Abdur Rahim Chowdhury Vs. Bangladesh Bank and others, 52 DLR (AD) (2000) 71

Case No: Civil Appeal No. 47 of 1998

Judge: Kazi Ebadul Hoque,

Court: Appellate Division ,,

Advocate: Syed Ishtiaq Ahmed,Mr. Rokanuddin Mahmud,Dr. Rafiqur Rahman,,

Citation: 52 DLR (AD) (2000) 71

Case Year: 2000

Appellant: Abdur Rahim Chowdhury

Respondent: Bangladesh Bank and others

Subject: Banking,

Delivery Date: 2000-02-08

Supreme Court of Bangladesh
Appellate Division
(Civil)

 
Present:
Latifur Rahman, CJ.
Bimalendu Bikash Roy Choudhury, J.
Kazi Ebadul Hoque, J.
 
Abdur Rahim Chowdhury
………………..Appellant
Vs.
Bangladesh Bank and others
……………….Respondents
 
Judgment
February 8, 2000.
 
The Banking Companies Act, 1991
Section 46
In view of the inspection report and recommendation of the standing committee it cannot be said that there was no material before the respondent no. 1 to form the opinion concerning the appellant or that the said opinion was fanciful. There was no requirement of any satisfaction but to form an opinion under the proviso to section 46 (2) of the Act. So there is no illegality in the impugned order………(9 & 12). 
 
Lawyers Involved:
Syed Ishtiaq Ahmed, Senior Advocate (Rokanuddin Mahmud, Senior Advocate with him), instructed by Shamsul Hoque Siddique, Advocate- on-Record—For the Appellant.
Rafiqur Rahman, Senior Advocate, instructed by Serajur Rahman, Advocate-on-Record — For the Respondent Nos. 1-3.
Not represented—Respondent No. 4.
 
Civil Appeal No. 47 of 1998
(From the Judgment and order dated July 10, 1997 passed by the High Court Division in Writ Petition No. 5764 of 1996).
 
JUDGMENT
Kazi Ebadul Hoque, J.
 
1.      This appeal is by leave from judgment and order dated 10-7-97 passed by a Division Bench of the High Court Division discharging the Rule Nisi obtained by the appellant A Rahim Choudhury in Writ Petition No. 5764 of 1996 upholding the order of respondent No. 1. Bangladesh Bank dated 22-12-96 directing the appellant to refrain from performing functions of the Managing Director of Arab Bangladesh Bank Ltd. until further orders under the provisions of section 46(2) of the Banking Companies Act, 1991.
 
2.      Appellant while serving as the Managing Director of Arab Bangladesh Bank Ltd. having been promoted to that post on March 1994, was served with an order by respondent No.1 dated 22-12-96 to show cause within 7 days as to why action under section 46(1) of the Bank Companies Act, 1991 (briefly the Act) shall not be taken against him as the Managing Director of the said Bank. By the said order appellant was also directed to refrain from performing the functions of the Managing Director from the time of receipt of the order until further orders and allowed the Deputy Managing Director of the Bank to perform the functions of the Chief Executive of the Bank. Appellant’s challenge to the said order before the High Court Division having failed he obtained leave to appeal.
 
3.      Learned Advocate for the appellant contended that no reason having been disclosed by the respondent No.1 in the impugned order directing the appellant to refrain from performing the functions of the Managing Director the same was arbitrary exercise of discretion on the part of the respondent No.1 and High Court Division erred in law in not holding so and discharging the Rule. He further contended that there was no material on record for the respondent No.1 to form an opinion under the proviso to section 46(2) of the Act. He also contended that High Court Division was wrong in discharging the Rule on holding that respondent’s opinion was formed on a subjective satisfaction on the recommendation of the Standing Committee on the materials before it though there was no such materials before the Standing Committee to make such a recommendation. He also contended that the “opinion” under the proviso to section 46(2) must be a reasonable opinion which a reasonable person might form on the basis of some materials and in that view of the matter High Court Division was wrong in applying the subjective instead- of the objective test as required by law.
 
4.      In the writ petition appellant challenged the order directing him to refrain from the functions of the Managing Director of the on the ground, amongst others, that there was i report of the Standing Committee which is precondition for passing such an Respondent’s case was that the said order passed on the basis of a report and recommendation of the Standing Committee. So under the direction of the High Court Division respondents filed the copies of the report of inspection and report a recommendation of the Standing Committee of Bangladesh Bank. After considering the report recommendation of the Standing Committee Court Division observed as follows:

“The said report after discussing alleged irregularities committed by petitioner made the following recommendation for consideration by the Governor of Bangladesh Bank.

ব্যাংকের আমানতকারীদের স্বার্থ ক্ষুণ্ণ হয়েছে। এমতাবস্হায় স্থায়ী কমিটি গভর্নর মহোদয়ের সদয় বিবেচনার জন্য নিম্নোক্ত প্রস্তাব রাখছে।
১। (ক) মেসার্স মার্সাল সার্ভিসেস এর হিসাবে অনিয়মিত ঋণ সুবিধা প্রদানের মাধ্যমে ব্যাংক তথা এর আমানতকারীদের স্বার্থ বিরোধী কাজে লিপ্ত হওয়ায় এ বি ব্যাংকের ব্যবস্থাপনা পরিচালিত এ রহিম চৌধুরী বিরুদ্ধে কোম্পানি আইন, ১৯৯১ এর ৪৬ (১) ধারার আওতায় যথাযথ ব্যবস্হা গ্রহন করা হইবে না, তজন্য তাকে চিঠি প্রাপ্তির ৩(তিন)দিনের মধ্যে কারন দর্শানোর জন্য নির্দেশ প্রদান করা যাইতে পারে।
(খ) ব্যাংকের ব্যবস্হাপনা পরিচালক এ রহিম চৌধুরীকে ব্যাংক কোম্পানি আইন, ১৯৯১ এর ৪৬ (১) ধারার আওতায় ব্যবস্হা গ্রহনের নিমিত্তে কারন দর্শানোর জন্য সুযোগ প্রদান জনিত বিলম্ব উক্ত ব্যাংক ও এর আমানতকারীদের জন্য ক্ষতিকর হতে পারে বিধায় উল্লেখিত আইন এর ৪৬ (১) ধারার আওতায় তাকে ব্যাংকের ব্যবস্হাপনা পরিচালক হিসাবে চিঠি প্রাপ্তির সময় হতে কাজ না করার জন্য নির্দেশ প্রদান করা যেতে পারে এবং তার সাময়িক কর্ম বিরতিকালিন সময়ে পরবর্তী ঊর্ধ্বতন কর্মকর্তাকে প্রধান নির্বাহীর দায়িত্ব প্রদান করা যেতে পারে।
২। মেসার্স মার্সাল সার্ভিসেস এর হিসাবে অনিয়মিত ঋণ সুবিধা অনুমোদনের মাধ্যমে ব্যাংকের আমানতকারীদের স্বার্থের পরিপন্থি কাজ করায় এ/বি ব্যাংকের পরিচালনা পরিষদ এর বিরুদ্ধে ব্যাংক কম্পান্য আইন/১৯৯১ এর ৪৭(১) ধারার আওতায় কেন যথাযথ ব্যবস্হা গ্রহন করা হবে না এ জন্য পরিষদের চেয়ারম্যানের মাধ্যমে পরিষদকে ৭(সাত) দিনের মধ্যে কারন দর্শানোর জন্য নির্দেশ প্রদান করা যেতে পারে।  

It thus appears that there was a recommendation by the standing committee that the petitioner should be placed under suspension under proviso to section 46(2) of the Bank Company Act, 1991. The Bank by its affidavit-in-opposition has taken the position that it formed the opinion that the continuation of the petitioner as Managing Director would be detrimental in the public interest, the banking company and the depositors. In view of the recommendation by the standing committee which was taken into consideration by the Bangladesh Bank we can not say that the order of suspension was taken without forming any opinion. In this connection the law has made a difference by the word satisfaction used in 46(1) and the word opinion in the proviso to section 46(2). There being material before us in the form of the recommendation of the standing committee to the Bangladesh Bank, it cannot be said that no opinion was formed by the Bangladesh Bank in passing the impugned order although no such opinion was mentioned in the impugned order itself.
 
5.      Learned Advocate for the appellant relied on the decision in the case of Dr. Nurul Islam V. Bangladesh reported in 1981 BLD (AD) 140 = 33 DLR (AD) 201 in support of his contention that reason has to be assigned in the order taking action against an officer by his superior authority. In that case Dr. Nurul Islam was retired from service under the provisions of section 9(2) of the Public Servants’ (Retirement) Act, 1974 without assigning any reason except stating in the order that he completed 25 years of service. In the leading judgment Munim J found the order to be bad for malice in law and arbitrary exercise of power in the absence of any guide line in the said provision of the Act. In that decision it was observed as follows:

“In such a case the authority concerned would have remained free, so as not to disclose any reason in the retirement order, but if its action in retiring a Government servant was challenged as arbitrary, as has been done by the appellant in the present case, the authority could have disclosed before the Court the basis of its action.”
 
6.      In the appeal before us though no reason was assigned in the impugned order directing the appellant to refrain from performing the functions of the Managing Director of the Bank the same having been disclosed in the recommendation of the Standing Committee of the Bangladesh Bank on the basis of which the impugned order was passed by the respondent No.1 and the same having been produced before the High Court Division we find no illegality on the part of the High Court Division in observing:
“it cannot be said that no opinion was formed by the Bangladesh Bank in passing the impugned order although no such opinion was mentioned in the order itself.”
 
7.      We therefore, find no merit in the first contention of the learned Advocate for the appellant. We hold that authority is not required to disclose its reasons in the order communicating its decision to the person affected by the same. But in case the order is challenged before the Court as arbitrary or discriminatory the authority must disclose the reasons before the Court failing which the order would be struck down as arbitrary or discriminatory.
 
8.      The contention that there was no material on record for the respondent No. 1 to form an opinion under the proviso to section 46(2) of the Act has been successfully met by the respondents by producing the inspection report and the report with recommendations of the Standing Committee to issue notice on the appellant to show cause within 7 days as to why action should not be taken against him under section 46(1) of the Act and to direct him not to perform the functions of the Managing Director of the Bank from the time of receipt of the letter as delay due to the time to show cause would be detrimental to the interest of the depositors of the Bank and to authorize the next higher officer to perform the functions of the Chief Executive during his temporary suspension of work. High Court Division, therefore, rightly negatived the contention that the order of suspension was made without forming any opinion. In the face of such recommendation by the Standing Committee, it cannot be said that there was no materials for the respondent No.1 to form an opinion to direct the appellant to refrain from performing the functions of the Managing Director.
 
9.      Proviso to section 46(2) of the Act speaks of “in the opinion of the Bangladesh Bank”. Formation of an opinion is undoubtedly result of mental exercise of any question. Normally for forming an opinion there is existence and consideration of some relevant materials concerning the question. But an opinion can also be formed fancifully without any such material. In the instant case Bangladesh Bank was of the opinion that to allow the appellant to perform the functions of the Managing Director from the time of service of the impugned order on him would be detrimental to the interest of the depositors of the Bank on the basis of the inspection report and the report and recommendation of the Standing Committee. It may be mentioned that an inspection report was submitted by two officers of the Bangladesh Bank on 14-12-96 regarding loan account of MIS. Marshall Services maintained in the principal branch of the Arab Bangladesh Bank Ltd. Thereafter on 17-12-96 a meeting of the Standing Committee constituted under section 48 of the Act was held. In the said meeting aforesaid report of the inspection and the connected papers were considered and the aforesaid report and recommendation were made. In view of the existence of the report and recommendation it cannot be said that there was no material before the respondent No.1 to form the opinion concerning the appellant or that the said opinion was merely fanciful. High Court Division is not, therefore, correct to observe that the opinion was formed on subjective satisfaction on the recommendation of the Standing Committee on materials before it inasmuch as there was no requirement of any “satisfaction” under the proviso to section 46(2) of the Act and the only requirement was of forming an “opinion”. Since there is no requirement of satisfaction for passing the impugned order High Court Division’s observation noted above cannot help the appellant.
 
10.    A reasonable opinion is formed by reasonable person when he finds something relevant in existence in the objective world concerning any question or issue. It a person without the existence of any such relevant objective phenomenon fancies something and then forms an opinion concerning any question or issue such opinion is neither, a reasonable opinion nor a reasonable person holds such an opinion. We have already noticed that the “opinion” of respondent No.1 concerning the appellant is based on the inspection report and the report and recommendation of the Standing Committee. So it cannot be said that the “opinion held by the respondent No. 1 concerning the appellant is not a reasonable opinion of a reasonable person.
 
11.    Before parting we like to observe that under the service jurisprudence when an employee is charge sheeted he is also put under suspension till conclusion of the inquiry proceedings. A Director, Managing Director or Chairman of a bank company does not serve under the Bangladesh which has been merely entrusted with the powers of supervision and control of the banking comp under the provisions of the Banking Companies 1991. So the requirement of formation of an opinion by the Bangladesh Bank has been made before directing a Director, Chairman or Chief Executive of a banking company to refrain from performing functions of his office during the pendency of the enquiry proceedings against him for his removal from office under section 46 of the Act. Such opinion must be formed on the basis of relevant materials on record and not fancifully without any such material nor on the basis of irrelevant materials. But such opinion need not be mentioned in the order communicated to Director, Chairman or Chief Executive of the banking company.
 
12.    In our view the High Court Division committed no illegality in the facts and circumstances and the law involved in the instant case in discharging the Rule. So the impugned judgment and order requires no interference by this Court.
 
The appeal is dismissed with cost to the respondents.
 
Ed.