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Legal Annotations Regarding Virtual Company Meetings In The Times Of Pandemic

Arefin Rafi — Sun, 22 Jan 2023 09:58:44 +0000

Extraordinary circumstances need extraordinary measures. The pandemic has proved the statement to be axiomatic, which can be juxtaposed to the corporate realm. In the times of pandemic more or less every type of functionary came to a standstill except the very essential ones. But as life must go on, the human kind has found ways to carry on life through bypassing physical presence while shifting things virtually considering the scopes. Mega corporation Grameenphone held its 23rd annual general meeting of 2020 on its very own digital platform, not in-person. This is a whole new scenario for the corporate sector of Bangladesh, considering general meetings can be tagged as the most vital function for the smooth operation of a company. But this also gives rise to a legal question, which is, if the current legal frameworks surrounding the corporate realm are accommodating for such scenarios or are there some lacunas and blockages.

A company has to call for several types of meetings based on different events and requirements, section 81 to 89 and schedule -1 of the companies act 1994 has laid down provisions of certain meetings. Amongst different meetings there is , AGM (Annual general meeting) which requires a notice period of 14 days in writing and EGM (Extraordinary general meeting) which requires that of 21 days. Notice may be served personally or by registered post. The meeting may be called by shorter notice if it so agreed in writing by all members entitled to attend and vote. Therefore, an electronic copy of the notice can be sent personally to the shareholders through email as long as the notice is in written format.

Any meetings need different persons of the company to be present. Regarding presence in the meeting, presence in person (here the Bengali text of this provision stipulates “personal presence”) or by proxy is required. Therefore, virtual presence is not prohibited as long as personal presence or presence by proxy is ensured. As this provision talks about presence personally or proxy it is clear that it does not intend or mean physical presence of such a person. However, still for better procedural clarity, the company’s Article can stipulate the procedure of virtual presence and virtual voting.

Every company is statutorily required to cause minutes of all proceedings of general meeting and meetings of its directors to be entered in books kept for that and other purposes. Any such minute shall be signed by the chairman of the meeting at which the proceedings were had or by the chairman of the next succeeding meeting as evidence of the proceedings. Here a question of physical presence arises legally.

However, Section 6 of the Information and Communication Technology Act, 2006 (“ICT Act, 2006”) grants functional equivalence to, and establishes the principle of non-discrimination for electronic records in Bangladesh. The said section in essence provides that if any law provides for any information or any other matter to be recorded in handwritten or typed or in any other form of writing or printing, such information/matter can be recorded electronically, subject to such information or matter being accessible for a subsequent reference.

Again, section 9 of ICT Act, 2006 imposes additional requirements for retention of electronic records which essentially are as follows:

(a) the preserved electronic records shall be accessible in future;

(b) such records shall be maintained in such original format in which they had been generated/ sent or received;

(c) mechanisms enabling determination of origin/destination, date and time of sending and receipt of electronic records in question, are in place.

Accordingly, a cogent argument depicts in addition to written or typewritten copies of the minutes, assuming the digital copies satisfy the requirements for maintaining electronic records under section 6 and 9 of ICT Act-2006, they will be deemed to be valid and enforceable records in Bangladesh, upon reliance on section 6 and 9 of the ICT Act-2006.

However, section 88 of the Companies act 1994 stipulates, in case any special or extraordinary resolution is adopted in such a meeting, a copy of every special and extraordinary resolution shall, within fifteen days from the passing thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the same. Therefore, although the meetings and other activities can be conducted virtually and remotely, this filing requirement will make physical presence necessary.

So it can be inferred, a virtual general meeting is possible as long as it addresses the required statutory reports and agendas and is signed by the Chairman of the meeting or the Chairman of the next meeting and in case of any special or extraordinary resolution adopted in such meeting it is within fifteen days from the passing thereof, printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar for recording purposes.

Generally, there is no residency requirement for directors of a company in Bangladesh. Therefore, general administrative affairs of a company can be run remotely from abroad by directors residing abroad. Although complete remote administration is not possible due to several in person activities of company officers, hence there is a necessity for the laws to be given impetus with the current circumstances of the pandemic and the 21st century globalization for total remote operations and mobility.

The post Legal Annotations Regarding Virtual Company Meetings In The Times Of Pandemic first appeared on AS Associates.

How To File A Patent Application In Bangladesh Under The New Bangladesh Patent Act 2022?

Arefin Rafi — Sun, 22 Jan 2023 09:55:57 +0000

On 11 April 2022, the Parliament of Bangladesh updated the age-old patent by repealing Patents and Designs Act 1911 and enacting the Bangladesh Patent Act 2022. The new law defines ‘patent’ as an unrestricted granted right to protect an innovation by which the owner of the patent becomes entitled to lawfully prevent any other person from using the innovation for personal gain. The Bangladesh Patent Act 2022 grants 20 years of protection to a granted application for patent.

Bangladesh is slowly moving towards an innovation led economy and its rank in the global innovation index is gradually improving. Thus, in the coming days, the businesses shall invest in their research and development departments for further innovations. This article focuses on how an innovator can file an application for patent.

Step 1:

A claimant of an innovation shall submit the prescribed form for patent application under the Bangladesh Patent Act 2022 with the prescribed fee to the Registrar of the Department of Patent, Designs, and Trademark. With the form, the innovator needs to attach the complete specification of the innovation. However, there is also scope for attaching the provisional specification of the innovation therewith.

The form shall include the followings:

Identification details of applicant and innovator.
Title of the innovation.
Clear and comprehensive description of the patent applied for.
Description of innovation.
Claims regarding innovation.
Summary of innovation in not more than 300 words.
Details of application number and date for pre-emption right claimed, if any.

The Registrar may, if necessary, order the foreign patent applicant to submit the following documents. In such case, the applicant must submit the documents within 90 days of the order.

A copy of the result of foreign application, and any document thereof.
A copy of the patent granting certificate.
A copy of the revocation order of the granted patent, if applicable.

Step 2:

At the time of submission of the application for patent, the Registrar shall assess the form and check whether all the requirements mentioned in the first part has been fulfilled.

If not, the Registrar may prescribe a fixed time for necessary amendments in the application. After the completion of the prescribed period, the incomplete application is deemed to be rejected.

If the requirements have been fulfilled, the Registrar shall check whether any person with specialized knowledge in the relevant sector can apply the innovation without further experiments. If yes, the claimed innovation shall be considered to have been published with clarity, precision, and comprehensiveness.

Step 3 (Optional):

The Registrar of the Department of Patent, Designs, and Trademark may order any foreign patent applicant to adjust the innovation befitting for the citizens of Bangladesh for the purpose of spreading the use of such innovation in the country.

The Bangladesh Patent Act 2022 reflects Bangladesh’s commitment to be compliant with the WTO’s Agreement on Trade related Aspects of Intellectual Property (TRIPS). The new law clarifies several gray areas for foreign investors with patents as their principal capital.

The post How To File A Patent Application In Bangladesh Under The New Bangladesh Patent Act 2022? first appeared on AS Associates.

Concept Of Intention In A Partnership Business Within Bangladesh

Arefin Rafi — Sun, 22 Jan 2023 09:53:25 +0000

Introduction

The current Partnership Act 1932 (‘the Act’ hereinafter) came into existence to oversee the main functionaries regarding partnership in trade, commerce, and business. ‘Partnership’ is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The challenge here is to determine the test by which courts can determine the existence of a partnership between the parties against mere co-ownership or some other relation between them. In this regard sections 5 and 6 of the Act must be taken into the relation to define some natures of partnership which include modes and a contractual element within them. Also, sections 7 and 8 oversee the timeframe of parties staying within the partnership. These elements actually point towards one certain direction which poses the ‘real intention of the parties’ to actually become partners and work together to share a profit, especially the part where this relation needs to be based on ‘free consent’ just like a contract. This article looks into the origin of a partnership and the test of intention which brings into existence the idea that the formed partnership.

Intention in contract

In the onset the principles of the Contract Act 1872 can be used to supplement the Partnership Act. In the case of Carlill v Carbolic Smoke Ball Company, the Court applied the “objective test” and asked whether the reasonable bystander, after taking into account all the circumstances of the case, thinks that the parties intended to be bound in a contract.¹ And reversely when there was no intention to be legally bound there can’t be a valid contract, especially in familial instances and social promises like in the case of Balfour v Balfour.² So these cases prove that ‘intention’ plays a vital role to determine if there was actually a ‘valid contract’ within the parties that is enforceable in the court of law, same things can be juxtaposed against parties trying to establish or deny a partnership through the harmonious interpretation of this Act by the virtue of section 2(e), and the principle that no provision of valid laws are in isolation with each other.

Role of Real Intention in Partnership and its formation

In the case of Hiralal Gendalal v Bharirath Bamchandra³ It was held that ‘although the right to participate in the profits of a business is a strong test of a partnership, yet whether that relationship does or does not exist must depend on the Real Intention⁴ and the contract of the parties.’ According to the explanation of section 6 of the partnership act, sharing of profit is a key mode of determining the existence of partnership. A case further propounds that to an ‘agreement’ to contribute money towards an undertaking and to share profits and losses therefrom is a partnership.⁵ Agreement is an essential element in a contract, and a contract between parties in instances where they intend to share the profit indicates a partnership between them.⁶ Section 5 of the Act explicitly says a relation of partnership arises from contract and not from status, this principle was reaffirmed in the case of Noor Hossain v Commissioner of income tax.⁷ It can be seen where the agreement of partnership was made not for the purpose of creating a real partnership but for an ulterior motive to avoid taxation, it wasn’t considered a partnership.⁸ A partnership depends upon mutual confidence and utmost good faith. So, sharing of profit is not a conclusive test of an existing partnership as a man who received profits is not necessarily a partner.⁹ There are other factors where partners intend to carry out a business through the mutual agency of one another and from that real relationship of partnership comes into fruition. So, the presumption of partnership lies in fact and circumstances not in law. The fact of participation in profits must be considered in the light of other circumstances,¹⁰ making this aspect a cogent aspect of determining partnership while taking into consideration the circumstances including the real intention and contract of the parties.¹¹ And according to the intention a course of business must be started with certain duties and responsibilities where the relationship between the partners becomes a fiduciary one and they conduct their business in a good faith basis. The intention of the partners will have to be decided with reference to the terms of the agreement and all the surrounding circumstances, including evidence as to the interlacing or interlocking of management, finance and, other incidents of the respective business according to the case of Deputy Commissioner of Sales Tax (Law) Board Of Revenue (Taxes) vs. K Kelukutty. ¹² So the cardinal principle of partnership seems to lie within the particulars of how it was formed and particularly the state of mind continuing through that formation. This can be inferred from section 30 where it states a minor can’t become a partner, for obviously a minor can’t give consent, also according to section 44(a) an unsound person can’t carry on with a partnership relation as their state of mind becomes deluded.

Conclusion

The common law surrounding the test of partnership takes into consideration of temperament of the subcontinent where the locals didn’t do everything on a formal basis, which is contrary to some civil law legal systems, including the United States’, Uniform Partnership Act, which defines partnership as the association of two or more persons to carry on as co-owners a business for profit, whether or not the persons intend to form a partnership. The Partnership Act of 1932 keeps the scope open for no agreement about the determination of the fixed period of partnership and no clause with respect to the determination of partnership in its section 7. So, when a dispute arises regarding the formation of partnership the subcontinental courts always look into the facts and circumstances which led to the actual formation of the partnership and the conduct surrounding it.

Footnotes

1 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

2 [1919] 2 KB 571

3 (1946) 33 AIR Bombay 174

4 Alco Hygienic Products Ltd. v Respondent: Islami Bank Bangladesh Ltd. (1995) 47 DLR 264

5 AIR 1919 Upp Bur 33

6 (1911) 163 Pun. L.R. 598 (DB)

7 (1964) PLD Dacca 373

8 (1960) PLD Kar.852

9 Cox v Hickman (1860) 8 HLC 268

10 (1928) AIR Mad. 890 (DB)

11 (1959) AIR Mad.379

12 AIR 1985 (SC) 1143

The post Concept Of Intention In A Partnership Business Within Bangladesh first appeared on AS Associates.

Scrutinizing A Niche Yet Necessary Law For The State: The Public Demands Recovery Act 1913

Arefin Rafi — Sun, 22 Jan 2023 09:50:54 +0000

Realizing the Dues (On the Basics of Sale and a Criticism)

To fathom the rudimentary elements of Sale and its mechanism around the execution of a certificate mainly a few sections of The Public Demands Recovery Act 1913, ss 11-28 (hereinafter ‘the Act’) of Part III of the Act and the rulesof schedule II of the same must be scrutinized. The main functionality of the Actpivots on creating a vehicle for realizing various kinds of dues for the state which is mentioned in section 3(6) and elaborated in schedule I of the act.

The discussion on realizing due from a certificate debtor from ‘sale’ comes into play from section 14 (a) of the Act where it is divided into two forms one is ‘attachment and sale’ and another ‘just by sale.’ These processes are a medium to execute a certificate for the purpose of actually realizing the dues are liquidated from the certificate debtor.

Now the first part, ‘attachment’ mainly means the seizure of property in anticipation of a favorable ruling for a creditor according to the case of V Dharmavenamma v C Subrahmanyam Mandadi (2009). It is mainly dealt with by Section 60 of The Code of Civil Procedure, 1908 but when sections relating to sale come into play, the Act itself gives a few safeguards to the certificate debtor while also balancing the interests of the certificate holder and the purchaser. The initiation of all things related to Sale starts under the umbrella of section 4 and section 6 of the Act through the filing of a certificate and serving of notice to the alleged certificate debtor which actually has the effect of an attachment to the concerned property. In cases of Sale, the properties are broadly separated into two spectrums which are moveable property and immovable property.

After the conduction of the sale, the purchaser naturally has a right to be delivered the property which is pronounced in rule 59 if it is moveable, and also can enjoy the transactions without any encumbrances if the certificate holder may allow so by the virtue of rule 63 of the act. But the rights of the purchaser are also balanced by the limitations of rule 60 and the consequence in 70.

Although this whole process of execution of certificates through sale seems to be the one in control is the certificate officer who is mainly empowered by the virtue of section 11 of the Act. From hearing and determining petitions, even taking evidence, having the discretion to adjust the certificate to adjourning [rule 50(1)] and stopping sale (rule 50), these motifs are completely vested on the certificate officer except for cases like frauds. The topics will be elaborated on in the later parts.

Even in cases of setting aside sale, a certificate officer gets unhinged power in lieu of section 23 of the Act through the obscure words like ‘satisfaction of the certificate officer’ prevalent in the section. Hence a question may arise about the status quo of the processes of a certificate officer, if their functions are overstepping the boundaries of separation of power which is one of the bases of Bangladesh’s constitution^, and destroying certain balances.

Also, an inquiry might spark up if a constitutionally guaranteed right of property should be dealt to such an extent without a proper judicial forum overseeing it which may connect to the question of due process in a broader spectrum too. But, nonetheless, whatever the anomalies may be present in the Act, by the virtue of the Act having a maverick quality, it can promise a speedier end if the means of attaining that end and the personnel around it are seasoned in a proper judicial oven and their powers are tailored with checks and balances.

The Protagonist of the Act (On the Certificate officer)

Continuing from the previous segment of the article, it seems pertinent to briefly discuss this legal creature created by the Act named ‘Certificate officer.’ Through the virtue of the public demands recovery Act 1913’s section 39, the Board of land administration has made rules on the appointment and powers of Certificate-officers. This enables the certificate-officer to exercise all the powers conferred upon him by the Act freely with a few qualifications from section 41, clause (3) relating to the exercise of appellate powers and Rule 11, schedule II of the Act relating to the transfer of petitions of objection.

This actually preludes the behemoth role a certificate officer plays in realizing debts which revolves around public demands recovery and the actual act. The certificate manual of the board of land administration recognizing this pivotal role of the certificate officer, under its instruction 16, has made this position responsible for the punctual disposal of certificate cases without undue delay. Now coming back to the act, section 3(3) states “Certificate-officer” means a Collector, an Upazila Nirbahi Officer, an Upazila Magistrate, and any officer, appointed by a Collector with the sanction of the Commissioner to perform the functions of a Certificate-officer under this Act. The proceedings of realization of dues start with the satisfaction of a certificate-officer as per sections 4 and 5 of the Act on realizing debts for two categories one for the collector and other cases which are not barred by law as per section 6 of the Act.

The Judiciary in the case of Sasa Musa Works v State of Bihar (1955) seems to put a restrain on the ‘satisfaction’ part of the certificate officer in cases of arbitrariness when an order is passed without any material before him. When a certificate is filed the certificate officer has the duty to ensure that the demand falls within the list contained in Appendix-A of Schedule I.When the certificate officer declares the due against the certificate-debtor it becomes equivalent to a decree of a civil court through an extraordinary effect (12 DLR 448).

When a denial is filed through section 9, it seems section 10 coupled with section 49 gives power to the certificate officer a notion of judicial power which is civil in nature, to take some actions and run some procedures like a court, (e.g. receiving evidence, administering oaths, etc.). This gives the certificate officer a mechanism to act on the due, take various actions like adjusting it, disposing it in the prescribed manner, etc.

Also, rule 39(1) of the schedule II gives the power to investigate an objection against attachment or sale and through 41 to release the property from said action. From attachment to sale and setting aside sale, the certificate officer holds a behemoth amount of discretionary power. Alongside the power of arrest and detention in a civil prison as per section 29(1) of the Act.

Through the plain reading of the sections of the Act it can be seen that the primary dealings of a certificate debtor is dealt by the certificate officer. As per the constitution of Bangladesh, The right to property is a fundamental right of great gravity. So, giving total procedural freedom without a proper judicial forum can be an imbalanced measure to the fabric of the right of property.

The ‘satisfaction’ part and the prescribed forms of discretionary instructions of the certificate officer found throughout the Act are the focal problematic areas. But nevertheless, a balancing factor must be kept in mind also, as overburdening the judiciary is never desired. Hence some spectrums of law must be left to other limbs of the state to be dealt with in a controlled manner.

The safety net of a Certificate Debtor (On Judicial Intervention)

But disseminating the law to be dealt with in different facets of the state, leaves scopes open for certain faults. Like most laws or acts, The Public Demands Recovery Act 1913 has laid out certain judicial safeguards, so a proper forum can deal with certain such anomalies, should they make an appearance.

To ensure the smooth operation of public demands recovery and to balance out the parties’ rights, liabilities, disputes, and other consequential reliefsof the certificate debtor, the Judiciary must intervene in certain matters which are mainly laid down from sections 34 to 37 of the Actincluding other instrumental commodities. Also, by the virtue of different constitutional articlesof Bangladesh, the High Court Division shall have the power to adjudge on this Act also, if no efficaciousremedies are to be found, on the basis of justice, equity and conscience.

Section 34 of the Act gives power to the certificate debtor under specific conditions of section 7, denial of liability under section 9 and subsequent appeal under section 51 from an order passed under section 10 to come to the civil court under the limited timeframe of 6 months.

After going through these procedures, a certificate debtor can ask for the civil court’s intervention to have the certificate canceled, modified, or to have any consequential relief. If those conditions are not fulfilled according to section 34 (b), the court shall not entertain the suit of the certificate debtor. Also, the court can’t intervene if a petition under section 10 is pending as it would be deemed premature then as per the case Rani Harsha Mukhi v Noba Krishna, (1938). Reading sections 34 and 35 together gives out a clear picture of how the court can intervene and the demarcation of the Court’s interventional power on as to what conditions the courts can cancel or modify the certificate.

The court can do so under three grounds laid down in section 35(1) and can modify it under two broad grounds under section 35(2) of the act. The court shall intervene when the certificate officer acts without jurisdiction if the certificate is already satisfied under section 35(1).

Also from the plain reading, it can be seen fraud is a genuine and undisputed ground for the intervention of civil courts in the matters of public demands recovery according to the case of Akmal Khan v Amaresh Chandra 18 DLR.

The post Scrutinizing A Niche Yet Necessary Law For The State: The Public Demands Recovery Act 1913 first appeared on AS Associates.

Compensation Right Of The Laid-Off Workers And Employers Liability Under Bangladesh Labor Law

Arefin Rafi — Sun, 22 Jan 2023 09:43:40 +0000

Under the labor law of Bangladesh, a badli or casual worker who has at least one year of continuous employment with the employer and whose name appears on the muster-rolls of the establishment gets laid off and he or she shall be entitled to get compensation from the employer. Here, at first we need to understand what is being ‘laid-off’ before understanding the procedural and conceptual aspects of being laid off. A worker may be laid off in accordance with section 16, if their employment is suspended for longer than three working days, according to section 12 of the Act. A layoff described in subsection (8) is effective as of the day that work is halted. The first three days of a worker’s pay may be deducted from the compensation due for a subsequent layoff.

Mainly, to combat the business loss, usually the employers try to cut off the labor cost by terminating the employees from the designated work. However, the law has put some restrictions on it as well that has ascertained in which specific circumstances an employer is bound to pay this compensation or not. Also, the law cutbacks the amount that an employee shall be paid under these circumstances. To get access to such compensation the employee needs to pass some eligibility checks first. These are: either their name is on the factory muster-rolls or they have completed at least one year of service under the employer which is one year of continuous service for substitute workers or they are not a casual worker who has not completed one year of employment. Basically, under section 16 of the Bangladesh Labor Act, 2006 the right to have such compensation has been established which is demonstrated as “he shall be paid compensation by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene” in the sub-section 1 of this section. But the amount will not be equal to his or her full payment. In fact, it shall be half of his or her total amount. Here, the payment refers to either the basic wages and dearness allowance along with ad-hoc or interim pay. Even the payment for house allowance shall be included in this, if it is payable in full by the employer during this employee’s employment period.

In spite of that, a worker is entitled to compensation under Section 20 of this Act and the retrenchment rule for every term of layoff lasting fifteen days or longer, barring any other arrangement between the employee and the employer. The compensation is equal to one-fourth of the sum of the basic earnings, dearness allowance, any ad hoc or temporary pay, and housing allowance, if applicable. Nevertheless, this right to laid-off compensation is not an absolute right, actually laid-off workers are not entitled to compensation in uncertain cases. No compensation shall be paid to a laid-off employee who refuses to accept any alternative employment in the same establishment for which he has been laid off that does not require any special skill or prior experience on the basis of the same pay. Any laid-off employee who shows up for work at the establishment at the time designated for that purpose during regular business hours on any given day and is not hired within two hours of doing so is presumed to have been fired on that day. Additionally, the employee’s right to receive this layoff benefit may be restricted if they failed to show up at least once daily during regular business hours. Hither, the shift of the employees can also be considered prior to imposing the compensation liability on the employers. Every laid-off employee who reports to an employer for work and is not hired within two hours of his or her arrival is judged to have been laid-off for the day. If a person who has been laid off is asked to report for duty during the second half of the shift and does so, he will be off the job for one-half of the day while the other half is treated as on duty.

Also, during any calendar year, no employee may receive payment of compensation under this section for a period longer than forty-five days. But after these forty-five days, an employee shall get a quarter of the total basic which is bound to be paid by the employer. Apart from this, there are more reservations as well for the employers that need to be maintained before imposing the compensation, since the labor law is enshrined for the benefit of both employers and employees. During either calendar year, no employee may receive payment of compensation under this section for a period longer than forty-five days. Substantially, it is a protection mechanism for the employers to tackle the business loss by cutting off some expenses. On the other hand, the employees are getting a minimum amount at least, even in the period of employment crisis, if the employee has done one continuous year of the service under the employment.

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