X and others Petitioners Versus Islami Bank Bangladesh Limited and others

DISTRICT: DHAKA

IN THE SUPREME COURT OF BANGLADESH

HIGH COURT DIVISION

(CIVIL REVISIONAL JURISDICTION)

CIVIL REVISION NO. OF ___________

X and others

Petitioners

Versus

Islami Bank Bangladesh Limited and others

Opposite-parties

COUNTER AFFIDAVIT ON BEHALF OF THE OPPOSITE-PARTY NOS. 1-4

I, A, son of B, aged about_________ years, Secretary of Islami Bank Bangladesh Limited, 40 Dilkusha Commercial Area, Dhaka-1000, by faith Muslim, by nationality Bangladeshi, by profession Service-holder, do hereby solemnly affirm and declare as follows:

01. That I am the opposite-party No. 3 and Tadbirkar of the opposite-party Nos. 1-2 and 4 in this case and conversant with the facts and circumstances of the case and competent to swear this affidavit on my behalf and on behalf of the opposite-party Nos. 1-2 and 4.

02. That the plaintiffs/appellants/petitioners instituted Title Suit No. 254 of 2003 in the Court of Joint District Judge, 5th Court at Dhaka for declaration along with an application under Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure by suppressing the amended provision of section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003]. The said application was also filed by suppressing the provisions of the BRPD Circular Letter No. 8 dated 26.04.2003 and BRPD Circular No. 12 dated 26.04.2003 both issued by Bangladesh Bank. The plaintiffs/appellants/petitioners also suppressed that since the directorship of the plaintiff/appellant/petitioner No. 1 would fallen vacant by operation of law in the 20th Annual General Meeting, he submitted his candidature for election as Director in the said meeting vide Nomination Form dated 21.08.2003, however subsequently he withdrew his candidature vide letter dated 23.08.2003. As such although the learned Court of Joint District Judge initially granted status-quo, nonetheless after hearing, the said Court found no prima facie case, or balance of convenience and inconvenience, or irreparable loss in favour of the plaintiffs/appellants/petitioners and accordingly rejected the application for injunction.

03. That thereafter the plaintiffs/appellants/petitioners filed the Miscellaneous Appeal No. 314 of 2003 wherein they filed an application under Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure by suppressing the fact that after rejection of the injunction application by the learned Court of Joint District Judge, 5th Court on 11.10.2003, the Board of Directors of the respondent Bank held a meeting on 18.10.2003. The said meeting was attended by all the plaintiffs/appellants/petitioners. In presence of and upon agreement with the plaintiffs/appellants/petitioners the Board of Directors adopted a resolution for holding the adjourned election of the Directors on 12.12.2003. On the one hand the plaintiffs/appellants/petitioners in agreement with other Directors fixed the date of the election on 12.12.2003 and on the other hand they are trying to obtain an order of injunction restraining the holding of election of Directors. This is how the plaintiffs/appellants/petitioners are playing dubious role in connection with the election of Directors. This is neither faire nor proper and should not be allowed to continue. As such the plaintiffs/appellants/petitioners have not come before the Court with clean hands and hence they cannot get an equitable relief of injunction. In fact the plaintiffs/appellants/petitioners are aware that in the event they directly oppose the newly introduced provisions regarding appointment/election of Directors of banking company, Bangladesh Bank might remove them as Directors in exercise of powers conferred upon Bangladesh Bank by section 46 of the Bank Companies Act, 1991. For such reason they have resorted to the baseless suit to obtain an injunction, so that they can give an impression to Bangladesh Bank that it is the Court not them who has restrained the election. But the established principle of law is that “it is the Company and not the Court which is responsible for its management” and as such in “the matter of a company, it is advisable that the court should not interfere by granting injunction where in the internal management and functioning of the company may be affected.”

04. That section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003 published in the Official Gazette on 10.03.2003] provides as follows:

(1) †Kvb e¨vsK-†Kv¤cvbxi cÖavb wbe©vnx Kg©KZ©v, †h bv‡gB AwfwnZ nDb bv †Kb, e¨ZxZ Ab¨ †Kvb e¨w³ GKvw`µ‡g `yB †gqv‡` Qq erm‡ii AwaK cwiPvjK c‡` AwawôZ _vwK‡eb bv|

Bangladesh Bank also issued two Circulars in connection with the constitution of the Board of Directors of a banking company. BRPD Circular Letter No. 08 dated 26.04.2003 issued by Bangladesh Bank provides as follows:

1| e¨vsK †Kv¤cvbx AvBb, 1991 Gi aviv 15KK Gi Dc-aviv (1) Abyhvqx e¨vs‡Ki cieZx© mvaviY mfvi ZvwiL ch©š mgq we‡ePbvq G‡b e¨vs‡Ki †h me cwiPvjK GKvw`µ‡g Qq eQi wKsev Gi †ekx mgq a‡i cwiPvjK c‡` AwawôZ i‡q‡Qb/_vK‡eb, Dc-aviv (2) Gi weavb mv‡c‡¶, cieZx© mvaviY mfvi ci Zviv Avi cwiPvjK c‡` AwawôZ _vK‡eb bv| GB avivi weavb Abymv‡i †Kvb D‡`¨v³v-cwiPvj†Ki c`Z¨vM Avek¨K n‡j †Kvb cwiPvjK c`Z¨vM Ki‡eb Zv Dc-aviv (3) G ewY©Z c×wZ Abyhvqx cwiPvjbv cl©` wba©viY Ki‡e|

Bangladesh Bank has also issued another Circular on the same date. It is BRPD Circular No. 12 dated 26.04.2003. The said BRPD Circular No. 12 dated 26.04.2003 has been issued to reduce the total number of Directors of banking company. Relevant portion of the said Circular reads as follows:

e¨vsK-†Kv¤cvbxi cwiPvjbv cl©` AbwaK 13 (†Zi) Rb cwiPvjK mgš^‡q MwVZ nB‡e| Z‡e †h mKj e¨vs‡K GB msL¨vi AwaK cwiPvjK iwnqv‡Q, †m mKj evvs‡Ki cwiPvjKMY Zvnv‡`i eZ©gvb †gqv` ch©š ¯^xq c‡` envj _vwK‡Z cvwi‡eb| Aemi MÖn‡Yi wecix‡Z bZb cwiPvjK wb‡qvM/cbtwb‡qvM ev mvgwqKfv‡e m„ó cwiPvj‡Ki kY¨ c` ci‡Yi ‡¶‡Î, e¨vsK †Kv¤cvbx AvBb, 1991 Gi aviv 15KK mv‡c‡¶, GB weavb Kvh©Ki nB‡e|

05. That BRPD Circular No. 12 dated 26.04.2003 is a delegated legislature which deals with the total number of Directors, while newly inserted section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] clearly provides that the Directors who have completed more than six years in two terms shall not remain as Directors. The length of directorship of the plaintiffs/appellants/petitioners are given below:

Sl Name Date of Appointment Length
1. Mr. C 25.09.86 17 years
2. Mr. D 15.07.92 11 years
3. Mr. E 24.08.95 8 years

From the aforesaid table it is clear that in view of the provision of section 15KK of the Bank Companies Act, 1991 the plaintiffs/appellants/petitioners having completed more than 6 years, none of them is eligible to remain as Directors of the opposite-party Bank. In fact pursuant to the provisions of section 15KK of the Bank Companies Act, 1991 and BRPD Circular Letter No. 08 dated 26.04.2003 none of them is Director of the Bank any more with effect from the date of the 20th Annual General Meeting of the Bank, because their offices have already fallen vacant by operation of section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] and the BRPD Circular Letter No. 08 dated 26.04.2003.

List of tenure of all existing Directors of the Bank is annexed herewith and marked as ANNEXURE “1”.

06. That I have gone through the revisional petition (hereinafter referred to as “the petition”) whereupon the instant Rule has been issued. Having understood the contents of the said petition I have been advised by my learned lawyer to controvert those statements which are necessary for disposal of the instant Rule and those statements which I do not hereinafter specifically admit shall be deemed to have been denied by the opposite-parties Nos. 1-4.

07. That the statements made in paragraphs 1-4 of the petition are matters of record. In this regard it is submitted that in view of the consistent decisions of our Appellate Division and High Court Division discouraging and advising the courts not to interfere with the internal management of any company and in view of the provision of section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] and the BRPD Circular Letter No. 08 dated 26.04.2003, the learned Courts below have not committed any error of law in rejecting the injunction application resulting in an error occasioning failure of justice.

08. That the statements made in paragraphs 5-6 of the petition with regard to the tenure of directorship of the appellants/petitioners are misrepresentation of law and as such denied by these respondents/opposite-parties. Contrary to what has been stated, in view of the provision of section 15KK of the Bank Companies Act, 1991 and BRPD Circular Letter No. 08 dated 26.04.2003 issued by Bangladesh Bank, the appellants/petitioners having completed more than 6 years, none of them is eligible to remain as Directors of the defendant Bank after the 20th Annual General Meeting of the defendant Bank held on 19.09.2003. In fact none of them is Director of the respondent Bank any more with effect from the date of the 20th Annual General Meeting of the Bank, because their office has already fallen vacant by operation of “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] and the BRPD Circular No. 08. However, due to non-holding of the election on 19.09.2003 in compliance of the order dated 17.09.2003 passed by the learned trial Court, the vacant positions of the appellants/petitioners could not be filled up in the said meeting.

09. That the statements made in paragraphs 7-11 of the petition are completely misinterpretation of law and hence denied by these respondents. Contrary to what has been stated, BRPD Circular No. 12 dated 26.04.2003 was issued by Bangladesh Bank in order to reduce the total number of Directors to thirteen. In reducing the total number of Directors, the said Circular provides that the Directors in addition to the said number of thirteen will continue until expiry of their current term. But section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] clearly provides that the Directors who have completed more than six years in two terms shall not remain as Directors. Since Bank Companies Act, 1991 is a primary legislation and BRPD Circular No. 12 dated 26.04.2003 is delegated legislation, the former will prevail over the later. In fact BRPD Circular No. 12 dated 26.04.2003 itself also provides that the said Circular will be applicable subject to the provision of section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003]. Consequently, the appellants/petitioners admittedly having completed more than six years [completed 17 years, 11 years and 8 years], cannot remain as Directors of the respondent Bank.

10. That the statements made in paragraph 12 of the petition are misrepresentation of both law and facts and as such denied by these respondents/opposite-parties. It is submitted that in view of the provision of section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] and the consistent decisions of our Appellate Division and High Court Division discouraging and advising the courts not to interfere with the internal management of any company, the appellants/petitioners cannot have any chance to succeed in the suit as claimed by the appellants/petitioners. There is no question of multiplicity of litigation as alleged by the plaintiffs/appellants/petitioners.

11. That the statements made in paragraphs 13-15 of the petition are false, frivolous and concocted, hence denied by these respondents. Contrary to what has been submitted, in view of the provision of section “15KK(1)” of the Bank Companies Act, 1991 [as amended by Bank Companies (Amendment) Act, 2003] and the consistent decisions of our Appellate Division and High Court Division discouraging and advising the courts not to interfere with the internal management of any company, the appellants/petitioners do not, in fact cannot have any prima facie case and as such the balance of convenience and inconvenience cannot be in their favour. Directorship not being a legal right and the appellants/petitioners having completed a quite long time as Directors, cannot and will not suffer any irreparable loss and injury. Since the basic requirement for grating any interim injunction is absence in the instant case, the question of the appeal becoming infructuous is immaterial and irrelevant.

12. That the statements made in paragraph 16 of the petition are matters of record. As such no comment is made.

13. That the statements made in paragraph 17 of the petition are baseless and inconsistent and as such denied by these respondents/opposite-parties. Contrary to what has been stated, the learned District Judge passed an order directing the defendants/respondents/opposite-parties to show cause as to why an order of injunction would not be passed. These defendants/respondents/opposite-parties appeared and filed Written Objection against the said application. But before hearing of the said application the plaintiffs/appellants/petitioners filed another application under section 151 of the Code of Civil Procedure for status-quo. These defendants/respondents/opposite-parties also filed another Written Objection against the said application under section 151 of the Code of Civil Procedure. After hearing the submissions of both the parties, the learned District Judge transferred it to the learned Additional District Judge, 2nd Court for hearing of the injunction matter and the said Court after long hearing, rejected the petitions vide order dated 01.12.2003.

Written Objections filed by the defendants/respondents/opposite-parties are annexed herewith and marked as ANNEXURES “2” and “3”.

14. That the statements made in paragraphs 18-20 of the petition are false and frivolous and as such denied by these defendants/respondents/opposite-parties. In this regard it is submitted that after rejection of the injunction application by the learned Court of Joint District Judge, 5th Court on 11.10.2003, the Board of Directors of the defendant/respondent/opposite-party Bank held a meeting on 18.10.2003. The said meeting was attended by all the plaintiffs/appellants/petitioners. In presence of and upon agreement with the plaintiffs/appellants/petitioners the Board of Directors adopted a resolution on 18.10.2003 for holding the adjourned election of the Directors on 12.12.2003. With regard to the legal opinion, it is submitted that the legal opinion has no manner of application in granting an order of injunction. If the election is not held in accordance with law then the election may be challenged in proper forum.

Extract of the resolution of the Board Meeting and the attendance register are annexed herewith and marked as ANNEXURES “4” and “5”.

15. That the statements made in paragraph 21 of the petition are matters of record. In this regard it is submitted that in rejecting the application for injunction the learned Additional District Judge, 2nd Court has not committed any error of law resulting in an error in the said order occasioning failure of justice. As such the instant revisional petition is liable to be rejected.

16. That the grounds taken in paragraph 22 do not disclose any error of law committed by the learned Court below and the prayer made in the petition is not tenable. As such the Rule is liable to be discharged.

17. That it is submitted that the impugned order has not resulted in an error in the decision occasioning failure of justice. In such situation it is not a proper case for inference by this Hon’ble Court. As such the order passed by the learned Court below should not be disturbed and therefore, the Rule is liable to be discharged.

18. That under the above circumstance your Lordships may be pleased to discharge the Rule and/or pass such further order or orders as the court may deem fit and proper.

19. That the statements of facts made above are true to the best of my knowledge and belief and the rest are submissions 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 aforesaid deponent on this the _________ day of ______________________. ADVOCATE

Commissioner of Affidavits

Supreme Court of Bangladesh

High Court Division

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