Mercantile Bank Limited Versus X

DISTRICT: DHAKA

IN THE SUPREME COURT OF BANGLADESH

HIGH COURT DIVISION

(CIVIL REVISIONAL JURISDICTION)

CIVIL REVISION NO. OF________

IN THE MATTER OF:

An application under Section 115(1) of the Code of Civil Procedure.

AND

IN THE MATTER OF:

1. Mercantile Bank Limited

Head Office

61, Dilkusha Commercial Area

Dhaka 1000

2. The Chairman

Board of Directors

Mercantile Bank Limited

Head Office

61, Dilkusha Commercial Area

Dhaka 1000

3. The Company Secretary

Mercantile Bank Limited

Head Office

61, Dilkusha Commercial Area

Dhaka 1000

Defendants

/Appellant

/Petitioners

Versus

X

son of late Y

121, Motijheel Commercial Area

P. S. Motijheel

Dhaka

Plaintiff /Respondent /Opposite-party

AND

IN THE MATTER OF:

Judgement and order dated 16.03.2003 passed by Mr. Muhammad Mahbub Ul Islam, Additional District Judge, 6th Court at Dhaka in Miscellaneous Appeal No. 26 of 2003 dismissing the appeal filed by the petitioner No. 1 and affirming the order dated 13.01.2003 passed by Mr. Mohammad Salehuddin Ahmed, Joint District Judge, 5th Court at Dhaka in Title Suit No. 3 of 2003 granting temporary mandatory injunction on an application filed by the opposite-party under Order XXXIX, Rule 1 & 2 of the Code of Civil Procedure, 1908 directing the petitioners to restore the directorship of the opposite-party in the Board of Directors of the Bank after he was removed from the Board by the shareholders of the Bank in the Extra Ordinary General Meeting held pursuant to the Companies Act, 1994.

PETITION VALUED AT TK. 5,00,000.00 ONLY

To:

Mr. Justice Mainur Reza Chowdhury, the Chief Justice of Bangladesh and his companion justices of the Hon’ble Supreme Court.

The humble petition of the petitioners above named most respectfully

SHEWETH:

01. That this revisional petition is filed against the judgement and order of affirmation dated 16.03.2003 passed by Mr. Muhammad Mahbub Ul Islam, Additional District Judge, 6th Court at Dhaka in Miscellaneous Appeal No. 26 of 2003 dismissing the appeal filed by the petitioner and affirming the order dated 13.01.2003 passed by Mr. Mohammad Salehuddin Ahmed, Joint District Judge, 5th Court at Dhaka in Title Suit No. 3 of 2003 granting temporary mandatory injunction on an application filed by the opposite-party under Order XXXIX, Rule 1 & 2 of the Code of Civil Procedure, 1908 directing the petitioners to restore the directorship of the opposite-party in the Board of Directors of the Bank after he was removed from the Board by the shareholders of the Bank in the Extra Ordinary General Meeting held pursuant to the Companies Act, 1994. The impugned judgement and order is erroneous since both the Courts below failed to consider that no order of mandatory injunction can be passed under Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure, 1908 and that the opposite-party being removed by the shareholders of the petitioner Bank by extra-ordinary resolution under section 106 of the Companies Act, 1994 in a duly held Extra-Ordinary General Meeting, the Court cannot direct the petitioner Bank to restore the directorship of the opposite-party. As such the learned Court below committed error of law in granting mandatory injunction resulting in an error in the decision occasioning failure of justice, hence the impugned judgement and order is liable to be set aside.

02. That the petitioner No. 1 is a banking company incorporated under the Companies Act, 1994 having its Head Office at the address given in the cause title (hereinafter referred to as the petitioner Bank). It carries on banking business within the territory of Bangladesh through its various branches. The petitioner No. 2 is the Chairman and the petitioner No. 3 is the Company Secretary of the petitioner Bank.

03. That the opposite-party No. 1 is a sponsor shareholder and was a Director of the petitioner Bank.

04. That since the opposite-party No. 1 as Director was involved in activities seriously damaging to the reputation and interest of the petitioner Bank, the shareholders of the Bank decided to discuss the issue in a formal meeting and consequently the Bank convened by the Notice dated 12.12.2002 an Extra-Ordinary General Meeting of the members of the Bank to discuss the following agenda:

“To discuss the prejudicial activities of Mr. X, a Sponsor Director of the bank and if the members present so deem fit, to adopt an appropriate resolution as extra-Ordinary Resolution.”

The meeting was scheduled to be held on 05.01.2002.

05. That although the notice was issued on 12.12.2002, the opposite-party with a malafide intention after 21 days of the issuance of the notice filed Title Suit No. 3 0f 2003 in the Court of Joint District Judge, 5th Court at Dhaka against the Bank on 02.01.2003 – just three days prior to the meeting, seeking declaration that the notice dated 12.12.2002 issued by the Bank is illegal. The prayer was as follows:

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K) weMZ 12/12/02Bs Zvwi‡L cÖ`Ë †bvwUkwU AKvh©Ki I D³ †bvwU‡ki wfwˇZ 05/01/2003 Bs Zvwi‡L Kw_Z G·Uªv AwW©bvix †Rbv‡ij wgwUs Abyôvb m¤cY© fv‡e †eAvBbx g‡g© GK Av‡`k w`‡Z|

06. That on the same day that is on 02.01.2003, the opposite-party also filed an application under Order XXXIX, Rule 1 & 2 of the Code of Civil Procedure for temporary injunction restraining the shareholders of the Bank from holding the Extra Ordinary General meeting on 05.01.2002. The prayer for temporary injunction was as follows:

AZGe ûRyi Av`vj‡Z ev`x `iLv¯Kvix c‡¶ cÖv_©bvt

weMZ 12/12/02Bs Zvwi‡L cÖ`Ë †bvwUkwUi gg© Abyhvqx AvMvgx 05/01/2003 Bs Zvwi‡L Kw_Z G·Uªv AwW©bvix †Rbv‡ij wgwUs Abyôvb bv Kivi Rb¨ weev`x e„›`‡K GK A¯’vqx wb‡lavRv Øviv evib Kwi‡Z AvRv nq|

Ges

BZ¨em‡i AÎ `iLv¯ ïbvbx bv nIqv ch©š weev`x e„›`‡K Aše©Zx Kvjxb A¯’vqx wb‡lavRv Av‡`k `v‡b AvRv nq|

07. That the Court below issued notice upon the petitioners to show cause within 3 days of receipt of the notice as to why temporary injunction as prayed for should not be granted.

08. That the petitioner Bank appeared in the suit by filing Vokalatnama on 02.01.2003 and prayed time for filing written objection against the petition for injunction filed by the opposite-party, but at the objection of the opposite-party the Vokalatnama was not accepted and the Sherestadar was directed to give note as to whether the Vokalatnama was duly filed on behalf of the petitioner No. 1.

09. That on 04.01.2003 the opposite-party filed an application under section 151 of the Code of Civil Procedure for temporary injunction wherein it was stated that if the injunction was not granted the shareholders would hold the Extra-Ordinary General Meeting on 05.02.2003. The Court below vide Order No. 5 dated 04.01.2003 rejected the application and fixed on 13.01.2003 for filing written objection.

10. That in the circumstances and for the following reasons the shareholders of the Bank who gathered at Dhaka from different parts of the country decided to proceed with the holding of the Extra Ordinary General Meeting of the shareholders on 05.01.2003:

(a) That as on 05.02.2003 there was no order of injunction, not even an order to maintain status quo by the Court on the Bank regarding holding the meeting of the shareholders. The Court vide order No. 5 dated 04.01.2003 rejected an application under section 151 of the CPC for temporary injunction;

(b) That the agenda of the Extra Ordinary General Meeting was not to remove the opposite-party as a Director but to discuss his various activities and to adopt appropriate resolution;

(c) That in view of series of decisions both by our highest Courts and the Courts of the Sub-Continent which are against granting injunction restraining holding the meetings of the shareholders, the shareholders presumed that at the end of the day the opposite-party would not get any restraining order on the shareholders from holding Extra Ordinary General Meeting;

(d) That it is the prerogative of the shareholders to elect a director and in accordance with law they have power to remove the said director as provided under section 106 of the Companies Act, 1994 and so far as their decision is concerned, the Court of this country as well as other jurisdictions are of the view that the Courts should not interfere in the management of a Company.

11. That during the meeting the shareholders discussed the misdeeds of the opposite-party. The misdeeds were thoroughly discussed and properly recorded. Thereafter, upon a proposal the shareholders unanimously decided to remove him from the Board as Director.

12. That the opposite-party did not attend the meeting to participate in the proceedings or to defend his actions amongst his peers, but subsequently filed an application under Order XXXIX, Rule 1 and 2 for mandatory injunction directing the Bank to restore his position as Director of the Bank.

13. That the show cause notice issued on 02.01.2003 was received by the petitioners No. 2 and 3 on 04.01.2003. Accordingly, the petitioner Nos. 2-3 appeared in the Court on 06.01.20003 – within three days as directed by the Court and prayed for time to file written objection. The learned trial Court below granted time and fixed 13.01.2003 for filing written objection. The learned Court also vide order No. 6 dated 06.01.2003, after holding of the EGM, directed the parties to maintain status quo until filing of the written objection. Subsequently, on the same day, i.e. on 06.01.2003 the opposite-party filed an application under Order XXXIX, Rule 1 and 2 for mandatory injunction directing the Bank to restore his position as Director of the Bank.

14. That on 07.01.2003 the petitioner No. 1 filed written objection to the application under Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure. Subsequently on the same day, i.e. on 07.01.2003 the opposite-party filed an application for extension of the order of status quo until hearing of the petition for temporary injunction, whereupon the Court vide order No. 10 dated 07.01.2003 extended the order of status quo till 13.01.2003. In the written objection the petitioner stated, inter alia, as follows:

(a) That the plaintiff/respondent was not entitled to any injunction restraining the petitioner from holding shareholders meeting “to discuss the prejudicial activities of Mr. X, a Sponsor Director of the bank and if the members present so deem fit, to adopt an appropriate resolution as extra-Ordinary Resolution.” The shareholders of a company is the supreme authority to take any decision regarding the internal affairs of the company. Pursuant to the provisions of Article 62 of the Articles of Association of the defendant Bank read with Regulation 49 of Schedule-I to the Companies Act, 1994 the Board of Directors may, whenever they think fit, call an extra-ordinary general meeting. Accordingly the Board of Directors of the defendant Bank convened the Extra-Ordinary General Meeting in question and the notice dated 12.12.2002 of the said meeting was issued by the Board Secretary by order of the Board. Therefore, no illegality has been committed by the defendant Company.

(b) That pursuant to section 106 of the Companies Act, 1994 the company may by extra-ordinary resolution remove any shareholder director before expiration of his period of office. The shareholders found out certain activities of the plaintiff are prejudicial and detrimental to the interest of the defendant Bank. As such the EGM in question has been convened to discuss the matter and adopt necessary extra-ordinary resolution. It may be mentioned here that whether the plaintiff will remain as director or not is the discretion of the shareholders of the defendant Bank who have elected the plaintiff in the last AGM. It is completely internal management affairs of the defendant Bank to discuss the activities of any of the director and to take necessary decision. Accordingly, the EGM was held on 05.01.2003 at 3-00 p.m. as convened by the Notice dated 12.12.2002. In the EGM the shareholders of the defendant Bank after detailed discussions on the prejudicial activities of the plaintiff passed an Extra-Ordinary Resolution removing the plaintiff as a Director of the defendant Bank.

(c) That in a series of decisions the Hon’ble High Court Division and Appellate Division of the Supreme Court of Bangladesh has held that an order of injunction cannot be granted interfering the internal affairs of any company.

(d) That there is no prima facie arguable case in granting the order of injunction. Any order of temporary injunction will adversely affect the internal management affairs of the defendant Bank, but non-granting of any order of injunction will not affect the interest of the plaintiff. The balance of convenience and inconvenience is in favour of not granting the order of temporary injunction as prayed by the plaintiff/petitioner.

15. That in addition to the above, on 13.01.2003 at the time of hearing of the injunction petition, the learned lawyers for the petitioner submitted by way of argument that (a) on the application filed under Order XXXIX, Rule 1 & 2 no mandatory injunction can be granted, (b) as there was no order whatsoever restraining the Bank from holding the EGM, the shareholders proceeded to hold the meeting (c) since in law the plaintiff/respondent was not entitled to any order of injunction, the Court should not grant mandatory injunction.

16. That the Court below heard both the parties on the application filed under Order XXXIX, Rule 1 and 2 for mandatory injunction and vide order dated 13.01.2003 granted mandatory injunction directing the Bank to restore directorship of the plaintiff/respondent by 08.02.2003. In his order the Court stated that although there was no injunction order but the Bank was required to show cause and instead of showing cause the Bank held the meeting on 05.01.2003 removed the plaintiff/respondent as Director. So according to the trial Court there was arguable case and the position of the parties have changed and hence relying on the case reported in 35 DLR (AD) at page 42, the trial Court granted mandatory injunction.

17. That as against the said order dated 13.01.2003, the petitioner Bank filed Miscellaneous Appeal No. 26 of 2003 before the Court of District Judge, Dhaka. The appeal was filed on the following grounds:

(i) That the order of mandatory injunction was passed on an application under Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure and as such the order was ex facie illegal and bad in law.

(ii) That at the time of holding the EGM on 05.01.2003 there was no order of injunction, nor any order of status quo. Not only that, the trial Court on the earlier day that is on 04.01.2003 rejected an application filed by the plaintiff/respondent/opposite-party under section 151 of the Code of Civil Procedure for temporary injunction. In such situation the granting of the mandatory injunction was illegal.

(iii) That there was no prima facie arguable case in granting the temporary injunction and as such the order of temporary mandatory injunction was illegal.

(iv) That the trial Court by passing the order of mandatory injunction directing the Bank to take back the plaintiff/respondent/opposite-party, in effect interfered in the internal management of a Company, which has been discouraged by the highest Courts of the Country.

(v) That the trial Court did not consider the statements made in the Written Objection and the submissions of the Bank.

18. That the learned Appellate Court below heard the Miscellaneous Appeal on 16.03.2002 and vide order dated 16.03.2003 dismissed the Miscellaneous Appeal and affirmed the order of mandatory injunction directing the Bank to restore directorship of the opposite-party. In his order the learned Appellate Court stated that –

“It appears that it is an admitted fact that the plaintiff-respondent was the director of the Company. Out of threat and fear he came in the shelter of the Court, and it is proved by the task, taking the decision of removal of plaintiff-respondent from the directorship in alleged meeting on 5.1.2003, the plaintiff-respondent’s apprehension was not baseless. He came to the Court challenging the notice of alleged meeting and the Court already passed an order of issuing notice upon the defendant-appellant how could hold the meeting and take the decision of removal of the plaintiff-respondent from the post of his directorship? Practically, doing no hurriedly, the defendant-appellant frustrated the object of the case and as well as the matter of the injunction also. In this respect learned Court below cited the renowned, historic decision of our honourable Supreme Court Appellate Division which is very much related where it was held that –

“If, in a case where an application for temporary injunction is pending any party to the case in order to defect the order of the Court which might be passed on such an application erected a wall with undue haste, the Court had inherent jurisdiction to issue a mandatory injunction ordering demolition of such a wall.”

Upon considering aforesaid discussion it is found that the learned Court below was perfectly justified while arriving at the decision favourable to the plaintiff-respondent and allowing the mandatory injunction, the end of justice was best met by passing the impugned order.”

19. That it is submitted that the impugned mandatory injunction granted on an application filed under Order 39 Rule 1 & 2 directing the petitioners to restore the directorship of the opposite-party is illegal.

20. That it is submitted that the impugned mandatory injunction directing the petitioners to restore the directorship of the opposite-party is in violation of section 91 and 106 of the Companies Act, 1994. Section 91 clearly provides that the directors of the company shall be elected by the members from among their number in general meeting while section 106 provides that any director may be removed by extra-ordinary resolution in general meeting, i.e. a meeting of the shareholders. In the instant case the shareholders have removed the opposite-party by extra-ordinary resolution in EGM in question. As such the order of mandatory injunction for restoration of directorship of the opposite-party has frustrated the said provisions of law. Therefore the trial Court by passing the said order has overridden the provisions of the said sections 91 and 106 of the Companies Act, 1994 and the appellate Court by affirming the said order has committed error of law which has resulted in an error in the decision occasioning failure of justice, hence the impugned order is liable to be set aside.

21. That it is submitted that pursuant to the provision of section 91 of the Companies Act, 1994 the petitioners have no authority to restore the directorship of the opposite-party. As such the Courts below directing the petitioners to restore the directorship of the opposite-party have committed error of law which has resulted in an error in their decisions occasioning failure of justice. Therefore the impugned order is liable to be set aside.

22. That it is submitted that the Courts below have failed to consider that the petitioners have not removed the opposite-party from his directorship. It is the shareholders who have removed the opposite-party from directorship. As such the petitioners cannot be directed to restore the directorship of the opposite-party. As such the Courts below directing the petitioners to restore the directorship of the opposite-party have committed error of law which has resulted in an error in their decisions occasioning failure of justice. Therefore the impugned order is liable to be set aside.

23. That it is submitted that both the trial Court and the appellate Court below have misinterpreted the decision of the Hon’ble Appellate Division in the case reported in 35 DLR (AD) at page 42 and thereby committed serious error of law which has resulted in an error in their decisions occasioning failure of justice. The learned Courts below failed to consider that in the decision of the Appellate Division the Hon’ble Court clearly outlined that there must be an intention “in order to defect the order of the Court” and there was an order of temporary injunction at the initial stage in that case, but in the instant case the meeting was prescheduled to be held on 05.01.2003. As such there cannot be any shred of doubt that the meeting was held in ordinary course and not with the intention to defect the order of the Court.

24. That it is submitted that the learned Courts below also failed to consider that in the decision of the Appellate Division the Hon’ble Court also outlined that the act of the party must be in order to defect the “order of the Court which might be passed on such an application”. But in the instant case the learned trial Court had already rejected the prayer for ad-interim injunction on two occasions, first on 02.01.2003 by not granting any ad-interim relief and issuing show cause notice only and on 04.01.2003, i.e. just one day prior to the holding of the EGM, by rejecting the application under section 151 of the Code of Civil Procedure for temporary injunction. Therefore, the trial Court itself has concurred with the fact that there was no prima facie case on behalf of the opposite-party to restrain the petitioners from holding the meeting. Had there be no such rejection of the prayer for ad-interim injunction, the petitioner would never hold the EGM.

25. That it is further submitted that both the Courts below have committed serious error of law in overlooking the fact that in the case reported in 35 DLR (AD) at page 42 the learned trial Court on the very same day of filing of the suit granted ad-interim injunction restraining the defendant from blocking the passage in question. But the defendant taking advantage of an order of stay obtained from the appellate Court in the appeal filed against rejection of an application under Order XXXIX, Rule 4 of the Code of Civil Procedure constructed the wall blocking the passage in question pending hearing of the appeal, whereupon an application for mandatory injunction was filed but was rejected by the appellate Court and ultimately the appeal was allowed. Against the said judgement of the appellate Court civil revision was filed in the High Court Division whereupon the High Court Division at the time of making the Rule absolute directed the defendant to remove the wall within seven days and accordingly the wall was removed. Against the judgement of the High Court Division the defendant filed appeal to the Appellate Division which was dismissed. As such it is clear that the facts of the case reported in 35 DLR (AD) at page 42 is out and out different from the facts of the instant case and that the mandatory order for removing the wall was passed in the said case by the High Court Division at the time of upholding the order of ad-interim injunction passed by the learned trial Court. As such the learned trial Court committed error of law in granting mandatory injunction directing the petitioners to restore the directorship of the opposite-party and the learned appellate Court in affirming the said order has committed gross error of law resulting in an error in the decision occasioning failure of justice. Hence the impugned order is liable to be set aside.

26. That it is submitted that it is well settled that the Courts are reluctant in granting temporary injunction affecting the internal affairs of any company. In such a situation passing of mandatory injunction affecting the internal affairs of a company cannot be justified.

27. That it is submitted that it is well settled that an order to show cause is not a formal order of injunction and as such it has no restraining effect. The said view has also been confirmed by our Hon’ble High Court Division in the case reported in 46 DLR at page 179.

28. That it is submitted that the Court should not pass any order in futile. In the instant case although the petitioners are not authorised to restore the directorship of the opposite-party, the learned trial Court has directed the petitioners to restore the directorship of the opposite-party. The said order is in effect an order in futile and the appellate Court has affirmed such a futile order. As such the Courts below by passing such futile order have committed error of law which has resulted in an error in their decisions occasioning failure of justice.

29. That it is submitted that it is well settled that before granting any equitable relief the Court should ascertain whether there is any prima facie case in favour of the party seeking equitable relief. Mandatory injunction is an equitable relief. As such the trial Court should have ascertained as to whether the opposite-party has any prima facie case. Therefore the learned trial Court in not ascertaining whether the opposite-party has any prima facie case, has committed error of law which has resulted in an error in their decisions occasioning failure of justice. Therefore, the impugned order is liable to be set aside.

30. That it is submitted that the Courts below have failed to consider that the opposite-party has no prima facie case in that in the suit he has challenged the notice of the EGM. The notice of the EGM was admittedly issued in compliance of section 85 of the Companies Act, 1994. As such the said notice cannot be ex-facie illegal. Since the notice was not illegal, the holding of EGM was not illegal in that there was no restraining order to hold the EGM, rather the trial Court rejected the prayer for ad-interim injunction to retrain the holding of the EGM. In such situation there cannot be any prima facie case in favour of the opposite-party.

31. That it is submitted that the Courts below have committed error of law in not considering that the balance of convenience and inconvenience is not in favour of the opposite-party. As such the learned trial Court have committed error of law in granting the mandatory injunction and the appellate Court by affirming the said order has committed error of law which has resulted in an error in their decisions occasioning failure of justice.

32. That being aggrieved by and dissatisfied with the judgement and order dated 16.03.2003 passed by Mr. Muhammad Mahbub Ul Islam, Additional District Judge, 6th Court at Dhaka in Miscellaneous Appeal No. 26 of 2003 dismissing the appeal filed by the petitioner No. 1 and affirming the order dated 13.01.2003 passed by Mr. Mohammad Salehuddin Ahmed, Joint District Judge, 5th Court at Dhaka in Title Suit No. 3 of 2003 granting temporary mandatory injunction on an application filed by the opposite-party under Order XXXIX, Rule 1 & 2 of the Code of Civil Procedure, 1908 directing the petitioners to restore the directorship of the opposite-party in the Board of Directors of the Bank after he was removed from the Board by the shareholders of the Bank in the Extra Ordinary General Meeting held pursuant to the Companies Act, 1994, the petitioners above named beg to file this revisional petition on the following amongst other –

GROUNDS

I. For that in the facts and circumstances of the case the learned appellate Court below committed serious error of law in dismissing the Miscellaneous Appeal and affirming the order of mandatory injunction passed by the trial Court upon an application under Order XXXIX, Rule, 1 and 2 of the Code of Civil Procedure which has resulted in an error in the decision occasioning failure of justice. As such the impugned judgement and order are liable to be set aside.

II. For that the impugned judgement and order are ex-facie illegal in that the provisions under Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure specifically provides the provision for temporary injunction and no provision is laid down therein for mandatory injunction, as such an order of mandatory injunction cannot be passed upon an application under Order XXXIX, Rule, 1 and 2 of the Code of Civil Procedure. Therefore, the learned appellate Court below has committed serious error of law in dismissing the Miscellaneous Appeal and affirming the order of mandatory injunction thereby has committed an error of law resulting in an error in the decision occasioning failure of justice.

III. For that the learned appellate Court below has committed error of law in affirming the order of mandatory injunction of the trial Court inasmuch as the said order of mandatory injunction is in violation of section 91 and 106 of the Companies Act, 1994 and thus the impugned judgement and order of the learned appellate Court has resulted in an error in the decision occasioning failure of justice.

IV. For that the learned appellate Court has failed to consider that in the instant case the shareholders have removed the opposite-party by extra-ordinary resolution in EGM and as such the order of mandatory injunction for restoration of directorship of the opposite-party has frustrated the provisions of section 91 and 106 of the Companies Act, 1994 which authorise the shareholders to elect and remove any director. Thus the learned appellate Court below by affirming the said order of mandatory injunction has committed error of law resulting in an error in the decision occasioning failure of justice.

V. For that the learned trial Court by granting the order of mandatory injunction has overridden the provisions of the sections 91 and 106 of the Companies Act, 1994 and the appellate Court below by affirming the said order has committed error of law which has resulted in an error in the decision occasioning failure of justice, hence the impugned judgement and order are liable to be set aside.

VI. For that the learned trial Court has failed to consider that pursuant to the provision of section 91 of the Companies Act, 1994 the petitioners have no authority to restore the directorship of the opposite-party and as such the trial Court by granting mandatory injunction directing the petitioners to restore the directorship of the opposite-party and the learned appellate Court below by affirming the said order has committed error of law which has resulted in an error in their decisions occasioning failure of justice. Therefore the impugned judgement and order are liable to be set aside.

VII. For that both the Courts below have failed to consider that the petitioners have not removed the opposite-party from his directorship. It is the shareholders who have removed the opposite-party from directorship. As such the petitioners cannot be directed to restore the directorship of the opposite-party. Therefore, the Courts below directing the petitioners to restore the directorship of the opposite-party have committed error of law, which has resulted in an error in their decisions occasioning failure of justice. Therefore the impugned judgement and order are liable to be set aside.

VIII. For that both the trial Court and the appellate Court below have misinterpreted the decision of the Hon’ble Appellate Division in the case reported in 35 DLR (AD) at page 42 and thereby committed serious error of law which has resulted in an error in their decisions occasioning failure of justice.

IX. For that the learned Courts below failed to consider that in the decision of the Appellate Division reported in 35 DLR (AD) at page 42 the Hon’ble Court clearly outlined that there must be an intention “in order to defect the order of the Court”, but in the instant case the meeting was prescheduled to be held on 05.01.2003. As such there cannot be any shred of doubt that the meeting was held in ordinary course and not with the intention to defect the order of the Court. Therefore, the appellate Court below has committed error of law by affirming the order of mandatory injunction.

X. For that the learned Courts below have failed to consider that in the decision of the Appellate Division the Hon’ble Court also outlined that the act of the party must be in order to defect the “order of the Court which might be passed on such an application”. But in the instant case the learned trial Court had already rejected the prayer for ad-interim injunction on two occasions, first on 02.01.2003 by not granting any ad-interim relief and issuing show cause notice only and on 04.01.2003, i.e. just one day prior to the holding of the EGM, by rejecting the application under section 151 of the Code of Civil Procedure for ad-interim injunction. Therefore, the trial Court itself has concurred with the fact that there was no prima facie case on behalf of the opposite-party to restrain the petitioners from holding the meeting. As such in such a situation granting of mandatory injunction is clearly a non-application of judicial mind. Therefore, the learned appellate Court below has committed error of law in affirming the said order of mandatory injunction and such affirmation has resulted in an error in the decision of the learned appellate Court occasioning failure of justice.

XI. For that both the Courts below have committed serious error of law in overlooking the fact that in the case reported in 35 DLR (AD) at page 42 the learned trial Court on the very same day of filing of the suit granted ad-interim injunction restraining the defendant from blocking the passage in question. But the defendant taking advantage of an order of stay obtained from the appellate Court in the appeal filed against rejection of an application under Order XXXIX, Rule 4 of the Code of Civil Procedure constructed the wall blocking the passage in question pending hearing of the appeal. As such it is clear that the facts of the case reported in 35 DLR (AD) at page 42 is out and out different from the facts of the instant case. Therefore, the learned appellate Court below has committed error of law in affirming the order of mandatory injunction relying upon the said decision reported in 35 DLR (AD) at page 42.

XII. For that both the Courts below have committed serious error of law in overlooking the fact that in the case reported in 35 DLR (AD) at page 42 the High Court Division at the time of making the Rule absolute and affirming the order of ad-interim injunction passed by the trial Court directed the defendant to remove the wall constructed subsequent to the passing of the ad-interim injunction by the trial Court. Therefore, the learned appellate Court below has committed error of law in affirming the order of mandatory injunction relying upon the said decision reported in 35 DLR (AD) at page 42.

XIII. For that it is well settled that the Courts should be reluctant in granting temporary injunction affecting the internal affairs of any company. In such a situation passing of mandatory injunction affecting the internal affairs of a company cannot be justified. As such the learned appellate Court below has committed error of law in affirming the order of mandatory injunction which has resulted in an error in the decision occasioning failure of justice.

XIV. For that the Courts should not pass any order in futile. In the instant case although the petitioners are not authorised to restore the directorship of the opposite-party, the learned trial Court has directed the petitioners to restore the directorship of the opposite-party. The said order is in effect an order in futile and the appellate Court has affirmed such a futile order. As such the learned appellate Court below by affirming such futile order has committed error of law which has resulted in an error in the decision occasioning failure of justice.

XV. For that it is well settled that before granting any equitable relief the Courts should ascertain whether there is any prima facie case in favour of the party seeking equitable relief. Mandatory injunction is an equitable relief. As such the trial Court should have ascertained as to whether the opposite-party has any prima facie case. Therefore the learned trial Court in not ascertaining whether the opposite-party has any prima facie case, has committed error of law and the learned appellate Court below by affirming the said order has committed error of law which has resulted in an error in the decision occasioning failure of justice. Therefore, the impugned judgement and order are liable to be set aside.

XVI. For that the Courts below have failed to consider that the opposite-party has no prima facie case in that in the suit he has challenged the notice of the EGM. The notice of the EGM was admittedly issued in compliance of section 85 of the Companies Act, 1994. As such the said notice cannot be ex-facie illegal. Since the notice was not illegal, the holding of EGM was not illegal in that there was no restraining order to hold the EGM, rather the trial Court rejected the prayer for ad-interim injunction to retrain the holding of the EGM. In such situation there cannot be any prima facie case in favour of the opposite-party. As such the impugned judgement and order are liable to be set aside.

XVII. For that the Courts below have committed error of law in not considering that the balance of convenience and inconvenience is not in favour of the opposite-party. As such the learned trial Court have committed error of law in granting the mandatory injunction and the appellate Court by affirming the said order has committed error of law which has resulted in an error in their decisions occasioning failure of justice.

XVIII. For that the learned appellate Court below did not apply its judicial mind while disposing of the appeal.

XIX. For that the impugned judgement and order are otherwise illegal and liable to be set aside.

Wherefore, it is humbly prayed that the Hon’ble Court may be pleased to:

a) Call for the records and issue Rule calling upon the opposite-party to show cause as to why the Judgement and order dated 16.03.2003 passed by Mr. Muhammad Mahbub Ul Islam, Additional District Judge, 6th Court at Dhaka in Miscellaneous Appeal No. 26 of 2003 dismissing the appeal filed by the petitioner No. 1 and affirming the order dated 13.01.2003 passed by Mr. Mohammad Salehuddin Ahmed, Joint District Judge, 5th Court at Dhaka in Title Suit No. 3 of 2003 granting temporary mandatory injunction on an application filed by the opposite-party under Order XXXIX, Rule 1 & 2 of the Code of Civil Procedure, 1908 directing the petitioners to restore the directorship of the opposite-party in the Board of Directors of the Bank after he was removed from the Board by the shareholders of the Bank in the Extra Ordinary General Meeting held pursuant to the Companies Act, 1994, shall not be set aside;

b) After perusal of the records, hearing of the parties and cause shown, if any, make the Rule absolute;

c) Pending hearing of the Rule, stay operation of the impugned judgement and order till disposal of the Rule.

d) Cost of the proceeding be awarded in favour of the petitioners; and

e) Pass such other or further order or orders as may be deemed fit and proper.

And for this act of kindness the petitioners as in duty bound will ever pray.

AFFIDAVIT

I, _______________________, son of _____________________, Senior Assistant Vice President, Mercantile Bank Limited, Head Office, 61 Dilkusha Commercial Area, Dhaka-1000, aged about __________ years, by faith ___________, profession service, nationality Bangladeshi, do hereby solemnly affirm and say as follows:

01. That I am the Tadbirkar of the petitioners in this case and acquainted with the facts and circumstances of the present case and competent and authorised to swear this Affidavit.

02. That the statements of facts made in this petition are true to my knowledge and matters of records, which I verily believe to be true and the rests are submission before this Hon’ble Court.

Prepared in my office:
DEPONENT
Advocate The deponent is known to me and identified by me.
Solemnly affirmed before me by the said deponent on this the ________ day of __________ at _______ a.m. Advocate
Commissioner of Affidavits

Supreme Court of Bangladesh

High Court Division

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