NAFISA CHOUDHURY Vs. UNITED FOOD COMPLEX LTD.

JUDGEMENT

(1.) This application under section 2 of the Companies Act, 1994 has been presented by the petitioner who is a share-holder of United Food Complex Ltd.

(2.) The petitioners Case, in brief, is that the petitioner is a minority share-holder holding 28,860 shares out of 1,47,816 shares issued by the United Food Complex Ltd (hereinafter called). The respondent No.1 company is a public limited company which was incorporated on 10-1-81 to carry on business of poultry, fish, dairy, etc. with an authorised capital of 3 crore and a paid up capital of Taka 1,75,000.00. The company was granted a loan of Taka 2,28,70,000.00 by the BSRS the respondent No. 4 by agreements dated 10-6-81 and 28-3-83. The loan was also granted by Investment Corporation of Bangladesh and 5 other commercial banks. The company was granted a working capital loan of Taka 30,00.000.00 by BSRS and Taka 35,00,000.00 by Janata Bank, Dhaka and thus the company received a sum of Taka 3,63,70,000.00 by 1984 as loan and Taka 1,75,000.00 as paid up capital to start its business. It is alleged that the company defaulted in making payment of loan to BSRS and the liability increased from Taka 363 crore in 1984 to Taka 9,49,47,195.00 by the end of 1997. The petitioner and her husband respondent No. 3 invested considerable amount of money to set up their own poultry and poultry hatchery. They imported 3 incubators and 3 hatchers from Denmark at a cost of Taka 17,13,418.00 and spare parts worth of Taka 6,67,296.00. The respondent No. 2 approached the petitioner and respondent No. 3 that they buy shares in the company and integrate their hatchery with the companys hatchery) thereafter by an agreement dated 26-8-97 between the company represented by the then Managing Director, the respondent No. 2, the petitioner, the respondent Nos. 3, 7 and 8, the petitioner agreed purchase the companys share worth of Taka 28,86,000.00 on certain conditions. The conditions are that the respondent No. 3 will become the Chairman of the company and all financial and executive power will vest in the Chairman and that BSRS and ICB agreed to reschedule the principal amount of loan and waive accumulated interest and penal interest and that the hatchers and incubators of the petitioner and the respondent No.3 will be taken over by the company and the company will pay the petitioner the actual cost of machines and spate parts as aforesaid and installation charge of Taka 3,00,000.00 by issue of stock debenture and in Case of default, will issue share of the same value. Pursuant to the aforesaid agreement the company submitted a proposal to BSRS for approval a letter dated 2-10-97 issued by the then Managing Director the respondent No. 2.

(3.) Thereafter the share holders of the company in their annual general meeting held on 31.12-97 elected the respondent No. 3 as Managing Director and respondent No. 2 as Chairman of the company as suggested by BSRS and by a resolution passed at an extraordinary general meeting held on 9-6-98 the share holders amended the Articles 101(a) and 145 Articles of Association of the company and substituted the names of respondent Nos. 2 and 3 as Chairman and Managing Director respectively in place of former Chairman and the Managing Director. The company forwarded the proceeding of the annual general meeting as aforesaid and the extraordinary general meeting Annexure-F & G to BSRS vide its letter dated 1-11-98 and the resolution adopted at the extraordinary general meeting held on 9-6-98 was submitted to the Registrar, Joint Stock Companies for recording the amendment of Articles 101(a) and 145 of the Articles of Association on 24-6-98. The BSRS by their letter dated 16-4-98 informed the company of their approval of the companys proposal by their Board of Directors in a meeting held on 23-3-98. The contents of letter amongst others, were waiver of 100% interest and penal interest if the outstanding loan is repaid within 18 months or alternatively waiver of 75% of accumulated interest and 100% penal interest if the loan is repaid within 7 years and Taka 2 lac paid by the company and Taka 28 lac to be paid would be adjusted with the working capital loan. Confirmation of Mr. Manzoor A Chowdhury as new Director and Managing Director that Chairman Mr. GM Manik would be released from the Chairmanship and that Mr. Syed AL Nesar Ahmed would be the Chairman. The then Managing Director of the company by letter dated 26-4-98 informed the BSRS of the companies acceptance of the alternative proposal as mentioned in the letter dated 16-4-98 Annexure-J. The respondent No.3 wrote to BSRS on 12-5-98 and 21-6-98 to draw up necessary documents and to complete the legal formalities as soon as possible reply was received by the respondent No. 3. Thereafter he addressed BSRS by several letters to complete the legal formalities. Although respondent No. 2 was replaced by respondent No. 3 as Managing Director according to Article 145 of the Articles of Association but the respondent No. 2 refused to give the power of Managing Director to respondent No. 3 and resisted respondent No. 3 from performing his function as Managing Director. Further, the respondent No. 2 addressed a letter dated 30-9-98 to respondent No. 3 stating that respondent No. 3 could not be recognised as the Managing Director unless he has executed a personal guarantee in favour of BSRS for all past loans of the company. It is alleged that the respondent No. 2 declared that he shall continue to act as Managing Director till the legal formalities have been completed. The petitioner claims that BSRS gave unqualified approval to the appointment of respondent No. 3 as Managing Director. Then the respondent No. 3 called a general meeting of the share holders at the companies firm at Savers to discuss the prevailing state of affairs of the company but the respondent No. 2 in excess of his authority cancelled the meeting only a day before the meeting was due to be held and since then the respondent No. 2 has prevented the petitioner and her husband respondent No. 3 from entering into the registered office of the company as well as the premises of the companys firm. The allegation of the petitioner is that the action of the respondent No. 2 is a continuation of the oppressive management prevailing in the company for more than a decade. The affairs of the company are being conducted and the powers of a Director are being exercised in manners which are burdensome, harsh and wrongful lacking in probity and fair dealing to the prejudice of the interest of the petitioner as a minority share holder.