New board exempted from illegality by ancestors

The High Court (HC) says the court-appointed board of directors of the International Leasing and Financial Services Limited (ILFSL) will not be responsible for any illegality committed by previous boards.
The HC asked law secretary and all judges of subordinate courts to take steps regarding striking out or exclusion of the names of the court-appointed independent directors from all proceedings under section 138 of the Negotiable Instruments Act, Artha Rin Adalat Ain-2003 and Penal Code-1860 against the ILFSL in connection with any affairs or loans of the entity before their joining.
The court-appointed independent directors, including the chairman, of the ILFSL will not be made party to any civil or criminal case in which the cause of action arose before their joining.
However, there will not be any bar to instituting any suit or filing any case against them in course of performing their duties if there is any specific and clear evidence of violation of any law of the land.
A one-member bench of Justice Muhammad Khurshid Alam Sarkar passed the order after hearing a petition filed by the ILFSL authorities seeking direction for ensuring immunity of the court-appointed board from any legal action against them.
The court passed the verbal order on May 24 this year. The written text of the order has been released on the SC website recently.
The same bench on 16 June 2021 reconstructed the ILFSL board. NI Khan, a former secretary, was made chairman of the entity.
Syed Abu Naser Bakhtear Ahmed, former Agrani Bank managing director and CEO, Md Shafiqul Islam, retired judge and former ACC director, Brig Gen (retired) Md Meftaul Karim, barrister Md Ashraf Ali and FCA Enamul Hasan were also included in the new board.
The HC said all the creditors of the ILFSL are restrained from commencing any legal actions implicating any of the court-appointed directors, including but not limited to any proceedings without first notifying the company court.
It also asked the central bank governor to notify all scheduled banks and financial institutions that the holders of cheques issued in ILFSL's name are required to approach the company court first before presenting any cheque signed by the court-appointed directors.
The police chief has been asked to take steps not to enforce but to return to the court concerned any summon or warrant issued in the names of the new board members in any proceedings commenced under the Acts.

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