Court appointed board gets immunity

Staff Reporter :
The High Court (HC) has declared that the court-appointed Board of Directors of the International Leasing and Financial Services Limited (ILFSL), a non-banking financial institution, which is in trouble due to loan irregularities, shall not be responsible for any illegality committed by the Board of Directors of the ILFSL or the management of the organization before their joining.
The HC asked the Law Secretary and all the judges of the subordinate courts to take necessary steps regarding striking out or exclusion of the names of the court-appointed Independent Directors from all the proceedings commenced under Section 138 of the Negotiable Instruments Act, Artha Rin Adalat Ain, 2003, and Penal Code 1860, if any, against the ILFSL in connection with any affairs or loans of the entity prior to their joining.
The court-appointed Independent Directors including the court-appointed Chairman of the ILFSL shall not be made party to any civil or criminal case in which the cause of action arose before their joining, the High Court also declared.
However, there shall not be any bar to institute any suit or file any case against them in course of performing their duties as the court-appointed Independent Directors including the court-appointed Chairman of the ILFSL, if there is any specific and clear evidence of violation of any law of the land, the order also read.
A one-member bench of Justice Muhammad Khurshid Alam Sarkar passed the order after hearing a petition filed by the ILFSL authorities seeking direction for ensuring immunity of the court-appointed Board of Directors from any legal action against them.
The court passed the verbal order on May 24 this year, while the written text of the order has been released on the SC website recently.
The same HC bench on June 16 in 2021 reconstructed the Board of Directors of the entity. N I Khan, a former Secretary of the government, was made the Chairman of the organisation.
Syed Abu Naser Bakhtear Ahmed, former managing director and CEO of Agrani Bank Limited; Md Shafiqul Islam, retired senior district and sessions judge and former director of the Anti-Corruption Commission (ACC); Brigadier General (retired) Md Meftaul Karim; Barrister Md Ashraf Ali; and FCA Enamul Hasan had also been included in the new Board of Directors of the ILFSL through the court order.
The High Court said all the creditors of the ILFSL are restrained from commencing any legal actions implicating any of the court-appointed Independent Directors, including but not limited to proceedings under Section 138 of the Negotiable Instruments Act, Artha Rin Adalat Ain, 2003 and Penal Code 1860, without first notifying the Company Court.
The HC asked the Bangladesh Bank Governor to notify all the schedule banks and financial institutions to the effect that the holders of cheques issued in the name of the ILFSL are required to approach the Company Court first before presenting any cheque signed by the court-appointed Directors.
It also asked the Inspector General of Police to take necessary steps not to enforce but to return to the concerned court any summon or warrant issued in the names of the court-appointed board members in any proceedings commenced under the Acts.