SARWAR ZAMAN Vs. YONGTAI INDUSTRIES BANGLADESH LTD.

JUDGEMENT

(1.) This petition for leave to appeal is directed against the judgment dated 9.5.2005 passed by Company Bench of the High Court Division in Matter No. 4 of 2005 rejecting the application filed by the petitioner under section 81(2) read with section 85(3) of the Companies Act, 1994 holding that the above application is not maintainable.

(2.) The petitioner filed the above Matter No.4 of 2005 seeking condonation of delay for holding statutory first annual general meeting of Yongtai Industries Bangladesh Ltd, hereinafter referred to as the company, stating that he is the managing director, promoter and sponsor director of the company which was incorporated on 7.4.2003 as private limited company under the Companies Act, 1994; the sponsor directors initially made subscription as under:

(3.) An application affirmed by one Li Tze Keung, claiming him as the managing director of the company, was then filed contents of which were however subsequently corrected by two supplementary affidavits affirmed by one Hossain M. Zahedi on the basis of power of attorney of said Li Tze Keung, wherein prayer was made for adding Li Tze Keung as respondent No. 2, stating inter alia that the company was registered on 7.4.2003 and the petitioner having 15% shares was made the Managing Director of the company for a period of one year from the date of incorporation of the company; 85% of the shareholders were foreign investors from China and Hong Kong and the majority shareholder Mr. Yu Xiana Li having 55% shares of the company, was appointed the chairman of the company; a meeting of the Board of Directors for appointment of new directors and increasing the shares in the company was also held in Dhaka on 6.6.2004 notice of which was duly issued by the petitioner who at that time was the managing director of the company; at that meeting two new directors were inducted in the company, one being Li Tze Keung from Hong Kong and the other was Hossain M. Zahedi from Bangladesh and thereby the number of directors of the company was raised to six and the petitioner himself was also present in the said meeting and subsequently the petitioner recorded the names of the above directors with the Registrar of the Joint Stock Companies; than an AGM of the company was called on 13.12.2004 after due service of notices upon the shareholders with the agenda for the appointment of a new Managing Director as there were number of complaints regarding the landling of the company's affairs and its finances by the petitioner; further at that time, the petitioner drawing handsome salary, was supposed to act as the full time Managing Director of the company but, as was revealed, he at that time was also working as full time paid Managing Director of another company named 'Wordy Ltd.' which was also engaged in similar garment export business and as a result company suffered significant loss due to lack of proper attention in running the business of the company; moreover it was a legal necessity to appoint a new Managing Director as the tenure of the petitioner expired on 6.3.2004; further despite repeated requests from the Chairman as well as other shareholders the petitioner did not submit any financial statements nor did he got the account of the company audited so that the statutory meeting of the company could be held; although the notice was served upon the petitioner 21 days prior to the meeting and despite the fact that the majority shareholders were coming from Hong Kong and China to attend the meeting for the important purpose of electing the Managing Director/Chief Executive Officer of the company, the petitioner sent letter addressed to the chairman of the company, which was duly presented in the meeting held on 13.12.2004, stating that for unavoidable circumstances he would not be able to attend the above meeting; one of the items in the agenda of the said meeting was to appraise the company of the completion of the statutory formalities for which the petitioner was asked to furnish the statement of account of the company which he was single handedly controlling and operating including signing of the cheques as the only signatory but the petitioner also did not provide the shareholders the statements which he was asked to furnish; in the above circumstances in the said meeting held on 13.12.2004 the shareholders appointed Mr. Li Tze Keung as the new Managing Director; the petitioner then to disrupt the business of the company asked the internet service provider to discontinue service although the above service was in the name of the company and the fees were paid from the account of the company; further the petitioner took away all the important documents of the company including the cheque books, customs documents and all documents relating to its accounts and also withdraw Tk. 8,00,000/- (taka eight lacs) from the account of the company two days after a new Managing Director was appointed leaving the account of the company dry and the petitioner also did not spend the above amount for the purpose of the company and thereby misappropriated the said amount; further the petitioner had also been creating problems for the company by falsely stating to the Chairman and General Manager of BEPZA and others that he was the Managing Director of the company; further the petitioner, claiming himself to be the Managing Director of the company also filed the present application under sec 81(2) read with sec 85(3) of the Companies Act 1994 for condonation of delay in holding the AGM though following the said EGM held on 13.12.2004 and based on the resolution passed in it, the Registrar of Joint Stock Companies duly recorded the same and already issued the certified' copy of the Form XII recognizing Li Tze Keung as the Managing Director of the company; the company also made Ramna PS GD No. 1387 dated 17.12.2004 against the petitioner and also one Sohel, a former employee of the company, for taking away from the officer of the company all the official documents and earlier. Mr. Sohel also made a statement in writing admitting that on the instruction of the petitioner he removed the documents and files of the company from its office and pursuant to the above GD, the police on 10.3.2005 recovered from Sohel some documents including the cheque book maintained with HSBC Bank from where all the money was earlier withdrawn by the petitioner; further by a letter addressed to the police Sohel took the stand that all accounts and related documents have been handed over to Mr. M.A. Aziz Khan, Advocate, for 'audit purpose' and asked the police to get in touch with Mr. Khan for those though according to law all such documents are supposed to remain in the office of the company and not with a lawyer who was not even appointed by the company; since the petitioner in his application has made a number of allegations against the company as well as the Chairman and the duly appointed Managing Director of the company, those allegations, being false, need to be controverted and so the company should be made a party in the matter as the respondent No.2. The petitioner filed an affidavit-in-reply denying the statements made in the above affidavit-in-opposition.