Director-shareholder of borrower company needs consent of lending bank to resign
High Court Division
(Statutory Original Jurisdiction)
Md. Rezaul
Hasan J
KM Minnatullah .
……………….. Petitioner
vs
Nebula Fashion Ltd and others …….Respondents
Judgment
June 18th, 2013.
Bank Company Act (XIV of 1991)
Section 27(Ka)
Section 27(Ka) of the Bank Companies Act 1991, a director-shareholder of a borrower company cannot transfer his shares, nor can he resign from his office without the consent of the lender bank. .. …. (10)
Jashimuddin Ahmed, Advocate with Mahmud Hasan Rana, Advocate – For the petitioner.
Fida M Kamal, Advocate with Md Mutahar Hossain, Advocate and Md Ali Akhanda, Advocate
For the Respondent No.2.
Judgment
This is an application filed under Section 43 of the Companies Act, 1994 (the Act).
2. It has been stated in the petition, amongst other, in the petition that the petitioner was the shareholder Director of the respondent no. 1 company having 10,000 shares of each of Taka 100. At the time of registration of the Company the petitioner was the owner of 5,000 shares of Taka 100 each and thereafter he purchased 5,000 shares of Taka 100 each from Mrs. Zebunnessa Hussain one of the Promoter Shareholders of the respondent No.1 company name and style as “Nebula Fashion Ltd. having its office at 547, Gazirchot DEPZ Road, Ashulia Industrial Zone, Ashulia, Dhaka; that respondent No.1 is a Private Limited Company having its Registration No. 67115 (4607)/07 and respondent No.2 is the Managing Director of the Respondent No. I, Company the respondent No. 3 is the Registrar of Joint Stock Companies and Firms having its office at the address mentioned in the cause title of the petition; that in early July 2010 the petitioner with a view to transfer his 10,000 shares of the company offered the shares to the Respondent No.2, who agreed to take over the same and accordingly the petitioner signed shares transfer Form 117 and to that effect Board Meeting of the company was held on 3rd August, 2010 wherein transfer of the share of the petitioner to the respondent No.2 was approved in favour of the respondent No.2, that further more the petitioner desire that without any consideration he shall hand over his entire shares to the Respondent No. 2 and also bear loss of Taka 1,00,00,000 loan of the company by him; that though some formalities regarding transfer of shares of the petitioner have been completed, yet the Respondent No.2 is not taking any step to remove the name of the petitioner from the share register of the Respondent No.1 company; that for the ends of justice and fair play the petitioner’s name would be omitted from the share register of the Respondent No. 1 Company by an order of this Hon’ble Court; that in the circumstances stated above the petitioner under a painful necessity has been compelled to file this petition in this Hon’ble Court under Section 43 of the Companies Act, 1994 for rectification of the share register of the respondent No.1 Company.
3. Hence this application for rectification register of share by removing name of the petition.
4. Respondent No.2 has filed an affidavit in-opposition denying all material facts alleged in the petition and further stated, amongst other, that there was no agreement between the petitioner and respondent No.2 for purchasing 10,000 (ten thousand) shares of the petitioner in respondent No. I-Company. It may be noted here that the petitioner’s decision of transferring his shares to respondent No.2 was merely put forward as one of the agendum at the meeting of the Board of Directors of respondent No. 1 company, held on 3-8-2010. However, the Board of Directors of the respondent No. 1 company did not grant any approval for the said transfer in that meeting. Furthermore, the respondent No.2 did not agree to transfer any share in his favour by the petitioner. It is, furthermore, stated that there is no mention of any ‘date’ of the meeting at the bottom of Form 117 (i.e. Instrument of Transfer of Shares) (Annexure-“B”), to show as to when the Board of Directors passed a resolution in respect of the transfer of shares of the petitioner and, therefore, the said Form 117 is forged and fabricated. It is stated that the petitioner has failed to prove that there has been any transfer of shares by the petitioner in fravour of respondent No.2. Further-more, the said Form 117 neither bears 1 incorporates any signature of a transferee, nor the same is properly stamped. In this context, the learned advocate adds that the respondent No. I-company previously mortgaged their properties with Prime Bank Ltd., Gulshan Branch, Dhaka and subsequently, upon obtaining permission from the Board of Directors of respondent No. I-company, the loan liability of the respondent No. I-company was shifted from Prime Bank Ltd. to Exim Bank Ltd. It is pertinent to note here that the petitioner has filed the instant application in order to evade his liability.
5. The petitioner however has controverted this facts by filing a counter reply.
6. The learned Advocate Mr. Jashimuddin Ahmed, appearing for the petitioner and having placed the petition along with the annexures, submits that the entire shares of the petitioner has been transferred to the respondent No.2 as evident from Form 117 (annexure-B) and that this transfer was approved by the board of directors, vide its resolution dated 3-8-2010 (annexure-C), but the petitioner company is not rectifying it’s register of members by removing the name of the petitioner and in the facts and circumstances of this case the petitioner is liable to be directed to rectify the register of member to omit name of the petitioner as share holder of respondent No.1 company.
7. The learned Advocate Mr. Fida M Kamal, appearing along with the learned Advocates Mr. Mohammad Mutahar Hossain and Mr. Mohammad Ali Akhanda, on the other hand, having drawn my attention to the petition, the affidavit-in-opposition and other materials on record, submits that it is apparent from the Form 117 (annexure-B) to the petition that it is not signed by any person as transferee. Besides, it does not refer to any consideration money, nor it bears signature of any witness to the alleged transfer of shares. He, next refers to the board resolution dated 3-8-2010 (annexure-C) to the petition and submits that the petitioner, being the Vice Chairman of respondent No. 1 company, himself decided to transfer the shares to the managing director of Nebula Fashion Limited, who is respondent No.2, free of cost. As such, admittedly there was no consideration for transfer of these shares and there is no approval of the board of directors to transfer the said shares by the petitioner to the respondent No.2, as alleged, The learned advocate further adds to his submission.
8. Heard the learned Advocates, perused the application, affidavit-in-opposition, counter reply and other materials on record.
9. I find from the materials on record that Form 117, which is annexure-B to the substantive application, has not been signed by the respondent No.2 as transferee. Besides the said instrument of transfer of shares is undated and it does not bear the signature of any witnesses, nor refers to any consideration money for transfer of the shares in question. Moreover, there is no record to show that any stamp duty was paid in respect of the transfer said to have been made by the petitioner to respondent No.2.
10. More importantly the respondent No.1 company is a borrower of respondent No.4 i.e. Export Import Bank of Bangladesh Limited. This has been admitted by the petitioner as well as this position has also been recorded in the board resolution dated 3-8-2010 director-shareholder (Annexure-C). As per section 27(Ka) of the Bank Companies Act 1991, a director-shareholder of a borrower company cannot transfer his shares, nor can he resign from his office without the consent of the lender bank. But there is nothing on record to show that the petitioner had obtained any such consent, as required by Section 27(Ka) of the Bank Companies Act to transfer his shares.
11. Considering all these aspect I am of the view that there was no transfer of any shares by petitioner to respondent No.2, either in fact or in the eye of law. Hence, I find no reason to pass any order to rectify the register of members of respondent No.1 Company by omitting name of the petitioner.
I find no merit in this petition.
In the result this petition is dismissed.
The parties will bear their respective costs.
(Statutory Original Jurisdiction)
Md. Rezaul
Hasan J
KM Minnatullah .
……………….. Petitioner
vs
Nebula Fashion Ltd and others …….Respondents
Judgment
June 18th, 2013.
Bank Company Act (XIV of 1991)
Section 27(Ka)
Section 27(Ka) of the Bank Companies Act 1991, a director-shareholder of a borrower company cannot transfer his shares, nor can he resign from his office without the consent of the lender bank. .. …. (10)
Jashimuddin Ahmed, Advocate with Mahmud Hasan Rana, Advocate – For the petitioner.
Fida M Kamal, Advocate with Md Mutahar Hossain, Advocate and Md Ali Akhanda, Advocate
For the Respondent No.2.
Judgment
This is an application filed under Section 43 of the Companies Act, 1994 (the Act).
2. It has been stated in the petition, amongst other, in the petition that the petitioner was the shareholder Director of the respondent no. 1 company having 10,000 shares of each of Taka 100. At the time of registration of the Company the petitioner was the owner of 5,000 shares of Taka 100 each and thereafter he purchased 5,000 shares of Taka 100 each from Mrs. Zebunnessa Hussain one of the Promoter Shareholders of the respondent No.1 company name and style as “Nebula Fashion Ltd. having its office at 547, Gazirchot DEPZ Road, Ashulia Industrial Zone, Ashulia, Dhaka; that respondent No.1 is a Private Limited Company having its Registration No. 67115 (4607)/07 and respondent No.2 is the Managing Director of the Respondent No. I, Company the respondent No. 3 is the Registrar of Joint Stock Companies and Firms having its office at the address mentioned in the cause title of the petition; that in early July 2010 the petitioner with a view to transfer his 10,000 shares of the company offered the shares to the Respondent No.2, who agreed to take over the same and accordingly the petitioner signed shares transfer Form 117 and to that effect Board Meeting of the company was held on 3rd August, 2010 wherein transfer of the share of the petitioner to the respondent No.2 was approved in favour of the respondent No.2, that further more the petitioner desire that without any consideration he shall hand over his entire shares to the Respondent No. 2 and also bear loss of Taka 1,00,00,000 loan of the company by him; that though some formalities regarding transfer of shares of the petitioner have been completed, yet the Respondent No.2 is not taking any step to remove the name of the petitioner from the share register of the Respondent No.1 company; that for the ends of justice and fair play the petitioner’s name would be omitted from the share register of the Respondent No. 1 Company by an order of this Hon’ble Court; that in the circumstances stated above the petitioner under a painful necessity has been compelled to file this petition in this Hon’ble Court under Section 43 of the Companies Act, 1994 for rectification of the share register of the respondent No.1 Company.
3. Hence this application for rectification register of share by removing name of the petition.
4. Respondent No.2 has filed an affidavit in-opposition denying all material facts alleged in the petition and further stated, amongst other, that there was no agreement between the petitioner and respondent No.2 for purchasing 10,000 (ten thousand) shares of the petitioner in respondent No. I-Company. It may be noted here that the petitioner’s decision of transferring his shares to respondent No.2 was merely put forward as one of the agendum at the meeting of the Board of Directors of respondent No. 1 company, held on 3-8-2010. However, the Board of Directors of the respondent No. 1 company did not grant any approval for the said transfer in that meeting. Furthermore, the respondent No.2 did not agree to transfer any share in his favour by the petitioner. It is, furthermore, stated that there is no mention of any ‘date’ of the meeting at the bottom of Form 117 (i.e. Instrument of Transfer of Shares) (Annexure-“B”), to show as to when the Board of Directors passed a resolution in respect of the transfer of shares of the petitioner and, therefore, the said Form 117 is forged and fabricated. It is stated that the petitioner has failed to prove that there has been any transfer of shares by the petitioner in fravour of respondent No.2. Further-more, the said Form 117 neither bears 1 incorporates any signature of a transferee, nor the same is properly stamped. In this context, the learned advocate adds that the respondent No. I-company previously mortgaged their properties with Prime Bank Ltd., Gulshan Branch, Dhaka and subsequently, upon obtaining permission from the Board of Directors of respondent No. I-company, the loan liability of the respondent No. I-company was shifted from Prime Bank Ltd. to Exim Bank Ltd. It is pertinent to note here that the petitioner has filed the instant application in order to evade his liability.
5. The petitioner however has controverted this facts by filing a counter reply.
6. The learned Advocate Mr. Jashimuddin Ahmed, appearing for the petitioner and having placed the petition along with the annexures, submits that the entire shares of the petitioner has been transferred to the respondent No.2 as evident from Form 117 (annexure-B) and that this transfer was approved by the board of directors, vide its resolution dated 3-8-2010 (annexure-C), but the petitioner company is not rectifying it’s register of members by removing the name of the petitioner and in the facts and circumstances of this case the petitioner is liable to be directed to rectify the register of member to omit name of the petitioner as share holder of respondent No.1 company.
7. The learned Advocate Mr. Fida M Kamal, appearing along with the learned Advocates Mr. Mohammad Mutahar Hossain and Mr. Mohammad Ali Akhanda, on the other hand, having drawn my attention to the petition, the affidavit-in-opposition and other materials on record, submits that it is apparent from the Form 117 (annexure-B) to the petition that it is not signed by any person as transferee. Besides, it does not refer to any consideration money, nor it bears signature of any witness to the alleged transfer of shares. He, next refers to the board resolution dated 3-8-2010 (annexure-C) to the petition and submits that the petitioner, being the Vice Chairman of respondent No. 1 company, himself decided to transfer the shares to the managing director of Nebula Fashion Limited, who is respondent No.2, free of cost. As such, admittedly there was no consideration for transfer of these shares and there is no approval of the board of directors to transfer the said shares by the petitioner to the respondent No.2, as alleged, The learned advocate further adds to his submission.
8. Heard the learned Advocates, perused the application, affidavit-in-opposition, counter reply and other materials on record.
9. I find from the materials on record that Form 117, which is annexure-B to the substantive application, has not been signed by the respondent No.2 as transferee. Besides the said instrument of transfer of shares is undated and it does not bear the signature of any witnesses, nor refers to any consideration money for transfer of the shares in question. Moreover, there is no record to show that any stamp duty was paid in respect of the transfer said to have been made by the petitioner to respondent No.2.
10. More importantly the respondent No.1 company is a borrower of respondent No.4 i.e. Export Import Bank of Bangladesh Limited. This has been admitted by the petitioner as well as this position has also been recorded in the board resolution dated 3-8-2010 director-shareholder (Annexure-C). As per section 27(Ka) of the Bank Companies Act 1991, a director-shareholder of a borrower company cannot transfer his shares, nor can he resign from his office without the consent of the lender bank. But there is nothing on record to show that the petitioner had obtained any such consent, as required by Section 27(Ka) of the Bank Companies Act to transfer his shares.
11. Considering all these aspect I am of the view that there was no transfer of any shares by petitioner to respondent No.2, either in fact or in the eye of law. Hence, I find no reason to pass any order to rectify the register of members of respondent No.1 Company by omitting name of the petitioner.
I find no merit in this petition.
In the result this petition is dismissed.
The parties will bear their respective costs.