must be assignable; and the plaintiff must sue in virtue of an assignment. " "a note," said he, "payable to bearer, is often said to be assignable by delivery; but in correct language there is no assignment in the case. It passes by mere delivery; and the holder never makes any title by or through any assignment, but claims merely as bearer. The note is an original promise by the maker to pay any person who shall become the bearer; it is, therefore, payable to any person who successively holds the note bona fide not by virtue of any assignment of the promise, but by an original and direct promise, moving from the maker to the bearer. " In Bank v. Wister, 2 Pet. " In Bank v. Wister, 2 Pet. , 326, this court said that it had "uniformly held that a note payable to bearer is payable to anybody, and is not affected by the disabilities (to sue) of the nominal payee. " Thompson v. Lee Co. , 3 Wall. , 331 [70 U. S. , XVIII. , 178]; Bushnell v. Kennedy, 9 Wall. , 391 [76 U. S. , XIX. ,788]; Lexington v. Butler, 14 Wall. , 293 [81 U. S. , XX. , 812]; Cooper v. Thompson, 13 Blatchf. [434]; Coe v. R. R. Co. , 19 Blatchf. , 522. The coupons here in suit are payable to the holder thereof, and, upon the authority of the adjudged cases, Perrine is not an assignee within the meaning of the Act of 1875 [18 Stat. at L. , 470]. He is entitled to sue without reference to the citizenship of any previous holder. We perceive no error in the record and the judgment must be affirmed. It is so ordered. " ( 112 ) ON the 18/4/1892, the Supreme Court of the United States decided the case in "eleanor Nesbitt Vs. The Independent District of Riverside, in the County of Lyon", 144 U. S. , 562. The plaintiff in the action brought a suit in the United States Circuit Court at De Moines, Iowa, against the Independent District of Riverside sued upon the interest coupons detached from two bonds. According to the plaintiff, she was the owner of the two bonds and the coupons detached thereto, and prayed for judgment upon six coupons then due and unpaid. To this, the defence was that, at the time of the issue of the bonds indebtedness of the district exceeded five per cent of the taxable property of the district, as shown by the state and county tax lists, and, therefore, the bonds were void under the Constitution of the State of Iowa. The judgment was rendered by the Lower Court in favour of the plaintiff for the full amount of the six coupons. ( 113 ) THE plaintiff brought the suit for the recovery of the amounts due on the bonds. The defence was that, the suit was barred under Article 11. 3 of the Constitution of Iowa of 1857. The judgment was rendered by the Lower Court in favour of the plaintiff for the full amount of the six coupons. ( 113 ) THE plaintiff brought the suit for the recovery of the amounts due on the bonds. The defence was that, the suit was barred under Article 11. 3 of the Constitution of Iowa of 1857. That provision reads as under:- "no county, or other political or municipal corporation, shall be allowed to become indebted in any manner, or for any purpose, to an amount in the aggregate exceeding five per centum on the value of the taxable property within such country or corporation-to be ascertained by the last state and country tax lists, previous to the incurring of such indebtedness. " ( 114 ) THE argument advanced on behalf of the plaintiff was that the suit on the coupons was decreed and when the plaintiff sought to recover the money due on the bonds and it was answered by saying that it was barred under Article 11. 3. of the Constitution of Iowa of 1857. The cause of action was the same, and, therefore, the plaintiff was entitled to decree. According to the plaintiff, the defendant, Trust, was precluded from taking the plea on the principle of estoppel by judgment. The Supreme Court of the United States rejected the case of the plaintiff and observed:- "but the question which is most earnestly pressed upon our attention is the estoppel which is alleged to have been created by the judgment against the district in the United States Circuit Court at Des Moines, upon coupons detached from the two bonds numbered 14 and 15. Is this a case of estoppel by judgment? The law in respect to such estoppel was fully considered and determined by this court in the case of Cromwell v. Sac County, 94 U. S. 351 [24: 195]. Is this a case of estoppel by judgment? The law in respect to such estoppel was fully considered and determined by this court in the case of Cromwell v. Sac County, 94 U. S. 351 [24: 195]. It was there decided that when the second suit is upon the same cause of action, and between the same parties as the first, the judgment in the former is conclusive in the latter as to every question which was or might have been presented and determined in the first action; but when the second suit is upon a different cause of action, though between the same parties, the judgment in the former action operates as an estoppel only as to the point or question actually litigated and determined, and not as to other matters which might have been litigated and determined. " ( 115 ) RELATING to the scope of the rights under coupons, the Supreme Court of the United States observed:- "now, the present suit is on causes of action different from those presented in the suit at Des Moines. Bonds 16,17, and 18 were not presented or known in that suit; and while bonds 14 and 15 were presented, alleged to be the property of plaintiff, and judgment asked upon six coupons attached thereto, yet the cause of action on the six coupons is distinct and separate from that upon the bonds or the other coupons. Each matured coupon is a separable promise, and gives rise to a separate cause of action. It may be detached from the bond and sold by itself. Indeed, the title to several matured coupons of the same bond may be in as many different persons, and upon each a distinct and separate action be maintained. So, while the promises of the bond and of the coupons in the first instance are upon the same paper, and the coupons are for interest due upon the bond, yet the promise to pay the coupon is as distinct from that to pay the bond, as though the two promises were placed in different instruments, upon different paper. " ( 116 ) ON the 18/3/1896, the Supreme Court of the United States decided the case of "james C. Edwards Vs. Bates County, Impleaded in Behalf of Mount Pleasant Township", 163 U. S. , 155. " ( 116 ) ON the 18/3/1896, the Supreme Court of the United States decided the case of "james C. Edwards Vs. Bates County, Impleaded in Behalf of Mount Pleasant Township", 163 U. S. , 155. The facts in that case, as noticed by the Supreme Court of the United States, are: "on October 5, 1891, plaintiff in error filed his petition to recover from the defendant an aggregate alleged indebtedness, consisting of the following items: (1) The principal of two bonds for $1,000 each, issued by the defendant on January 18, 1871, with interest from the date of maturity of the bonds, January 18, 1886; (2) the amount interest coupons on said bonds, due and payable on the 18th day of January, in the year 1873 to 1886, both inclusive, with interest from the maturity of each coupon; and, (3) the principal of seven funded bonds of said county, each for the sum of $100, dated October 1, 1885, and payable 1/10/1905. The petition alleged that due notice had been given by the county, pursuant to an option reserved by it, that it would redeem said last-named bonds at a place named on the 1st of July, 1891, and that on that date and at the place designated said bonds had been duly presented and payment thereof demanded and refused. A plea to the jurisdiction was filed on behalf of the defendant, based upon the claim that the matter in controversy, exclusive of interest and costs, did not exceed the sum or value of $2,000. A plea to the jurisdiction was filed on behalf of the defendant, based upon the claim that the matter in controversy, exclusive of interest and costs, did not exceed the sum or value of $2,000. It was alleged, among other things, that each of the funded bonds provided on its face that the said county of Bates, for and on behalf of the township of Mount Pleasant, reserved the right at its option to redeem the bonds at any time after five years from the first day of October, 1885, in accordance with the conditions printed on the back, which conditions, among other things, provided for the giving of notice, by advertisement, of the intention to redeem, and further provided that "if any bond be not presented on the back, which conditions, among other things, provided for the giving of notice, by advertisement, of the intention to redeem, and further provided that "if any bond be not presented as required in such notice, or within thirty days after the date therein fixed, interest thereon shall cease from said date, but said bond, with interest accrued to said date, shall be payable upon presentment at the office of the treasurer of Bates county at any time thereafter. " It was further alleged that the funding bonds in question had not been presented for payment, and that the purpose of including them in the suit at bar was merely in aid of an attempt to confer jurisdiction upon the court over the claim of plaintiff upon the two $1,000 bonds. The plaintiff filed a reply to the plea to the jurisdiction and the issue thereby raised was heard upon an agreed statement of facts and certain documentary evidence unnecessary to be specifically stated. The plaintiff filed a reply to the plea to the jurisdiction and the issue thereby raised was heard upon an agreed statement of facts and certain documentary evidence unnecessary to be specifically stated. In the agreed statement of facts it was admitted that the funding bonds in question had never been presented for payment at the place designated by the contract for the redemption of the same, though said county had on deposit at the depository named in the advertised notice of intention to redeem, on said first day of July, 1891, and for more than thirty days thereafter, sufficient funds to pay said bonds, which funds had been deposited for such special purpose, and that the county of Bates had in the hands of its county treasurer money sufficient belonging to said township to pay said bonds at any and all times after said thirty days from said first day of July, 1891, if they had been presented for payment by the holder thereof. The trial court sustained the plea, and dismissed the case for want of jurisdiction. 55 Fed. Rep. 436. The case was then brought to this court by writ or error. " ( 117 ) ULTIMATELY, the Supreme Court of the United States remanded the matter setting aside the judgment of the Lower Court on the ground of want of jurisdiction. The Supreme Court of the United States referred to the judgment in Aurora v. West, 74 U. S. 7 Wall, 82 [19: 42] relating to the scope of the coupons. ( 118 ) THE Supreme Court of the United States proceeded to consider the negotiable character of the coupons and the nature of the obligation of the person liable to pay on the coupons. The Court held:- "each matured coupon upon a negotiable bond is a separable promise, distinct from the promises to pay the bond or other coupons, and gives rise to a separate cause of action. Nesbitt v. Riverside Independent Dist. 144 US 610 [36:562]. In that case this court said (p. 619[565]): "each matured coupon is a separable promise, and gives rise to a separate cause of action. It may be detached from the bond and sold by itself. Indeed, the title to several matured coupons of the same bond may be in as many different persons, and upon each a distinct and separate action be maintained. It may be detached from the bond and sold by itself. Indeed, the title to several matured coupons of the same bond may be in as many different persons, and upon each a distinct and separate action be maintained. So, while the promises of the bond and of the coupons in the first instance are upon the same paper, and the coupons are of interest due upon the bond, yet the promise to pay the coupon is as distinct from that to pay the bond, as though the two promises were placed in different instruments, upon different paper. " Not only may a suit be maintained upon an unpaid coupon in advance of the maturity of the principal debt, but the holder of a coupon is entitled to recover interest thereon from its maturity. Amy v. Dubuque, 98 U. S. 470. 473 [25: 228,230]. The logical effect of these rulings is that when the interest evidenced by a coupon has become due and payable the demand based upon the promise contained in such coupon is no longer a mere incident of the principal indebtedness represented by the bond, but becomes really a principal obligation. Clearly, such would be the nature of the claim of one who, as owner of the coupons and not of the bonds, brought his action to enforce payment of the indebtedness evidenced by the coupons. So, also, before maturity of the bonds, their holder could still have sued upon the matured coupons as an independent indebtedness, and not as a mere accessory to a demand for a recovery of the face of the bonds. No good reason,d the case at bar in which there is coupled with the demand to recover upon the coupons a demand for judgment upon the bonds. The confusion of thought, to which we alluded, in the case of Brown v. Webster, 156 U. S. 328 [39:440], is also involved in the decision below, that is, the failure to distinguish between a principal and accessory to any other demand, but was in itself principal and primary. " ( 119 ) FROM the above discussion, it is clear that the negotiability of the coupons and the transfer by deliver and endorsement and the post dated cheques are independently negotiable by the holder and the fact that the holder is the owner thereof cannot be disputed. " ( 119 ) FROM the above discussion, it is clear that the negotiability of the coupons and the transfer by deliver and endorsement and the post dated cheques are independently negotiable by the holder and the fact that the holder is the owner thereof cannot be disputed. ( 120 ) THE statement of law in American jurisprudence is also to the same effect. In paragraph 56 Volume 12 American Jurisprudence IInd Editiion, it is stated:- "interest coupons. Interest coupons from private corporate bonds and public bonds, in the form in which they are generally drawn, are negotiable separately from the bond itself. It is not necessary that the holder of interest coupons own the bonds from which they are detached for the coupons to be negotiable. To be negotiable the coupons must contain all the necessary elements of negotiability and so, for example, if they are not payable to order or bearer or do not contain other equivalent words, they are not negotiable. Moreover, to be negotiable the coupons must be so upon their face without reference to any other paper. But the fact that they are declared to be for interest on bonds specified by their numbers does not destroy their negotiability when separated from the bonds, or impair the title of one purchasing from another without production of the bonds. On the other hand, interest coupons not negotiable in form are not negotiable instruments when separated from the bonds, although the latter are themselves negotiable, and the purchaser of these detached instruments takes them subject to all defects in title. Generally, until negotiated or used in some way, coupons serve no independent purpose, and while they are in the hands of the holder they remain mere incidents of the bonds and have no greater or other force or effect than the stipulation for the payment of interest contained in the bonds. However, it has been held that when the interest evidenced by a coupon has become due and payable, the demand based upon the promise contained in it is no longer a mere incident of the principal debt represented by the bond but itself becomes a principal obligation. " . However, it has been held that when the interest evidenced by a coupon has become due and payable, the demand based upon the promise contained in it is no longer a mere incident of the principal debt represented by the bond but itself becomes a principal obligation. " . ( 121 ) REFERRING to the transfer by way of delivery, it is stated in paragraph 58 of the 12 American Jurisprudence IInd Edition: "transfer by delivery Delivery effects negotiation of a negotiable public bond or coupon, or private corporate bond or coupon, payable to bearer. Delivery will also effect a negotiation of a negotiable public bond or coupon, or private corporate bond or coupon, payable to a certain person or bearer. Negotiable bonds are sometimes made payable to a designated person or his order and in such case are negotiated by indorsement and delivery. It has been held that non-negotiable city bonds, even though payable to bearer, are not transferable merely by delivery; title thereto can be derived only through the indorsement of the person from whom the consideration moved to the maker when issued. Similarly, registered bonds are not transferable merely by delivery and have been held to be transferable only by regular assignment on books of the obligor. " ( 122 ) IN Volume 11 Corpus Juris Secundum IInd Edition the statement of law is found in paragraph 65. The same reads as under:- "interest coupons attached to negotiable bonds, when payable to order or to bearer at a time and place stated, are negotiable promissory notes, subject to the rules governing negotiable instruments, and when detached from the bond possess all the attributes of negotiable paper. Such interest coupons attached to bonds, even though they contain no provision that they are subject to separate negotiable; but until detached and separately negotiated they serve no independent purpose. On detachment, such coupons may be negotiated separately by simple delivery, provided they are payable to order or to bearer; and this rule applies after the bond itself has been paid and satisfied as well as before. Coupons once detached and negotiated cease to be mere incidents of the bond and become independent claims, unless they refer to the bonds for their terms and conditions. Coupons once detached and negotiated cease to be mere incidents of the bond and become independent claims, unless they refer to the bonds for their terms and conditions. The mere fact that coupons are declared to be for interest on bonds specified by their numbers does not destroy their negotiability when separated from the bond, nor impair the title of one purchasing from another without production of the bond. " ( 123 ) DEALING with the right of action, it is stated in paragraph 100 of Volume 11 Corpus Juris Secundum IInd Edition: "a negotiable coupon being governed by the rules pertaining to commercial paper in general may support a separate and independent action, and, although several coupons may be due at the time of the recovery on one, such recovery will not bar a suit on the others. Where coupons are so drawn and executed that they may be separated from the bond and negotiated, an action may be maintained thereon by the owner without producing the bonds; nor is it necessary that he should own the bonds from which they were detached. " ( 124 ) I may now refer to the transactions between the Bank and the respondents 2 and 3. ( 125 ) ON the 17/3/1992, the respondents 2 and 3 wrote to the Bank, which has already been extracted, stating that they were offering the bonds and one interest warrant for sale. On the 17/4/1992, the Bank wrote to the second respondent informing: "please refer to my telephonic discussion with Mr. Sanjeev Malik of your office as per which we are selling you today 9% NHPC Tax-Free Bonds, (Intt date 31/3 and 30/9), Face Value Rs. 9,06,34,000. 00 today for Rs. 6,40,05,892. 00 on an Ex-Interest basis. " ( 126 ) THE Bank had clearly stated that the bonds had been sold on ex-interest basis. The word `ex interest', according to Mr. V. N. Koura, the learned senior counsel for the Bank, would mean without interest. The learned senior counsel, Mr. V. N. Koura, referred to the meaning given the legal dictionary and the same is as under:- Ex-interest: In the language of stock exchanges, a bond or other interest-bearing security is said to be sold "ex-interest" when the seller reserves to himself the interest already accrued and payable (if any) or the interest accruing up to the next interest day. V. N. Koura, referred to the meaning given the legal dictionary and the same is as under:- Ex-interest: In the language of stock exchanges, a bond or other interest-bearing security is said to be sold "ex-interest" when the seller reserves to himself the interest already accrued and payable (if any) or the interest accruing up to the next interest day. " ( 127 ) THEREFORE, the Bank cannot now claim the money payable under the post dated cheques. The learned senior counsel, Mr. V. N. Koura, also explained the position relating to the meaning of `cum-dividend' and `ex-dividend'. The meanings given in the legal dictionary of `cum-dividend' and `ex-dividend' are as under:- "cum Dividend: Means that when a share of stock is sold after a dividend is declared, the buyer has the right to the dividend, lit with dividend. See also Dividend (Cumulative dividend) Ex dividend: A synonym for "without dividend. " The buyer of a stock selling ex-dividend does not receive the recently declared dividend. Said of a stock at the time when the declared dividend becomes the property of the person who owned the stock on the record date. The payment date follows the ex-dividend date. When stock is sold ex-dividend, the seller, not the buyer, has the right to the next dividend which has been declared but not paid. " ( 128 ) THE learned senior counsel for the Bank, Mr. V. N. Koura, referred to para 58 of the Volume 11 Corpus Juris Secundum IInd Edition and submitted that the right to interest would depend upon the proper construction of the bond itself. The same reads as under:- "the question of whether an award of interest may be made in an action on a bond is, in so far as the right is based on contract, determined by the proper construction of the bond itself, and interest coupons must be considered when construing a bond. In determining the liability on interest coupons attached to a bond, however, the bond, and not the coupons, controls the rights of the parties, since interest coupons in the hands of bondholders are mere incidents thereto, and have no greater effect than a stipulation in the bonds for the payment of interest. " ( 129 ) THE learned senior counsel for the Bank, Mr. V. N. Koura, referred to paragraph 59 of the Corpus Juris Secundum IInd Edition, Vol. " ( 129 ) THE learned senior counsel for the Bank, Mr. V. N. Koura, referred to paragraph 59 of the Corpus Juris Secundum IInd Edition, Vol. 11, wherein it is stated:- "unless irrevocable, a bond may be canceled or rescinded by the parties. Except where the character of a bond is such as to be irrevocable, a bond may be canceled, rescinded, or revoked, following which action the bond is extinguished to all intents and purposes. A bond will be annulled by the cancellation of a contract which forms a part of the bond, unless the latter is excepted from the operation thereof. A mere agreement between the parties to cancel a bond without an actual cancellation, or a mere unexecuted testamentary direction for the destruction of the bond, will not have this effect; nor will a notice, not in conformity with the requirements of a provision therefor in the bond, terminate the obligatio. A claim of release from a bond due to a promise by the obligee to look only to the land securing the bond for payment thereof, which land is already mortgaged to the obligee, is not enforceable because of the absence of consideration therefore. " ( 130 ) IN paragraph 65 of the Corpus Juris Secundum Vol. 11, it is stated:- "it has been held, however, that although a statute providing for the registration of bonds does not affect the negotiability of the coupons, it does not authorise the detachment of all coupons on bonds due some years in the future and give such coupons a separate status as negotiable instruments. " ( 131 ) THE statement of law does not represent the accurate position in law in the light of the judgments of the Supreme Court of the United States. The learned senior counsel for the Bank, Mr. V. N. Koura, referred to another part of the same paragraph, wherein it is stated:- "where coupons are subject to conditions or reservations in the bond or mortgage securing the same, affecting the time of payment, and not within the control of the holders, the coupons are deprived of the character of negotiable instruments, but where the reservation relates merely to procedure under the mortgage and does not prevent the bondholders from enforcing their general remedies at law for the collection of the obligation, the negotiability of the coupon is not affected. A provision in the coupons or mortgage securing the payment of the bonds that the coupons will be paid only on their presentation and surrender does not change their negotiable character. " ( 132 ) THE position in the instant case is entirely different and by its own conduct, the Bank itself had accepted the position. Therefore, the reliance on the above passage, which would depend upon so many other factors, would not, in any way, in my view, affect the rights of holders of interest warrants. ( 133 ) THE learned senior counsel for the Bank, Mr. V. N. Koura, referred to yet another part in the same paragraph. The same reads as under:- "in the absence of negotiable words, or language from which negotiability can be inferred, a bond coupon is not negotiable, in the absence of a statutory provision to the effect, even though the bond from which it has been severed itself contains negotiable words. " ( 134 ) THE statement of law is not relevant in the present case in view of the terms of the contract between respondents 2 and 3 and the NHPC Ltd. , as could be seen from the terms and conditions of the bonds. The learned senior counsel for the Bank, Mr. V. N. Koura, also referred to paragraph 71 of the Corpus Juris Secundum Vol. 11, which reads as under:- "since interest coupons, if detached, are treated as negotiable instruments if they meet the requirements thereof, the rights and liabilities of the parties to such coupons are governed accordingly. If interest coupons are negotiable in form and cut from the bonds they may be treated as negotiable securities, as already discussed in para 65, and, accordingly, presentment, protest, and notice to hold an indorser may be required. However, the rule is altogether different with regard to coupons allowed to remain attached to the bond, the coupons are mere incidents of the debt as long as they remain attached to the bond, and the same act which fixes the liability of the indorser for the debt equally fixes his liability for the interest, the payment of which is expressly stipulated for in the bond. " ( 135 ) I am unable to appreciate the submission that this passage is of any assistance to the Court in deciding the point. " ( 135 ) I am unable to appreciate the submission that this passage is of any assistance to the Court in deciding the point. ( 136 ) IN the petition under Section 111 of the 1956, Act before the Company Law Board, the claim made by the Bank has now to be noticed. In paragraph 6. (e) of the petition it is stated: "for the convenience of the holders of the said bonds, certain cheques, called interest warrants, which enabled collection of the interest due on said bonds on due dates were also issued and delivered to the first holders aforesaid of the said bonds, Mrs. Pramod Gupta and Mr. Sanjay Gupta (respondents Nos. 2 and 3 respectively ). The said cheques/interest warrants were not intended to have any independent existence, and were intended on the transfer of said bonds to be endorsed by the holder to the extent not already encashed, and delivered to the purchaser to enable the purchaser to collect the interest due on the said bonds. " ( 137 ) IT is asserted that there is a covenant in the transaction itself for the delivery of interest warrants. In paragraph 6. (f) it is asserted that how the Bank omitted to take delivery of the interest warrants/post dated cheques. It is stated in paragraph 6. (g): "in contravention of the said covenant and condition aforesaid of the said Bond Certificate, on the purchase aforesaid of the said bonds by the petitioner Bank, the said Mrs. Pramod Gupta and Mr. Sanjay Gupta (respondent Nos. 2 and 3 respectively) delivered to the petitioner Bank, the said Bond Certificate signed/endorsed by them as transferors, together only with one cheque/interest warrant for the collection of the interest due on the said bonds upto March 31, 1992. They, however, omitted to deliver the cheques/interest warrants enabling the collection of interest on the said bonds due thereafter. " ( 138 ) THE Bank admitted that it transferred to Fairgrowth Financial Services Limited the bonds and the one interest warrant. It is stated in paragraph 6. They, however, omitted to deliver the cheques/interest warrants enabling the collection of interest on the said bonds due thereafter. " ( 138 ) THE Bank admitted that it transferred to Fairgrowth Financial Services Limited the bonds and the one interest warrant. It is stated in paragraph 6. (h) of the petition under Section 111 of the 1956 Act: "the petitioner in turn transferred the said bonds to the respondents No. 4, Fairgrowth Financial Services Ltd. , for valuable consideration on or about March 18, 1992 by delivering to the respondent No. 4 the said Bond Certificate endorsed by respondents No. 2 and 3 together with the said interest/warrant cheque entitling the holder to receive the interest becoming due on the said bonds on March 31, 1992. " ( 139 ) IF the case of the Bank could be accepted in law, the Bank should have stated that it purchased bonds and all the interest warrants from respondents 2 and 3 and it retained all the interest warrants and transferred only one interest warrant. That is not the case. What was purchased by the Bank was only the bonds and one interest warrant. The Bank had with-held the material facts and it had chosen to aver in paragraph 6. (i) that: "the respondent No. 4 thereafter transferred the said bonds to the respondent No. 5, Fairgrowth Investments Limited by delivering the said Bond Certificate endorsed by the respondent Nos. 2 and 3 together with the said interest warrant. The respondent No. 5, Fairgrowth Investments Limited entered its name as transferee of the said bonds on the reverse of the said Bond Certificate and got the said bonds registered in its favour in the records of the respondent No. 1 Corporation and on the reverse of the said bonds. " ( 140 ) IN paragraph 6. (j) of the petition under Section 111 of the 1956 Act, it is stated: "thereafter the respondent No. 5, Fairgrowth Investments Limited transferred the said bonds to the respondent No. 4, Fairgrowth Financial Services Limited by signing/endorsing on the reverse of the said Bond Certificate endorsed as aforesaid to the respondent No. 4. " . ( 41 ) IN dealing with this in reply to para 17 the Bank had stated:"that the contents of para 21 are wrong and denied. " . ( 41 ) IN dealing with this in reply to para 17 the Bank had stated:"that the contents of para 21 are wrong and denied. It is submitted that Shri Singla was served with Tabular Proforma in respect of irregularities committed by him in respect of loan account of M/s. Balwant Steel Rolling Mills to which he had submitted his reply. Further, he was served with Tabular Proforma in respect irregularities/lapses in the loan accounts of Shri N. D. Awasthi and Mrs. Vijay Awasthi. However, despite having been granted sufficient opportunity he did not submit any reply to the said Tabular Proforma. In any case it is submitted that under the provisions of the Danda Regulations it is not at all essential that an officer employee should be given Tabular Proforma before service of charge sheet upon him for his alleged acts of misconduct under the Conduct Regulations. " ( 42 ) ANNEXURE P-15 is the document, a tabular statement which should have been given to the petitioner in this case. According to the learned Senior Counsel for the petitioner, such a document was never furnished to the petitioner and not was produced at the time of inquiry which has been filed as Annexure P-15 are completely fabricated by the Bank and the petitioner had not made anything in writing in that tabular statement. Column I is the observations by the Bank. Column 2 is a column Delinquent Officer. Column 3 the views and recommendations by the Bank. According to the learned Senior Counsel for the petitioner this tabular statement was prepared by the Bank just for the purpose of inquiry and instead of denial by the petitioner no material had been produced by the Bank to show that it was ever sent to the petitioner for remarks and the petitioner made any such remarks in the tabular report. The presenting officer at the time of inquiry stated "are you prove it on the basis of the record produced in the inquiry in due course, further though technically there is no comments of the CO appearing on tabular proforma Annexure D-104 but it was based on the reply/letter submitted by the EO. I will refer this document at appropriate stage" ( 43 ) THIS statement of the Presenting Officer is extracted by the petitioner in his rejoinder. I will refer this document at appropriate stage" ( 43 ) THIS statement of the Presenting Officer is extracted by the petitioner in his rejoinder. Therefore the present officer admitted that the tabular statement was not sent to the petitioner for signatures. The learned Senior Counsel for the petitioner referred to para 17 of the counter affidavit of the Bank wherein it submitted "that Sh. Singla was served with Tabular Proforma in respect of irregularities committed by him in respect of loan account of M/s. Balwant Steel Rolling Mills to which he had submitted his reply. Further he was served with Tabular Proforma in respect of irregularities lapses in the loan accounts of Shri N. D. Awasthi and Mrs. Vijay Awasthi". ( 44 ) THEREFORE, a wrong statement had been made in the counter affidavit about furnishing of Tabular Proforma as required under the Regulation. I am clearly of the view that there is absolutely no evidence against the petitioner of anyone of the charges levelled against him. This is a clear case of no evidence and the order passed by the Disciplinary Authority, order passed by the Appellate Authority are perverse and no person properly instructed in law would take the view that has been taken by those Authorities. ( 45 ) THE learned Senior Counsel for the petitioner submitted that having regard to the charges and the way in which the inquiry had been conducted the punishment imposed is excessive. The learned Senior Counsel referred to Annexures P-1 to P-10 where the merits of the petitioner had been recognised and the certificate had been issued. The learned Senior Counsel submitted that the Bank had not lost anything and the value of the security given is ample and the money due could be recovered from the parties The learned Senior Counsel referred to the valuation certificate given by the Architects and Engineers (Regd.) Ludhiana wherein it is stated : It is certified that the valuation of the Industrial property situated at G. T. Road, Near Raja Vanaspati, 10642. 0 sq. yards belonging to M/s. Govind Iron Mills Pvt. Ltd. and M/s. Hariom Steel Traders is reasonably assessed in our considered opinion according to the present fair market value as Rs. 3,30,08,000. 00 only. 0 sq. yards belonging to M/s. Govind Iron Mills Pvt. Ltd. and M/s. Hariom Steel Traders is reasonably assessed in our considered opinion according to the present fair market value as Rs. 3,30,08,000. 00 only. ( 46 ) THE learned Senior Counsel submitted that the Disciplinary Authority and the Appellate Authority had acted unreasonable fashion in imposing punishment of removal which comes in mischief of the Article 14 of the Constitution of India. The learned Senior Counsel relied upon the judgment of the Supreme Court in Ex. Naik Sardar Singh v. Union of India and Ors. , AIR 1992 SC 41 ( 47 ) IN para 5 their Lordships of the Supreme Court had observed: In Council of Civil Service Union v. Minister for Civil Service, (1984)3 All ER 930a 950 Lord Diplock said :"judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropriety. This is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of 'proportionality' which is recognised in the administrative law of several of our fellow members of the European Economic Community. . . . "this principle was followed in Ranjit Thakur v. Union of India, (1987) 4 SCC 611 : ( AIR 1987 SC 2386 ), where this Court considered the question of doctrine of proportionality in the matter of awarding punishment under the Army Act and it was observed thus (at p. 2392 of AIR):"the question of the choice and quantum of punishment is within the jurisdiction and discretion of the Court-Martial. But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias. But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias. The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is the Court-Martial, if the decision of the Court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction. Irrationality and perversity are recognised grounds of judicial review. "in Bhagat Ram v. State of Himachal Pradesh. (1983) 2 SCC 442 : ( AIR 1983 SC 454 ), this Court held as under (at p. 460 of AIR):"it is equally true that the penalty imposed must be commensurate with the gravity of the misconduct, and that any penalty disproportionate to the gravity of the misconduct would be violative of Article 14 of the Constitution. " ( 48 ) THE learned Senior Counsel for the Bank Mr. A. K. Sikri referred to the judgments of the Supreme Court for the proposition that this Court cannot reappraise the evidence. The learned Senior Counsel referred to Union of India and Others v. Upendra Singh, (1994) 3 SCC 357 . The Supreme Court reaffirmed its view that judicial review is not directed against the decision but is confined to the decision making process. The learned Senior Counsel referred to Government of T. N. and Another v. A. Rajapandian, (1995) I SCC 216. In this case, the respondent before the Supreme Court was working as Sub Inspector Police in the State of Tamilnadu. He was promoted to the post of Inspector in the year 1977. Disciplinary proceedings were initiated against him and ultimately he was dismissed from service on 7. 2. 1994. He challenged the order before the High Court of Madras by filing a writ petition was transferred to the Tamilnadu Administrative Tribunal after its formation. The Tamilnadu Administrative Tribunal set aside the order of dismissal on the ground that the evidence was not sufficient to prove the charges against the Inspector. The Supreme Court held:"the Administrative Tribunal reached different conclusions from the Inquiring Authority on its own evaluation of the evidence. The Tribunal fell into patent error and acted wholly beyond its jurisdiction. The Tamilnadu Administrative Tribunal set aside the order of dismissal on the ground that the evidence was not sufficient to prove the charges against the Inspector. The Supreme Court held:"the Administrative Tribunal reached different conclusions from the Inquiring Authority on its own evaluation of the evidence. The Tribunal fell into patent error and acted wholly beyond its jurisdiction. "the Supreme Court had referred to Union of India v. Sardar Bahadur, (1972)4 SCC 618 and Union of India v. Parma Nanda, (1989) 2 SCC 177 . ( 49 ) THE learned Senior Counsel then referred to judgment in B. C. Chaturvedi v. Union of India and Others, (1995) 6 SCC 749 = JT 1995 (8) SC 65. The appellant before the Supreme Court was dismissed from service by order dated 29. 10. 1986. That order was challenged before the Central Administrative Tribunal. The Tribunal after appreciating the evidence upheld all the charges as having been proved but came to the conclusion that the order of dismissal was disproportionate to the office committed and modified the punishment into one compulsory retirement. The appellant challenged the findings given by the Tribunal and the Union of India filed an appeal before the Supreme Court convassing the power of the Tribunal to interfere with the punishment imposed by the Disciplinary Authority. In para 12, the Supreme Court held:"judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the Court. When an inquiry is conducted on charges of misconduct by a public servant, the Court/tribunal is concerned to determine whether the inquiry was held by a competent officer or whether rules of natural justice are complied with. Whether the findings or conclusions are based on some evidence, the Authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the Authority accepts that evidence and conclusion receives support therefrom, the Disciplinary Authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/tribunal in its power of judicial review does not act as Appellate Authority to reappreciate the evidence and to arrive at its own independent findings on the evidence. The Court/tribunal may interfere where the Authority held the proceedings against the delinquent officer in a manner inconsistent with the rules of, natural justice or in violation of statutory rules prescribing the mode of inquiry or where- the conclusion or finding reached by the Disciplinary Authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached, the Court/tribunal may interfere with the conclusion or the finding, and mould the relief so as to make it appropriate to the facts of each case. " ( 50 ) IN paragraph 18 the Supreme Court posited:"a review of the above legal position would establish that the Disciplinary Authority, and on appeal the Appellate Authority, being fact-finding Authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the Disciplinary Authority or the Appellate Authority shecks the conscience of the High Court/tribunal, it would appropriately mould the relief, either directing the Disciplinary/appellate Authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof. "hansaria, J. concurring with the view taken by K. Ramaswamy, J. held :"i am in respectful agreement with all the conclusions reached by learned brother Ramaswamy, J. This concurring note is to express my view on two facets of the case. "hansaria, J. concurring with the view taken by K. Ramaswamy, J. held :"i am in respectful agreement with all the conclusions reached by learned brother Ramaswamy, J. This concurring note is to express my view on two facets of the case. The first of these relates to the power of the High Court to do "complete justice", which power has been invoked in some cases by this Court to alter the punishment/penalty where the one awarded has been regarded as disproportionate, but denied to the High Courts. No doubt. Article 142 of the Constitution has specifically conferred the power of doing complete justice on this Court, to achieve which result it may pass such decree or order as deemed necessary; it would be wrong to think that other courts are not to do complete justice between the parties. If the power of modification of punishment/penalty were to be available to this Court only under Article 142, a very large percentage of litigants would be denied this small relief merely because they are not in a position to approach this Court, which may, inter alia, be because of the poverty of the person concerned. It may be remembered that the framers of the Constitution permitted the High Courts to even strike down a parliamentary enactment, on such a case being made out, and we have hesitated to concede the power of even substituting a punishment/penalty, on such a case being made out. What a difference! May it be pointed out that Service Tribunals too, set up with the aid of Article 323-A have the power of striking down a legislative act. The aforesaid has, therefore, to be: voided and I have no doubt that a High Court would be within its jurisdiction to modify the punishment/penalty by moulding the relief, which power it undoubtedly has, in view of a long line of decisions of this Court, to which reference is not deemed necessary, as the position is well- settled in law. It may, however, be stated that this power of moulding relief in cases of the present nature can be invoked by a High Court only when the punishment/penalty awarded shocks the judicial conscience. "hansaria, J. further held :"what has been stated above may be buttressed by putting the matter a little differently. The same is that in a case of a dismissal. "hansaria, J. further held :"what has been stated above may be buttressed by putting the matter a little differently. The same is that in a case of a dismissal. Article 21 gets attracted, and, in view of the interdependence of fundamental rights, which concept was first accepted in the case commonly known as Bank Nationalisation case (Rustom Cavasjee Cooper v. Union of India, (1970) I SCC 248, which thinking was extended to cases attracting Article 21 in Maneka Gandhi v. Union of India, (1978) 1 SCC 248 = AIR 1978 SC 597 , the punishment/penalty awarded has to be reasonable; and if it be unreasonable. Article 14 would be violated. That Article 14 gets attracted in a case of disproportionate punishment was the view of this Court in Bhagat Ram v. State of H. P. , (AIR 1983 S. C. 454) also. Now if Article 14 were to be violated, it cannot be doubted that a High Court can take care of the same by substituting, in appropriate cases, a punishment deemed reasonable by it. "hansaria, J eventually observed :"i had expressed my unhappiness qua the first facet of the case, as Chief Justice of the Orissa High Court in paras 20 and 21 of Krishna Chandra Pallai v. Union of India ( AIR 1992 Ori 261 (FB), by asking why the power of doing complete justice has been denied to the High Courts. I feel happy that I have been able to state, as a Judge of the Apex Court, that the High Courts too are to do complete justice. This is also the result of what has been held in the leading judgment. " ( 51 ) THE learned Senior Counsel Mr. A. K. Sikri referred to State of Tamil Nadu and Am. v. S. Subramaniam, JT 1996 (2) S. C. 114. The respondent before the Supreme Court was removed from service. He challenged the order before the State Administrative Tribunal. The Tribunal appreciating the evidence came to the conclusion that the evidence adduced was not cogent and the Department had not proved the charges satisfactorily and on that ground set aside the order of removal. That was taken up before the Supreme Court. The Supreme Court held:"when the conclusion reached by the authority is based on evidence. The Tribunal appreciating the evidence came to the conclusion that the evidence adduced was not cogent and the Department had not proved the charges satisfactorily and on that ground set aside the order of removal. That was taken up before the Supreme Court. The Supreme Court held:"when the conclusion reached by the authority is based on evidence. Tribunal is devoid of power to re-appreciate the evidence and would come to its own conclusion on the proof of the charge. The only consideration the Court/tribunal has in its judicial review is to consider whether the conclusion is based on evidence on record and supports the finding or whether the conclusion is based on no evidence. This is consistent view of this Court vide B. C. Chaturvedi v. Union of India [ JT 1995 (8) SC 65 ], State of Tamil Nadu v. T. V. Venugopalan [ (1994) 6 SCC 302 para 7], Union of India v Upendra Singh [ (1994) 3 SCC 357 at para 6], Government of Tamil Nadu and Anr. v. A. Rajapandian [ (1995) 1 SCC 216 para 4] and Union of India v. B. S. Chaturvedi [ (1995) 6 SCC 749 at 759-7601. In view of the settled legal position, the Tribunal has committed serious error of law in appreciation of the evidence and in coming to its own conclusion that the charge had not been proved. Thus we hold that the view of the Tribunal is ex fade illegal. The order is accordingly set aside. " ( 52 ) THE learned Senior Counsel Mr. A. K. Sikri referred to State of U. P. and Ors. v. Nand Kishore Shukla and Anr. , JT 1996 (3) S. C. 551. The respondent before the Supreme Court challenged the order of his removal from service Tribunal unsuccessfully. But the order of removal was set aside by the High Court in a writ petition filed by the employee. The Supreme Court held that the order of removal did not cast any stigma on the employee to disable him to seek any appointment elsewhere and held that the High Court was wholly wrong in setting aside the order of removal. ( 53 ) THE learned Senior Counsel Mr. A. K. Sikri referred to Rai Bareli Kshetriya Gramin Bank v. Bhola Nath Singh and Ors. , JT 1997 (3) S. C. 717. The respondent before the Supreme Court was dismissed from service. ( 53 ) THE learned Senior Counsel Mr. A. K. Sikri referred to Rai Bareli Kshetriya Gramin Bank v. Bhola Nath Singh and Ors. , JT 1997 (3) S. C. 717. The respondent before the Supreme Court was dismissed from service. He filed a writ petition in the Allahabad High Court. The learned Single Judge found that the charges had not been proved and set aside the order of punishment of dismissal from service. The Supreme Court noticed the facts in the following terms:"having regard to the respective contentions, the only question that arises for consideration is : whether the conclusion reached by the High Court is correct in law? It is not in dispute that the procedural steps under the disciplinary rules, required by the appellant, have been followed. After the enquiry was concluded and report was submitted, the Disciplinary Authority had given him a show-cause notice to the proposed punishment and the respondent also submitted his explanation. After consideration of the report and the reply, the punishment of dismissal was imposed by the Disciplinary Authority against which an appeal was filed. At this stage, he made an application for summoning the witnesses afresh. That application was dismissed by the Appellate Authority. This order also was allowed to become final. The appeal was dismissed by the Board. "dealing with the position of law, the Supreme Court held:"under these circumstances, the question arises: whether the High Court would be correct in law to appreciate the evidence and the manner in which the evidence as examined and to record a finding in that behalf ? The judicial review is not akin to adjudication of the case on merits as an Appellate Authority. The High Court, in the proceedings under Article 226 does not act as an Appellate Authority but exercises within the limits of judicial review to correct errors of law or procedural errors leading to manifest injustice or violation of principles of national justice. In this case, no such errors were pointed out nor any finding in that behalf was recorded by the High Court. On the other hand, the High Court examined the evidence as if it is a Court of first appeal and eversed the finding of fact recorded by the Enquiry Officer and accepted by Disciplinary Authority. In this case, no such errors were pointed out nor any finding in that behalf was recorded by the High Court. On the other hand, the High Court examined the evidence as if it is a Court of first appeal and eversed the finding of fact recorded by the Enquiry Officer and accepted by Disciplinary Authority. Under these circumstances, the question of examining the evidence, as was done by the High Court, as a first appellate court, is wholly illegal and cannot be sustained. "the ratio descendi discernible from the above decisions of the Supreme Court can not at all be disputed. What is pointed out by the Constitution Bench of the Supreme Court in Union of India v. H. C. Goel, AIR 1964 SC 364 , has to be borne in mind? The Supreme Court held :"it may be that the technical rules which govern criminal trials in courts may not necessarily apply to disciplinary proceedings, but nevertheless, the principle that in punishing the guilty scrupulous care must be taken to see that the innocent are not punished, applies as much to regular criminal trials as to disciplinary enquiries held under the statutory rules. " ( 54 ) THE learned Senior Counsel Mr. Sikri in his written arguments had given Annexures A and B highlighting the charges and the findings by the Inquiry Officer and the Appellate Authority and also broad features of the case of the petitioner in the writ petition and the reply given by the Bank. Annexure-A is as follows: Shri Y. K. SINGLA - W. P. No. 3940/97 BEFORE HON'ble HIGH COURT ____________________________________________________________________________ Charge Sheet dt. Findings of the order of the 2. 2. 93/4. 11. 93 enquiry officer appellate Authority ____________________________________________________________________________ 1. Charge No. 1-B The charge stands the unit was not Diesel Generator Set proved to the extent having requisite of 300 KW was proposed that the unit was power load. to be utilised as proposed to be utilised (Pg. 283 of Paper- an alternate arrangement lised as an alternate book) ment of power supply arrangement but the electric power of power supply available with the but the electric party was just 98. 76kw power available against the actual was just 98. 76kw requirement of 400 KW against the actual (Pg. l63 of Paper-Book) requirement of 400 KW. (Pg. 165 of Paper - Book) 2. 76kw power available against the actual was just 98. 76kw requirement of 400 KW against the actual (Pg. l63 of Paper-Book) requirement of 400 KW. (Pg. 165 of Paper - Book) 2. Charge No. l (e) The applicants themselves page 284 of Paper- failed to take mentioned in book. cognizance of the the application that fact that the they have experience Directors of the in trading of products Company were not proposed to be manufactured experienced in which implies the line. that they did not have (Pg. 169 of Paper requisite experience in the manufacturing of the proposed product. (Pg. 169-170 of the Paper-Book ). 3. Charge No. 1 (f) Shri Singla did not page 284 of did not ensure ensure availability paper-Book. availability of of the requisite requisite margin margin with the with the party. party. The party has NWC (Pg. 175 of the of 1. 27 lacs as per Paper Book ). provisional balance sheet as on 5. 3. 90 & 3. 67 lacs as on 31. 3. 90 against required NWC of 13. 47 lacs. (Pg. 170 of Paper- Book ). Annexure B reads as under : Shri Y. K. SINGLA - W. P. No. 3940/97 before HON'ble HIGH COURT ____________________________________________________________________________ Contents of Petition Reply ____________________________________________________________________________ 1. Bank has made admission this relates to insurance betore DIl & CGC that there against bad-debts. The purpose is no irregularity committed is entirely different by its officials. i. e. of claiming the money that has become bad. If at the time of filling the form some officials of the Bank has written something, it is of no consequence and does not mean that no irregularity has been committed by an official. The charge against shri Singla has been proved by departmental enquiry on the basis of evidence produced there which alone is material. Even if any such certificate was given it was by the Chief Manager, Civil lines Ludhiana Branch on 10. 3. 93 whereas the chargesheet sheet was issued to Mr. Singla by General Manager on 2. 2. 93 when Shri Singla was posted at Delhi. Further in the instant case, even the Dl & cgc rejected the claim of the Bank attributing it to the negligence of the official of the Bank. 2. 3. 93 whereas the chargesheet sheet was issued to Mr. Singla by General Manager on 2. 2. 93 when Shri Singla was posted at Delhi. Further in the instant case, even the Dl & cgc rejected the claim of the Bank attributing it to the negligence of the official of the Bank. 2. No hearing was given the statute does not provide before passing of orders for providing hearing by the appellate Authority before passing order by the (1986 SC 1173 to appellate Authority. Otherwise, 1182, para 24 ). Even the principles of though Shri Singla has natural Justice can be specifically requested for excluded by specific provisions the same. in the rules. (Relied on Tulsi Ram Patel 1985 SC 1416 ). 3. There is no loss in the even if there is profit in the Account. account, the charge-sheeted officer is liable for the irregularities. Even if there is no loss in the account is immaterial. (Relied on 1996 CLR (1) 991 ). 4. The Disciplinary Authority where the Disciplinary Authority has not passed any specific agrees with the findings order on the point that the of the enquiry officer, generator was used for producing it is not necessary for it 300 KW of Electricity to pass any specific order. when the power sanctioned further, the court should was for 100 KW and there was not re-appreciate the evidence demand notice for 400 KW. and pass orders. Moreover, Because of Gulf War there was this aspect has been shortage of Diesel; hence discussed by the Appellate difficulties in running the authority on page 8 of its unit. order dated 26. 6. 97 (page 283 of the Paper-Book ). relied on 1994 (1) LLJ 808 jt 1996 (2) SC 114. " this would not in any way advance the case of the Bank and I have dealt with these aspects above. ( 55 ) THE learned Senior Counsel for the petitioner submitted that the punishment imposed is out of proportionate to the offence said to have been made out and the Disciplinary Authority had not taken into clean the perfect service record of the petitioner for 38 years. ( 55 ) THE learned Senior Counsel for the petitioner submitted that the punishment imposed is out of proportionate to the offence said to have been made out and the Disciplinary Authority had not taken into clean the perfect service record of the petitioner for 38 years. ( 56 ) AS I have come to the conclusion that no offence has been made out against the petitioner, it is not necessary to go into the quantum of punishment ( 57 ) THE order passed by the Disciplinary Authority dated and the order passed by the Appellate Authority are quashed. The petitioner shall be entitled to all consequential benefits. The writ petition stands allowed. There shall be no order as to costs.