BANGLADESH TELECOM (PVT.) LTD. Vs. BANGLADESH TELEGRAPH AND TELEPHONE BOARD

JUDGEMENT

(1.) These two appeals by leave are from the same judgment and order of the High Court division dated 18.8.92 discharging the Rule in part and making the Rule absolute in part in Writ Petition No.1286 of 1992. The writ petition is the appellant in CA No.73 of 1992. Respondent Nos.1 and 2 of the writ petition are the appellants in CA No.3 of 1993. The two appeals have been heard together and will be disposed of by this common judgment.

(2.) Bangladesh Telecom (Pvt) Ltd, shortly BTL, the writ petitioner and a private limited company, entered into a written agreement on 26.7.89 (Annexure-A to the writ petition) with Bangladesh Telegraph and Telephone Board, a statutory body, shortly BTTB, respondent No.1 in the writ petition, permitting BTL to install and operate 4 types of communication systems in the private sector, namely, (i) radio trunking, (ii) cellular radio telephone. (iii) riverine radio communications network and (iv) paging system. In response to BTLs query (Annexure C) BTTB by Memo dated 27.8.89 (Annexure C(1) clarified the written agreement stating that BTL can transfer a portion of the licensing right for joint venture purpose provided it obtains prior written permission from BTTB. Pursuant to and as set out in detail in the Agreement BTTB issued a licence dated 25.3.90 (Annexure B) in favour of BTL under section 4 of the Telegraph Act, 1885 giving BTL all powers, authorisations, consents and permissions to provide, operate and maintain the aforesaid communication systems in the private sector for 20 years with effect from 26.7.89 with exclusive right of operation of services of the aforesaid systems for a period of 5 years from the said date. It was alleged in the writ petition that BTL investing a huge sum in foreign and local currency implemented the radio paging system, radio trunking system and riverine radio communication system with its own finance. But as huge investment in foreign exchange and local currency involved in the installation and operation of cellular radio telephones BTL opened negotiations with Hutchison Telecommunications Ltd. Hong Kong, a foreign company, shortly HTL, to form a joint venture company in the installation, operation and maintenance of cellular radio telephones in Bangladesh. A Memorandum of Understanding signed on 7.1.90 between BTL and the said foreign company HTL. Subsequently on 5.4.90 a tripartite joint venture agreement was signed between Mr Sahjad Ali, the then Chairman of BTL, BTL itself and Hutchison Telecommunications (Bangladesh) Ltd. (which we are told was incorporated in the Virgin Islands), a subsidiary of HTL, agreeing thereby that for the business of cellular radio telephones a joint venture company in the name Hutchison Bangladesh Telecom Ltd. would be formed and incorporated in Bangladesh under the Companies Act, 1913. The Board of Investment, shortly BOI, established as a statutory body under the Investment Board Act, 1989 (Act No.XVII 1989) was approached for approval or the joint venture company and after usual enquiries and investigations BOI by a Memo dated 11.8.91 (Annexure D(l) to the writ petition) approved the formation of the joint venture company with 50% ownership to BTL and 50% ownership to HTL the foreign company. As such a private limited company in the name of Hutchison Bangladesh Telecom Ltd. shortly HBTL, was incorporated on 8.10.90 under the Companies Act, 1913. Thereafter the joint venture company HBTL made construction of the fourth of the Maghbazar Exchange Building, imported necessary equipment for cellular radio telephone, established a cell site at Narayanganj and a tower at Uttara Telephone Exchange. The cellular radio telephone system became operational by January 1991 and in order to inter-connect the Uttara cell site and Maghbazar cell site BTL applied for inter-connection called Public Switch Tel. Network, shortly PSTN. BTTB issued a demand note for nearly Taka 41 lakh which BTL duly deposited in March, 1991. BTL started selling the cellular telephone sets to customers but for failure of BTTB to provide the PSTN the customers cannot talk to telephone subscribers of BTTB. While the work of installation was going on HBTL, the joint venture company, was secretly taking steps to oust BTL from the joint venture company and by letter dated 20.7.91 alleged default of BTL in complying with the terms of the joint venture agreement. Six days later HBTL proposed to BTL to buy out its shares. The proposal fell through as the parties could not agree to the price, HBTL then wrote to the concerned Ministry on 20.8.91 (Annexure 1 to the writ petition) to exclude BTL from the joint venture Project. It also disclosed in the said letter that the share of BTL in the joint venture company had been transferred to Watership Ltd., a subsidiary of Hutchison Telecommunications (Bangladesh) Ltd. incorporated outside Bangladesh. BTL denied the said transfer by informing the Minister by letter dated 7.1.92 and by filing Matter No.2 of 1992 before the Company Judge of the High Court Division under section 38 of the Companies Act for restoration of he name of BTL in the register of members of HBTL, the joint venture company. BTL also filed Matter No.9 of 1992 in the same Court under sections 162 and 166 of the Companies Act for winding up of the joint venture company HBTL. On 12.1.92 BTTB issued a Memo. dated 12.1.92 (Annexure J to the writ petition) to BTL stating that clause 17 of BTLs agreement with BTTB provides that before operating cellular radio telephone system jointly with any local or foreign company, BTL would be required to obtain permission of BTL, but in violation of clause 17 of the agreement BTL has not taken permission of BTTB for operating cellular radio telephone system in collaboration with HBTL. It was also alleged that by transferring its share to Watership Ltd. BTL had interfered with the powers BTTB under the Telegraph Act. BTL was asked to show cause why the cellular radio telephone system all not be excluded from the said agreement by way of amendment. BTL replied to the letter on 19.1.92 (Annexure-K to the writ petition) and stated that since the system was not fully operational the stage had not arrived when it could apply and obtain permission of BTTB. On 31.3.92 respondent No.1 (BTTB) issued the impugned Memo exercising its power under section 8 of the Telegraph Act, 1885 (Annexure Rs.to the writ petition) cancelling BTLs agreement with BTTB dated 26.7.89 for violation of clauses 3,6, 7,9, 17 and 23 of the Agreement.

(3.) BTL by letter dated 9.4.92 protested against the order of cancellation and requested its withdrawal with no effect. BTL then filed the instant writ petition challenging the impugned Memo. dated 31.3.92 on various grounds.