Bangladesh Bank and others Vs. Zafar Ahmed Chowdhury and another, 53 DLR (AD) (2001) 70

Case No: Civil Petition for Leave to Appeal No. 245 of 2001

Judge: Mahmudul Amin Choudhury.,

Court: Appellate Division ,,

Advocate: Dr. M Zahir,,

Citation: 53 DLR (AD) (2001) 70

Case Year: 2001

Appellant: Bangladesh Bank and others

Respondent: Zafar Ahmed Chowdhury and another

Subject: Company Matter,

Delivery Date: 2001-02-20

Supreme Court of Bangladesh
Appellate Division
(Civil)

 
Present:
Mahmudul Amin Choudhury, J.
Mainur Reza Chowdhury, J.
Md. Gholam Rabbani, J.
Md. Ruhul Amin, J.
 
Bangladesh Bank and others
.......... Petitioners
Vs.
Zafar Ahmed Chowdhury and another
……… Respondents
 
Judgment
February 20, 2001.
 
The Code of Civil Procedure 1908 (V of 1908),
Order XXXIX, Rules 1 and 2
The Bank Companies Act, 1991
Section 46
A person who is aware of an order of the Court is bound to obey the same even though he was not a party to that when it affects the result of the earlier order. In the present case earlier order was to maintain status quo in respect of composition of the Board of Directors of the Bank and a copy of that order was sent to the Bangladesh Bank by the UCBL and in such a situation Bangladesh Bank was bound to honour that order. What cannot be done directly cannot be allowed to be done indirectly to circumvent the same………… (10)
 
Cases Referred to-
Dr. Nurul Islam vs. Bangladesh and others 33 DLR (AD) 201; Attorney-General vs. Times Newspapers Ltd & another (1991) 2 All England Law Reports 398.
 
Lawyers Involved:
Dr. M Zahir Senior Advocate (Amirul Islam, Senior Advocate with him), instructed by Sharifuiddin Chaklade, Advocate-on-Record—For the Petitioners.
Syed Istiaque Ahmed, Senior Advocate (Rokanuddin Mahmud, Senior Advocate with him), instructed by Ataur Rahman Khan, Advocate Record—For the Respondent.
Not represented—Respondent No. 2.
 
Civil Petition for Leave to Appeal No. 245 of 2001
 (From the judgment and order dated 18-1-2001 passed by the High Court Division in Writ Petition No. 5642 of 2000).
 
JUDGMENT
 
Mahmudul Amin Choudhury, J.
 
1.         This petition for leave to appeal is against judgment and order dated 18-1-2001 passed by a Division Bench of the High Court Division in Writ Petition No. 5642 of 2000 making the Rule absolute.
 
2.         The short fact leading to this petition is that, respondent filed aforesaid writ petition on being aggrieved by letters dated 14th June, 2000, 16th October, 2000 and 6th November, 2000 which were Annexed as Annexures ‘A’ to ‘C’ issued by the present petitioners and a Rule was issued asking the petitioners to show cause as to why the aforesaid Memos and the proceeding initiated under section 46 of the Bank Companies Act, 1991 shall not be declared to have been issued without lawful authority and is of no legal effect.
 
3.         The short fact leading to this petition is that, respondent No. 2 was one of the Sponsor Director of the United Commercial Bank Limited, hereinafter referred to as UCBL and since establishment of the bank he was continuously working as Director of the Bank and became its Chairman in 1997. The writ petitioner filed writ petition challenging the aforesaid orders of the present petitioners issued purportedly under section 46 of the Bank Companies Act, 1991 for his removal from the present post and position i.e. Chairman of the bank, on the basis of an ex parte report prepared in gross violation of the principles of natural justice and without any recommendation of the Standing Committee as required under section 47 of the said Act. It is the case of the writ petitioner that notice dated 14th June, 2000 was issued under the signature of petitioner No. 3 at the order of respondent Nos.1-2 asking the writ petitioner to show cause as to why he should not be removed from the post of the Chairman and Director of the UCBL on certain allegations, dated 16th October 2000 asking him to appear before petitioner No. 2 on 19-10-2000 for a personal hearing and letter dated 6th November, 2000 issued by petitioner Nos. 1-3 asking the writ petitioner to appear before the Deputy Governor, Bangladesh Bank who was the Chairman of the Standing Committee under section 48 of the said Act for personal hearing. Letter dated 20th November, 2000 is a modification of the earlier two letters. It has been alleged by the present petitioners that the writ petitioner obtained illegal financial benefit from UCBL between 1-9-1997 and 20-8-1999 causing obstruction in the management of the bank which is against public interest and also against the interest of the customers and depositors. It is the further case of the writ petitioner that the present petitioners were preparing to take illegal steps to remove him from the post of Chairman of UCBL when they earlier failed to remove him for which another writ petition was filed which was disposed of in favour of the writ petitioner on compromise. It is also the case of the writ petitioner that when petitioner No. 1 Bank issued notice dated 27-8-1999 under section 47 of the Bank Companies Act, 1991 against the Directors and also the Board of Directors of UCBL which included the present writ petitioners wherein the petitioner No. 1 wanted to supersede the Board of Directors of the aforesaid bank Writ Petition No. 3385 of 1999 was filed challenging the aforesaid Memos dated 27-8-1999 and a Rule Nisi was issued. That letter dated 27-8-1999 was subsequently withdrawn by the present petitioner No. 1 and an agreement was entered into between Bangladesh Bank and the writ petitioners and ultimately, the writ petition was withdrawn in view of this agreement. It is the further case of respondent No. 1 that one Akhteruzzaman Chowdhury claiming himself as chairman of the said Bank filed Title Suit No. 210 of 1999 in the 4th Court of Assistant Judge, Dhaka which was subsequently renumbered as Title Suit No. 81 of 2000 of the First Court of Assistant Judge, Dhaka wherein he obtained an ad interim order of injunction restraining the present respondent and 4 others from interfering with the activities and act as Chairman and Directors of UCBL till 3-10-1999. Against that order of the learned Assistant Judge present respondent No. 1 preferred Miscellaneous Appeal No. 224 of 1999 before the learned District Judge, Dhaka who by order dated 14-9-1999 admitted the appeal and stayed operation of the ad interim order of injunction passed by the trial Court. Thereafter Akhteruzzaman Chowdhury filed Civil Revision No. 3118 of 1999 before the High Court Division wherein a Rule was issued which was subsequently discharged. Then Appellate Division was moved in Civil Miscellaneous Petition No. 534 of 1999 and by order dated 30-11-1999 that Leave Petition was disposed of with a direction to the parties to maintain status quo in the composition of the Board of Directors of the UCBL as recognised by Bangladesh Bank by letter dated 5-9-1999 till the disposal of the injunction matter by the trial Court. This Division passed the following order on 30-11-1999:
 
“Heard the learned Counsel for the petitioners and the caveator. Let the status quo in the composition of the Board of Directors of the concerned Bank be maintained as recognised by the Bangladesh Bank by its letter dated 5-9-1999 till disposal of the injunction matter by the trial Court”.
 
4.         The definite case of the writ petitioner is, that by a forwarding letter of the UCBL a copy of this order was sent to Bangladesh Bank and that injunction matter in the suit is still pending. Thereafter orders dated 14th June, 2000, 16th October, 2000 and 6th November, 2000 have been issued by the present petitioners. The High Court Division on consideration of the facts and circumstances of the case made the Rule absolute earlier issued and declared that the aforesaid Memos and notices have been made without lawful authority and are of no legal effect.
 
5.         Dr. M Zahir, learned Advocate appearing on behalf of the petitioners, at the very outset submits that the suit where injunction was passed was filed by one Akhteruzzaman Chowdhury in which suit Bangladesh Bank was not a party. So, any order passed in that suit has no binding effect upon the present petitioners. He submits that Bangladesh Bank by the impugned orders passed under section 46 of the Bank Companies Act, 1991 only asked the writ petitioner to show cause and this issuance of show cause is a statutory right of the petitioner. It is contended that if satisfied with the explanation Bangladesh Bank may drop the proceeding but this cannot be gagged in view of the pendency of the suit where the petitioners are not parties. Dr. Zahir submits that copy of the order passed by the Appellate Division in the earlier writ petition has no binding effect on Bangladesh Bank. Dr. Zahir contends that the statutory power of Bangladesh Bank to initiate a proceeding under section 46 of the Bank Companies Act, 1991 may not be thwarted by an order to maintain status quo in the composition of the Board on a different fact.
 
6.         Mr. Amir-ul Islam, learned Advocate adopting the submission made by Dr. Zahir submits that earlier order was passed invoking the provision of Order 39 rules 1 and 2 of the Code of Civil Procedure and this Rule though relates to the subject matter of the suit but here the subject matter of the proceeding is on a completely different factor.
 
7.         Syed Istiaque Ahmed, the learned Advocate entering caveat on behalf of respondent No. 1, submits that the Appellate Division in Civil Miscellaneous Petition No. 534 of 1999 directed maintenance of status quo in the composition of the Board of Directors of UCBL as recognised by Bangladesh Bank by letter dated 5-9-1999 till disposal of the injunction matter by the trial Court and when a copy of this order was received by Bangladesh Bank they are bound to obey this order from the highest court of the country. It is submitted that in the suit itself composition of the Board is in question and when there was a direction from the Appellate Division to maintain status quo it must be maintained and cannot be disturbed in any manner whatsoever either directly or indirectly. Mr. Ahmed submits that earlier in Writ Petition No. 3385 of 1 1999 a joint petition was filed for permitting the writ petitioner to withdraw the writ petition and that has been done and the present petitioner No. 3 was a signatory to that petition for withdrawal of writ petition and in such circumstances the petitioners are bound by the order passed in Civil Miscellaneous Petition No. 534 of 1999. The learned Advocate contends that on being failure to dislodge the present Board of Directors previously the plaintiff of the earlier suit utilised his influence and got the present proceeding started under section 46 of the Bank Companies Act, 1991. The learned Advocate placing reliance in the case of Dr Nurul Islam vs. Bangladesh represented by the Secretary Ministry of Health and Population Control and others reported in 33 DLR (AD) 201 submits that the action now being taken under section 46 of the Bank Companies Act, 1991 was an action to circumvent the earlier order passed on 30-11-1999 by the Appellate Division in Civil Miscellaneous Petition No. 534 of 1999 which is a malice in law and the notices issued are void. He submits that when the proceeding is void ab initio no action can be taken.
 
8.         Mr. Rokanuddin Mahmud, learned Advocate appearing on behalf of United Commercial Bank Limited, adopted the submission made by Syed Istiaque Ahmed and added that the present proceeding under section 46 of the Bank Companies Act, 1991 is nothing but a device to remove respondent No. 1 from the post of Chairman of the Board of Directors and to dislodge the Board of Directors of the Bank when the bank has no grievance against the Chairman or any of the Directors.
 
9.         Admittedly in Civil Miscellaneous Petition No. 534 of 1999 this Division directed the parties to maintain status quo on the composition of the Board of Directors of the aforesaid UCBL. That order was passed on 30-11-1999 and it is the definite case of the respondents that a copy of this order was forwarded to Bangladesh Bank which they received. Thereafter respondent No. 1 was directed to show cause under the provision of section 46 of the Bank Companies Act, 1991. This section provides that where Bangladesh Bank is satisfied that it is necessary to remove the Chairman, Director or Chief Executive by whatever name called, of a Banking company in the public interest or to prevent the affairs of a Banking company being conducted in a manner detrimental to the interest of its depositors or to secure the proper management of the Bank the Bangladesh Bank may by order remove from office such Chairman or Director or Chief Executive of the Bank. It therefore appears that Bank Companies Act, 1991 has given power to Bangladesh Bank for removal of the Chairman, Directors and the Chief Executive of the bank in public interest or to prevent detrimental conduct of the company by any of the directors or the Chairman. This power under section 46 of the Bank Companies Act, 1991 is limited to that extent.
 
10.       Admittedly in the suit filed by Akhteruzzaman Chowdhury Bangladesh Bank was not a party and in that suit composition or the functioning of the Board of Directors was in challenge. Plaintiff Akhteruzzaman Chowdhury wanted a declaration that they are lawfully appointed Chairman and Directors of the Board of UCBL by virtue of an unanimous resolution dated 26-8-1999 and defendant Nos. 1 to 5 are no longer Chairman and Directors of the Board of Directors of the said Bank. The plaintiff also prayed for permanent injunction restraining defendant Nos. 1 to 5 from interfering with the plaintiff functioning as Chairman and Directors respectively of the Board of Directors and obtained an ad interim order of injunction which matter ultimately came before this Division in Civil Miscellaneous Petition No. 534 of 1999 and this Division by judgment dated 30-11-1999 directed for maintaining status quo in the composition of the Board of Directors of the Bank as recognised by Bangladesh Bank by its order dated 5-9-1999 till disposal of the injunction matter by the trial Court. A copy of this order was sent to Bangladesh Bank by UCBL which has been accepted by them and there is no denial of it. So, it appears that Bangladesh Bank was fully aware of the order passed by this Division. Thereafter the impugned orders were issued under section 46 of the Bank Companies Act, 1991 for removal of respondent No. 1 from the office of the Chairman or the Director of UCBL. When Bangladesh Bank was fully aware of the purport of the order passed by this Division they ought not to have taken recourse to section 46 of the aforesaid Act, 1991. The purport of this impugned order is to find out whether respondent No. 1 can be removed from the office of the Chairman. This prima facie indicates that in spite of their knowledge of the earlier order passed by this Division Bangladesh Bank has set up a device to get rid of respondent No. 1 from the office of the Chairman or Director of the bank. Dr. Zahir submits that notices issued were under the statutory authority provided by the Act to Bangladesh Bank and they have only asked the respondent No. 1 to show cause and that the proceeding may be dropped in case nothing is found for interference. But in that case removal of respondent No. 1 would be in question when there was specific order for maintenance of status quo as regards composition of the Board of Directors by this Division. It is well established that one who is not entitled to any relief directly can not be allowed to get the same indirectly. The facts and circumstances prima facie indicate that the proceeding that has been initiated is only to circumvent the order passed by this Division in Civil Miscellaneous Petition No. 534 of 1999 of which Bangladesh Bank was fully aware. When Bangladesh Bank petitioner is fully aware of this Division’s order or had knowledge of the order they are bound to honour the same. Reliance is placed on the principle of law enunciated by the House of Lords in the case of Attorney-General vs. Times Newspapers Ltd. and another reported in (1991) 2 All England Law Reports 398 wherein it has been held that a person who is aware of an order of the Court is bound to obey the same even though he was not a party to that when it affects the result of the earlier order. Here in the present case earlier order of this Division was to maintain status quo in respect of composition of the Board of Directors of the Bank and a copy of that order was sent to Bangladesh Bank by UCBL and in such a situation the Bangladesh Bank is bound to honour the order passed by this Division.
 
11.       We have considered the submissions made by the learned Advocate of both the sides and perused the available materials. Dr. Zahir also placed before us the judgment of the High Court Division but we find nothing to interfere with the same. There is no legal infirmity in the judgment of the High Court Division which may call for our interference.
 
There is therefore no merit in this petition and the same is accordingly dismissed.
 
Ed.