Bangladesh Telecom (Pvt.) Ltd.
Vs.
Bangladesh T & T Board & ors.
Supreme Court
Appellate Division
(Civil)
Present:
Shahabuddin Ahmed CJ
M H Rahman J
A T M Afzal J
Mustafa Kamal J
Latifur Rahman J
Bangladesh Telecom (Pvt.) Ltd………………………………………………………………. Appellant
[In CA No. 73]
Bangladesh Telegraph and Telephone Board and anr. ……………………………Appellant
[ CA No. 3/93]
Vs.
Bangladesh T & T Board & ors……….. Respondents [ In CA No.73/92]
Bangladesh Telecom (Pvt) Ltd. and another………………………………………Respondents
[In CA No. 3/93]
Judgment
April 19th, 1993.
Cases Referred to-
Mohinder Singh vs. Chief Election Commissioner, AIR 1978 (SC) 851; Joseph Vilangandan vs. Executive Engineer, AIR 1978 (SC) 930.
Lawyers Involved:
Syed Ishtiaq Ahmed, Senior Advocate Mahmudul Islam, Advocate with him), instructed by Shamsul Haque Siddique, Advocate-on-Record—For the Appellant in CA No.73/92.
T H Khan, Senior Advocate instructed by NH Khandker, Advocate-on-Record—For the Respondent No.1 in CA No.73/92.
Rokanuddin Mahmud, Advocate instructed by Md. Aftab Hossain, Advocate-on-Record-For the Respondent No.3 in CA No.73/92.
Not represented—Respondent No. 2 in CA No.73192.
T H Khan, Senior Advocate instructed by N H Khandker, Advocate-on-Record—-For the Appellant in CA No.3/93.
Shamsul Haque Siddique, Advocate-on-Record —For the Respondent No.1 in CA No.3/93.
Md. Aftab Hossain Advocate-on-Record — For the Respondent No.2.
Civil Appeal No. 73 of 1992 & Civil Appeal No.3 of 1993.
(From the Judgment and order dated 18.8.92 passed by the High Court Division in Writ Petition No. 1286 of 1992)
Judgment:
Mustafa Kamal J: These two appeals by leave are from the same judgment and order of the High Court division dated 18.8.92 discharging the Rule in part and making the Rule absolute in part in Writ Petition No.1286 of 1992. The writ petition is the appellant in CA No.73 of 1992. Respondent Nos.1 and 2 of the writ petition are the appellants in CA No.3 of 1993. The two appeals have been heard together and will be disposed of by this common judgment.
2. Bangladesh Telecom (Pvt) Ltd, shortly BTL, the writ petitioner and a private limited company, ‘entered into a written agreement on 26.7.89 (Annexure-A to the writ petition) with Bangladesh Telegraph and Telephone Board, a statutory body, shortly BTTB, respondent No.1 in the writ petition, permitting BTL to install and operate 4 types of communication systems in the private sector, namely, (i) radio trunking, (ii) cellular radio telephone. (iii) riverine radio communications network and (iv) paging system. In response to BTL’s query (Annexure C) BTTB by Memo dated 27.8.89 (Annexure C(1) clarified the written agreement stating that BTL can transfer a portion of the licensing right for joint venture purpose provided it obtains prior written permission from BTTB. Pursuant to and as set out in detail in the Agreement BTTB issued a licence dated 25.3.90 (Annexure B) in favour of BTL under section 4 of the Telegraph Act, 1885 giving BTL all powers, authorisations, consents and permissions to provide, operate and maintain the aforesaid communication systems in the private sector for 20 years with effect from 26.7.89 with exclusive right of operation of services of the aforesaid systems for a period of 5 years from the said date. It was alleged in the writ petition that BTL investing a huge sum in foreign and local currency implemented the radio paging system, radio trunking system and riverine radio communication system with its own finance. But as huge investment in foreign exchange and local currency involved in the installation and operation of cellular radio telephones BTL opened negotiations with Hutchison Telecommunications Ltd. Hong Kong, a foreign company, shortly HTL, to form a joint venture company in the installation, operation and maintenance of cellular radio telephones in Bangladesh. A Memorandum of Understanding signed on 7.1.90 between BTL and the said foreign company HTL. Subsequently on 5.4.90 a tripartite joint venture agreement was signed between Mr Sahjad Ali, the then Chairman of BTL, BTL itself and Hutchison Telecommunications (Bangladesh) Ltd. (which we are told was incorporated in the Virgin Islands), a subsidiary of HTL, agreeing thereby that for the business of cellular radio telephones a joint venture company in the name Hutchison Bangladesh Telecom Ltd. would be formed and incorporated in Bangladesh under the Companies Act, 1913. The Board of Investment, shortly BOI, established as a statutory body under the Investment Board Act, 1989 (Act No.XVII 1989) was approached for approval or the joint venture company and after usual enquiries and investigations BOI by a Memo dated 11.8.91 (Annexure D(l) to the writ petition) approved the formation of the joint venture company with 50% ownership to BTL and 50% ownership to HTL the foreign company. As such a private limited company in the name of Hutchison Bangladesh Telecom Ltd. shortly HBTL, was incorporated on 8.10.90 under the Companies Act, 1913. Thereafter the joint venture company HBTL made construction of the fourth of the Maghbazar Exchange Building, imported necessary equipment for cellular radio telephone, established a cell site at Narayanganj and a tower at Uttara Telephone Exchange. The cellular radio telephone system became operational by January 1991 and in order to inter-connect the Uttara cell site and Maghbazar cell site BTL applied for inter-connection called Public Switch Tel. Network, shortly PSTN. BTTB issued a demand note for nearly Taka 41 lakh which BTL duly deposited in March, 1991. BTL started selling the cellular telephone sets to customers but for failure of BTTB to provide the PSTN the customers cannot talk to telephone subscribers of BTTB. While the work of installation was going on HBTL, the joint venture company, was secretly taking steps to oust BTL from the joint venture company and by letter dated 20.7.91 alleged default of BTL in complying with the terms of the joint venture agreement. Six days later HBTL proposed to BTL to buy out its shares. The proposal fell through as the parties could not agree to the price, HBTL then wrote to the concerned Ministry on 20.8.91 (Annexure 1 to the writ petition) to exclude BTL from the joint venture Project. It also disclosed in the said letter that the share of BTL in the joint venture company had been transferred to Watership Ltd., a subsidiary of Hutchison Telecommunications (Bangladesh) Ltd. incorporated outside Bangladesh. BTL denied the said transfer by informing the Minister by letter dated 7.1.92 and by filing Matter No.2 of 1992 before the Company Judge of the High Court Division under section 38 of the Companies Act for restoration of he name of BTL in the register of members of HBTL, the joint venture company. BTL also filed Matter No.9 of 1992 in the same Court under sections 162 and 166 of the Companies Act for winding up of the joint venture company HBTL. On 12.1.92 BTTB issued a Memo. dated 12.1.92 (Annexure J to the writ petition) to BTL stating that clause 17 of BTL’s agreement with BTTB provides that before operating cellular radio telephone system jointly with any local or foreign company, BTL would be required to obtain permission of BTL, but in violation of clause 17 of the agreement BTL has not taken permission of BTTB for operating cellular radio telephone system in collaboration with HBTL. It was also alleged that by transferring its share to Watership Ltd. BTL had interfered with the powers BTTB under the Telegraph Act. BTL was asked to show cause why the cellular radio telephone system all not be excluded from the said agreement by way of amendment. BTL replied to the letter on 19.1.92 (Annexure-K to the writ petition) and stated that since the system was not fully operational the stage had not arrived when it could apply and obtain permission of BTTB. On 31.3.92 respondent No.1 (BTTB) issued the impugned Memo exercising its power under section 8 of the Telegraph Act, 1885 (Annexure L to the writ petition) cancelling BTL’s agreement with BTTB dated 26.7.89 for violation of clauses 3,6, 7,9, 17 and 23 of the Agreement.
3. BTL by letter dated 9.4.92 protested against the order of cancellation and requested its withdrawal with no effect. BTL then filed the instant writ petition challenging the impugned Memo. dated 31.3.92 on various grounds.
4. Respondent No. 1 BTTB in its affidavit-in-opposition alleged violation of the agreement dated 26.7.89 stating that BTL established cellular telephone system and made it operational by the joint venture company HBTL without prior written permission of BTTB and without transferring its licence to the joint venture company and that BOI did not endorse the letter of approval dated 11.8.90 either to the Ministry or BTTB. BTL also violated clause 13 of the agreement and other terms and conditions, it contended.
5. But the main ground taken by BTTB was that the writ petition was not maintainable as the contract was commercial in nature and its allegedly illegal cancellation can be agitated by arbitration of in a suit for damages. It was the further case of BTTB that Mr. AKM Moinul Haque who had sworn the affidavit in the writ petition was not a director or chairman of BTL and, as such, had no locus standi to sign and verify the application and that his name was not found in the Memorandum and Articles of BTL.
6. HBTL, the joint venture company, was not made a party to the writ petition. It added itself as respondent No.3 by an application. HBTL filed an affidavit-in-opposition and claimed all investments made in installing the cellular radio telephone system to be its own. After the fall of Ershad regime Mr. Sahjad Ali, the overwhelming majority shareholder of BTL, had been missing and BTL did not take any steps for implementation of the project ever since Mr. Sahjad Ali disappeared from Bangladesh and did not provide any fund. As BTL was in breach of the joint venture agreement and the entire project was jeopardised respondent No.3 offered to buy BTL’s assets including its share in joint venture company but having been unsuccessful in this regard respondent No 3 held a meeting of the Board of Directors of HBTL in Hong Kong to enable Mr. Sahjad Ali to attend the meeting which he did not. In that meeting the share of BTL was transferred to Watership Ltd.
7. The High Court Division held that the writ petition was maintainable because in cancelling the agreement dated 26.7.89 which was commercial in nature BTTB invoked its powers under section 8 of the Telegraph Act, 1885. It also found that prima facie Mr. AKM Mainul Haque purchased some shares and became a director and later on Chairman of BTL. Hence for the purpose of the writ petition the learned Judges of the High Court Division accepted him as the Chairman of BTL without prejudice to the stand taken by BTTB and HBTL to various petitions before the company Judge. The High Court Division held that cancellation of the agreement amounted to cancellation of the licence and found that in cancelling the agreement dated 26.7.89 in respect of radio trunking, riverine radio communication network and paging Systems which were admittedly installed at the cost of BTL, no show cause notice was issued to BTL. As such the impugned order so far as it relates to these three communication systems was passed without lawful authority and the Rule was made absolute in respect thereof. But in respect of cellular radio telephone system the High Court Division held that at least for this item a show cause notice was issued and the cause was shown and BTTB after considering the same terminated the agreement. Hence the agreement and cancellation of the licence insofar as it relates to cellular radio telephone system cannot be said to have been done without lawful authority. The Rule was discharged in respect of this item.
8. While BTL as appellant obtained leave in CA No.73 of 1992 against the judgment and order of the High Court Division discharging the Rule relating to cellular radio telephone system, BTTB obtained leave in CA No.3 of 1993 against the judgment and order of the High Court Division making the Rule absolute in respect of the other three systems.
9. Leave was granted in CA No.73 of 1992 to consider whether any permission of BTTB was necessary to implement the cellular radio telephone system by the joint venture company HBTL. Whether the show cause notice dated 12.1.92 (Annexure J to the writ petition) was at all a show cause notice, whether BTL had still time to apply for permission from BTTB, if permission was at all needed, whether the impugned order was passed mala fide and for the collateral purpose of granting licence to respondent No.3 when the cellular system was ready for operation, whether other licence granted to BTL was an indivisible one and the High Court Division committed any illegality in bifurcating it and whether the impugned order having been passed on several grounds of which all but one were found to be untenable the impugned order was legal.
10. Leave was granted in CA No. 3 of 1993 to consider BTTB’s submission that the writ petition was not maintainable as the contract dated 26.7.89 was purely a commercial contract, the alleged illegal cancellation of which would be remedied by arbitration as provided in the agreement itself or by a suit for damages, whether the principle of natural justice was applicable to a contract of this nature and whether a show cause notice was at all necessary, and whether Mr. AKM Mainul Haque had the locus standi to prefer the writ petition.
11. As the submission of BTTB goes to the root of the matter, it is necessary to determine in the first instance whether the writ petition was maintainable.
12. The High Court Division held that in cancelling the agreement dated 26.7.89 which was commercial in nature BTTB invoked its power under section 8 of the Telegraph Act, 1885 and therefore the writ petition was maintainable.
13. That was a simplistic disposal of the issue and needs a deeper approach to resolve it.
14. Section 4 of the Telegraph Act, 1885 provides that within Bangladesh, the Government shall have the exclusive privilege of establishing, maintaining and working telegraphs: Provided that the Government may grant a licence, on such conditions and in consideration of such payments as it thinks fit, to any person to establish, maintain and work a telegraph within any part of Bangladesh.
15. Section 8 of the Telegraph Act provides that the Government may, at any time, revoke any licence granted under section 4, on the breach of any of the conditions therein contained, or in default of payment of any consideration payable thereunder.
16. The agreement dated 26.7.89 between BTL and BTTB (Annexure A to the writ petition) was only a Memorandum of Understanding, executory in nature. This agreement merged with the licence dated 25.3.90 (Annexure B to the writ Petition), because BTTB, being empowered by section 3 of the Bangladesh Telegraph and Telephone Board Ordinance, 1979 (Ordinance No. XII of 1979), granted a licence to BTL under section 4 of the Telegraph Act, 1885 “Pursuant to and as set out in detail in the Agreement entered into on 26th July 1989” by and between BTTB and BTL. In other words the terms and conditions of the agreement dated 26.7.89 became the terms and conditions of the licence itself. This licence may be revoked by BTTB under section 8 of the Telegraph Act, 1885 if the licensee is in breach of any of the conditions of the licence or in default of payment of any consideration payable thereunder. BTTB can now cancel only the licence and not the agreement as the agreement has already merged into the licence. Therefore the exercise of power under section 8 was not redundant and superfluous, as urged by Mr. TH Khan, learned Counsel for BTTB. It was correctly invoked and although the agreement was sought to be cancelled it was in fact the licence which stood cancelled by the impugned order dated 31.3.92 (Annexure L to the writ petition). Hence it was not a cancellation of a contract, far less a commercial contract. The impugned order was meant to be a cancellation of BTL’s licence which the High Court Division was constrained to accept as a natural corollary. As the licence was granted to BTL in exercise of a statutory power and as the cancellation thereof was also made in exercise of a statutory power, it is no longer case of cancellation of a commercial contract. Had there been no licence in favour of BTL then the agreement, standing alone, would have been a purely commercial contract, the cancellation of which could not have attracted the writ jurisdiction of the High Court Division but as the agreement merged into licence its terms and conditions no longer remained the terms and conditions of a commercial contract became the terms and conditions of the licence itself. Therefore in the facts of the present case the writ petition cannot be resisted on the ground cancellation of a commercial contract.
17. Mr. TH Khan has questioned the locus standi of Mr. AKM Mainul Haque to prefer the writ petition on behalf of BTL and has contended that the writ petition is not maintainable on that score as well. We find that Mr. AKM Mainul Haque as Director of BTL corresponded with BUS from October, 1991 and as Chairman of BTL he replied to the show cause notice but BTTB did not raise any objection as to his competence to reply on behalf of BTL. It is also pertinent to observe that HBTL, respondent No. 3 which is supporting the cancellation of BTL’s licence, does not question the locus standi of Mr. AKM Mainul Haque specifically, except stating in its affidavit-in-opposition in a general way that the writ petition had not been filed with proper authority from BTL. BTL has explained in its affidavit-in-reply under what circumstances Mr. AKM Mama! Haque was authorised by the Board of Directors to institute and defend legal proceeding in Courts on behalf of BTL in its meeting held on 4.12.92. Defects, if any, in those proceedings are internal to the company and may be properly agitated in the various petitions lying before the Company Judge and without prejudice to those proceedings Mr. AKM Mainul Haque may be accepted as the Chairman of BTL for the purpose of the writ petition and the appeals. That disposes of the second branch of Mr. TH Khan’s submission on maintainability.
18. With regard to the availability of arbitration and civil suit as an alternative remedy, Article 102 of the Constitution provides that if there is “no other equally efficacious remedy” “provided by law” then the writ jurisdiction of the High Court Division may be invoked. “Provided by law” means a remedy provided in the statute in invocation of which the impugned order was passed. The Telegraph Act, 1885 does not provide for any appeal review against the order of cancellation of licence. The provision for arbitration is a term and condition of the licence and clause 18 of the Agreement provides for arbitration if there is any disagreement or dispute regarding the subject matter covered by the agreement. As the conditions of the agreement stood merged with the licence the arbitration clause may be invoked if there was disagreement or dispute regarding the subject matter covered by the licence, but when the licence itself is cancelled under section 8 the efficacious remedy, if any, must be provided in the Telegraph Act itself so as to disentitle the licensee to invoke the writ jurisdiction without exhausting the remedy. The Telegraph Act does not do so. The other contention of Mr. T H Khan that for alleged breach of a commercial contract suit for damages lies in the civil Court and therefore the writ jurisdiction is not available is equally unacceptable because the cancellation is, in fact, not of an agreement but of the licence.
19. Mr. Rokanuddin Mahmud, learned Counsel for HBTL, the joint venture company and respondent No. 3, has made some submissions of HBTL’s own regarding the maintainability of the writ petition. First, he submits, the writ petition is not maintainable because the question of ownership of the licence is a disputed question of fact. The agreement dated 27.6.89 was made between BTTB and BTL, when BTL was an unincorporated company. BTL was incorporated later on 16.8.89. In the tripartite agreement dated 5.4.90 (Annexure I of the affidavit-in-opposition of respondent No. 3) Mr. Sahjad Ali in clause 5.2 of the agreement undertook to transfer to HBTL the licence on execution of the agreement for a consideration of Taka 1 crore which will be treated as Mr. Ali’s investment in the joint venture company and which will also be adjusted with the sum of Taka 4.50 crore required to be paid by each group of shareholders of the joint venture company as working capital. Mr. Sahjad Ali, therefore, made an implied representation that he was the owner of the licence. BTL being a party to the tripartite agreement was silent and therefore BTL will be deemed to have accepted the position that Mr. Sahjad Ali was the owner of the licence. The writ petition, he submits, is not maintainable without joining Mr. Sahjad Ali as one of the writ petitioners.
20. Respondent No. 3 did not allege in its affidavit-in-opposition that Mr. Sahjad Ali was the implied holder of the licence, nor did it object to the maintainability of the writ petition in the absence of Mr. Sahjda Ali as a co-petitioner. The objection, therefore, must be deemed to have been waived. The writ petition cannot be said to be not maintainable on introduction of a fresh plea highlighting facts not agitated in the High Court Division and making them appear to be disputed question of fact for the first time in this Court. Besides, BOI granted permission to set up a joint venture company to install and operate the cellular radio telephone system by specifying the shareholding position of local and foreign participants at 50% each. BTL was the local shareholder. In the tripartite agreement it was provided in clause 2.1 that BTL or its group company shall bold the shares of Group A which shall constitute 50% of the issued share capital of the company. By the term “Group company” was meant, in relation to Mr. Au, any company which is wholly owned by him or any person holding shares for Mr. Ali. Therefore the payment of consideration of Taka 1 crore to Mr. Ali for transfer of the licence to HBTL was an internal arrangement of Group A share-holders. On this fact alone there can be no room for claiming disputed question of fact in regard to the ownership of the licence.
21. Secondly, Mr. Rokanuddin Mahmud argues, HBTL, the foreign company and HBTL, the joint venture company, acted on the promise of Mr. Sahjad Ali or BTL to transfer the licence to HBTL and made huge investments. HBTL, as such, acquired a right, title and interest in the licence, unless respondent No. 3 is joined as a co-petitioner, the writ petition at the instance of BTL alone is not maintainable. To allow this writ petition at the instance of BTL alone will amount to giving a verdict that BTL is the owner of the licence.
22. This submission is also misconceived. Respondent No. 3 in paragraphs 4 and 5 of its affidavit-in-opposition categorically accepted the position that BTL was granted the licence and that BTL failed to transfer the licence in favour of HBTL in violation of clause 5.2 of the tripartite agreement. In fact it is BTL which received the show cause notice (Annexure J) and it is the licence of BTL which has been cancelled and the cancellation order has also been addressed to BTL. Until and unless the licence is transferred to HBTL, HBTL cannot claim to stand on the same footing with BTL. Moreover, unless BTL is the 50% shareholder of HBTL. The latter has no claim on the licence granted to BTL. As at presently constituted HBTL does not qualify for the same licence which was granted to BTL.
23. Thirdly, Mr. Rokanuddin Mahmud submits that BTL is barred by estoppel from insisting on any right under the agreement dated 26.7.89 and contrary to the tripartite agreement dated 5.4.90. BTL and/ or Mr. All having made a promise intending to create a legal relation and HBTL having acted upon that promise, the Court will refuse BTL to act inconsistently with it. To allow BTL to maintain the writ petition would amount to allowing it to act inconsistently with the promise.
24. Again, HBTL in its affidavit-in’ opposition has not pleaded estoppel and no such argument appears to have been made before the High Court Division. We do not see how we can entertain this submission at this stage without any pleading before the High Court Division.
25. BTTB and HBTL’s submissions on maintainability therefore fail.
26. It now falls to be considered the main submissions of Mr. Syed Ishtiaq Ahmed, learned Counsel for BTL, against the judgment and order of the High Court Division discharging the Rule in respect of cellular radio telephone system. His principal submissions are that the show cause notice dated 12.1.92 (Annexure J) is not a show cause notice at all and that there has been a violation of the principles of natural justice. Also there was no factual basis in exercise of power under section 8 of the Telegraph Act. He submits that BTL having taken approval from BOI for setting up a joint venture company for the installation and operation of cellular radio telephone system and BTTB having acted upon the same, the agreement cannot be cancelled on the ground of BTL taking a foreign partner. He further submits that the impugned order is vitiated by consideration of extraneous, irrelevant and non-existent facts and also by malice in law.
27. Mr. TH Khan, on the other hand, submits that the contract being a purely commercial one no show cause notice is at all necessary and the principle of natural justice is not at all attracted. If at all a show cause notice was necessary it was fully complied with and BTL having fully understood it replied to the same and did not allege either mala fide or malice in law in reply. He has taken us through clauses 3, 6, 7, 9, 17 and 23 of the Agreement and submits that proper factual basis exists for exercise of power in cancelling the contract. He further submits that only the contract has been cancelled and invocation of section 8 of the Telegraph Act was redundant and superfluous, although he concedes as a result thereof the licence though not revoked has become ineffective. He further submits that the approval of BOI dated 11.8.90 (Annexure D(1) was not communicated to either BTTB or the Secretary of the concerned Ministry and BTTB was always acting under the impression that it was BTL alone which was installing the cellular radio telephone system. It was only upon receiving a copy of HBTL’s letter to the Minister dated 28.8.91 (Annexure 1) that BTTB came to be aware of the association of the joint venture company HBTL in the cellular radio telephone system. The copy of the letter to the Minister put BTTB into the task of making an enquiry from BTL as to who is the legal owner of the machineries installed for other system and as to whether BTL will be able to operate the system independently. Having addressed several letters to BTL including the show cause notice (Annexure J) BTTB was satisfied that no previous permission was obtained by BTL for operating the cellular radio telephone system in a joint venture p company with HBTL. The cancellation of the agreement under clause 17 thereof was therefore fully justified. He also submits that in view of the pending petitions before the Company Judge the contract in question stands completely frustrated and the Court will not issue a writ which will be inexecutable. Also he urges that this Court should save the project in the public interest and in the interest of public revenue and not leave it to the mercy of litigations.
28. Mr. Rokanuddin Mahmud submits, on the other hand, that the show cause notice (Annexure J) is only one of a series of earlier show cause notices issued by BTTB to BTL and from a combined reading of all these notices and replies thereof it is apparent that the principle of natural justice, namely, the opportunity of a fair hearing, has been substantially complied with in this case. BTL had more than one occasion and more than one reasonable opportunity to explain its position. He further submits that the criteria of fairness has been fulfilled in this case. BTL was fully aware of the allegations against it. There was a breach of fundamental obligation, namely, the obligation to operate the cellular radio telephone system, in, consequence of which BTTB was justified in treating the contract as repudiated. Mr. Mahmud also submits that BTL admitted in its letter dated 27.7.91 (Annexure 3 to this respondent’s affidavit-in-opposition) that HBTL is the only legal entity duly constituted under the law for cellular system business in Bangladesh and therefore BTL could not complain of cancellation of something which admittedly would not be operated by it.
29. Facts of this case are admitted on all hands. The contract dated 26.7.89, Memorandum of Understanding dated 7.1.90 between BTL and HBTL, the foreign company, the licence granted to BTL on 25.3.90, the tripartite agreement dated 5.4.90 between Mr. Sahjad Ali, BTL and HBTL, and BTL’s application to BOI for permission to set up a joint venture company with HBTL for installation and operation of other cellular radio telephone systems are all admitted facts.
30. Section 3 of Act No. XVII of 1989 by which BOI was established provides that the provisions of this Act and the rules made thereunder shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force. One of the functions of BOI shall be, according to section 7(e), “approval and registration of all industrial projects in the private sector involving local and foreign capital”. Section 11(6) provides that a decision given by BOI approving an industrial project shall be deemed to be a decision given by the Government and such decision shall be implemented accordingly. Section 14 makes it a duty of the concerned authorities to implement the decision of BOI within the time-limit specified. It is admitted on all hands that after receipt of a prayer for setting up a joint venture company BOI set up a Sub-Committee with the Chairman of BTTB as convener and the said Sub-Committee with the said Chairman presiding recommended the formation of a joint venture company on 13.5.90 (Annexure D). It is also admitted that BOI in its meeting dated 31.5.90 with the then President of Bangladesh as Chairman discussed the report of the sub-committee and approved the joint venture project substantially on the same terms as recommended by the sub-committee. The Chairman of BTTB was present in the meeting and a copy of the proceeding of the meeting was also forwarded to him on 12.6.90. It is also admitted on all hands that the formal approval of the joint venture company addressed to HBTL by BOI on 11.8.90 (Annexure D (1) was communicated neither to BTTB nor to the Secretary of the concerned Ministry). But from non-communication of this approval it cannot be concluded that BTTB was unaware of a joint venture project in respect of cellular radio telephone system. BTTB has statutory obligation to implement the decisions of BOI pertaining to its field of activities. That BTTB was not completely unaware of the joint venture is borne out by the fact that BTTB examined and approved the list of machineries to be imported by HBTL in pursuance of the approval given by BOI vide BTTB’s Memo. dated 5.8.90 Annexure X (1). It however appears to us that a copy of this letter dated 5.8.90 was addressed to BTL and not to HBTL Thereafter, it appears, it is BTL and not HBTL which was corresponding with BTTB and dealing with BTTB with regard to construction of the 4th floor of the Maghbazar Exchange Building, import of necessary machineries for cellular radio telephone and establishing cell site at Narayanganj and a tower at Uttara Telephone Exchange. Even the payment of nearly Taka 41 lakh for PSTN connection was made in the name of BTL. The joint venture company HBTL does not appear to have corresponded with or dealt with BTTB in its own name while installing the cellular radio telephone system. Mr.TH Khan submits that under the circumstances BTTB had the impression that it was only the BTL which was implementing the project and that BTTB was in the dark as to how and when the joint venture company was formed after BOI approved the project in its meeting dated 31.5.90. It is unfortunate that a statutory body would act on impressions. The proceedings of the meeting of BOI held on 31.5.90 in which the Chairman of BTTB was present was forwarded to him on 12.6.90 and that was good enough notice under section 11(6) of Act XVII of 1989 to implement the project in terms of the decision of BOI. It passes our comprehension as to why BTTB did not enquire of the formation of the joint venture company from BTL and as to why it allowed all the acts of installation of the cellular radio telephone system to be done only in the name of BTL. It simply shut its eyes to the discussion of BOI dated 3 1.5.90. BUS also does not appear to have taken exception to any activity of BTL with regard to the cellular radio telephone system. It is only after receiving a copy of HBTL’s letter to the Minister dated 20.8.91 (Annexure I) that BTTB started corresponding with BTL, as if awakened from a slumber. By its Memo dated 25.9.9 1 BTTB asked BTL to comment/explain the matters raised by HBTL in its letter to the Minister, in particular to explain whether BTL will be able to install and operate the cellular radio telephone system all on its own. This was a strange question to ask and this was not a show cause notice either, as urged by Mr. Rokanuddin Mahmud and later by Mr. TH Khan, but a mere warning to explain. It is also not understood why BTTB should have addressed such a wrong question to BTL. It should have asked, what happened to the joint venture company sanctioned by BOI, what are its Articles and Memorandum of Association and why BTL, instead of HBTL, was installing the project. BTL replied on 6.10.91 requesting that PSTN connection be given and that all credits or HBTL go to both joint venture partners and not only to HTBL. BTTB wrote a further letter on 28.11.91 and asked about the ownership of the machineries installed by BTL. This again was a wrong question asked by BTTB and was not a show cause notice at all. BTL replied on 7.12.91 and clearly stated that there was a joint venture in existence which would operate the proposed system. “The question of one or the other participant being not able to perform its obligations without the others would not arise in the circumstances. The management and operation of the system will be in accordance with the joint venture agreement as reflected in the Articles of HBTL” Then followed the show cause notice, BTL’s reply and the impugned order of cancellation.
31. We have held earlier that although the impugned letter of cancellation is in respect of the Agreement, it is in effect a revocation of the licence. Mr. TH Khan insistently argued that it was cancellation of a commercial contract for which no show cause notice was necessary. The licence was not revoked, but it was rendered ineffective as a consequence of cancellation of the Agreement, he argues. Under section 8 of the Telegraph Act a licence can only be revoked, not made ineffective, The impugned letter of cancellation can only mean revocation of licence, nothing else. A licence is a privilege created in favour of the licensee and unless the statute excludes the operation of the principle natural justice, a show cause notice is a must before revocation of the licence.
32. It is not enough to issue a show cause notice. In order to be valid it must be a meaning one. The High Court Division failed so read the notice, although it is apparent that it does not fulfill the requirements of a meaningful and therefore valid show cause notice. When it is agreed on all hands that without the PSTN connection the cellular radio telephone system is not operational yet, it is idle to talk about violation of clause 17. BTL’s transfer of its shares to Water-ship Ltd. is sub-judice and cannot be the basis of cancellation. Apart from these two allegations no facts have been made out in the show cause notice to attract the violation of clauses 3, 6, 7, 9 and 23 of the Agreement. An attempt has been made by BTTB to furnish some facts in its affidavit-in-opposition and Mr. TH Khan has also verbally submitted some facts, but we are unable to entertain them, as the facts which constitute the valid basis of cancellation have to be alleged in the show cause notice itself and cannot be supplemented by fresh facts in affidavit. As Krishna Iyer, J aptly put in the case of Mohinder Singh vs. Chief Election Commissioner, AIR 1978 (SC) 851, “orders are not like old wine getting better on being older”. The show cause notice was in respect of cellular radio telephone system, but the agreement, in effect the licence, was cancelled in respect of all the 4 systems. BTTB has no grievance against BTL on record in respect of the other three systems and it does not contend that only the cellular radio telephone system is the subject matter of cancellation. Its case is that the cancellation is in respect of all the 4 systems, making the show cause notice even more vulnerable. BTL was asked to show cause why the cellular radio system shall not be severed from the Agreement by way of amendment, yet the action taken was cancellation of licence of all the 4 systems. Mr. Syed Ishtiaq Ahmed cited the case of Joseph Vilangandan vs. Executive Engineer, AIR 1978 (SC) 930, wherein a show cause notice issued to a contractor asked him to show cause why work should not be stopped, but the impugned order covered not only stoppage of work but also blacklisting the contractor. The blacklisting was found to be illegal by the Indian Supreme Court. One cannot notify a party proposing to take a particular course of action and then upon receiving reply take a completely different action. Nor do we accept the contention of HBTL and Later BTTB that the show cause notice, (Annexure J) is only the last of a series of show cause notices, as we have seen that the earlier Memos were merely in the nature of enquiries and that also on wrong premises. We hold the show cause notice not to be a valid one for the reasons stated above. Consequently, we hold, there has been a violation of the principle of natural justice.
33. We, however, do not accept the submission of Mr. Syed Ishtiaq Ahmed that the impugned order is vitiated by malice in law. It does not appear that BTTB was actuated with a motive to grant the licence to HBTL without BTL and in fact HBTL has not been granted any licence yet. It did not act forthwith on receiving a copy of HBTL letter to the Minister. It asked for BTL’s comments on that letter, not once but twice. All that can be said of the action of BTTB is that it was a confused and muddle-headed action, but no malice in law can be inferred therefrom.
34. Mr. Syed Ishtiaq Ahmed argued that after BOI accorded permission to form a joint venture company, the permission of BTTB under clause 17 of the Agreement was a mere formality. Ultimately, however, he veered round the view that in spite of BOI’s approval, BTTB can legitimately ask for a permission before operating a system under a joint venture, because clause 17 gives the BTTB an authority to finally check and satisfy itself that the installation of the system is in order, that the joint venture is competent to operate the system and that there has been so far no violation of the terms and conditions of the agreement. In that view of the matter we hold that under clause 17 of the Agreement, prior permission of BTTB is necessary to operate the cellular radio telephone system under a joint venture.
35. Mr. Rokanuddin Mahmud has forcefully argued that there was a breach of a fundamental obligation, namely, the obligation to operate the cellular radio telephone system in consequence of which BTTB was justified in treating the contract as repudiated.
36. BTL admits that in respect of operation of cellular radio telephone system HBTL is the only legal entity duly constituted under the law. To the knowledge of BTTB, BTL never undertook its operation all by itself. Although the licence stood in the name of BTL, it was never the fundamental obligation of BTL to operate the cellular radio telephone system alone. BTTB knew that. In such circumstances, all that BTTB could do was to ask BTL to apply for transfer of the licence in favour of HBTL and not to cancel the licence of BTL. If BTL failed to do that, BTTB could legitimately complain of a breach of fundamental obligation.
37. All parties before us agree that the cellular radio telephone system, but for PSTN connection, is ready for operation since July 1991 and is still in that state of readiness. It is unfortunate that a public utility system, admittedly installed by both the local and foreign participants at a huge cost to themselves, is lying idle owing to disputes and litigations between the parties. Each side has blamed the other for this impasse. We refrain from expressing any opinion on the culpability of any side. But we are firmly of the view that BTL on obtaining relief from this Court cannot sit on the licence and do nothing but to prosecute the various litigations. Mr. Syed Ishtiaq Ahmed has categorically submitted that it cannot be said that the parties would not be able to settle their differences if the licence is restored. Also, he submitted, it cannot be said That BTTB would cancel the licence again and so the relief given will be ineffective and infructuous. We are inclined to restore the licence but we will not permit BTL to procrastinate and drag its feet nor will we look upon with favour any attempt on the part of BTTB to start the cycle of cancellation immediately all over again. As long as BOI’s approval is limited to 50% shareholding of the foreign company and 50% shareholding of BTL, we cannot regard RBTL as the ultimate holder of the licence without Bit as 50% shareholder. However, this is not to say that we are expressing any opinion on the pending controversies between BTL and HBTL before the Company Court. The observation is limited to the facts as it is found in the present case. We are restoring the licence and giving all the parties a time-limit within which the licence is to be transferred to HBTL, comprising of the foreign company and Bit with 50% shareholding each and within which the cellular radio telephone system is to be made fully operational. If this opportunity is not availed of by the parties within the time stated, the ball will be in the court of BTTB which may take such action as it will be advised.
38. In the result Civil Appeal No. 73 of 1992 is allowed subject to the following conditions that BTL, the appellant, shall apply for written permission on BTTB (respondent No. 1) for transfer of the licence in respect of cellular radio telephone system in favour of HBTL (respondent No. 3) within two months from date and operation of the said system by respondent No. 3 within one month thereafter, failing which BTTB (respondent No.1) shall be free to take such steps with regard to the licence as it will be advised. The impugned judgment of the High Court Division, so far as it relates to cellular radio telephone system, is set aside and the writ petition in respect of this system is allowed. No order as to costs. Civil Appeal No. 3 of 1993 is dismissed without any order as to costs.
Ed.
Source: 48 DLR (AD) (1996) 20