Let it be known to all, if it is not already known, that civil Courts of our country are well-competent, and in fact better equipped, to deal with all the provisions of the Companies Act; it would be a misconstruction of Section 2(1)(d) and Section 3(1) of the Companies Act to hold that the civil Court’s door would be available only for those cases for which the Companies Act does not specifically mandate the Company Court to entertain an application. The basis of the above proposition is that there is no expression in Sections 2(1)(d) and 3(1) of the Companies Act by which the jurisdiction of the civil Court has been taken away. And, that is why, this Court on some occasion, but not on regular basis, suggests a petitioner under Section 43 or Section 233 of the Companies Act to approach the civil Court where serious complicated question of facts are involved necessitating recording of testimonies of a number of witnesses. This Court very seldom adopts the aforesaid path only in the rarest of rare cases on the ground of its overwhelmingly over-burdenness of cases; not on the ground that this Court is powerless/incompetent to record oral evidence. ...Engr. Md. Anwar Hossen Vs. Chittagong Club Ltd & ors., (Civil), 15 SCOB [2021] HCD 60 ....View Full Judgment

It is undisputed that the writ petitioner Company and respondent No.3 started business jointly in 1979 under the name and style of Rangs Rental Services Ltd. and with the passage of time their busi­ness flourished and several other com­panies were also established with the Trade Marks "Rangs". Subsequently as dispute arose between them over the business matter, a Memorandum of Un­derstanding was signed on 14.04.1992 between the parties and as per terms of Memorandum of Understanding, the companies were divided into 2(two) groups namely, 'Ka' and 'Kha" group and pursuant to the Memorandum of Understanding dated 14.04.1992 two arbitrators were appointed and the arbi­trators made an unanimous 'Award' on 16.09.1992 making the division of the companies and the said 'Award' was made Rule of the Court and decreed ac­cordingly by the Subordinate Judge(now Joint District Judge),3rd Court, Dhaka in title Suit No.273 of 1992. Accordingly Rangs Rental Serv­ices Ltd. fell in the share of the writ pe­titioner. Abdur Roiif Chowdhury vs. Rangs Medicine Ltd (M. M. RuhulAmin J) (Civil) 9 ADC 979

No Director or Directors are or shall be allowed to form any company with the word "Rangs" either as a prefix or as a suffix except that owners/shareholders of Rangs Limited shall be entitled to float a company under the name and style of "Rangs" etc. Only owners/shareholders of a company are entitled to float a company under the name that company, no Director or Directors are or allowed to the same.The Registrar of Joint Stock Companies Firms can ask any company to change the name and object of that company as the name of the company has similarly and resemblance with the name and object of another company which was earlier incorporated.
Abdur Rouf Chowdhury-Vs.-Rangs Medicine Ltd. & others. 4 ALR (AD) 2014 (2) 209

It is also found that attempts at the EGM held on 20.11.2013 to introduce changes in Article 14, thereby, facilitating the induction of the Respondent No.3 as a director, were equally unwarranted in law and irregular in form. Notably further, this EGM was held upon notice on 10.11.2013 to adopt a special resolution, thereby, falling far short of the statutory twenty-one days’ notice requirement mandated under Section 87(2) of the Act. That in turn exposes the Company to violation of Section 20 of the Act that authorizes alteration of the Articles by special resolution but only by necessary adherence to the notice period requirement of Section 87(2). ...Shamsur Rahman Vs. Zhang Yu & ors, (Civil), 4 SCOB [2015] HCD 12
Relationship between the Articles and the law:
The Articles, as a negotiated constituent document of the Company, in turn must correspond to a higher authority which is the law itself. Indeed, it is this indivisible relationship between the Articles and the law and the fact of such Articles being the outcome of careful negotiation by free will and for business expediency executed by subscribers of the memorandum that clothes the Articles with an essential binding nature. ...Shamsur Rahman Vs. Zhang Yu & ors, (Civil), 4 SCOB [2015] HCD 12 ....View Full Judgment

Income Tax Ordinance, 1984
Section 44(4)(b), 2(20)(a), 2(65), 16
Income Tax Act, 1922
Section 60(1)-(a)(3)
Constitution of Bangladesh
Articles 15, 17, 83
Private Universities Act, 1992/ 2010
Societies Registration Act, 1860
Companies Act, 1994
Section 28
The Trust Act, 1882
Private university is a juristic person— The observation of the High Court Division that tax on private universities will increase the education cost of the students is not correct, since income tax is a direct tax payable only when a private university earns income; In case of loss no tax is payable. —However, the writ-petitioner-respondent private universities may not be required paying tax if it enjoys tax exemption under any lawful arrangement. .....Ministry of Finance, Bangladesh =VS= North South University, (Civil), 2024(1) [16 LM (AD) 63] ....View Full Judgment

Discretion as to registration of any transfer of shares implies just and proper consideration of the proposal in the facts and circumstances of the case. Giasuddin Ahmed vs Green Delta Insurance Company Ltd and another 56 DLR (AD) 31.

Section 38 of the Companies Act gives the Court a wide discretion to scrutinize any fraud, error or undue influence or misrepresentation in the matter of transfer of any share and grant relief commensurating with the appropriate possible relief. Ahmed lmpex (Private) Ltd & others vs Moqbul Ahmed and others 56 DLR (AD) 92.

The Court has a wide power to scrutinize any fraud and other matters in transferring shares.
The provision of section 38 of the Companies Act gives the Court a wide discretion to scrutinize any fraud, error or undue influence or misrepresentation in the matter of transfer of any share and grant relief commensurating with the appropriate possible relief contemplated under the said section. Aggrieved person have the right to apply to the Court for rectification of the register of members where the name of a person is fraudulently or without sufficient cause entered in or omitted from that register.
Ahmed Impex (Private) Ltd. -Vs.- Moqbul Ahmed. 3 ALR (2014)(1)(AD) 158

The Companies Act 1994
Section 43 r/w
The Evidence Act
Section 73
We note from the impugned judgement that the learned Judge of the Company Bench compared the signature of the petitioner (respondent No.1 herein) appearing on Form-117 dated 8.10.2007 with those of his signatures appearing on other documents on record, including the Memorandum of Association. This is well within the jurisdiction of the learned Judge under the provisions of section 73 of the Evidence Act.
In such circumstances, we cannot but hold that the claim of the present respondent No.1 is established and that the Company Bench of the High Court Division came to a correct finding in allowing the petition for rectification of shares. …Reza Bin Rahman =VS= A.T.G. Mortaza, (Civil), 2019 (2) [7 LM (AD) 8] ....View Full Judgment

Rectification of the Register of Member– Proprietary right vested to any member cannot be extinguished or ceased at the instances of an employee like a Secretary of the Club without any approval of the Board of Directors and without giving an opportunity of hearing of the concerned member to make payment of the outstanding amount as guaranteed in Articles 27 and 52 of the Articles of Association. The learned Company Judge of the High Court Division has clearly and specifically failed to appreciate the legal consequences in failing to comply the mandatory provisions of Articles 27 and 52 of the Article of Association wherein it has been contemplated as regard the disciplinary provisions in the Articles of Association. ...Monir Hossain Emon(Md.) =VS= All Community Club Ltd., (Civil), 2021(1) [10 LM (AD) 155] ....View Full Judgment

In this case, if the meaning of the word ‘omitted’ is taken as ‘suspended’, then, it shall create a chaos and confusion for the persons who would approach this Court for striking down/deleting the name of a person from the Register of the Members of the company in that the respondent would have the scope to make out a case for suspending the name instead of omitting it, which this Court cannot do and, in fact, has never made any order in that direction making the operation, application and use of the provisions of Section 44 of the Companies Act nugatory. This Court, in the aforesaid type of scenario, either has rejected the petitioner’s application for omitting a person’s name from the Members’ Register or has ordered the company for rectification of the Members’ Register by omitting the name-in-question from the Members’ Register. So, it is apparent that the facts and circumstances of the petitioner’s case do not attract the provisions of Section 43 of the Companies Act. ...Engr. Md. Anwar Hossen Vs. Chittagong Club Ltd & ors., (Civil), 15 SCOB [2021] HCD 60
Court cannot be adventurous for expansions of its jurisdiction going beyond the scope of the law:
Since this Court now-a-days shows its inclination to receive and dispose of a case wherein a complaint about dereliction/violation of any provisions of law is made, in spite of absence of an enabling provision permitting a petitioner to approach this Court, the present case could have been entertained by this Court had there been an apparent non-compliance/violation of any provision of the Companies Act. But the present case merely involves adjudication of a grievance as to non-compliance with the provisions of Memorandum of Association and Articles of Association of the club; no provision of the Companies Act directly is resorted to for disposal of the petitioner’s case. It is for information of all the concerned that this Court is always in favour of remedying a petitioner ignoring the technical issues of a case even in a roundabout manner; but the Court cannot be adventurous for expansions of its jurisdiction going beyond the scope of the law. Therefore, when this Court finds that it has not been empowered to try a case/suit/proceedings, this Court becomes helpless to extend its hands to be petitioner. ...Engr. Md. Anwar Hossen Vs. Chittagong Club Ltd & ors., (Civil), 15 SCOB [2021] HCD 60 ....View Full Judgment

Without holding and completion of 9th AGM by electing its Directors of the Board of Directors should not be de­clared to be illegally done and irh-practible to call the 10th AGM of respondent No. 1 bank, namely, Export-Import Bank of Bangladesh Limited vide "Price Sensitive Information" pub­lished in the Daily "Samakal" on 24.04.2009 (Annexure-'H') and Notice of the AGM dated 15.07.2009 (Annexure-'C-2'). Md. Mazakat Ali Harun vs. Export Import Bank (Md. Abdul Wah­hab Miah J)(Civil) 9 ADC 779.

In terms of section 81(2) of the Companies Act the High Court Division while directing the calling of a general meeting of the company may give such ancillary or consequential direction as the Court thinks expedient in relation to the calling, holding and conducting of the meeting and in terms of Section 85(3) the High Court Division while giving an order of calling the meeting may also give such ancillary or consequential direction as it thinks expedient. Bangladesh Bank Vs. Sk. Abul Hossain & Ors 16 BLT (AD)110

Power of High Court Division to give direction for holding Annual General Meeting (AGM.)—
The High Court Division in exercise of its power under section 81(2) and 85(3) of The Companies Act, 1994 can direct holding of AGM and in so directing can also give ancillary and consequential direction as it may seem fit. Bangladesh Bank Vs. Sk. Abul Hossain and others 12 MLR (2007) (AD) 292.

A company is a juristic person comprised of its members/share holders, governed by its own Article of Association through the Board of Directors selected/appointed by the Members for taking decisions in the formal meeting in accordance with the Article of Association as well as in accordance with law. So the members/shareholders of a company, whose combined effort, expressed through the Board of Directors is the key stone in running the company. It is the shareholder who can take any decision in respect of management of company through different types of meetings. The appellant company being one of the oldest company of the country, incorporated on 18.11.1959 and being run smoothly since then upon holding all its meetings in accordance with law. Thus it is held that the supreme power being in the hands of the shareholders they can take any decision in respect of running of the company in its meetings and when upon holding the 33rd annual general meeting and all subsequent meetings thereafter, the company took several resolutions approved by all subsequent meetings and the copies of those resolutions upto 38th meeting having already been submitted with the Registrar of Joint Stock Companies now no shareholder can have any grievance against any of such resolutions. .....Mirpur Ceramic Works Limited =VS= Yousuf Ariff Tabani, (Civil), 2018 (2) [5 LM (AD) 77] ....View Full Judgment

If for any reason it is impracticable to call, hold and conduct a meeting on the happening of any circumstance the Court being satisfied to that effect to call a meeting in the manner such a meeting is to be called, could pass an order for holding the meetings to be conducted by a neutral Chairman even in the absence of an application.
United Commercial Bank Ltd vs Jahangir Alam Khan and others 56 DLR (AD) 76.

If for any reason it is impracticable to call, hold and conduct a meeting on the happening of any. circumstance the Court being satisfied to that effect to call a meeting in the manner such a meeting is to be called, could pass an order for holding the meetings to be conducted by .a neutral Chairman even in the absence of an application. United Commercial Bank Ltd vs Jahangir Alam Khan and others 56 DLR (AD) 76.

Meetings to be conducted by a neutral Chairman.
We are of the view that under the circumstances, if for any reason it is impracticable to call, hold and conduct a meeting on the happing of any circumstances the Court being satisfied to that effect to call a meeting in the manner such a meeting is to be called, could pass an order for holding the meetings to be conducted by a neutral Chairman even in the absence of an application under section 85(3) of the Companies Act invoking the provision of section 85(2) of the Companies Act in the facts and circumstances of the case. United Commercial Bank Ltd Vs. Jahangir Alam Khan & Ors 12BLT(AD)213

Power of the Company Bench of the High Court Division to give directions in ancillary matters—
Law is well settled that the Company Bench of the High Court Division can not interfere with the internal management of the company. In the instant case the Company Bench directed in certain ancillary matters such as the fixing of record date, preparation of fresh balance sheet and fixing the date of AGM. The apex court having found nothing wrong affirmed the impugned order and dismissed the appeals. Reazaul Karim (Mohd.) and others Vs. ABM Khalecjiizzaman and others 15 MLR (2010) (AD) 369.

Companies Act, 1994
Section 85(3) r/w
Companies Rule, 2009
Rule 8 —Section 85 is very much clear that the provisions provided in this section are with respect to all meetings, namely, annual general meeting, board meeting and other meeting. The learned Counsel for the respondent-leave petitioners has mainly argued that the High Court Division committed wrong in giving this direction for holding board meetings under section 85(3) of the Companies Act, 1994. The learned Counsel has contained that sub-section 3 of section 85 of the Companies Act is not applicable in respect of board meetings of a company, but it is applicable for annual general meeting only of a company. But Appellate Division does not find this argument of the learned Counsel acceptable at all. Section 85 is regarding provisions as to meetings and votes. The title of this section 85 is “Provision as to meeting and votes”.
The Appellate Division also held that this very section 85 is very much clear that the provisions provided in this section are with respect to all meetings, namely, annual general meeting, board meeting and other meeting. So, this argument of the learned counsel is not acceptable at all that sub-section 3 of section 85 is applicable in respect of board meetings only of a company.
Md. Rafiqul Islam and others -Vs.- Mostafa Jamal Mohiuddin and others. (Civil) 10 ALR (AD) 300-302

Winding up of the Company– It transpires from the materials on record that the Managing Director and some other share-holders were not present in the meeting where decision was taken for winding up of the Company and in the company matter also they were not made parties. It is true that the Chairman of the Company may file an application for winding up of the Company but, here in this case admittedly the Company is a private limited Company owned by six persons. Out of them three persons filed the application for winding up whereas the rest three were not even made parties to the Company Matter. The Managing Director of the Company was made a party but the name of Managing Director was not at all mentioned in the application for winding up of the Company. Appellate Division is further of the view that other share-holders of the Company should be made parties to the company matter to avoid any miscarriage of justice. Accordingly, the impugned judgment and order dated 12-4-2018 as well as order dated 11-12-2018 passed by the High Court Division in Company Matter No.11 of 2018 is hereby set-aside. The High Court Division is directed to dispose of the matter within 3(three) months. .....KV Industries Limited =VS= Md Karim Uddin Bharasha Chairman, (Civil), 2022(1) [12 LM (AD) 348] ....View Full Judgment

Under the garb of recommendation Board of Directors cannot reject the candidature of any person for the election to the office of the director of the Bank.
The word “recommended” means power of the Board to point out defects, if any, in the candidature of a person for the office of direct. tor for consideration in the Annual General Meeting to avoid complications in such meeting and not the power to reject any candidature on the ground of defect real or fanciful, Per Kazi Ebadul Hoque, J.]
ASF Rahman and another Vs A M Agha Yousuf and others, 20 BLD (AD) 205.

Appellants representing majority shares having contested the written objection filed by the respondent No.1 challenging election of Mr A Matin Khan before the Company Judge have locus standi to file the appeal. ASF Rahman and another vs AM Agha Yousuf and others 52 DLR (AD) 127.

Under the garb of recommendation Board of Directors cannot reject the candidature of any person for the election to the office of the director of the Bank. ASF Rahman and another vs AM Agha Yousuf and others 52 DLR (AD) 127.

Temporary Injunction
The courts are generally reluctant to interfere with the decisions taken at company meetings unless there is almost a manifest breach of the Articles or the statute, because it is the company and not the Court which is responsible for its management. [Para- 121
Moharnmad Mohibul Ahsan(Shawart) & Ors. Vs. Ittefaq Group of Publications Ltd. 7 BLT (AD)-14

It is now a well-defined principle that the Courts are generally reluctant to interfere with the decisions taken at Company meetings unless there is almost a manifest breach of Articles or the statutes, because it is the Company and not the court which is responsible for its management. The High Court Division was well aware of the legal position and having found that there was an apparent breach of section 95 of the Act in holding the meeting on 7.1.1995 granted temporary injunction. The said order of injunction was found to be inappropriate but the same cannot be a routine matter to be followed under all circumstances:
Mohammad Mohibul Ahsan (Shawan), Director, Ittefaq Group of Publications Ltd. Vs Ittefaq Group of Publications Ltd, represented by Mainul Hossain, Executive Director-I and others, 18 BLD (AD) 207.

Dispute relating to matters as contemplated under section 95 being of civil nature are to be decided by the civil court—
Section 2(g) of the Companies Act, 1994 confers jurisdiction upon the civil court to decide disputes under section 95 and as such the Company Court of the x High Court Division can not decide such dispute. Abdul Mohit and others Vs. Social Investment Bank Ltd. and others 13 MLR (2008) (AD) 35.

Companies Act [XVIII of 1994]
Sections 95 and 233 read with
Company Rules, 2009
Rule 8
The High Court Division is of the opinion that reading section 233 with section 95 of the Act and rule 8 of the company Rules, 2009 this court has jurisdiction to decide about the validity of a meeting held without complying with the provisions of section 95 and to cancel any resolution taken in such a meeting under section 233 as well as for ends of justice. Mr. Mohd. Abdul Wadud -Vs.- The Heaven Homes Private Limited represented by its Chairman Mr. Kohd. Abdus Salam and others. (Spl.Original) 2019 ALR (HCD) Online 382 ....View Full Judgment

It is now a well-defined principle that the Courts are generally reluctant to interfere with the decisions taken at company meetings unless there is almost a manifest breach of the Articles or the Statute, because it is the company and not the Court which is responsible for its management. The High Court Division was well aware of the legal position and having found, among others, that there was apparent breach of section 95 of the Companies Act, 1994 in holding the meeting on 7-1-95 granted the temporary injunction. It may be that on an earlier occasion, an order of injunction was found to inappropriate but the same cannot be a routine matter to be followed under all circumstances. .....Mohibul Ahsan (Md) =VS= Ittefaq Group of Publication Ltd. , (Civil), 2022(1) [12 LM (AD) 611] ....View Full Judgment

The High Court Division correctly held that the Board meetings which could not be called to order due to lack of quorum were 'meetings' in the eye of law and the petitioner's deliberate absence without leave must be treated as 'absence' in those meetings and will attract the mischief of section 108(1)(f) of the Act and his office would fall vacant by operation of law, for which no resolution need be taken, save to record the fact of vacation of the office of the absentee in the minutes and to submit a Form XII to the RJSC and, thereafter, that director will not be entitled to receive any notice of Board meeting or to attend the meeting of the Board. The High Court Division further held that although the impugned Board resolution dated 16.02.2017 has become infructuous because of the order of stay and the subsequent EGM decision dated 17.05.2017, however, the conduct of the petitioner in deliberately absenting himself from three consecutive Board meetings, so that quorum could not be formed and the meetings could not be called to order, amounts to absence without leave in the said Board meetings, within the meaning and for the purpose of section 108 (1)(f) of the Act and the impugned Board resolution dated 16.02.2017 was valid. Such conduct of the petitioner also amounts to breach of his statutory duties and it was clearly prejudicial to the interest of the company inasmuch as a director, by resorting to any tactics or measures whatsoever, cannot lead the company to a situation in which it will become impracticable for the company to call or hold its Board meeting or any other meetings permitted or required by law. We do not find any illegality or infirmity in the impugned judgement and order of the High Court Division. ...Mobarak Hossain(Md.) =VS= SBS Cables Limited, (Civil), 2019 (1) [6 LM (AD) 194] ....View Full Judgment

Companies Act [XVIII of 1994]
Section 115 and 350 read with
Evidence Act [I of 1872]
Section 73
In the light of the expert report with regard to the thumb impression appearing on the document of transfer of shares and considering the fact that the document prima facie appears to have been forged, the Appellate Division directs Mohammad Mehdi Hasan, Deputy Registrar, Supreme Court of Bangladesh to lodge a complaint, before a Magistrate of the first class having jurisdiction, against the appellants, namely Reza Bin Rahman and Abdul Wahab Azad in terms of section 195 (1)(c) of the Code of Criminal Procedure for committing an offence punishable under sections 471/475/476 of the Penal Code.
The Appellate Division is of the view that since a thumb impression of A.T.G. Mortaza (respondent No. 1 herein) appears on the disputed transfer form, the point in issue would be more conclusively decided if the thumb impression appearing on Form-117 is compared with that of A.T.G. Mortaza taken in court in the presence of the learned Advocates of both the sides. It is noted that the present respondent No. 1 had filed an application in Court on 05.02.2017 with a prayer for production of the original Form 117, by which it is alleged that the present respondent No. 1 transferred his 2,27,167 shares in Synthetic Yarn Ltd., and thereafter to obtain a report from the CID of Police upon examination and comparison of the signature and thumb impression of the present respondent No. 1 with those appearing on the instrument of transfer (Form 117). The Appellate Division directed the C.I.D Dhaka to compare the specimen thumb impressions of A.T.G. Mortaza taken in Court with the one by which he is alleged to have transferred his shares to the present appellant No. 1 and to submit report within one month. A report from the C.I.D. Dhaka under Memo No. ফরেনসিক ল্যাবরেটরী (ঢাকা) ফিংগারপ্রিন্ট ব্যুরো/এফপি ০২-০৪৪৭-২০১৮/২৮২২/২০১৮ তারিখঃ ১৫/১০/২০১৮ খ্রিঃ shows that the thumb impressions of A.T.G. Mortaza taken in court do not tally with the thumb impression appearing on the share trans¬fer Form-117 dated 08.10.2007 by which he is alleged to have transferred his shares to Reza Bin Rahman. The finding is as follows: “মতামত গৃহীত দলিলপত্রে থাকা আংগুলের ছাপগুলোকে উল্লেখিত প্রয়োজনীয় বৈজ্ঞানিক যন্ত্রপাতির সাহায্যে তুলনামূলক পরীক্ষা করে, পরীক্ষালব্ধ ফলাফলের ভিত্তিতে নিম্নরূপ মতামত প্রদান করা হলো।FORM-117, INSTRUMENT OF TRANS¬FER OF SHARES. NAME OF THE COMPANY-SYNTHETIC YARN LTD এর TRANSFER NO. 03 সংক্রান্তে প্রদত্ত ক চিহ্নিত আঙ্গুলের ছাপটি, গত ইং ০৭/১০/২০১৮ তারিখ হলুদ বর্ণের কার্ট্রিজ কাগজে নেয়া এটিজি মরতুজার ডান ও বাম হাতের বৃদ্ধাঙ্গুলের নমুনা ছাপপত্রে থাকা ছাপগুলোর সাথে মিল নেই।ʺ In such circumstances, the Appellate Division can¬not but hold that the claim of the present respondent No. 1 is established and that the Company Bench of the High Court Division came to a correct finding in allowing the petition for rectification of shares. In view of the above, the Appellate Division finds no merit in this appeal which is accordingly dismissed. Reza Bin Rahman and others -Vs.- A.T.G. Mortaza and others (Civil) 2019 ALR (AD) Online 101 ....View Full Judgment

The Board of Directors of the Company increased the share capital and allotted new shares among the share-holders excepting the petitioners, who are also the existing share-holders of the company, in violation of section 155 read with Regulation 113 of the 1st Schedule of the Companies Act, 1994. .....Shah Mustafa Ragib Shamsad =VS= IBCS-Primax Software (BD) Ltd., (Civil), 2022(1) [12 LM (AD) 247] ....View Full Judgment

Upon hearing both sides, by the im­pugned judgment, the High Court Division made the Rule absolute upon finding that BCIC is selling urea fertil­izer at Tk. 10,000/- per metric ton and showing in the balance sheet sale price of Tk.8,000/- per metric ton; that the balance sheet, therefore, does not reflect the true and correct picture of the profit and/or of loss of the company and section 185(2) of the Companies Act is being violated at the time of preparation of the balance sheet; that if the BCIC prepares an untrue and unfair balance sheet of ZFCL, the workers would be deprived of getting their due share from the profit of the workers participatory fund. BCIC vs. Zia Fertilizer Company Limited (Muhammad Imman li J)(Civil) 8 ADC 567

Nowhere in section 193 of the Act any power has been given to the Registrar to resort to a procedure of hearing of the parties on the application of a person be it a Director or the Managing Director to investigate as to whether he/she was removed lawfully or in violation of section 106 of the Act as the Director or the Managing Director of the company or for that matter to re-instate him/her in his/her said position in the company. A statutory functionary cannot assume a jurisdiction which is not vested in it by the statute. Ms. Ok-Kyang Oh vs. Tea Hung Packaging (BD) Ltd (Md. Abdul Wahhab Miah J) (Civil) 10 ADC 500.

Now, we are to see as to whether the Registrar had any authority to entertain the application and assume the jurisdic­tion to conduct a hearing on the same within the meaning of sub-section (6) of section 193 of the Act or whether any burden was explicitly put on the Regis­trar to afford the company concerned a right to be heard if the affairs of the company were not being managed in ac­cordance with the provisions of the Act and whether the Registrar was author­ized to investigate as to whether the ap­pellant was removed from the office of the Director lawfully or in contravention of section 106 of the Act as formulated in point Nos. 1 and 2 of the leave grant­ing order; to decide the above points we feel it necessary to consider section 193 of the Act in its entirety which reads as follows. Ms. Ok-Kyung Oh vs. Tea Hung Packaging (BD) (Md. Abdul Wahhah Miah J)(Civil) 9 ADC 472.

In exercising power under section 193 of the Act in certain matters the Registrar is required to perform quasi-judicial function and is authorized to make some investigation as may be found neces­sary for discharging his duties including the right of hearing before imposing fine to negligent or defaulting companies, also by engaging section 397, read with section 393 of the Act, to lodge complaints in appropriate Court against those who make false state­ments through documents required by or for the purpose of any provision of the Act, but such quasi-judicial power in no way can be stretched to conduct a hearing as to the managing directorship of the Company which is the domain only of a competent Court.
Ok-Kyung Oh vs Tae-Hung Packaging (BD) Ltd 17 BLC (AD) 1.

The Appellate Division held that in exercising power under section 193 of the Act in certain matters the Registrar is required to perform quasi-judicial function and is authorized to make some investigation as may be found necessary for discharging his duties including the right of hearing before imposing fine to negligent or defaulting companies, also by engaging section 397 read with section 393 of the Act, to lodge complaints in appropriate Court against those who make false statements through documents required by or for the purpose of any provision of the Act, but such quasi-judicial power in no way can be stretched to conduct a hearing as to the managing directorship of the Company which is the domain only of a competent Court, so the Registrar acted beyond his statutory power in issuing the impugned notice vide annexure-'K' to the writ petition asking the writ petitioners to participate in the hearing on the re-instatement of the appellant as Managing Director of the Company.
Ms. Ok-Kyung Oh, Dhaka. -Vs.-TeaHung Packaging (BD) Ltd and others. 4 ALR (AD) 2014 (2) 13

The provisions of appointing auditors in the Annual General Meeting is for prospective auditing of a Company when the minority share–holders apply under section 233 of the Companies Act, the Court has inherent power to make alternative arrangements for appointment of Auditors for past years, if no auditing has taken place.
Faruk (Md) vs Abdul Hamid and others 51 DLR (AD) 48

It was stated that following the signing of the said shareholders' agreement af­fairs of the company was run by respon­dent No.4 as majority shareholder and was also holding the post of Managing Director of the company. H.B.M. Iqbal vs. Md. Shirajul Islam (Md. Abdul Matin J) (Civil) 6 ADC 565

The High Court Division, after hearing the applications analogously, by com­mon judgment, allowed the applications and cancelled the respective debentures as being void holding, amongst others, that (a) A member has an interest in maintaining the value of his share and he may bring himself within section 233 if he can show that the value of is share­holding is seriously diminished or jeop­ardized by reason of conduct of those having defact control of the company which is unfair to the member con­cerned. A member has an interest in competent management of a company, its profitability, dividend policy which will have effect on his financial interest as a shareholder and on the value of his shares. People's Republic vs. Dr. A.B.M. Safdar (Md. Tafazzul Islam J) (Civil) 9 ADC 901.

A minority share holder can petition the Court for relief if there has been fundamental breach of the rules and where the majority endeavoring directly or indirectly to appropriate to themselves money, property or advantages which belonged to the company.
Syed Al Nesar Ahmed, MD, United Food Complex Ltd vs Nafisa Choudhury and others 5 DLR (AD) 83.

A remedy under section 233 can be given only if the directors have acted in breach of duty or if the company has breached any of its articles or any relevant agreement. Nahar Shipping Lines Ltd and anr vs Homera Ahmed and others 56 DLR (AD) 36.

In the instant case the respondent No.l, who was a director as well as a joint signatory for operating the bank accounts of the company, also had a legitimate expectation to remain as such and moreover, his investment in the Company has been struck off because of his removal from directorship of the company and no opportunity at all was given to the respondent No.l to remove his capital upon reasonable terms and, as under section 233, the Court in a fit case may pass appropriate order and accordingly, the High Court Division gave direction upon the appellant Nos. 2 and 3 to purchase the shares of the respondent No.l.
HBS Association (Pvt) Ltd vs Professor Shahabuddin Khaled Chowdhury 11 BLC (AD) 67.

The High Court Division has also considered the submission, as advanced by the learned Advocate for the respondent that, section 233 of the Act protects the interest quo member. But, the question whether such interest shall refer only to the direct interest of a member or to ultimate interest to see that the company is being managed properly and as per law was neither agitated nor decided in the aforesaid decisions referred to by the learned advocate for the respondent. A Member’s interest, in my considered opinion, is not confined only to his individual interest. But shall extend to his ultimate interest as well and in his inter-est to ensure that the company is being managed and run properly, profitably and in compliance with the provisions of law. Once the complaining share holder is able to show mismanagement of the affairs of the company, resulted either from non-compliance of law or otherwise, a petition under section 233 of the Act is maintainable and the court may pass appropriate order to undo the wrong resulting from non-compliance of the provisions of the Act or of the Articles of Association. Otherwise, the purport and the legislative intent in incorporating section 233, in the Companies Act, will be frustrated. The sprit of section 233 is to be considered to ensure corporate governments as well and to require fairness in managing the affairs of the company by the Board of Directors or majority share-holders. Mr. Mohd. Abdul Wadud -Vs.- The Heaven Homes Private Limited represented by its Chairman Mr. Kohd. Abdus Salam and others. (Spl.Original) 2019 ALR (HCD) Online 382 ....View Full Judgment

To protect the interest of the minority shareholders of the company–– It appears that the High Court Division was satisfied that there was total mismanagement of the affairs of the company which were being conduct¬ed in a manner prejudicial to the interest of the respondents and by the impugned order sought to protect the interest of the minority shareholders of the company and other respondents were directed to transfer the disputed share in terms of Article 5 of the shareholders agreement. ––Appellate Division finds no illegality in the order calling for interference by this court and accordingly the leave petition is dis¬missed. .....H.B.M. Iqbal =VS= Md. Shirajul Islam, (Civil), 2023(1) [14 LM (AD) 494] ....View Full Judgment

Under section 233 of the Companies Act, 1994 for protection of the interest of the minority share-holders– The learned advocate for the leave petitioners expressed that his clients, however, are not interested to continue with their membership in the company and, as such, the other share-holders of the company may buy off their shares at the rate of the value of each share as was prevailing prior to 15-9-2017. The learned advocate for the respondents, under such circumstances, having received instructions from his clients submits that the respondents are ready to accept the offer.
Thus the respondents are directed to appoint `Huda Vasi Chowdhury & Company (Chartered Accountants Firm) as directed by the High Court Division for assessing the value of the shares of the respondent No. 1 company, held by the petitioners as on the day prior to 15-9-2017, and do the needful within 60 (sixty) days from the date of receipt of this order and then pay the present petitioners the value of their respective shares as per assessment and get the share register rectified in accordance with law. The respondents are further directed to comply with all other directions of the High Court Division, as stated above, in accordance with law. The entire process is to be completed within 6(six) months. .....Shah Mustafa Ragib Shamsad =VS= IBCS-Primax Software (BD) Ltd. , (Civil), 2022(1) [12 LM (AD) 247] ....View Full Judgment

The protection of the interest of the minority share holder– The court held that the present legislation i.e. the Companies Act 1994 has given wider power to the court under section 233 for the protection of the interest of the minority share holder. A minority share holder can petition the Court for relief if his or their interest are unfairly prejudiced by the manner in which their company’s affairs are conducted and if the members do not follow the procedure prescribed by articles and if there has been fundamental breach of the rules and where the majority endeavouring directly or indirectly to appropriate to themselves money, property or advantages which belonged to the company or in which the other shareholders are entitled to participate.
Having gone through the judgment of the High Court Division Appellate Division does not find any illegality in its findings that the petitioner is minority shareholder, that the application was a proper application under section 233 of the Companies Act and thus the directions given by the High Court Division were in accordance with law and the Companies Act, 1994 and calls for no interference. .....Syed Al Nesar Ahmed =VS= Nafisa Choudhury, (Civil), 2022(1) [12 LM (AD) 573] ....View Full Judgment

The provisions of appointing auditors in the annual general meeting is for prospective auditing of a company. When the minority shareholders apply under section 233 of the Companies Act, the Court has inherent power to make alternative arrangements for appointment of Auditors for past years if no auditing has taken place. .....Faruk (Md) =VS= Abdul Hamid, (Civil), 2022(1) [12 LM (AD) 582] ....View Full Judgment

The contention that decree obtained by the respondent No. l was not capable to execution and the process of realisation of the debt has become barred by law and 33 such order of winding up and liquidation of the company was not legally maintainable is of no substance since no such contention was taken before the High Court Division nor any particulars has been placed before the Appellate Division to substantiate the aforesaid contention.
Dockyard and Engineers Ltd vs Bangladesh Shilpa Rin Sangstha and others 10 BLC (AD) 131.

The High Court Division was very much conscious of the broad fact of huge loan liabilities of the Company and was on the view that the same has to be put at halt and also considering the provision of Section 241(v)(vi) of the Companies Act deemed it just and equitable that the Company should be ordered to be wound up. Accordingly, allowed the application for winding up of the Company and appointed official receiver as the liquidator and passed other incidental orders.
Prime Finance and Investment Ltd vs Delwar H Khan 15 BLC (AD) 170.

On the face of such statement made in the petition of complaint it cannot be said at this stage before recording evidence of the parties that the proceeding is an abuse of the process of the court or is, therefore, liable to be quashed under section 561A of the Code of Criminal Procedure. In such premises the High Court Division passed the impugned judgment and order and discharged the rule. Mahabubul Goni vs The State (Amirul Kabir Chowdhury J) (Criminal) 3 ADC 660

Income Tax Ordinance, 1984
Sections 16 CCC, 16, 17, 20, 28(1), 29, 35, 37, 38, 42, 83(2) & sec. 2 (34), (46), (65)
The Constitution of Bangladesh, 1972
Articles 26, 27, 31, 40 and 42 r/w
Companies Act, 1994
Finance Act
Section 16 CCC of the Ordinance, 1984 is enacted for betterment of the people of the country and to prevent tax evasion–– The legislature suddenly incorporated Section 16 CCC in the Ordinance, 1984 through the Finance Act, 2011, imposing liability of paying minimum tax @ 0.50% on gross receipts for every company irrespective of its profit or loss in an assessment year from all sources; Previously similar provision was also incorporated in the Ordinance, 1984 as Section 16 CC through the Finance Act, 2006 which was subsequently omitted by Finance Act, 2008; The provision of newly inserted Section 16 CCC being inconsistent and contrary to the provisions of Sections 16, 17, 20, 28(1), 29, 35, 37, 38, 42, 83(2) and definition clauses (34), (46), (65) of Section 2 of the Ordinance, 1984 as such is in conflict and contradictory with the aim, spirit, purposes, object and basic concept of the Ordinance, 1984; The fundamental rights of the petitioners guaranteed under Articles 26, 27, 31, 40 and 42 of the Constitution have been grossly violated and thus impugned Section 16 CCC of the Ordinance, 1984 is liable to be declared violative of the fundamental rights enshrined in the Constitution and also relevant provisions of the Ordinance, 1984.
The court must, therefore, act within their judicial permissible limitation to uphold the Rule of Law and harness their power in public interest and if the intent and general operation of the impugned tax legislation is to adjust the burden with a fair and reasonable degree of equality, Constitutional requirement is satisfied and in this regard a taxation law enacted by the Parliament in accordance with law is not amenable to judicial review. It has been consistently held by this Division that in matters of policy decision of the Government the court requires restraint. ––Appellate Division is of the view that impugned Section 16 CCC is enacted for betterment of the people of the country and to prevent tax evasion and the enactment is not arbitrary, unreasonable, unfair as well as not violative of any of the provisions of the Ordinance, 1984 or of the Constitution. .....S. Alam Beg Manufacturing Mills Ltd. =VS= Ministry of Finance, BD, (Civil), 2023(1) [14 LM (AD) 344] ....View Full Judgment