Abdul Malek (Md) Vs. Bangladesh and others


Supreme Court

High Court Division

(Special Original Jurisdiction)


Abdul Malek (Md)……………………Petitioner


Bangladesh and others……………Respondents


Md. Awlad Ali J

Zinat Ara J

Judgment : April 12, 2006.

Lawyers involved:

Md. Idris Khan, Advocate—For the Petitioner.

MA Samad, Advocate—For Respondent Nos. 2, 3, 4 and 5.

Writ Petition No. 1558 of 1997.


Zinat Ara J.- In this Rule, the petitioner calls in question the legality of the order bearing Memo No. JFCI/BIPINON-27/FMC (Sherpur) 146 dated 13-2­1997 passed by the General Manager (Commercial) on behalf of the Managing Director, Jamuna Ferti­liser Company Limited, Jamalpur (Annexure-D) cancelling dealership agreement of the petitioner with forfeiture of the security money.

2. Facts relevant for disposal of this Rule, in brief, are as under:

3. The petitioner, a reputed businessman, was selected for appointment as a dealer of fertiliser by District Selection Committee and the Deputy Com­missioner, Sherpur by his letter dated 24-12-1995 asked the petitioner to deposit Taka 2(two) lac as security money in favour of the Bangladesh Chemical Industries Corporations (hereinafter referred to as BCIC). The petitioner deposited Taka 2(two) lac as security money in favour of BCIC Thereafter he was appointed as a dealer for selling the fertiliser of Jamuna Fertiliser Company Ltd. (shortly, the company) by an agreement dated 10-1­1996 signed between the petitioner and the General Manager of the Company. Originally, the agreement for dealership was for a period of one year with effect from 10-1-1996 and subsequently, the said dealership was extended up to 30-4-1997. Clause 15 of the said agreement provides as follows:

“??????? ??????? ?????? ??????? ??, ????? ?????? ????? ??? ??????? ??????? ????? ???? ?????? ???? ???? ?? ??????? ??? ???? ???? ???????? ????? ????? ????? ?????? ????? ????? ?????? ????? ????? ????? ?????? ??????? ????, ?????? ????? ??? ???? ????? ???? ??????? ???? ?????? ???????? ???? ????????? ???????”

4. The petitioner in compliance with the terms of the agreement, and the instructions recei­ved from time to time from the respondents had been carrying on his business satisfactorily and in terms of the agreement received allotment of 45 metric tons of fertiliser vide letter dated 23-11-1996 for the month of December, 1996. The petitioner deposited the value of entire 45 metric tons and after lifting of 45 metric tons of fertiliser sought permission of Thana Nirbahi Officer to distribute fertilizer and permission was accorded to distribute the fertilizer in accordance with the rules. On 8-1­-1997. Assistant Director, Local Government had gone to the godown of the petitioner for inspection but the petitioner was not present at that time. Father of the petitioner informed the Assistant Director that the total sale on that day was 317 bags and that some bags of the fertilizer sold on that day were still lying with them which would be delivered to the purchasers within a short time. But the said Assistant Director, without considering the above statement, seized the cash memos and stock register of the petitioner. The petitioner contracted with the Assistant Director and explained all the facts to him and requested him to give back the papers seized but without responding to his request the Assistant Director sent an inquiry report to the Deputy Com­missioner on 14-1-1997. Then the petitioner met the Deputy Commissioner and explained to him the real facts but the Deputy Commissioner without consi­dering his statement sent memo No. ??? ??? ????- ???/???/????-????/??/?? dated 15-1-1997 to respondent No. 2 BCIC and the company for taking punitive action against the petitioner. On receiving that letter, the impugned order was passed by the company without issuing any show cause notice to the petitioner and thereby violating the established principle of natural justice. Hence this writ petition.

5. Respondent Nos. 2, 3, 4 and 5 have appeared and opposed the Rule by filing a joint affidavit-in-opposition denying the assertions made in the writ petition contending, inter alia, that as per the decision of the District Monitoring Committee dated 14-12-1996, the godown of eight dealers at Sadar Thana of Sherpur District were inspected on 8­1-1997 and on verification of the godown of the petitioner it was found that 167 bags of fertiliser was lying in the godown against the closing stock of 66 bags in the Register maintained by the petitioner and 101 bags thus found in excess of the stock. This had been done by the petitioner with a mala fide intention to sell the excess stock in the black market and thus to create fertilizer crisis in the area earmarked for the petitioner. An enquiry was held over this matter and the enquiry officer submitted a report dated 14-1­1997. The enquiry officer found the petitioner guilty for maintaining stock register with false entries with a view to sell fertiliser in the black market. On the basis of this enquiry report, Deputy Commissioner recommended punitive action against the petitioner by his letter dated 15-1-1997. There is a clear provision in Clause 15 of the agreement that if the petitioner violates any terms of the agreement, his dealership would be cancelled and security money would be forfeited. Since the petitioner violated the terms of the agreement, the impugned order was legally passed against him and the present Writ petition for violation of the terms of contract is not maintainable.

6. A supplementary affidavit has been filed on behalf of the petitioner stating that the dealership licence of the petitioner was issued under a statutory provision, namely, the Fertiliser (Control) Order, 1995 and in pursuance of the said Order, the activities of the Fertilizer dealers are controlled by the Government and, as such, the agreement of dealership is a statutory contract and natural justice calls for issuance of show cause notice before cancellation of the contract.

7. Mr. Md. Idris Khan, the learned Advocate appearing on behalf of the petitioner, submits that the security money was deposited by the petitioner in favour of BCIC and his appointment as dealer was recommended by the Deputy Commissioner, Sherpur and his dealership agreement is controlled by the Fertiliser (Control) Order, 1995 and, as such, his contract is a statuary contract and cancellation of such contract without a show cause notice is against the principle of natural justice. He further submits that since no show cause notice was given to the petitioner before passing the impugned order, the same is liable to be struck down. He lastly, by referring to an unreported decision dated 29-11­-1998 passed in Writ Petition No. 5280 of 1996 in the case of Khandker Shahidul Islam vs. Bangladesh and others, submits that under the similar facts and circumstances the contract of Jamuna Fertiliser Company with another person was found to be a statutory contract by a Division Bench of this Court and the Writ petition is thus maintainable.

8. Mr. Md. MA Samad, the learned Advocate appearing for respondent Nos. 2, 3, 4 and 5, con­tends that the writ petition is not maintainable, inasmuch as the contract of dealership between the petitioner and the Company is purely a contract between a company and the petitioner and the right alleged to have been violated or negated arises out of non-statutory contract which is not amenable to the writ jurisdiction. He further contends that according to Clause 15 of the contract, the company had a right to cancel the dealership and forfeit the security and no show cause notice was necessary for that purpose. He further contends that although no show cause notice is necessary but the Government issued show cause notice and after holding a proper enquiry the petitioner having been found guilty of violation of the terms of the contract another show cause notice was not necessary. Lastly, by referring to the decision reported in 39 DLR (AD) 85 in the case of Sharping Matshjibi Samabaya Samity Ltd. and others vs. Bangladesh and others and also to the decision reported in 57 DLR (AD) 31 in the case of Ananda Builders Ltd. vs. Bangladesh Inland Water Transport Authority and others, he strenuously argues that contract does not become a statutory contract simply because a public functionary entered into the contract, unless a statute stipulates terms which have been incorporated in the contract.

9. Admittedly, the Deputy Commissioner, Sherpur selected the petitioner for appointment as a dealer of the respondent No. 3 (vide Annexure F) and that the petitioner was directed to furnish Taka 2(two) lac as security money in favour of BCIC and the petitioner was appointed as a dealer of fertiliser by the respondent No. 3 Company and an agreement was signed between the parties on 10-1-1996 for a period of one year (vide Annexure-A) which subse­quently was extended up to 30-4-1997 by letter bearing No JFCL/Biponan 27/FMC/l dated 5-1­-1997 (vide Annexure-B). Admittedly, in the usual course of business the petitioner took delivery of his allotment of fertiliser for the month of December, 1996 and an inspection was held at the godown of the petitioner and it was found that some fertilizer shown to have been sold out in the register were found to be lying in the godown of the petitioner and an enquiry was held and the petitioner was found guilty and the Deputy Commissioner, Sherpur on the basis of the enquiry report dated 14-1-1997 submitted by the Assistant Director, Local Govern­ment requested BCIC and the Company by his letter dated 15-1-1997 to take immediate punitive action against the petitioner and on receiving the said letter from the Deputy Commissioner, Sherpur, the impug­ned order was passed cancelling the dealership of the petitioner with forfeiture of the security money. Admittedly, no show cause notice was issued to the petitioner by the Company before passing the impugned order.

10. The facts and circumstances of the reported cases referred to by the learned Advocate for the respondents and mentioned earlier are not similar and distinguishable, inasmuch as the dealership contract of fertiliser is controlled by the Government under the Fertiliser (Control) Order, 1995 and, as such, a contract is not an ordinary contract but a statutory contract.

11. It appears from the judgment dated 29-11-1998 passed in Writ Petition No. 5280 of 1996 (Annexure-J to the supplementary affidavit) that in the similar facts and circumstances it was held by a Division Bench of this court as follows:

“……. in the Fertiliser (Control) Order 1995 (Annexure-G) the production, sale and distribution of fertiliser is fully controlled by the Government in its sovereign capacity. There is, therefore, no doubt that the petitioner entered into a contract with the respondents for supplying fertiliser as a subsidiary of the corpo­ration and the Government authorised it to exercise Government power to deal with ferti­liser. As such, contract in this case is not an ordinary contract like supplying of chairs and the same was not entered into by the petitioner with the respondents in their trading capacity in discharge of an ordinary function of the Govern­ment. It was rather a contract arising out of statutory rules necessitating the performance of function of the State as a sovereign power. Thus, we are of the view that although the relief sought for arose out of a contract, this writ petition is maintainable….”

12. Mr. Samad admits that no appeal was pre­ferred against this judgment either by the Company or by BCIC.

13. The facts and circumstances of the present writ petition is similar and the view taken in that writ petition is also applicable in the instant writ petition.

14. In view of the above, it is found that the dealership agreement between the petitioner and the Company was, in fact, a statutory contract. So, the petitioner should have been given an opportunity of showing cause and to defend himself before cancellation of his agreement with forfeiture of the security money. It is true that the inquiry officer found some anomaly about the fertiliser sold and the fertiliser found in stock in the go down. The petitioner had no explanation for this anomaly. The respondents failed to show that the petitioner was given an opportunity by issuing any show cause notice to explain that anomaly. So, in the absence of show cause notice, the cancellation of the agreement was violative of natural justice and, as such, was not lawful.

15. However, it appears that at the time of issu­ance of the Rule, an interim order was passed staying the impugned order and the respondents were directed to allot and deliver to the petitioner regularly for the rest period of the agreement. Admittedly, the period of agreement has expired long before and the petitioner is no longer working as a dealer of fertiliser of the respondent No. 3. So, it is not necessary to declare the impugned order as a whole to be without lawful authority as the dealership agreement already expired. However, the impugned order bearing No. JFCL/BIPONON-27/TMC (Sherpur) 146 dated 13-2-1997 passed by the General Manager (Commercial) on behalf of the Managing Director of the Company, so far as it relates to the forfeiture of the security money, is declared to have been passed without lawful authority and the same is of no legal effect.

In the result, the Rule is made absolute. No costs.


Source : 59 DLR (2007) 284