Osman Goni

Attorney client privilege in Bangladesh

Fri, 04 Nov 2016 00:00:00 +0000

One of the crucial aspects of the relationship between a lawyer and clients is the attorney client privilege. It means that the communications between the lawyer and clients cannot be forced to disclose. It assures the client that s/he can disclose all material facts to the lawyer and it will not be disclosed and used against him/her in any court. If any client discloses any confidential information to his/her lawyer, the lawyer cannot disclose that information. Such candid disclosure enables the lawyer to provide better advice and representation to the client. If such protection was not provided, it would force any person to think twice before disclosing any unfavorable facts to the lawyer. Which would ultimately hamper the person’ right to obtain a candid legal advice from his/her lawyer. It is one of the core characteristics of the lawyer – client relationship.

Provisions in Bangladesh laws:

In Bangladesh, the Evidence Act 1872 deals with the attorney client privileges. Section 126 to 129 deals with it.

Section 126: No Advocate shall at any time be permitted, unless with his client’s express consent, to disclose any communication made to him in the course and for the purpose of his employment as such Advocate by or on behalf of his client, or to state the contents or condition of any document with which he has become acquainted in the course and for the purpose of his professional employment, or to disclose any advice given by him to his client in the course and for the purpose of such employment:

Provided that nothing in this section shall protect from disclosure–

(1) any such communication made in furtherance of any illegal purpose:

(2) any fact observed by any Advocate, in the course of his employment as such, showing that any crime of fraud has been committed since the commencement of his employment.

It is immaterial whether the attention of such Advocate was or was not directed to such fact by or on behalf of his client.

Explanation– The obligation stated in this section continues after the employment has ceased.

[Illustrations removed]

Section 127. The provisions of section 126 shall apply to interpreters and the clerks or servants of Advocate.

Section 128. If any party to a suit gives evidence therein at his own instance or otherwise, he shall not be deemed to have consented thereby to such disclosure as is mentioned in section 126; and, if any party to a suit or proceeding calls any such [Advocate] as a witness, he shall be deemed to have consented to such disclosure only if he questions such [Advocate] on matters which, but for such question, he would not be at liberty to disclose.

Section 129. No one shall be compelled to disclose to the Court any confidential communication which has taken place between him and his legal professional adviser, unless he offers himself as a witness, in which case he may be compelled to disclose any such communications as may appear to the Court necessary to be known in order to explain any evidence which he has given, but no others.

I have summarized the key points for you –

1. The protection is provided to client, not lawyer. A lawyer cannot disclose any information which s/he obtained from the client.

2. Unless one person becomes a client, the protection is not allowed. So, there must be some kind of agreement for legal service between the person and the lawyer. Otherwise the lawyer or the person cannot claim the protection of the privileges offered in these sections.

3. The protection is provided for all communication. Any communication between the client and the lawyer is protected under these sections. Documents are also covered. A lawyer cannot disclose the content of any documents of any client. Any written legal advice, email would also be protected.

4. The protection will end if the clients provided his/her consent to the lawyer to disclose the communications. The privileges are not waived by volunteering evidence by any client.

5. The privileges are also applicable to lawyers’ support staffs, interpreters.

6. The privileges are only allowed for lawyers who are license to practice in Bangladesh by Bangladesh Bar Council.

7. The privileges will not cover any future illegal works that has been committed after the relationship between the lawyer and client initiated.

What about in house counsel:

The status of in house legal counsel regarding attorney client privileges is not clear under the Bangladeshi laws. Technically an in house legal counsel is not an advocate. Canons of Professional Conduct and Etiquette for lawyers in Bangladesh does not permit any lawyer to engage in any other profession or business. But the law requires the attorney client privileges is only applicable to advocates. So, it is not clear whether an in house counsel would get the same treatment as advocates or not for attorney client privileges.

I personally feel that in house counsel should receive the same benefit as independent advocates. Otherwise, their employer may not get their best advice in legal matters, for which they are hired.

Ordinary, special and extraordinary resolution

Mon, 03 Oct 2016 00:00:00 +0000

What is a “resolution“:

The word “resolution” is not defined in our Companies Act 1994. Usually, in terms of company law, a resolution means the formal decision of a body (either the board of directors and/or shareholders) which has been taken ina meeting after proper deliberations. In a normal scenario, any proposed action (that require prior approval) is set out before the board of directors or shareholders as agenda for their approval. After the quorum isfulfilled, the board of directors or shareholders discuss, amend and vote such agenda. If the agenda is approved by a majority of the directors/shareholders, it becomes a resolution.

Kinds of resolutions:

Under the Companies Act 1994, (the “Act”) there are three kinds of resolutions for general meetings – i) Ordinary; ii) Special; and iii) Extraordinary resolution.

There is also resolution of board meetings. But in this post, I will only discuss resolutions of general meetings.

Ordinary resolution:

In the Act it is not clarified what kind of resolution can be called ‘Ordinary Resolution’. An ordinary resolution is a resolution which is passed by a simple majority of the shareholders who are entitled to vote at a general meeting of the company. In the Act there are certain business which is required to be approved by resolution in a general meeting. Those resolutions mean an ordinary resolution unless the context otherwise provides.

Extraordinary resolution:

According to section 87 (1) of the Companies Act, a resolution is an extraordinary resolution if -i) in the notice it was mentioned that this would be an extraordinary resolution; ii) passed by a majority of three fourth of the members who are entitled to vote as are present in person or by proxy, where proxy is allowed.

Special Resolutions:

Special resolution is described in section 87(2) of the Companies Act. A special resolution is a resolution -i) which has been passed by such a majority as required for passing an extraordinary resolution; ii) in the notice it was mentioned that the resolution would be a special resolution; and iii) a notice of not less than 21 days’ has been given.

So, from section 87(1) and 87(2) of our Companies Act, it transpired that the basic difference between extraordinary resolution and special resolution is that for special resolution, you must serve a 21 days’ notice to the shareholders.

But, for holding a valid shareholder meeting (except Annual General Meeting), you must serve a 21 days’ notice to the shareholders. (There is also the option of calling a shareholder meeting with a short notice. For this post, we will not discuss short notice.) So technically there is no difference between a special resolution and an extraordinary resolution.

Having said that, you cannot disregard the requirement/ restriction imposed by the act for special or extraordinary resolution. For some specific acts, you will need either special or extraordinary resolution. For those acts, you will have to mentioned in the notice that the resolution would be either special or extraordinary resolution and serve a 21 days’ notice. If you do not do that, you are risking the validity of the resolution.

Bangladesh labour act and rules – English version

Wed, 03 Aug 2016 00:00:00 +0000

Last year government published the Bangladesh Labour Rules 2015. Since then I have been receiving lots of request for English translation of the both Act and Rules. Later government published an authenticated English translation of Bangladesh Labour Act 2006. But until recently there is no English translation of Labour Rules 2015.

Few days back, one of my acquaintance emailed me an unofficial translation of the Labour Rules 2015. However he cannot confirm who translated it.

For your convenience, here is the Authenticated English Translation of the Bangladesh Labour Act 2006 and unofficial English translation of Bangladesh Labour Rules 2015.

Can RJSC refuse to accept a return?

Thu, 14 Jan 2016 00:00:00 +0000

Let me tell you a story.

Few months back, one of our clients wanted to start two different businesses. So, we incorporated two different companies for the client. Except for the object clause, both companies have nearly identical Articles of Association. Businesses were good and soon our client had some new shareholders in those two companies. They needed some restructuring. They also needed to amend the Articles of the two companies.

After few rounds of emails, we finalized the draft, held an extra ordinary general meeting, passed the resolution and adopted the new articles. We submitted all the documents with the Registrar of Joint Stock Companies and Firms (hereinafter “RJSC”) as the Companies Act 1994 required. We were waiting to close the deal.

Then something strange happened. RJSC approved and issued certified copies for one company. But they refused to accept the documents of another company. According to the dealing officer of RJSC, we did not follow the Companies Act properly. We prepared identical documents for the both companies and documents for one company were accepted without any question. But the officer responsible for the second company did not move. He did not care what the other officer did. We had to redraft the documents according to his wish.

It caused lots of trouble for us, for our client and other parties involved in those deals. We were a bit embarrassed, but the client understood the situation.

I was not surprised by this action of RJSC. I (I mean our paralegal) deal with them regularly. And this kind of situation is not uncommon. In fact it has become a practice of the officials of RJSC to dictate which documents can be filed and which cannot. Also, sometimes they accept the documents and do nothing. In their words, the document is not “passed” i.e. not approved. So it is quite possible that you file your return, RJSC accepts it. But, you will never get the certified copy unless they “pass” it.

The question is can RJSC do this? Can RJSC make our life this difficult?

The question was raised in Bangladesh Chemical Industries Corporation vs. RJSC, (39 DLR (H.C.), 1). In this case, RJSC did not accept a return for annual general meeting. Mustafa Kamal, J. asked the counsel of RJSC to explain whether the Companies Act 1913 (now replaced with Companies Act 1994) allows the Registrar to reject documents, as they did in the case. The counsel of the RJSC was failed to show any provision in the Companies Act which allows the Registrar to do so.

The present act, the Companies Act, 1994, also does not allow RJSC to withhold, delay or refuse acceptance of any return.

In the same case, the Mustafa Kamal, J. opines that the law does not authorize the Registrar to act as a mini-court. He further indicates that if the Registrar thinks that a company violates any provision of the law, s/he can initiate appropriate legal proceedings.

So, the case is closed, right? I guess not, unfortunately.

RJSC cannot arbitrarily reject any return. However, the officials of RJSC, as a public official, cannot turn a blind eye to any act which s/he thinks might be illegal and not right. The officials of RJSC must exercise some discretion in performing his/her duties.

In Mousel and Co. (Chittagong) Ltd. vs. RJSC, (8 DLR 202), the High Court Division stats that RJSC, in the matter of recording resolutions or amendments of the Article of Association, a certain amount of discretion. The extent of such discretion will depend upon the nature of each case.

Finally, in simple words, RJSC cannot refuse to accept any document unless there is apparent fraud or forgery or illegality.

Laws relating to Mutation in Bangladesh

Tue, 15 Dec 2015 00:00:00 +0000

Mutation is a important factor in land ownership in Bangladesh. When you become an owner of a land/property, you need to complete the mutation. It is a very important piece of evidence for the title of the land.

You will not be able to sell the land if your name is not on the latest Khatian or you update the record through mutation. In another way, you will not be able to buy a land, if the seller’s name is not mutated.

If you have some property, you should have some idea of mutation.

In this post, I will give you some idea about mutation – what it means, the value of it, its relationship with the title of a land and other related legal stuff.

Definition

In general, mutation means recording the new owner’s name in the Khatian who have become the owner by way of transfer or inheritance[1].

In other words, it means the legal process of recording the name of the new owner of a land, by amending and updating the Khatian, for the convenience of paying land development tax[2].

জমা খারিজ (Separation of holding)

If a Khatian contains the name of several owners, separating the portions of an owner by creating a new Khatian is called জমা খারিজ. Section 117 of the State Acquisition and Tenancy act 1950 (the “SAT Act“), deals with Joma Kharij.

Legal basis of Mutation

Section 143 of the State Acquisition and Tenancy act 1950, Rule no. 8, 9 and 23 of the Tenancy Rules 1954-1955 deals with mutation. Besides those, there are numerous circulars that government issued in this regard.

When mutation is required

If a person becomes owner of the land by any legal means, the relevant Khatian needs to be updated. Then a mutation is required.

One of the basic purposes of the mutation is to inform the government about the latest change of the ownership and enable the government to collect land tax from the new owner.

Usually, mutation is required for the following reasons:

If the land owner dies and his/her successors want to update the records.
If the ownership of the land is transferred by registered deed.
If land ownership is dissolved for alluvion or under section 90, 91, 92, 93 of the SAT Act.
If a person becomes owner of a land by the decree of a civil court.
For settlement of khas land.

Process of mutation

To mutate a piece of land, the owner need to apply to the AC (Land) in prescribed form. There are certain government fees involved.

In the application form, the applicant must clearly mention

the name and address of the applicant and the transferor;
detail description of the land and its surrounding boundary, size, nature and identification of the land;
information relating to all previous Khatians;
registered deed number and date of such registration.

Moreover, the applicant ought to attached copy of

title deed, via deed,
copy of Khatian,
receipt of payment of land development tax,
copy of the decree or judgment obtained from competent court (if applicable),
passport size photograph of the applicant etc. with the application.

In case of transfer by inheritance, the process is a bit different. A succession certificate is required.

Mutation proceeding is not judicial proceedings in which title to immovable property is determined[3]. It can at best be used as an item of evidence[4].

Remedy against the decision in any mutation case

Appeal

If any person is not satisfied with the decision of the mutation case, can file an appeal to the collector and the appeal can go to the Commissioner of the Division[5].

There is also options for review and revision.

Mutation with relevant government agency for leasehold property

If your property is a leased from any government agency (e.g. RAJUK, National Housing Authority), you may need to update record maintained at that government agency.

If you directly obtained the lease from the government agency, then no mutation is required with the agency. However if you obtained the land from by any means other than the lease, you should mutate your name in the record maintained with the agency.

Mutation and title of the land

I have complete mutation, so I am the owner of the land, right? I got this question quite often.

The answers is not that simple.

Let’s start with Khatian, because by mutation, we are updating it.

Khatian itself is not a document of title. It is an evidence of present possession[6]. A Khatian neither creates nor destroy title. It is merely a record of physical possession at the time when it is prepared[7].

And Mutation does not confer title[8] either. Mere mutation and payment of rents do not confer any title on any person[9].

However, when supported by other evidence, mutation, would be a valuable evidence. Rent paid after mutation will also become a piece of evidence.

Rent receipts though not documents of title, are important items of evidence of possession and may be used as collateral evidence of possession since possession generally follows title[10].

Municipal rent receipts are also evidence of possession which follows title[11].

Thus mutation plays as a vital evidence to proof title of a property. You should complete mutation, once you become owner of any land.

Without mutation, a land cannot be sold

Government amended the Registration Act 1908 and the Transfer of Property Act 1882 in 2004 with effect from July 1, 2005.

Pursuant to the amendment of the both Act –

Seller name must be included in the latest Khatian if s/he is the owner of the property by way of other than by inheritance; or
the name of the seller or his/her predecessor must be included in the latest Khatian, if he is owner of the property by inheritance.

So, if seller’s name is not mentioned or updated in the latest Khatian, you should not buy that land. Because you may not be able to register the sale deed.

References:

Ain Shobdocosh (আইন শব্দকোষ) by Mohammed Habibur Rahman and Anisuzzaman (2006) P-698 ↑
Handbook for AC (land), by Land Reforms Board (ভূমি সংস্কার বোর্ড) (2015), P- 23. ↑
38 DLR 270 (273) ↑
20 DLR 309 ↑
Section 147 and 148 of the State Acquisition and Tenancy Act 1950 ↑
32 DLR 252 ↑
Dhaka City Corporation vs. Shamsur Rahman 59 DLR 207 ↑
19 DLR 9 ↑
Shahani Bibi vs. Nur Islam 4 BLC 195 ↑
2001 BCL 54, 35 DLR 295 ↑
53 DLR 19 ↑

Registration law in Bangladesh

Tue, 17 Nov 2015 00:00:00 +0000

Today, I will discuss the laws relating to registration in Bangladesh. For clarification, I will not cover birth, death, marriage, divorce or voter registration. Rather I will deal with mainly document registration. Before going into the details, here is the basics-

Principal laws for registration in Bangladesh are-

Registration Act 1908; and
Registration Rules 2014.

Other laws relevant to registration are-

It is not possible to cover the laws relating to registration in details in one post. So, I will discuss the basic idea, supported by relevant section and rules.

I must highlight the fact that the practices of the Sub Registry Office might be different from the law. Here I will only discuss legal aspects of registration, not practical aspects.

In this post “the Act” will refer to the Registration Act 1908 and “the Rules” will refer to Registration Rules 2014.

What documents must be registered?

Section 17 and 17A of the Act provide a list of documents which must be registered (mostly).

Section 17 of the Act:

**17. Documents of which registration is compulsory **

17. (1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, this Act came or comes into force, namely:-

(a) instruments of gift of immoveable property;

(aa) declaration of heba under the Muslim Personal Law (Shariat)

(aaa) declaration of gift under the Hindu, Christian and Buddhist Personal Law;

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immoveable property;

Explanation − In the case of an assignment of a mortgage the consideration for the deed of assignment shall be deemed to be the value for registration.

(c) Non-testamentary instruments (other than the acknowledgement of a receipt or payment made in respect of any transaction to which an instrument registered under clause (b) relates) which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and instrument of mortgage referred to in section 59 of the Transfer of Property Act, 1882;

(d) leases of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immoveable property;

(f) instrument of partition of immovable property effected by persons upon inheritance according to their respective personal laws;

(g) instrument of sale in pursuance of an order of the Court under section 96 of the State Acquisition and Tenancy Act, 1950]:

Provided that the Government may, by order published in the official Gazette, exempt from the operation of this sub-section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty taka.

(2) Nothing in clauses (b) and (c) of sub-section (1) applies to-

(i) any composition deed; or

(ii) any instrument relating to shares in a Joint Stock Company, notwithstanding that the assets of such Company consist in whole or in part of immoveable property; or

(iii) any debenture issued by any such Company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immoveable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the Company has mortgaged, conveyed or otherwise transferred the whole or part of its immoveable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or

(iv) any endorsement upon or transfer of any debenture issued by any such Company; or

(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immoveable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title orinterest; or

(vi) any decree or order of a Court except a decree or order expressed to be made on a compromise and comprising immoveable property other than that which is the subject-matter of the suit or proceeding; or

(vii) any grant of immoveable property by the Government; or

(viii) any instrument of partition made by a Revenue-officer; or

(ix) any order granting a loan or instrument of collateral security granted under the Land Improvement Act, 1871, or the Land Improvement Loans Act, 1883; or

(x) any order granting a loan under the Agriculturists’ Loans Act, 1884, the Bangladesh Krishi Bank Order, 1973 or under any other law for the time being in force relating to the advancement of loans for agricultural purposes, or any instrument under which a loan is granted by a co-operative society for any such purpose, or any instrument made for securing the repayment of a loan so granted; or

(xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage-money, and any other receipt for payment of money due under a mortgage; or

(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue-officer; or

(xiii) any counter-part of a lease, where the lease corresponding thereto has itself been registered.

(3) Authorities to adopt a son, executed after the first day of January 1872, and not conferred by a will, shall also be registered.

17A. Registration of contract for sale, etc.

(1) Notwithstanding anything to the contrary contained in this Act or any other law for the time being in force, a contract for sale of any immovableproperty shall be in writing, executed by the parties thereto and registered.

(2) A contract for sale referred to in sub-section (1) shall be presented for registration within thirty days from the date of execution of the contract and the provisions regarding registration of instruments shall apply.

As you can see, Section 17 (1), 17 (3) and 17A of the Act provide the list of documents which must be registered. Section 17(2) provide the list of the documents, registration of which is optional.

Can I registered any other documents which is not mentioned in clause 17?

Yes, Section 18 of the Act allows registration of any documents. It states any document not required to be registered under section 17 may also be registered under the Act.

Legal effect of non-registration

Document, registration of which is mandatory, if not registered, does not have any effect. An unregistered deed will not pass any title [Pabitra Ranjan Roy vs Proshanta Talukdar and other 14 MLR (2009) 69]. Section 49 of the Act deals with the effect of non-registration.

Section 49:

49. No document required to be registered under this Act or under any earlier law providing for or relating to registration of documents shall-

(a) operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immoveable property, or

(b) confer any power to adopt,

unless it has been registered.

Time of registration

Part IV (Section 23-27) of the Act deals with time for presenting the documents for registration. A documents should be submitted with the Registrar within three months from the date of its execution. However, in certain circumstances, Registrar may pardon any delay.

Section 23-25:

23. Subject to the provisions contained in sections 24, 25 and 26, no document other than a will shall be accepted for registration unless presented for that purpose to the proper officer within three months from the date of its execution:

Provided that a copy of a decree or order may be presented within three months from the day on which the decree or order was made, or, where it is appealable, within three months from the day on which it becomes final.

24. Where there are several persons executing a document at different times, such document may be presented for registration and re-registration within four months from the date of each execution.

25. (1) If, owing to urgent necessity or unavoidable accident, any document executed, or copy of a decree or order made, in Bangladesh is not presented for registration till after the expiration of the time hereinbefore prescribed in that behalf, the Registrar, in cases where the delay in presentation does not exceed four months, may direct that, on payment of a fine not exceeding ten times the amount of the proper registration-fee, such document shall be accepted for registration.

(2) Any application for such direction may be lodged with a Sub-Registrar, who shall forthwith forward it to the Registrar to whom he is subordinate.

It should be noted here that Registrar’s decision to extend time cannot be challenged in court. [Nabadwip Chandra Karmakar vs Madhu Sudan, 7 DLR (1955), 235]

If a document is executed by any party outside Bangladesh, the Registrar may accept the document for registration if the documents is presented for registration within four months of after its arrival in Bangladesh. Here relevant section is Section 26.

26. When a document purporting to have been executed by all or any of the parties out of Bangladesh is not presented for registration will after the expiration of the time hereinbefore prescribed in that behalf, the registering officer, if satisfied-

(a) that the instrument was so executed, and

(b) that it has been presented for registration within four months after its arrival in Bangladesh,

may, on payment of the proper registration fee, accept such document for registration.

The only exception to the above rules is will. According to Section 27 of the Act, a will may at any time be presented for registration or deposited in manner hereinafter provided. Please see Section 40, 41, 42 for more.

Place of registration

Government has established Sub Registry Office in various parts of the country. These Sub Registry Office have specific local jurisdiction set by the government. A document should be presented for registration in the Sub Registry Office within which jurisdiction the whole or major portion of the property to which such document relates is situated. Document void when no portion of property transferred situates within jurisdiction of Sub Registrar. [Shefali Rani and others vs Makhan Chandra Das and others, 50 DLR (1998) 349].

If the major portion of such property is not situated within the jurisdiction of one Sub Registry Office, the document maybe presented for registration in any Sub Registry Office within which jurisdiction part of the property is situated.

Section 28:

28. (1) Save as in this Part otherwise provided, every document mentioned in section 17, sub-section (1), clause (a), (b), (c), (d) and (e), section 17, sub-section (2), and section 18, in so far as such documents affects immoveable property shall be presented for registration in the office of a Sub-Registrar within whose sub-district the whole or major portion of the property to which such document relates is situate.

Provided that where the major portion of such property is not situate within one sub-district the document shall be presented for registration in the office of the Sub-Registrar within whose sub-district any portion of such property is situate.

(2) Notwithstanding anything contained in sub-section (1),-

(a) after a document is registered, no party thereto shall be entitled to question the validity of its registration on the ground that the property which purported to give jurisdiction to the Sub-Registrar to register it either did not exist or was fictitious or insignificant or was not intended to be conveyed; and

(b) a document the registration of which is secured by the inclusion of a non-existent, fictitious or insignificant portion or item shall not in any manner affect the rights of a person who was not a party thereto and acquired rights in the property without notice of the transaction to which such document relates.

Whom can present a document for registration?

A document can be presented for registration by

the executant or the receiver of a document; or
the representative or assignee of the above stated person; or
the agent of such person, representative or assign, duly authorized by power-of-attorney.

Section 32 is the relevant section.

32. Except in the cases mentioned in section 89, every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented,-

(a) by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or

(b) by the representative or assign of such person, or

(c) by the agent of such person, representative or assign, duly authorized by power-of-attorney executed and authenticated in manner hereinafter mentioned.

33. (1) For the purposes of section 32, the following powers-of-attorney shall alone be recognized, namely:-

(a) if the principal at the time of executing the power-of-attorney resides in any part of Bangladesh in which this Act is for the time being in force, a power-of-attorney executed before and authenticated by the Registrar or Sub-Registrar within whose district or sub-district the principal resides;

(b) if the principal at the time aforesaid resides in any other part of Bangladesh, a power-of-attorney executed before and authenticated by any Magistrate;

(c) if the principal at the time aforesaid does not reside in Bangladesh a power-of-attorney executed before and authenticated by a Notary Public, or any Court, Judge, Magistrate, Bangladesh Consul or Vice-Consul or representative of the Government:

Provided that the following persons shall not be required to attend at any registration-office or Court for the purpose executing any such power-of-attorney as is mentioned in clauses (a) and (b) of this section, namely:-

(i) persons who by reason of bodily infirmity are unable without risk or serious inconvenience so to attend;

(ii) persons who are in jail under civil or criminal process; and

(iii) persons exempt by law from personal appearance in Court.

(2) In the case of every such person the Registrar or Sub-Registrar or Magistrate, as the case may be, if satisfied that the power-of-attorney has been voluntarily executed by the person purporting to be the principal, may attest the same without requiring his personal attendance at the office or Court aforesaid.

(3) To obtain evidence as to the voluntary nature of the execution, the Registrar or Sub-Registrar or Magistrate may either himself go to the house of the person purporting to be the principal, or to the jail in which he is confined, and examine him, or issue a commission for his examination.

(4) Any power-of-attorney mentioned in this section may be proved by the production of it without further proof when it purports on the face of it to have been executed before and authenticated by the person or Court hereinbefore mentioned in that behalf.

It should be noted here that the power of attorney must be prepared in the prescribed form as mentioned in Rule 6 and 7 of the Power of Attorney Rules 2015.

Precondition of registration

There are some preconditions for registration of document. Before registering any documents, the Sub Registrar will make sure that the document fulfill those precondition.

These Preconditions are mentioned in Rule 20 and 21 of the Rules.

20. On the presentation of a document for registration the registering officer shall satisfy himself –

(a) that it has been presented at the proper office (sections 28 and 29);

(b) that it is duly stamped or is exempt from, or does not require stamp duty;

(c) that if it is written in a language which he does not understand and which in not commonly used in the district as prescribed in rule18, it is accompanied by a translation into a language commonly used in the district and also by a true copy (section 19);

(d) that it contains no unattested interlineation, blank, erasure or alteration which in his opinion requires to be attested or to be entered in a duly attested note or “Kaifiyat” at the end of the document (section 20);

(e) that if the document is non-testamentary and relates to immovable property it contains a description of such property sufficient to identify the same as laid down in section 21 or in the rule made under section 22;

(f) that if the document is non-testamentary and contains a map or plan, it is accompanied by as many true copies of the map or plan as are equal to the number of copies of the document required to be forwarded under sections 65 [section 21(4)];

(g) that if the document is one other than a will it has been presented within the time prescribed by sections 17A and section 23 to 26;

(h) that the document has been presented by some person entitled to present it (section 32 or section 40);

(i) that the instrument of any transfer contains the particulars necessary to convey the intention of the parties, complete description of the properties to be transferred and nature of transaction [section 22A(1)];

(j) that the recent passport size photographs of both the parties have been pasted on the instrument and the parties have put their signatures and left thumb impressions across their photographs in the instruments. [section 52A (2)];

(k) that in the case where the instrument is executed by the constituent attorney on behalf of the parties, the attorney has put his signature and left thumb impression across his photograph in the instrument;

(l) that the instrument has been presented in the format prescribed by under sub-section (3) of section 22A (Form No. 40 in Appendix I);

(m) that the seller has submitted the latest khatian of the property prepared under the State Acquisition and Tenancy Act, 1950, in the name of the seller, if he is owner of the property otherwise than by inheritance [section 52A(a)];

(n) that the seller has submitted the latest khatian of the property prepared under the State Acquisition and Tenancy Act, 1950, in the name of the seller or his predecessor, if he is owner of the property by inheritance [section 52A(b)];

(o) that the seller has submitted an affidavit affirming that he has lawful title to and possession in the property and the property has not been transferred earlier in any manner and not vested to the Government [section 52A(g)]; and

(p) that in the case of a sale deed the following particulars have been included in and attached with, as the case may be –

(i) nature of the property,

(ii) price of the property,

(iii) map of the property together with the axes and boundaries, and

(iv) description of the ownership of the property for last 25(twenty five) years. [section 52A(c), section 52A(d), section 52A(e) and section 52A(f)].

The Registrar may also refuse to register a document, if proper registration fee, duty and tax is not paid. (Rule 21).

Refusal to register a document

Registration of a document may be refused if the above mentioned preconditions are not fulfilled. According to Section 71 of the Act, a Sub Registrar refusing to register a document will make an order of refusal and record his reasons for such order and endorse the words “registration refused” on the document. On application made by the person executing or claiming under the document, the Sub Registrar will give him/her a copy of the reasons so recorded.

Remedies for refusal

The refusal with grounds to registration have some remedies. Sections 72-77 of the Act deal with such remedy.

An appeal will be allowed against the refusal of the Sub Registrar to the Registrar within 30 days of such refusal. The Registrar may reverse or alter such order. If the Registrar directs the documents to be registered, the Sub Registrar, within thirty days after such direction, will register the documents in accordance with Sections 58, 59 and 60.

If the document is refused on the ground of denial of execution, an appeal shall lie to the Registrar within 30 days of the refusal. The Registrar shall, as soon as conveniently may be, enquire-

whether the document has been executed;
whether the requirements of the law for the time being in force have been complied with.

If answers of the both questions are yes, the Registrar will order the document to be registered.

If the Registrar refuses to allow the registration, an appeal lies to the civil court against the refusal.

Registration by commission

If a person intending to register a document is unable to appear before the Sub Registrar at the Registry Office, s/he may apply to the Sub Registrar’s office for commission. On such application, the Sub Register or his/her representative will visit the applicant’s desirous place and register the document.Certain fees will be applicable for such commission.

Value of property

The value of the property mentioned in the document intending to be registered must be determined before registration. It is a very common practice to show a lower price for property to avoid stamp duty, tax and fees while registering a document.

Government has set out a rules for fixation of the lowest market price of property. At present the applicable rules is the Fixation of Lowest Market Price of Property Rules, 2010. Before applying for registration of any documents related to property, please enquire with the local Sub Registry Office for a list of the lowest market price of property.

Applicable stamp duty, tax and fees

While registering a document, applicable duty, fees and tax must be paid. If applicable duty, fees and tax must be paid, the registration will be refused by the Sub Registrar.

Some of the applicable duty, tax and fees are:

Stamp duty (see Stamp Act, 1899);
Registration fees (Section 78 of the Registration Act 78);
Local government tax (Section 53 ofZela Porishod Act 2000, Section 100 of Local Government (Pourosova) Act 2009, Section 84 of the Local Government (City Corporation) Act 2009, Section 66 of the Local Government (Union Parishad) Act 2009);
Cantonment board tax;
Upzella immovable property transfer tax (Section 44 of the Upzella Parishod Act 1998);
Income tax (Section 53H, 53HH, 53FF of theIncome Tax Ordinance 1984);
VAT; and
Court fees.

Registration in the Chittagong Hill Tracks

The District of Khagrachari, Rangamati, and Bandarban have different rules for registration of deeds. The Registration Act 1908 and the Registration Rules 2014 are not applicable there. All kinds of registration of deeds in those area are regulated by the Chittagong Hill Tracts Regulation 1900. Rules no. 12-33 of the Regulation deal with registration of documents there.

Prescribe format for transfer deed and power of attorney

Form 40 of Appendix I of the Registration Rules 2014 contains a prescribed format of deed. If the format is not used for any transfer of property, the Sub Registrar may refuse to register the deed.

Power of Attorney Rules 2015 also contains some prescribed format for power of attorney.

Importance of latest khatian (Record of right) for land registration

Government amended the Registration Act 1908 and the Transfer of Property Act 1882 in 2004 with effect from July 1, 2005.

Pursuant to the amendment of the both Acts –

Seller name must be included in the latest Khatian if s/he is the owner of the property by way of other than by inheritance; or
the name of the seller or his/her predecessor must be included in the latest Khatian, if s/he is the owner of the property by inheritance.

Also the sale deed must include

a brief description of the ownership of the property for last 25 (twenty-five) years
nature of the property;
price of the property;
a map of the property together with the axes and boundaries;

Priority of documents

Section 48 of the Transfer of Property Act 1882 states that if a person creates rights by transfer at different times, the first ones should get priority. Transfer is this section means a complete transfer and does not include a mere transfer or an incomplete transfer by unregistered deed where registration is compulsory.

This section should be read with Section 48 of the Act.

Why a Liaison Office need TIN?

Thu, 15 Oct 2015 00:00:00 +0000

(Before starting this post, I think I should give you a clarification. A Liaison Office and Representative Office, refer to the same thing in Bangladesh. In this post, I will mention them as Liaison Office only.)

A Liaison Office need to a get a Tax Identification Number (“TIN”). Some of the foreign investors become surprised to hear that. They ask, why? I get this question quite often. I don’t blame them. Let me explain.

According to the policy of the Board of Investment (“BOI”):

A Liaison/Representative Office of a foreign Company can only maintain liaison/coordination between principal and local agents, distributors/exporters’ institutions through correspondences, personal contracts and other electronic media. Such organizations can also collect, compile analyze and disseminate business information related to its field of activities as mentioned in the approval letter. This sort of foreign office will have no local source of income in Bangladesh. Establishment costs, all operational costs including remunerations of the expatriates and local employees of the concerned Liaison or Representative office will have to be met on receipt of remittances from the head office abroad. No outward remittances of any kind from Bangladesh sources will be allowed except the amount brought in from abroad (the unspent part).

(emphasis added)

So, a Liaison Office cannot have any local income in Bangladesh. That’s the policy of BOI said. This raise the question – if an entity cannot have any income, why will it need TIN? Or even have to file any tax return?

When my clients asked me these questions, I gave them a simple answer.

BecauseNational Board of Revenue (“NBR”) said so. For you information, NBR is the central authority for tax administration in Bangladesh.

NBR, through an office order (অফিস স্মারক) dated 21.10.1998 (pretty old, right?), provided the clarification. According to the office order, a Liaison Office should get TIN. They also must file tax return just like other tax payers.

The decision of the NBR is illogical and a court might declare it illegal if challenged.

**What about VAT? **

A Liaison Office is not supposed to engage in any kind of activities which is taxable. They need to pay VAT on the office rent. A Liaison Office should at least rent an office, right?

Thus, a Liaison Office is not required to obtain VAT registration. This is the clarification provided by NBR. However, this does not mean a Liaison office is exempted from VAT obligation altogether. It still need to pay VAT on the office rent or for any other service it obtained. Also, it should submit the treasury challan for the VAT with the relevant VAT circle.

NBR provided this explanation on 05 June 2014 vide letter no. ব্যাখ্যা পত্র নং-০১/মূসক/২০১৪.

Should you register your partnership?

Thu, 10 Sep 2015 00:00:00 +0000

After reading the title, you may wonder. Is it possible to run a partnership business without registration?

The answer is yes, unregistered partnership can legally run business in Bangladesh.

Partnership is the most convenient vehicle for carrying out business by more than one person. In comparison with company, partnership has less obligations in terms of both tax and Register of Joint Stock Companies and Firm (“RJSC”) return filling. It also cost less to maintain a partnership than a company.

In Bangladesh, the relevant law for regulating partnership is the Partnership Act 1932 (“Partnership Act”).

You might find it interesting, the Partnership Act does not need even a written agreement between the partners.

Section 4 of the Partnership Act states:

Definition of “partnership”, “partner”, “firm” and “firm name”4. “Partnership” is 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.

Persons who have entered into partnership with one another are called individually “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm name”.

At various times, the court decided that it is not necessary that there should be a formal or written agreement. An agreement to create a partnership may as well arise from the conduct of the parties concerned.

It is not required for a partner to contribute capital in a partnership to become a partner. The validity of a partnership firm does not depend upon capital contribution. A person can become a partner without having to make any contribution towards the capital of the firm. A person may contribute the following to become a partner:

know-how;
intellectual property rights;
skill and experience; or
labour or any other thing.

Let’s get back to the question of registration.

As I said earlier, registration of partnership firm is not compulsory. It is optional and there is no penalty. Technically you can run an unregistered partnership as long as you want.

However, registration becomes necessary at one time or the other. Because, Section 69 of the Partnership Act seriously cuts short the capacity of an unregistered firm and its partners to sue.

Section 69 of the Partnership Act states:

Effect of non-registration69.(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not effect-

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or

(b) the powers of an official assignee, receiver or Court under the 5[ Insolvency (Dacca) Act, 1909, or the] Insolvency Act, 1920, to realise the property of an insolvent partner.

(4) This section shall not apply-(a) to firms or to partners in firms which have no place of business in Bangladesh, or whose places of business in Bangladesh are situated in areas to which, by notification under section 56, this Chapter does not apply, or

(b) to any suit or claim of set-off not exceeding one hundred Taka in value which, is not of a kind specified in the Second Schedule to the Small Cause Courts Act, 1887, or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim.

As you can see from section 69(1), a partner of an unregistered firm cannot sue the firm or his/her present or past co-partners for the enforcement of any right arising out from a contract or conferred by the Partnership Act. Only a partner of a registered firm, whose name appears in registration can sue for enforcement of such rights.

Section 69(2) suggests that an unregistered firm cannot sue any third party for the enforcement of any right arising from a contract. A suit can be brought only by or on behalf of a registered firm and that also by persons whose names appear as partners in the register of firms.

So, suppose you have a unregistered partnership. And you want to take legal action in any civil court against your partner or any third party to enforce a contractual right. You will have hard times, pretty hard times to do that.

What about criminal action?

Again, the law is not for an unregistered firm. Just because a partnership firm is unregistered, it does not protect that firm and its partners from criminal liability.

Any party may file criminal suit under section 138 of the Negotiable Instruments Act 1882 against the partners of an unregistered firm.

There are some exceptions. However, in this post, I am not going to discuss those.

What does that mean for you?

If you want to start a business in the form of partnership or already have a partnership business which is not registered, you should consider registering it.

Registration of partnership firm is not a complicated process. There is not much paperwork and you don’t need a bag full of cash for that. RJSC are the designated registrar for partnership firms.

It is better to be safe than sorry.

Can a foreigner buy land in Bangladesh?

Sun, 16 Aug 2015 00:00:00 +0000

The answer is no.

A foreigner cannot buy real property in Bangladesh.

I am not aware of any law which specifically prohibit the buy of land by any foreigner. Also, I am not aware of any law which specifically allow a foreigner to buy land.

Transfer of Property Act 1882 and the Registration Act 1908 are the two main laws which regulate transfer of property in Bangladesh. These two laws do not have any provisions related to foreigner, which may allow a foreigner to buy land in Bangladesh.

Article 13 and 42 of the constitution of Bangladesh speaks about ownership.

13. Principles of ownership:The people shall own or control the instruments and means of production and distribution, and with this end in view ownership shall assume the following forms –

(a) state ownership, that is ownership by the State on behalf of the people through the creation of an efficient and dynamic nationalised public sector embracing the key sectors of the economy;

(b) co-operative ownership, that is ownership by co-operatives on behalf of their members within such limits as may be prescribed by law; and

(c) private ownership, that is ownership by individuals within such limits as may be prescribed by law.

42. Rights to property(1) Subject to any restrictions imposed by law, every citizen shall have the right to acquire, hold, transfer or otherwise dispose of property, and no property shall be compulsorily acquired, nationalised or requisitioned save by authority of law.

(2) A law made under clause (1) of this article shall provide for the acquisition, nationalisation or requisition with compensation and shall fix the amount of compensation or specify the principles on which, and the manner in which, the compensation is to be assessed and paid ; but no such law shall be called in question in any court on the ground that any provision of the law in respect of such compensation is not adequate.

As you can see, both articles of the constitution apparently allow only citizen of Bangladesh to own land.

Can a foreigner with work permit buy land in Bangladesh?

The answer is still no. Work permit would not allow a foreigner to buy land.

Is there a way around?

A foreigner can incorporate a company with the Registrar of Joint Stock Companies and Firms. The company would be considered as a local entity and would be able to buy land in its name. Till now, this is the only way a foreigner can buy land in Bangladesh.

What is a representative office?

Mon, 13 Jul 2015 00:00:00 +0000

In most jurisdictions, a representative or a liaison office means an office, which cannot engage in commercial activities, opened by a foreign company which is not registered (as a local subsidiary) in that jurisdiction.

For example, if an US Corporation who wants to sell its products in another country, it can open a representative office in that country and perform marketing activates. However, since the representative office is not permitted to undertake commercial activities, the customer/client needs to buy the products from the US Corporation directly. The representative office cannot sell the products directly to the customer/client.

Technically speaking, a representative office is not a separate entity. All of obligations and liability of a representative office must be borne by the parent company.

A representative office is not supposed to generate any income and engage in any commercial activities which may generate income. As such a representative office is not required to pay tax in most jurisdiction.

This option is widely used by foreign investors to enter into a new market. This option enables them to enter the market, engage in marketing activities, develop some sales and then possibly setup a permanent entity.

In most jurisdiction, a representative office and a liaison office refer to the same entity.

Its main activities are generally as follows (but may differ from country to country):

Collect industry information and report to the parent company;
Develop the market or conduct research;
Supply marketing information of new products/services;
Support inspection and quality control of products/service; and
Supply advice to agencies or customers regarding products/service.

In most countries, permission for representative office is provided for a limited period and unless renewed, the permission expired and the representative office ceases to exist.

Representative office in Bangladesh:

In Bangladesh, Board of Investment (BOI) issues the approval for representative office. The approval is provided for mostly three years. A representative office is not required to pay tax, but it must obtain Tax Identification Number from National Board of Revenue.

Like most jurisdictions, a representative office in Bangladesh is not supposed to engage in commercial activities, and prior approval of BOI is required for this.