FARUK (MD) Vs. ABDUL HAMID

JUDGEMENT

(1.) This petition for leave to appeal by respondent No.2 petitioner is from the judgment and order dated 25-3-98 passed by the learned Company Judge of the High Court Division rejecting the petitioners application for direction and clarification and/or modification of the learned predecessor Company Judges order dated 21-8-97 in Company Matter No.52 of 1995.

(2.) Respondent Nos.1 and 2 as petitioners filed an application under section 233 of the Companies Act, 1994, Matter No. 52 of 1995. While describing the contents of the said application the words petitioner and respondent will be used in the manner described in the said application. They alleged that the petitioners and respondent Nos. 2-6 formed a private limited company under the name and style of Madina Vegetable and Oil Refinery Industries (Pvt) Ltd. taking over the business, assets and liabilities of Madina Vegetable, & Oil Refinery Industries, a proprietary concern, solely owned by respondent No.2. The petitioners and the respondents are all permanent directors under the Articles of Association of the company. All the directors/shareholders are close relations. The petitioners and respondent Nos 2-5 are full brothers. Respondent Nos. 3 and 4 are the son and wife respectively of respondent No.2 and respondent No.6 is the wife of respondent No.5. Out of 11,000 total shares of the company the petitioners were holding 1,000 shares each and the rest 9,000 shares are held by the remaining five directors. At a Board Meeting held on 26-5-92 respondent No.2 (the present petitioner), the Managing Director of the company, was authorised to purchase a complete set of imported machineries in packed condition from the aforesaid proprietorship concern and was further authorised to sign and execute the agreement for sale on behalf of the company. The Managing Director-respondent No.2 (the present petitioner) purchased the assets and liabilities of the proprietorship concern under a vendors agreement dated 1-6-92 at a consideration of Taka 68,24,992,20, but respondent No 2 allegedly made another false vendors agreement on 1-7-92 showing Taka 3,43,31,638.87 as the consideration, and also stating that in future the company would allot 22.000 shares to three persons including himself. Respondent No.2 made the false vendors agreement for his personal benefit. He continued to treat the private limited company as his own absolute property and ignored the interest of the petitioners and other shareholders. The company made a huge profit of Taka 4,61,86,98 1.00 by selling soya bean oil but it was not shown in the companys account. No dividend was declared by respondent No.2. He defalcated the companys fund and committed various other irregularities sometimes by forging the signatures of other directors. He failed to hold Board Meetings and so the petitioner and k respondent Nos. 5 and 6 held a requisitioned meeting of the Board of Directors on 28-2-95 and in the said meeting petitioner No.1 was authorised to call a meeting of the Board on 30-3-95. The members were duly notified on 16-3-95. Respondent No.2 failed to turn up. Again notices were issued on 15-4-95 fixing 30-4-95 for Board Meeting but respondent No.2 again failed to attend. Thereafter the petitioners and respondent Nos.5 and 6 called an extraordinary general meeting on 16-5-95 by issuing notices on 2-5-95 and in the said meeting it was resolved inter alia that since the tenure of respondent No.2 as Chairman and Managing Director of the company was going to expire on 20-5-95 on the expiry of 3 years it was decided to appoint respondent No 5 as the new Managing Director of the company. The petitioners made quite a few GD Entries at the Lalbagh Police Station against respondent No.2 and a criminal case filed by the new Managing Director against respondent No. 2 is still pending. The petitioners prayed for three reliefs, namely, to endorse the removal of respondent No.2 as the Managing Director of the company, to endorse the appointment of respondent No. 5 as the Managing Director of the company and to appoint an independent auditor to audit the accounts of the company and give such other directions as the Court may deem fit.

(3.) The present petitioner as respondent No.2 filed one affidavit-in-opposition and two supplementary affidavits denying the averments in the application and stating that the second vendors agreement was a modified version of the earlier vendors agreement containing assets, raw materials etc. and the allotment of 22,000 shares was made towards partial adjustment of the consideration of the second vendors agreement. The defalcation of the companys fund was denied. The allegation of misappropriation of over Taka 4 crore was also denied. It was denied that respondent No. 2 was removed and respondent No. 5 was appointed the Managing Director as the meeting was not convened or held legally. The Refinery is closed for the last 2 years owing to the intervention of respondent No. 5.