Legal and constitutional questions over cancellation of the governor's tenure

On 25 February, accountant and garment sector businessman Md Mostaqur Rahman was appointed as the new governor after Ahsan H Mansur was released. Rahman was a member of the BNP's election steering committee.

Never before in Bangladesh, a governor had a direct or formal political identity. The bigger question than the new governor's appointment is whether the outgoing governor's departure followed legal procedures.

The Governor of Bangladesh Bank is not an ordinary government employee. He is the head of an autonomous financial institution, whose position was created under the Bangladesh Bank Order, 1972.

As the central bank of the country, Bangladesh Bank has crucial responsibilities such as formulating monetary policy, maintaining financial stability, managing foreign exchange, and supervising the banking sector. The role of the governor is not only administrative but also deeply intertwined with policy-making and institutional independence.

Therefore, the appointment, qualifications, duties, and removal of the governor are not regulated like those of ordinary government employees; instead, they are managed through a special legal framework.

As a result, the governor’s position cannot be simply equated with the conventional administrative structure of the constitution. Hence, the removal of a governor should also be governed by special laws. Globally, the removal of a key figure in this position is not considered lightly or purely for political whims.

Article 134 of the Constitution of Bangladesh states that persons in the service of the Republic shall hold office during the pleasure of the President. This provision gives rise to the ''Doctrine of Pleasure''.

The Doctrine of Pleasure implies that the employment is held ''during the pleasure of the President,'' meaning a person remains in the position as long as the President wishes. The government cannot add extraneous or arbitrary bases for dismissal. The President's satisfaction must be objective, not whimsical.

The question is whether the Governor of Bangladesh Bank is a ''person in the service of the Republic.'' If he holds an independent office created under a specific law with distinct terms of employment, then the principle of ''during the pleasure of the President'' may not apply directly and freely to him.

As there are explicit conditions, qualifications, and criteria for disqualification specified in special law for removal, the President's pleasure should not mean arbitrary or personal decision; instead, it should be an administrative satisfaction reached on an objective, reasonable, and relevant basis. For these reasons, the position of governor cannot simply be equated with the traditional administrative framework of the constitution.

By order of the President, Ahsan H Mansur was appointed as the Governor of Bangladesh Bank for four years under section 10(5) of the Bangladesh Bank Order on 13 August 2024. According to the same order, on 25 February, the remaining term of his contract was canceled by presidential order. The cancellation notice from the Financial Institutions Division did not cite any section of the Bangladesh Bank Order.

The removal of Ahsan H Mansur is seen as damaging to the government's image, according to Zahid Hussain, former lead economist at the World Bank's Dhaka office. On the day the decision was made, he told Prothom Alo that the process was not dignified. The recent outgoing governor had to take on responsibilities during a challenging time and made some bold and risky decisions. His contributions could have been recognised. His departure process is unfortunate, signaling that in the future, qualified individuals may not want to assume such positions.

Analysing the Bangladesh Bank Order, it is found that the government has the power to remove the governor. However, questions remain. Is this power entirely and exclusively dependent on the personal satisfaction of the government, or should it be exercised based on due process and objective evidence?

According to the Bangladesh Bank Order, the governor can be removed in cases of permanent incapacity, breach of trust, acts contrary to the interests of the bank, or under disqualifications mentioned in section 10(9). Thus, the grounds for removal must be specific, provable, and consistent with the law.

Section 15(1)(a) of the Bangladesh Bank Order states that the government can remove the governor from office if he is permanently incapable of performing his duties, breaches the trust vested in him, his continuation in office is explicitly contrary to the bank's interest, or if he is disqualified under section 10(9) of the Bangladesh Bank Order.

The Bangladesh Bank Order also clearly states the disqualifications for a governor. Section 10(9) mentions that a person cannot be a governor if he is a member of parliament, employed by another organisation, a loan defaulter, bankrupt, mentally unsound, or convicted of moral turpitude and sentenced to one year of imprisonment.

Therefore, if none of these conditions are present in reality, making a decision based solely on administrative satisfaction will not be legally sustainable.

None of the above incidents occurred in Ahsan H Mansur's case, yet he was removed from the position of the governor of Bangladesh Bank without any explanation or investigation. Thus, his disqualification as a governor was not proven.

If the basis for removal is incapacity, misconduct, disqualification, or unsuitability, the principles of natural justice will apply; this especially holds if the law does not explicitly state otherwise. Under the constitutional judiciary of Bangladesh, even in the silence of the law, if an administrative decision results in a civic consequence, the principle of giving the other party the right to be heard must be followed.

In Latin, there is a principle called Audi Alteram Partem, which has been applied in countries around the world. Its core philosophy is that before any decision is made against a person, they must be given the opportunity to present their own case.

The Supreme Court of Bangladesh has consistently stated that if a removal is based on fault, stigma, or allegations of disqualification, then the individual concerned should be given the opportunity to show cause, and if necessary, a fair inquiry should be conducted.

If the government alleges disqualification or unsuitability, willful removal cannot be made without achieving satisfaction based on objective evidence, and the individual concerned should be given a reasonable opportunity to respond.

Failure to provide this opportunity makes the action challengeable under the constitution. Article 27 of the Constitution states that all citizens are equal before the law and are entitled to equal protection under the law.

Article 31 of the Constitution mentions the right to protection of law, stating that no action should be taken that harms an individual’s life, liberty, body, reputation, or property. Article 102 of the Constitution details the judicial powers in the section titled ''Powers of the High Court Division to issue certain orders and directions.''

This article thus provides the right to file a writ petition for protection against unlawful exercise of power by the government. The question is, who will file the writ in this case? Ahsan H Mansur's reputation has been harmed. Will he be the one to file the writ?

Speaking to lawyers, it is found that it is not necessary for Ahsan H Mansur to file the writ. Anyone can do so in public interest. The court will then provide a review, which can be used as an example in the future.

A pertinent question arises whether a governor holds his position ''during the pleasure of the President'' under Articles 133 to 135 of the Constitution like government employees.

If the removal of a governor is completed without written reasons, relevant evidence, a fair investigation, and the opportunity for self-defence, it may raise serious questions regarding its legal validity.

The pleasure of the President is never a synonym for arbitrary power; instead, it is an administrative decision tested by the standards of law, logic, evidence, and justice.

In India, the governor of the central bank is appointed for a fixed term and can only be removed based on law. The President of the European Central Bank can only be removed based on serious misconduct or proven incapacity.

In the UK, the governor of the central bank can only be removed based on incapacity or serious misconduct. There is no opportunity for removal based directly on the government's wishes, as maintaining the bank's operations free from political influence is a policy commitment.

Even in the United States, a governor of the central bank cannot be removed simply due to policy disagreements; there needs to be evidence of serious misconduct or disqualification.

If due process is violated, courts can examine the issue of their removal, which is a recognized constitutional-economic principle to safeguard the independence of central banks. Hence, due investigation or procedural fairness is essential when removing a governor.

Canceling the contract term of the outgoing Governor Ahsan H Mansur without providing written reasons and an opportunity for a hearing leaves room for debate from a legal and constitutional perspective.

*Fakhrul Islam is a special correspondent at Prothom Alo.
#The opinion is the writer's own.

#The article, originally published in Prothom Alo print and online editions, has been rewritten in English by Rabiul Islam