Shibbir Ahmed Vs. Pritom Inn (Pvt.) Limited and others 2018 (1) LNJ 56

Case No: Company Matter No. 192 of 2015

Judge: Md. Rezaul Hasan. J.

Court: High Court Division,

Advocate: A.K.M. Badrudduza, Mr. A.R.M. Kamruzzaman Khan,

Citation: 2018 (1) LNJ 56

Case Year: 2017

Appellant: Shibbir Ahmed

Respondent: Pritom Inn (Pvt.) Limited and others

Subject: Company Matter

Delivery Date: 2018-02-15

HIGH COURT DIVISION

 

(STATUTORY ORIGINAL JURISDICTION)

 

 

 

Md. Rezaul Hasan, J

Judgment on

18.05.2017

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Shibbir Ahmed

. . . Petitioner

-Versus-

Pritom Inn (Pvt.) Limited and others

. . . Opposite parties

 

Company Act (XVIII of 1994)

 

Section 43

 

It is an allegation of glaring fraud, as has been disclosed in the course of hearing. The culpable conduct of the respondent No. 2 was intended not only to deprive the petitioner from his valuable right, but the respondent No. 2 being a director of respondent No. 1 Company, was duty bound to follow the provisions of the Companies Act and of the Articles of Association of the company. He was bound not to abuse the trust placed in him as a director. He has acted in a manner which is prejudicial not only to the interest of the petitioner, but also of the company. He has breached the fiduciary duties of a director. The existence of a person like respondent No. 2 in the board of the respondent No. 1 company is very much risky for the company, for its shareholder as well as for all parties dealing with and/or having interest in the company. Therefore, in exercise of inherent power of this Court to ensure ends of justice, the respondent No. 2 should be restrained from performing functions as Managing Director and from operating the bank account of the company, for a specific period and an exemplary cost should be imposed as a deterrent towards such grave breach of trust and fraudulent conduct as well as to ensure the corporate governance and fair trade practices in the country.        . . .(11)

 

 

 

Mr. A.K.M. Badrudduza with

 

Mr.Muhammed Arifujjaman Khan, Advocates.

 

. . .For the petitioner.

 

Mr. A.R.M. Kamruzzaman Khan, Advocate.

 

. . .For the respondent Nos. 1,2 and 4.

 

Mr. Md. Abdul Hai, Advocate.

 

. . .For the respondent No. 9.

 

None appears

 

. . . For the Respondent.

 

JUDGMENT

 

Md. Rezaul Hasan, J: This is an application filed under section 43 of the Companies Act, 1994 (the Act).

 

2.            It has been stated, amongst other, in the petition that the respondent No. 1 is a private limited Company (hereinafter referred as the ‘company’) incorporated under the Companies Act, 1994, and duly registered with the Registrar of Joint Stock Companies and Firms (RJSC); the respondent Nos. 2-8 are directors of the respondent No. 1 company; the respondent No. 9 is the Registrar of Joint Stock Companies & Firms, which is entrusted with the responsibility of registration of different companies and firms and their returns; that the respondent No. 1 company is a Private Company Limited by shares and incorporated under the Companies Act, 1994, bearing Registration No. C-44435 dated 19.11.2001, with an authorized capital of Tk. 10,00,00,000/= (Taka Ten Crore), divided into 10,00,000 ordinary shares of Tk. 100/- each, and paid up capital of Tk. 10,000/-(Taka Ten Thousand), divided into 100 paid up shares; that while the petitioner has been living in United Kingdom, due to his absence in taking active part in the business of the company and its management in Bangladesh, the respondents by making fake, forged and manufactured documents had fraudulently transferred his entire 2400 (Two Thousand Four Hundred) shares, numbered from 29601 to 32000, in favour of the respondent No. 2, i.e.,M.A.S. Ruhel; that then the petitioner having learnt about the aforesaid matter from a reliable source in Bangladesh, enquired into the matter, in the office of the respondent No. 9, and to this utter surprise, he found that the respondent No. 3, i.e., Golam Kibria (Hira Miah) and the respondent No.2, i.e., Director M.A.S. Ruhel, who were then living in Bangladesh, effected the alleged share transfer, in connivance and collusion with each other, they had manufactured fake Board Resolution dated 18.09.2005 for showing transfer of the petitioner’s 2400 (Two Thousand Four Hundred) shares in favour of the respondent No. 2, i.e., Mr. M.A.S. Ruhel and, for that reason, the respondents had also manufactured a fake resignation letter dated 15.09.2005, consent of Directors dated 01.09.20015 and Form-117 dated 18.09.2005 forging the petitioner’s signature showing that the petitioner has tendered his resignation as well as undated Notice of Board Meeting and hence, the respondents in connivance and in collusion with each other transferred the petitioner’s entire 2400 (Two Thousand Four Hundred) shares to the respondent No. 2 i.e., Mr. M.A.S. Ruhel (Annexure-D series), that thereafter the petitioner, for further enquiry on the matter, through his learned Advocate Rashedul Hasan, having chamber address at Shah Ali Tower (10th Floor), 33, Karwan Bazar, Dhaka, applied for certified copies of all relevant documents vide online Application dated 18.08.2014 under Submission No. 2014382844 before the respondent No. 9 Annexure: ANNEXURE-E Series’; but the respondent No. 9 failed to supply all the aforesaid certified copies as applied for, but supplied the certified copies of Schedule-X dated 26.09.2005, Schedule-X dated 26.09.2006, Schedule-X dated 26.09.2007, Schedule-X dated 26.09.2008, Form-XII dated 18.09.2005, Form-XII dated 17.06.2008, stating that the record is missing (Annexure: ANNEXURE-F Series); that, it is stated that from the certified copies of Form XII as on 08.04.2010, it is obvious that the petitioner has been ceased to be a Director of the respondent No. 1 company on 18.09.2005, but the petitioner was out of Bangladesh from 20.01.2003 to 05.03.2010, which is apparent from the Confirmation of Certification dated 19.02.2015 issued by Saif Uddin Khaled of Hamlet Solicitor LLP under Ref No. SK/Msc/15/IMM in respect of Passport of the petitioner, and hence, it was not possible for the petitioner to sign any documents, papers such as Affidavit in regard to transfer of shares, Form-117, Board Resolution, Resignation Letter or any papers/documents relating to his alleged transfer in favour of the respondent No. 2 and hence, it is apparent that the alleged transfer of shares has been made by producing fake, forged and manufactured documents by the respondents in collusion and in connivance with each other in order to make illegal gain from the petitioner (Annexure: G), that it is stated that the respondents in connivance and  in collusion with each other by faking, forging and manufacturing the petitioner’s signature(s) in the share transfer documents, affidavits and all other related documents for such transfer and by ante-dating all those documents and by submitting ante-dated Returns in collusion with the officials of respondent No. 9 allegedly transfer 2400 (Two Thousand Four Hundred) shares numbered from 29601 to 32000 in favour of the respondent No. 2 while the petitioner was abroad and got the same purportedly recorded and entered in the Register of Members of the respondent No. 1 company and with the office of the respondent No. 9, i.e., the Registrar, Joint stock Companies and Firms, Dhaka, on 08.04.2010 vide Online Submission No. 2010631497 (Annexure: J); that in the the instant case the original share certificate of the petitioner are still lying with him and the respondent No. 9 recorded the transfer of share with relevant return though the instrument of transfer was not accompanied with share certificate.

 

         Hence, this petition for rectification of those register of the company.

 

3.            Learned Advocate Mr. A.K.M. Badrudduza and learned Advocate Mr. Muhammed Arifujjaman Khan have appeared on behalf of the petitioner. He having placed the petition, submits that the petitioner was allotted 2400 number of shares distinctive number (inclusive) from 29601 to 32000 in favour of the petitioner and the respondent No. 1 company had issued a share certificate No. 014 dated 20.07.2004, duly signed by the then Managing Director M.A.S. Ruhel i.e. respondent No. 2. He further submits that these shares were acquired for valuable consideration and that he was then accepted as director and his name had also been recorded in the Annual Summary of share capital (schedule-X) made up to 26.09.2005, vide Annexure: C, C-1 and C-2. He next submits that the petitioner has been residing in UK and thus while he was in U.K. and during his absence, the respondent No. 3 Golam Kibria (Hira Miah) and respondent No. 2 M.A.S. Ruhel have created and manufactured the documents, as narrated in paragraph 9 of the petition and by forging signature of the petitioner on Form No. 117 dated 08.09.2005, whereby 2400 numbers of shares were shown to have been transferred, in one lot, to the respondent No. 2 i.e. M.H. Ruhel. He further adds that, the original share certificate of the aforesaid 2400 shares are still lying with the petitioner and that he did not at all execute any Form No. 117 at that time and that the relevant time he was staying in the United Kingdom, vide Annexure: G series, which are letters dated 19.02.2015 of a Solicitor in London and attested copy of the Passport of the petitioner affirming that at that time he was in London. He proceeds on that, it was the duty of the respondent No. 9 as Registrar of Joint Stock Companies and Firms to verify the genuineness of the documents, particularly when a schedule X, made up to 26.09.2005 Annexure C(1) instead of mechanically accepting the purported documents submitted to his office. The learned Advocate produced original share certificate being No. 014, in respect of 2400 number of shares, distinctive number (inclusive) from 29601 to 32000, bearing folio number 09. (Annexure- C copy of the share certificate) and that there is no endorsement on the back page of the share certificate. As such, the learned Advocate submits that, the fact of forgery and fraud committed by the respondent No. 2 in connivance with respondent No. 3 is very much clear. He also points out that the respondent even did not appear before this Court, as they cannot deny the facts  alleged in the petition. He lastly submit that the petitioner has acquired these shares for valuable consideration and that he was then accepted as director and his name also appeared in the Annual Summary of share capital (schedule-X) made up to 26.09.2005, Annexure: C, C-1 and C-2. Accordingly, he prays for allowing the petition.

 

4.            Mr. A.R.M. Kamruzzaman Khan, learned Advocate for the respondent No. 9 submits that they were given power by the respondent Nos. 1, 2 and 4, but these respondents did not give any instruction to them in respect of this case.

 

5.            Learned Advocate Mr. Md. Abdul Hai appearing on behalf of the respondent No. 9, having placed their affidavit-in-opposition, submits that the respondent No. 9 was not at all aware about the fact of forgery and that he has acted as a recording officer or an officer to receive the document filed in the office of the Registrar, Joint Stock Companies and Firms. He also submits that the respondent No. 9 has no knowledge and he may be exempted from any responsibility.

 

6.            I have heard the learned Advocate, pursued the petition and examined the documents annexed to the petition.

 

7.            It appears that the petitioner was allotted 2400 number of shares, distinctive numbers (inclusive) from 29601 to 32000, in favour of the petitioner and the respondent No. 1 company and a share certificate No. 014 dated 20.07.2004, duly signed and issued by the then Managing Director M.A.S. Ruhel i.e. respondent No. 2, has been issued. It also appears that the petitioner has acquired these shares for valuable consideration and that he was then accepted as director and his name was recorded in the Annual Summary of share capital (schedule-X) made up to 26.09.2005 vide Annexure: C, C-1 and C-2. The annexed photocopy copy of the passport of the petitioner also proves that he was staying in the UK during the period of the questioned transfer process and that during his absence, the respondent No. 3 Golam Kibria (Hira Miah) has created and manufactured documents as stated in paragraph 9 of the petition and thus the respondent No. 3, has practiced fraud and forgery and, by forging signature of the petitioner on a Form No. 117 dated 08.09.2005, one lot of 2400 numbers of shares was shown to have been transferred to respondent No. 2 i.e. M.H. Ruhel. The original share certificate of the aforesaid 2400 shares are still lying with the petitioner. All these clearly prove that the petitioner did not at all execute any Form No. 117. At the relevant time the petitioner was staying in London, vide Annexure: G series, which are letters dated 19.02.2015 of a Solicitor in London and the attested copy of the Passport of the petitioner, confirming the petitioner’s stay in on the relevant date.

 

8.            It further appears from the original share certificate being No. 014, there is no endorsement on the back of the said share certificate. As such, the fact of forgery and fraud committed by the respondent No. 2 is proved to the satisfaction of this Court.

 

9.            In absence of any instruction or affidavit-in-opposition, learned Advocate for the respondent Nos. 1, 2 and 4 could not make any submission in reply to the allegations made in the petition and also could not refute the submissions of the learned Advocate for the petitioner.

 

10.        I have also considered the submissions made by the learned Advocate for the respondent No. 9. The respondent No. 9 has acted bonafide, but he ought to have been more diligent when the petitioner was absent in Bangladesh. He should not have accepted Form 117 without being satisfied about the presence of the petitioner and without requiring the respondents to produce the original certificates, disregard of the fact that he was aware or not that the petitioner usually resides in London.

 

11.        It is an allegation of glaring fraud, as has been disclosed in the course of hearing. The culpable conduct of the respondent No. 2 was intended not only to deprive the petitioner from his valuable right, but the respondent No. 2 being a director of respondent No. 1 Company, was duty bound to follow the provisions of the Companies Act and of the Articles of Association of the company. He was bound not to abuse the trust placed in him as a director. He has acted in a manner which is prejudicial not only to the interest of the petitioner, but also of the company. He has breached the fiduciary duties of a director. The existence of a person like respondent No. 2 in the  board of the respondent No. 1 company is very much risky for the company, for its shareholder as well as for all parties dealing with and/or having interest in the company. Therefore, in exercise of inherent power of this Court to ensure ends of justice, the respondent No. 2 should be restrained from performing functions as Managing Director and from operating the bank account of the company, for a specific period and an exemplary cost should be imposed as a deterrent towards such grave breach of trust and fraudulent conduct as well as to ensure the corporate governance and fair trade practices in the country.

 

Thus, I find merit in this petition and the same should be allowed.

 

O R D E R:

 

In the result, the petition is allowed.

 

The impugned transfer of 2400 number of shares, distinctive number (inclusive) from 29601 to 32000, in the name of respondent No. 2, dated 18.09.2005, along with all documents recording this fraudulent and unlawful transfer are hereby set aside and cancelled. The respondents are directed to rectify the share Register of the respondent company, within 30 days from the date of receipt of this judgment and order, by inserting of the name of the petitioner for the said 2400 shares and deleting the name of the respondents against those shares.

 

The respondent No. 2 is hereby restrained from performing the functions of and from attending any meeting of the board of directors as the Managing Director of the company as well as he restrained from operating the bank accounts of the company till holding of the next AGM. He is further debarred from being a candidate for the office of the Managing Director in the next AGM or to seek extension of his tenure as the Managing Director, as the case may be.

 

The board shall adopt appropriate resolutions for operating bank’s account of the company, by adopting appropriate resolution, if so required.

 

The respondent No. 2 is further directed to pay Tk. 1,00,000/= (one Lac) as cost to the petitioner within 2(two) weeks from the date of drawing up of this judgment and to submit an affidavit-in compliance.

 

Let a copy of the judgment along with the original record (of the company) be sent to the Registrar of Joint Stock Companies and Firms, through proper process.

 

Let another copy of this judgment be sent to the Banks of the company.

 

Ed.