Company Cases
2024-10-30
When the Club has taken decision to expel the petitioner permanently, having his membership deleted from the Register Book, the provisions of section 43 of the Act are attracted without any contrivance. When any decision's/order's consequence is omission of a member's name from the register book of a company/Club by which the member is aggrieved, a case under section 43 of the Act is prima facie made out, irrespective of the nature of the order. The proposition that this Court wishes to lay down here is that whether the company's order is an administrative order or an order of other nature does not matter in a section 43 application, if the ultimate consequence is removal of a member's name from the register book or inclusion of any person's name therein without sufficient cause.
Ref: 73 D.L.R (2021) -439
2024-10-27
Section 43 of the Act in a very simple expression, sets out as to who can be a petitioner of a section 43 application or, in other words, what are the qualifications for standing as a section 43 application. Section 43 of the Act delineates that in order to be the petitioner under the section, the petitioner has to be either an aggrieved person by the entry/omission of some one's name, including the petitioner's own name, in the book of the company's membership register i.e. a person whose right/interest has been or is likely to be jeopardized/hampered in any manner because of inclusion or deletion of the name from the company's membership register book; any member of the company or the company itself.
Ref: 73 D.L.R (2021) -439
2024-10-26
Section 233 of the Act empower the Court to pass "such Orders as it (this Court) deems fit", in conjunction with the specific power of regulating affairs of a company in a deserving manner, in addition to the vast power of this Court of passing "any ancillary and consequential directions", as authorized/approbated by the provisions of section 85(3) of the Act. This Court is well equipped with ample authority (i) to form a board of directors for any company, (ii) to appoint necessary number of shareholder directors, (iii) to appoint independent director/s and (iv) appoint a Chairman for the Board, out of the share- holder-directors or Independent directors, as per the exigencies of a particular company.
Ref: 73 D.L.R (2021) -270.
2024-10-24
Whether the Company Court is competent to investigate into the title as to membership of a company any party. When an aggrieved person or any member of a company approaches the Company Court complaining that a person's name has been entered in or omitted from the Members' Register illegally, or the fact of becoming/ceasing to become a member of the company has not been recorded in the Members' Register, the Company Court, upon deciding any question of fact and law, may determine the title as to membership of the company of any party to the application.
Ref: 72 D.L.R (2020) -567
2024-10-23
When two or more companies become desirous to enter into any arrangement of merger with each other towards converting themselves into one single entity, they all, as the petitioners, would make an application to the Court under sub-section (1) of section 228 of the Act for directions for convening of the meetings of the members and creditors, if any, for considering the proposed scheme of amalgamation, at first. On such an application, the Court would issue directions for convening of separate meetings of the members and/or creditors or different classes of members and/or creditors, as the case may be. In the meetings of the members and/or creditors, the scheme of amalgamation is required to be approved by majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members, as the case may be. After the scheme is approved by all concerned in their respective meetings, a separate petition then would be - presented to the Court for sanctioning of the - scheme of amalgamation. If the prayer for sanctioning of the scheme of amalgamation has = already been made in the original application, there is no need to file a separate application, but in that event, the fact as to the approval by the three-fourths in value of the members/ creditors should be brought to the notice of this Court by way of filing a supplementary affidavit.
Ref: 72 D.L.R (2020) -75
2024-10-22
The plain meaning and scheme of section 228(2) of the Act, as can be gathered from the a Bengali text which is written in a clearer a version without keeping any ambiguity in understanding the same, is that three-fourths of the shareholders/creditors means three-s fourths of the entire shareholders/ creditors; s there is no scope for any company to interpret the law that three-fourths of the shareholders/ creditors means three-fourths of the present sees in the AGM/EGM. It follows that until and unless the three-fourths of the entire shareholders remains present in the AGM/EGM and approves the scheme of amalgamation, the requirements envisaged in section 228(2) of the Act are not fulfilled.
Ref: 72 D.L.R (2020) -75
2024-10-20
In an application under section 228 read b with section 229 of the Act, when, after conducting the meeting with the members and/ or the creditors of the companies as per the Order of the Court, the petitioner (transfer and transferee companies) show the Court that three-fourth in value of the creditors and/or members of each of the companies (transferor and transferee companies) agree to any arrangement of reconstruction/amalgamation/merger and the proposed arrangement is not against the public interest, rather it is aimed at the benefit of both the companies, their members, creditors, employees and other concerns; in other words, if the scheme of amalgamation has been undertaken upon fulfilling the requirements of law laid down in the sections 228 and 229 of the Act, and the Court finds it to be beneficial for all concerns of the transferee and transferor companies, then, the same deserves positive consideration by the Court.
Ref: 71 D.L.R (2019) -01
2024-10-16
The provisions of section 85(3) of the Act are applicable to any type of meetings of any incorporated company, which include statutory meeting, board meeting, extra- ordinary general meeting (EGM) and annual general meeting (AGM) and when any impracticability arises in calling or holding or conducting any types of meeting, the Court may interfere to facilitate the meeting to that end.
Ref: 71 D.L.R (2019) -229
2024-10-15
If no proceeding has been drawn against the company its director officer for failure to comply with any provisions of the Act, the delinquent company its director officer may file an application for exoneration from the fine penalty and, in the event that any proceeding for failure to comply with the provisions of the Act is pending before the competent Court, the Company Court would not deal with the issue of fine/penalty and simply deal with the issues of civil nature, such condonation of delay towards enabling the company to do the needful in compliance with the various provisions of Act.
Ref: 71 D.L.R (2019) -229
2024-10-14
Any member of a company is entitled to apply for calling, holding and conducting its AGM and, additionally, provisions of section 15/3) of the Act empower the Court to such motu call, hold and conduct the AGM of a company when it becomes impracticable to call and conduct its AGM as per the provisions of the Companies Act or Articles of the company.
Ref: 71 D.L.R (2019)-229
2024-10-09
As regards the submission to pass a direction upon the respondents to buy or purchase the shares of the petitioner (minority), I am of the view that, such an order cannot be passed upon mere asking for the same. It will depend on the facts and circumstances of each case and is a matter of discretion to be exercised by the Court keeping the interest of the company and of the aggrieved shareholders as paramount. The Court should consider if the order to buy out shares of the minority (or of a group) would amount to rewarding the person (s), whether minority or majority, who has/have created a situation prejudicial to the interest of the company or of the aggrieved shareholders. In otherwards, the person who seeks such a relief must have his own hands clean. Nor a petition under section 233 shall be treated as if it is a plaint in a suit for partition.
Ref: 70 D.L.R (2018) -728
2024-10-07
The delay in holding the AGM for the year 2013 was a matter purely attributable to a temporary suspension of the application of section 81 by reason of a demanding IPO process embarked upon by the Company in April, 2013. Pending the successful completion of the IPO as per the regulatory requirements cited by the BSEC it would indeed have been fool- hardy for the Company to press on with a pre- mature holding of the AGM by May, 2014.
Ref: 67 D.L.R (2015)- 326
2024-10-06
Section 81 is a procedural section enabling a company to carry on its business as has to be conducted to the fullest extent possible at a general meeting unless faced with impracticability in doing so. The purposive aspect of the exercise of this Court's discretion is simply "to allow the company to get on with managing its own affairs and not be frustrated by the impracticality of calling or conducting a meeting in the manner prescribed by the Company's articles and the Companies Act"
Ref:67 D.L.R (2015) -326
2024-10-05
Amended definition of "defaulter-borrow- er" under section 5 Ga Ga is a declaratory and clarificatory amendment and, as such, it should be regarded to be already in place in the Act. This amended provision under section 5 Ga Ga should have retrospective effect and, as such, should apply to the petitioner retrospectively. This retrospective application of the - amended definition of "defaulter-borrower" may also be viewed as subsequent withdrawal of exemptions by the amended definition of 'defaulter-borrower' as provided by section 5 Ga Ga of the Act will also be applicable to the petitioner as the same is a declaratory and clarificatory amendment of the term 'defaulter- borrower'.
Ref: 67 D.L.R (2015) -271
2024-10-03
A case of total dead lock in running and managing the affairs of the company as a commercial concern has been made out, on facts and from the circumstances revealed from the averments made by the parties as well as from the materials on record, and no device has been kept in these articles to overcome such dead lock either by forming quorum or by using casting vote, while the intention for separation in both groups is obvious from the fact of filing this petition.
Ref: 66 D.L.R (2014) -461
2024-10-02
A shareholder, even if he had succeeded to prove a case of making allotment of shares (in - his favour) otherwise than in cash, under sub- clause (i) or (ii) of clause (b) of section 151(1) of the Act, however, would have no locus stand to file an application under section 233(1) for not -holding shares equivalent to (not less than) 10% of the paid capital in the company.
Ref: 65 D.L.R (2013) -350
2024-10-01
The powers vested in Bangladesh Bank under section 46 of the Act is a power vested in the regulator to enable it to perform its duties, while the provisions of section 106 of the Companies Act, 1994 vesting power in the members of the company to remove a director is not inconsistent with power vested in Bangladesh Bank under section 46 of the Act. Moreover, the provisions of sections 106 and 108 of the Companies Act, 1994 is protected by section 2 of F the Act.
Ref: 64 D.L.R (2012) -67
2024-09-29
The respondent No. 1, without exercising his jurisdiction under section 193 of the Companies Act has issued the impugned order stating that the same cannot be resolved by himself and the parties were required to take resort to the court of law. This is a failure on the part of the Regis- trar to what he is required by law to do in respect of exercising jurisdiction under the provision of Companies Act. Consequently, the respondent No. 1 when issued the impugned Annexure-O failed in his duty which he ought to have per- formed and, as such, the same must be declared to have been issued without lawful authority and a mandamus is required to compel him to exercise his jurisdiction under section 193 of the Companies Act, 1994.
Ref: 61 D.L.R (2009) -226
2024-09-26
Section 95 of the Companies Act providing no forum thereunder, any dispute arising thereto is to be resolved as a civil dispute resorting to the ordinary civil Court of competent jurisdiction and, as such, the inherent jurisdiction under the Companies Act in the absence of any specific provision therein would not be invoked to enforce the provision of section 95 of the Companies Act, as the said provision is providing procedural matters only and not substitutive provision.
Ref: 61 D.L.R (AD) (2009) -83
2024-09-25
High Court Division must be satisfied that it is impracticable to call a meeting in the manner in which it is to be called-Sections 81(2) and 85(3) of the Act pertain to procedural impractica- bility and not to any impediment imposed by operation of law-That impracticability must be determined primarily in the light of the Articles of the Company and the provision of the Companies Act is to be looked into only when they are silent on a particular matter or the Articles are in conflict with the provisions of the Act. In that view, "impracticability" relates to the internal mechanism of the Company and not to any external influence..
Ref: 59 D.L.R (AD) (2007) -60
2024-09-24
Sustainability of a petition for the winding up of a company on the ground that it is unable to pay its debts does not depend on whether the - company is able to pay the debt of the person who moves the petition; the company must be unable to pay its debts, which means that inability is not one to pay the debt of the person O moving for winding up, but the debt as a whole due by the company.
Ref: 57 D.L.R (2005) -337
2024-09-23
Rectification of register-The section gives the Court wide discretion to decide any matter relating to the rectification of a register of members of a company but such power would not mean to empower the Court to consider and decide each and every difference or dispute between the members of a company.
Ref: 57 D.L.R (2005) -149
2024-09-22
The claim is not undisputedly ascertained, and unless it is admitted, it cannot be said it is a debt and the respondent company is liable to pay the debt. Winding up of a company by Court for debt is not called for where there is a Bonafede dispute relating to the existence of the debt.
Ref: 56 D.L.R (2004) -422
2024-09-21
If for any reason it is impracticable to call, hold and conduct a meeting on the happening of any circumstance the Court being satisfied to that effect to call a meeting in the manner such a meeting is to be called, could pass an order for holding the meetings to be conducted by a neutral Chairman even in the absence of an application.
Ref: 56 D.L.R (AD) (2004) -76
2024-09-19
The Court, in considering a prayer for holding a meeting, should be cautious and in normal circumstances should not supersede the rights and wishes of the share-holders and their representatives, the directors to manage and run the company including holding of their meetings.
Ref: 55 D.L.R (2003) -495
2024-09-18
There is no fetter on the powers of the Court in invoking sub-section 3 of section 85 to call, hold and conduct a meeting and not restricted only to the articles or the Act. However, the Court shall not invoke its power on a mere trifling domestic squabble between the directors but only when it is necessary in the paramount interest of the company, looking at the facts from a reasonable commonsense point of view and acts as a prudent person of business to decide whether it has become impracticable to call a general meeting.
Ref: 55 D.L.R (2003) -495
2024-09-17
Winding up-An order of winding up of a company can be made in the discretion of the Court but under section 250 of the Act, when a winding up order has been made, no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the Court. If the proceeding under section 241 of the Companies Act satisfies the requirements of law, it shall certainly find its mark in accordance with law and shall not be disallowed or deviated because of other equally efficacious remedies available to the petitioner in another forum.
Ref: 55 D.L.R (2003)-478
2024-09-16
Balance sheet, no doubt, is a good evidence of acknowledgment of any liability of the company. But the balance sheet should not be accepted as an acknowledgment if it is found that the directors or those who are in control of the company took decision favoring or in furtherance of their interest although that was to the detriment of the company and the minority shareholders.
Ref: 52 D.L.R (2000) -249
2024-09-15
In order to be a valid and complete transfer of share for the company to register in its register of members the instrument of transfer must be executed both by the transferor and the transferee, the instrument of transfer must be duly stamped and such instrument is delivered to the company along with the scripts.
Ref: 52 D.L.R (2000) -160
2024-09-14
The application under section 43 of the Companies Act for the rectification of the Members Register is held to be not maintainable as the said matter has not been earlier referred to the Arbitration Tribunal as provided in section 12 of the Ordinance and/or as stipulated in Article 66 of the Articles of Association of the Chamber of Commerce.
Ref: 51 D.L.R (1999) -538
2024-09-08
In all companies either private or public for holding a board meeting a written notice shall be given to every director and civil Court may not interfere when there is a valid meeting. When there is prima facie and invalid resolution the civil Court can interfere. The respondents are restrained by an order of temporary injunction from acting on the alleged resolution of the Board of Directors.
Ref: 50 D.L.R (1998) -598
2024-09-07
From the conduct of the respondent company and in the manner promises were made, assurances given, new repayment schedules chalked out again and again only to be broken giving the impression that the affairs of the company are not clean and above board, the opinion is that the respondent company is unable to pay its debt and it will be just and equitable if the company is wound up. Hence, it is ordered that the respondent-company is wound up with immediate effect.
Ref: 48 D.L.R (1996) -392
2024-09-03
Judgment of a Division Bench of the High Court Division in an appeal against the Judgment of a Single Company Judge exercising power under section 38 is taken to be non-set, having been passed completely without jurisdiction, a classic example of coram non judice.
Ref: 48 D.L.R (1996) -82
2024-09-02
When a Single Company Judge of the High Court Division is exercising power under section 38 of the Companies Act an appeal from its decision has to be taken by way of leave to the Appellate Division under Article 103(1) of the Constitution.
Ref: 48 D.L.R (1996) -82
2024-09-01
The Original Side Rules framed by the Calcutta High Court under Clause 37 of Letters Patent, 1865 have not been preserved by the Law Reforms Ordinance, 1978. The Original Side Rules therefore have no existence now in the eye of law. Therefore there can be no manner of recourse to Rule 1 of Chapter XXXI of the Original Side Rules for preferring an appeal to a Division Bench from the decision of a Single Company Judge under section 38 of the Companies Act, 1913.
Ref: 48 D.L.R (1996) -82
2024-08-26
The inclusion of a Company of which the Government is the 100% shareholder, in the schedule of the Public Corporation (Management and Co-ordination) Ordinance, 1986 (Ordinance 48 of 1986) does not make the company Public Corporation and the provisions of liquidation as contained in the Companies Act are applicable to such an enterprise in spite of the inclusion of the company in serial No. 32 of the schedule on inclusion of the company in the serial 37 of the members of the consultative committee of public enterprises of the said Ordinance of 1986.Government, while doing commercial or trading business through a company, does not function as a department or organ of the government in its administrative capacity and such a company satisfies all the qualifications of a company within the meaning of the companies Act and the petition for its winding up is competent.
Ref: 46 D.L.R (1994) -552
2024-08-22
Money belonging to the company under liquidation cannot be withdrawn and paid to the Official Liquidator for the purpose of dissolution of another company under liquidation to be used for dissolution of the company which has no assets of its own to meet the costs and expenses of its dissolution. The Official Liquidator is to seek fund from the Government in this connection.
Ref: 45 D.L.R (1993) -482
2024-08-20
Winding up of a Company – Whether mismanagement could be a ground for winding up – There may be certain irregularities and omissions in the management of a company. But mere allegation of mismanagement will not make the company liable to be wound up on the just and equitable reason-Where nothing more is established than that the directors have misappropriated the funds of the company an order for winding up would not be just and equitable. Allegations of misconduct of the directors or that the business has been carried on at a heavy loss are per se not grounds on which the court would order winding up. Where petition by a share-holder contains allegations which all relate to the internal management or mismanagement of the company's affairs, it is a matter for the share-holders themselves to deal with and not one that would call for interference by the court.
Ref: 44 D.L.R (1992) -256
2024-08-19
Default in delivery of share certificate – Quashing of proceeding for such default – It is not the complainant’s case that his share certificates were not made ready within time. Once the share certificates are completed and made ready within time, the liability of the accused persons ends. The law does not provide that the certificates are to be made ready for delivery to the complainant. Non-delivery of the share certificates is not an offence and the proceeding is liable to be quashed.
Ref: 44 D.L.R (1992) -107
2024-08-18
Maintainability of application before the Company Court for rectification of share register – It is a discretion of the Court to see whether the point at issue relating to rectification of share register can be resolved on the basis of materials on record. If the case is complicated and very doubtful and if it appears that without resorting to some procedure other than the summary proceeding u/s 38 of the Act a case cannot be disposed of, the Company Court should not interfere with such a matter. But if it is apparent on the face of the records that legal rights of the parties are clear and can be settled on the basis of the materials on the record, the Company Court can exercises its jurisdiction in the matter.
Ref: 44 D.L.R (1992) -48
2024-08-17
The Banking Companies Ordinance 1962 made special provision for banking companies when they are in liquidation and empowered the High Court Division exclusive jurisdiction to decide any claim by or against a banking company. Though this Ordinance is in addition and not in derogation of the Companies Act or any other law for the time being in force, section 60 of the Banking Companies Ordinance by its non obstante clause made provision to prevail over the Companies Act, Civil Procedure Code or any other law for the time being in force.
Ref: 42 D.L.R (1990) -480
2024-08-16
Winding up on plea of inability to pay debts – collateral security of the appellant company along with the value of the lands where its factory is situated and the value of machineries when taken up together, debts to the petitioner bank were fully secured. In such a position no application for winding up can be maintained.
Ref: 42 D.L.R (1990) -474
2024-08-14
Petitioner bank when not entitled to interest changed against the company related to period of turmoil and for the period from the date of its taking over as abandoned property till date of its released. To allow such interest is absolutely a discretion of the Court. During this period the shareholders and Directors had legal disabilities over the affairs of the company and as such they should not be made to pay interest such period.
Ref: 42 D.L.R (1990) -474
2024-08-13
Winding up of a company – Maintainability of the application for winding up on grounds of inability to pay debts was challenged upon a counter-claim of money by the appellant company. The Court found the counter-claim to be just an allegation, no evidence having been placed before the Court in Support of the counter-claim. Such counter-claim was not acceptable.
Ref: 42 D.L.R (1990) -474
2024-08-12
A company may be wound up the Court upon the resolution that the company be wound up by the Court and on the ground that the Court would be of the opinion that it is just and equitable that the company should be wound up.
Ref: 42 D.L.R (1990) -302
2024-08-11
In view of the provision of section 87 B(f) of the Companies Act, the Board of Directors has authority to appoint a new firm of partners to continue the work of managing agents only by way of temporary arrangement.
20 D.L.R (1968) -1056
2024-08-10
Change of a Company which keeping it identity as the same is possible only under section 11 of the Companies Act after following the prescribed procedure for the purpose.
Ref: 20 D.L.R (1968) -173
2024-08-08
Cost of unsuccessful litigation awarded against official Liquidator –Payable out assets of company in priority to costs of liquidation itself.
Ref: 16 D.L.R (1964) -656
2024-08-07
Power of the High Court to given relief under section 281 (2) is limited to cases when proceeding against a person concerned was not before a Court under section 281 (1).
Reliefs under section 281 are available when the act complained of was the result of a bonafide mistake and all the facts disclosed before the high Court.
Ref: 10 D.L.R (1958) -179
2024-08-06
Director of a company –authority to act, determined by the articles of Association of the Company –Any act done by or contract with a Director falling within the scope of the Articles of Association –legally enforceable.
Articles of association determine the scope of functions of the Directors of a company –Persons dealing with the with the Directors not bound to enquire into the specific resolutions.
Ref: 9 DLR (1957) -1
2024-08-04
-‘Company’, ‘liable to be wound up’, ‘arrangement’, ‘court’ ‘include’, explained –Whether sub-section (6) applicable to unregistered Company deallt with by section 271. –The purpose of section 153---difference between Sa. 153 and 153A.
Ref: 8 DLR -325
2024-08-04
-‘Company’, ‘liable to be wound up’, ‘arrangement’, ‘court’ ‘include’, explained –Whether sub-section (6) applicable to unregistered Company dealt with by section 271. –The purpose of section 153---difference between Sa. 153 and 153A.
Ref: 8 DLR -325
2024-07-18
The High Court Division has discretion under section 248 of the companies Act, 1994 to restrain further proceedings in any suit against the company, not against the guarantors. But in the concerned suit, the company alone is not the defendant, rather two other guarantors are also defendants along with the company and their liability is co-extensive with that of the company (the principal debtor) as per provision of section 128 of the Contract Act, 1872. This situation has to be taken into consideration in exercising discretion, under section 248, while considering a prayer for restraining further proceeding of a suit or proceeding. So, the High Court Division found balance of convenience and inconvenience in favuor of the applicant. Fartex Fashion Wear Limited-Vs.-Mrs.Amena Islam and others.
Ref: 4 ALR -2014 (2) -313
2024-07-17
Board of Directors were competent to issue the right shares.
A plain reading of clause –(c) to sub-section (1) and sub-section (2) of section 155 clearly shows that the shares of a company remain under the control and disposal of the directors and the Board of Directors were competent to issue the right shares in favour of the respondent No.4 in the manner it has been allotted.
Ref:4 ALR -2014 (2) -63
2024-07-16
No director or Directors are or shall be allowed to from any company with the word “Rangs” ethers as a prefix or as a suffix except that owners/shareholder of Rangs Limited shall be entitled to float a company under the name and style of “Rangs” etc. Only owner/shareholders of a company are entitled to float a company under the name that company, no director or directors are or allowed to the same.
The Registrar of Joint Stock Companies Firms can ask any company to change the name and object of that company as the name of the company has similarly and resemblance with the name and object of another company, which was earlier incorporated.
Ref:4 ALR (AD) 2014 -209
2024-07-15
The Appellate Division held that in exercising power under section 193 of the Act in certain matters the Registrar is required to perform quasi-judicial function and is authorized to make some investigation as may be found necessary for discharging his duties including the right of hearing before imposing fine to negligent or defaulting companies, also by engaging section 397 read with section 393 of the Act, to lodge complaints in appropriate Court against those who make false statement through documents required by or for the purpose of any provision of the Act, but such quasi-judicial in no way can be stretched to conduct a hearing as to the managing directorship of the Company which is the domain only of a competent Court, so the Registrar acted beyond his statutory power in the issuing the impugned notice vide annexure-‘K’ to the writ petition asking the writ petitioners to participate in the hearing on the re-instatement of the appellant as managing director of the company.
Ref: 4 ALR (AD) -2014 (2) -13
2024-07-15
When Independent Chairman required.
Company Bench’s view that exceptional circumstances has to be made out for exercising special powers by the court, particularly in the absence of any provision in section 81 (2) of the Act that does not require appointment of the independent chairman. The Bench has the considered that an independent Chairman should not be appointed on mere asking for the same or to make it a routine for holding general meeting. There must exist exceptional circumstances to justify appointment of independent chairman and such appointment must be in the interest of the company, not to serve the purpose or whims of any person or group. Such exceptional situation has to be objectively assessed and the powers must be used with circumspection by this court.
Ref: 5 ALR -2015 (1) - 22