KADER TEXTILES (PVT) LTD. Vs. MD. LEHAJUDDIN MIAH

JUDGEMENT

(1.) Petitioners seek leave to appeal against the judgment and order dated 12-5-2002 of a Company Judge of the High Court Division passed in Company Matter No. 5 of 1995 arising under section 233 of the Companies Act, 1994, which was instituted by the respondents for protection of the interest of the minority share holders.

(2.) The short facts, leading to this leave petition are that the respondents are promoters/ shareholders of the petitioner No.1 Company, hereinafter shortly called the company. The deceased respondent No.1 purchased 1,875 shares out of 6000 shares of the Company. Respondent No. 2 Md. Abed Ali purchased 1,875 shares and Abdul Kader, respondent No.3 held 375 shares and Md. Chand Mia, respondent No. 4, held 1,875 shares. They are related to one other. The company was incorporated in 1980 according to the Articles of Association of the Company and was registered under the Companies Act, 1913. It was stipulated in the memo of Articles that the respondent No. 2 would remain the Managing Director and hold the office as such for life. The grievance of the respondent is that the company never declared any dividend and no formal board meeting or annual general meeting of the company was ever held and the accounts were never audited. Although the minority share holders were claiming that the company was making profit but the Managing Director and the majority shareholders were telling that the company was running at a loss and it did not disclose any dividend and even the minority members were not allowed any access to the account of the company and a salish was held on 18th August 1985 and another on 27th September 1985 over the affairs of the company and it was disclosed in the salish that there was profit amounting Taka 36,30,000 made by the company during the period of 1980-84. Accordingly, an award was also given in that salish on 27th September, 1985 for the amount of Taka 3,69,730.63 and Taka 2,86,220.63 respectively to be paid to the respondent No.1 and the respondent No. 2 respectively but the same was not paid to the respondents. The respondent No.2 asked the petitioner to pay 75% of their money subscribed by him but it was not paid on the allegation that the company was running at a loss.

(3.) The respondent No. 1 Lehajuddin Miah, (now deceased) during his lifetime was demanding to hold board meeting of the directors and the annual general meeting of the share holders but the petitioners 2 and 3 did not make any response. The respondents then referred the matter to the Registrar, Joint Stock Companies. On examination of the papers, he referred the matter to the Ministry of Commerce who appointed a firm of the Chartered Accountants by its letter dated 16-9-1986 to look into the irregularities of the company, if any. But the petitioner Nos. 2 and 3 filed Title Suit No. 294 of 1986 on 28th September, 1986 challenging the authority of the Registrar and the authority of the Ministry of Commerce to look into the allegations made against the company. They also filed an application for injunction against the firm of the Charted Accountants praying for restraining them to look into the matters of the company. The respondents also removed the name of the respondent No. 2 and his brother the respondent No. 4 as directors and members of the company. The respondent No. 1 and the respondent No. 4 filed an application under section 38 of the Companies Act, 1913 being Matter No. 18 of 1990 praying for rectification of the share register of the company which was allowed. The High Court Division by an order dated 14-11-1991 directed for rectification of the share register. An appeal was taken before the Appellate Division. The appeal was dismissed by the judgment and order dated 22-7-1993. The further allegation of the respondent is that in spite of the order for rectification of the share register in respect of their 1875 shares, they could not enter into the mill premises and could not have access to the records and books of the company although the respondent No. 1 and the respondent No. 2, together were holding the majority shares of the company, but they were kept in complete darkness in respect of the management and the financial aspect of the company although the respondents gave personal guarantee in favour of the bank and the respondent No. 4 and his wife mortgaged their properties to secure repayment of the loan taken by the respondent company. In the meantime, the Agrani Bank filed Title Suit No. 8 of 1992 in the Court of the Subordinate Judge and Artha Rin Court No. 1, Dhaka against the company and the respondents with a prayer for recovery of its loan by sale of the properties of the company mortgaged to the Agrani Bank. Although the company was making huge profits but the same was being illegally misappropriated by the respondent Nos. 2 and 3. Under the aforesaid facts and circumstances, the respondents filed a petition under section 233 of the Companies Act. Upon that application the relevant company case was started.