IINN TTHHEE SSUUPPRREEMMEE CCOOUURRTT OOFF BBAANNGGLLAADDEESSHH

AAPPPPEELLLLAATTEE DDIIVVIISSIIOONN

PPRREESSEENNTT::

Mr. Justice Borhanuddin

Mr. Justice M. Enayetur Rahim

Mr. Justice Md. Ashfaqul Islam

Mr. Justice Md. Abu Zafor Siddique

CIVIL PETITION FOR LEAVE TO APPEAL NO.2876 OF 2023

(From the order dated the 30th day of May, 2023 passed by a Division Bench of the High Court Division in Writ Petition No.10574 of 2022)

Sulaiman Rubel and others  :     .  .   .   Petitioners -Versus-

Dr. Kazi Sirajul Islam and others : . . . Respondents

For the Petitioners : Mr. Sk. Md. Morshed, Senior Advocate

with Mr. Mushtaq Ahmed Chowdhury, Advocate  and  Mr.  Shah  Mohammad Ezaz  Rahman,  Advocate instructed  by Mr.  Md.  Abdul  Hye  Bhuiyan, Advocate-on-Record

For Respondent No.1   :  Mr.  Murad  Reza,  Senior  Advocate

instructed  by  Ms.  Madhu  Maloti Chawdhury Barua, Advocate-on-Record

For Respondent Nos.2-6   :  Not represented

Date of Hearing and Judgment   :  The 27th day of November, 2023

JUDGMENT

M. Enayetur Rahim, J: This civil petition for leave to appeal is  directed  against  the  judgment  and  order  dated 30.05.2023 passed by a Division Bench of the High Court Division in Writ Petition No.10574 of 2022 making the Rule absolute.

The relevant facts leading to the filing of the instant civil petition for leave to appeal are as follows:

The present respondent No.3, Islami Bank Bangladesh Limited instituted Artha Rin Case No.388 of 2019 in the Court of Artha Rin Adalat, Court No.4, Dhaka against the present petitioners (mortgagor-defendants) as well as respondent No.1 (borrower-defendant) for realization of Tk.4,65,18,699/- (Taka four crore sixty five lacs eighteen thousand six hundred and ninety nine) as on 14.07.2019.

In the plaint it is categorically stated that the plaintiff Bank on several occasions gave reminder and warnings to the defendants for payment of their outstanding liabilities through official letter and requested them to take initiative to regularize all their overdue. However, the defendants were reluctant to adjust their outstanding dues.

In order to realize outstanding dues the plaintiff Bank on 06.07.2018 had published auction notice under section 12(3) of Artha Rin Adalat Ain, 2003 (hereinafter referred to as ‘the Ain,2003’) in to Daily newspapers, namely Dainik Bangladesh Protidin and Dainik Ittefaq for selling the mortgaged property.

However, the Bank did not get any responsible bidder to sell the property and, that the mortgagors, filed Writ Petition No.9186 of 2008 challenging the said auction notice wherein they got an order of stay. Under such circumstances the plaintiff Bank has compelled to file the suit.

When the suit is at the stage of peremptory hearing, the Chairman of the borrower Company (defendant no.3) filed an application before the Artha Rin Adalat to sell the mortgaged property before proceeding further with the suit, but the same was rejected by the learned Judge of Artha Rin Adalat by an order dated 03.08.2012.

Challenging the said order, the borrower defendant No.3 that is the present respondent No.1 filed Writ Petition No.10574 of 2022 before the High Court Division and accordingly a Rule was issued.

A Division Bench of the High Court Division after hearing the said Rule, made the same absolute making the following observations and direction:

“They are required to bear in their minds the principles, which have been laid down hereinbefore by this Court, and now articulated in the following manner:

1.         The Banks/Financial Institutions must not file any Artharin Suit without, at first, selling or having failed to sell the liened and/or pledged and/or hypothecated and/or mortgaged property of both movale and immovable nature.
2.         Before filing the Artha Rin Suit, the Banks/Financial Institutions are competent to put the mortgaged/hypothecated property more than once, if the 1st auction does not wield or succeed in providing/getting the

expected price or fails for some other reason.

3.         In a scenario where the Banks/Financial Institutions despite invoking Section 12(3) of the Artha Rin Ain, could not attract any bidder because of filing any case by the mortgagor or hypothecated goods owner, the Adalat shall allow the Banks/Financial Institutions to invoke Section 12(3) of the Artha Rin Ain afresh treating it as continuation of the proceeding under Section 12(3) of the Artha Rin Ain commenced earlier.
4.         The Banks/Financial Institutions shall not be allowed to put the mortgaged/ hypothecated property on auction after filing of the Artha Rin Suit if the Court finds that provision of Section 12(3) of the Artha Rin Adalat was invoked by the Banks/Financial Institutions before filing of the Artha Rin Suit without being interrupted by the mortgagor.
5.         The Banks/Financial Institutions are competent to sell the liened and pledged properties, even after filing the Artha Rin Suit if they consciously or inadvertently have not sold the said liened/pledged properties.

Accordingly, the following Orders and Directions passed:

1.         The Bank (respondent No.2) is directed to take necessary steps for arranging the auction to sell the aforesaid mortgaged property in question in accordance with the relevant laws within 30(thirty) days from the date of receipt of this Order.
2.         The Artha Rin Adalat No.1, Dhaka (before whom the Artha Rin Suit No.388/19, renumbered as Artha Rin Suit No.367/22, in now pending) is directed to facilitate the auction process. Meanwhile (i.e. till completion of the auction process), the trial of the Artha Rin Suit No.388/19 (renumbered as Artha Rin Suit No.367/22) shall be halted and once the auction process in completed, the trial of the Artha Rin Suit No.388/19, renumbered as Artha Rin Suit No.367/22, shall be proceeded with in accordance with the law, if the Bank’s dues are not fully adjusted by the sale price or if the auction price is not accepted by the Adalat.
3.         The Registrar General of the Supreme Court of Bangladesh is directed to disseminate a copy of this Judgment to all the learned Judges of the country who are vested with

the power of conducting the Artha Rin Suits/Cases.

4.         All the learned Judges of all the Artha Rin Adalats of Bangladesh are directed to acquaint with the ratio laid down in this Judgment, particularly the principles recorded in the penultimate paragraph of this Judgment within 1(one) month of receipt of this Judgment and, thereafter, report to the learned District Judges of their concerned Districts.
5.         All the learned District Judge of the country are directed to ensure that the learned Judges of the Artha Rin Adalat/s of his/her District complies with this Court’s Directions and, also, they shall notify the Registrar General of the Supreme Court of Bangladesh by e-Mail that this Court’s Directions have been complied with.”   

Being aggrieved by the said order the mortgagors- defendants have preferred this civil petition for leave to appeal.

Mr. Sk. Md. Morshed, learned Senior Advocate appearing for the petitioners submits that the High Court Division has failed to take into consideration that there is no scope to sell the mortgaged property on the application of the writ petitioner i.e. the borrower under section 12(3) of the Artha Rin Adalat Ain, 2003, rather

the Bank has got the exclusive jurisdiction to take any step(s) under section 12(3) of the Ain, Therefore, the writ petitioner has no locus standi to file such application.

Mr. Murshed further submits that the High Court Division has failed to take into consideration that when an Artha Rin Suit is already filed without selling the mortgaged property following the provision of section 12(3), then the provision of sub-section 3 of the said section must be followed by the court suo-moto or on the application of the judgment debtor and there is no scope to sell the property afterwards  and the provision of section -12 (6) and section 12(7) of the Artha Rin Ain are mandatory provision of law, not an alternative provision of section 12(3) of the Ain.

Mr. Murshed lastly submits that the principal borrower cannot escape his liability by shifting the burden on the third party mortgagors and asking for sale of the mortgaged property inasmuch as whether the third party has committed fraud or not, can be decided only upon trail and as such the principal borrower cannot ask for selling the mortgaged property bringing allegation of fraud against the third party mortgaged.

Per contra, Mr. Murad Reza, learned Senior Advocate appearing for the borrower writ petitioner-respondent having supported the impugned judgment and order has submitted that the High Court Division on proper appreciation of the facts and law passed the impugned

order directing to facilitate the auction process and trial of the Artha Rin Suit shall be halted and the suit shall be proceeded with in accordance with law, if the Bank’s due are not fully adjusted by the sale price or if

the auction price is not accepted by the Adalat.

We have considered the rival submissions of the learned Advocates for the respective parties, perused the impugned judgment and order, the materials as placed before us and the relevant provisions of law.

To decide the issue involved in this case, it is necessary to look into the provision of section 12 of the Artha Rin Adalat, 2003 (hereinafter referred to as Ain, 2003) which as follows;

"12| (1) Dc-aviv (2) Gi weavb mv‡c‡ÿ, †Kvb Avw_©K cÖwZôvb, Dnvi wbR `Lj ev wbqš¿‡Y _vKv weev`xi †Kvb m¤úwË hvnv cY ev eÜK (Lien or

pledge ) ivwLqv FY cÖ`vb Kiv nBqv‡Q, Ges hvnv weµq Kwievi AvBbMZ AwaKvi ev`xi iwnqv‡Q ev`x‡K AcY© Kiv nBqv‡Q, Dnv weµq bv Kwiqv Ges

weµqjä A_© FY cwi‡kva eve` mgš^q bv Kwiqv, A_© FY Av`vj‡Z †Kvb gvgjv `v‡qi Kwi‡e bv|

2.       Dc-aviv (1) Gi weavb m‡Ë¡I, †Kvb Avw_©K cÖwZôvb wbR `Lj ev wbqš¿‡Y _vKv cY ev eÜKx m¤úwË weµq bv Kwiqv gvgjv `v‡qi Kwi‡j AbwZwej‡¤^ D³ m¤úwË c~- ee ©wY©Z g‡Z weµq Kwiqv weµqjä A_© F‡Yi mwnZ mgš^q Kwi‡e Ges welqwU Av`vj‡K wjwLZfv‡e AewnZ Kwi‡e|
3.       †Kvb Avw_©K cÖwZôvb, weev`xi wbKU nB‡Z †Kvb ¯v ’ei m¤úwË (Immovable Property) eÜK (Mortgage) ivwLqv A_ev A¯’vei

m¤úwË  (Movable Property)  `vqe×  ivwLqv  (Hypothecated)

FY cÖ`vb Kwi‡j Ges eÜK cÖv`b ev `vqe× ivLvi mgq eÜKx ev `vqe× m¤úwË weµ‡qi ÿgZv Avw_©K cÖwZôvb‡K c` Övb Kiv nBqv _vwK‡j, Dnv weµq bv Kwiqv Ges

weµqjä A_© FY cwi‡kva eve` mgš^q bv Kwiqv, A_ev weµ‡qi †Póv Kwiqv e¨_© bv

nBqv, A_© FY Av`vj‡Z †Kvb gvgjv `v‡qi Kwi‡e bv|

4.      Dcaviv (3) G DwjøwLZ weµ‡qi †ÿ‡Î Avw_©K cÖwZôvb GB AvB‡bi aviv 33

Gi Dc-aviv (1), (2) I (3) Gi weavb, hZ`~i m¤¢e, Abymib Kwi‡e|

5.    †Kvb Avw_©K cwÖZôvb, hw` Dnvi AbyKz‡j Dc-aviv (3) Gi Aaxb eÜwK ev

`vqe× †Kvb ¯’vei ev A¯’vei m¤úwË weµ‡qi Rb¨ GB avivi Aaxb Mn „xZ Kvhµ©‡gi

myweav‡_© Abyiƒcv e ¯i ’ ev A¯’vei m¤úwËi `Lj I wbqš¿Y weµ qi c‡ ~e© ev c‡i

weev`x ev FY MnÖxZv nB‡Z wbR `Lj ev wbqš¿‡Y mgwc©Z nIqv A_ev, †ÿÎgZ,

†µZvi AbyK‡j z mgc©Y Kiv cÖ‡qvRb g‡b K‡i, Zvnv nB‡j D³ Avw_©K cÖwZôvb

wjwLZfv‡e Aby‡iva Kwi‡j weev`x ev FY-MnÖxZv Abyiƒc `Lj Awej ‡¤^ Avw_©K

cÖwZôvb ev †ÿÎgZ, †µZvi AbyK‡j ~ mgc©b Kwi‡e|

(5K) Dc-aviv (5) Gi Aax‡b wjwLZfv‡e Aby‡iva Kiv m‡Ë¡I hw` weev`x ev FY

MÖnxZv D³ Dc-avivq DwjøwLZ m¤úwËi `Lj I wbqš¿Y Avw_©K cÖwZôvb ev ‡ÿÎgZ †µZvi AbyK‡j ~ mgc©b bv Kwiqv _v‡Kb, Zvnv nB‡j Avw_©K cÖwZôvb mswkøó ¯v ’bxq Awa‡ÿ‡Îi †Rjv g¨vwR‡÷ª‡Ui wbKU `iLv¯Í Kwiqv D³ m¤úwËi `Lj I wbqš¿Y

weev`x ev FY MÖnxZv nB‡Z Dnvi AbyK‡j ~ ev †ÿÎgZ, †µZvi AbyK‡j ~ mgc©Y Kwi‡Z

Aby‡iva Kwi‡Z cvwi‡e; Ges Abyiƒcfv‡e Abyiæ× nB‡j †Rjv g¨vwR‡÷ªU wKsev

Zvnvi g‡bvbxZ cÖ_g †kÖbxi †Kvb g¨vwR‡÷ªU, D³ m¤úwË wKsev Zvnvi g‡bvbxZ cÖ_g †kÖYxi †Kvb g¨vwR‡÷ªU, D³ m¤úwË Avw_©K cÖwZôv‡bi AbyK‡j ~ cÖ`Ë F‡Yi

wecix‡Z eÜK ev `vqe× _vKvi wel‡q mš‘ó nIqv mv‡c‡ÿ Dnvi `Lj I wbqš¿b

weev`x ev FY-MÖnxZv nB‡Z D×vi Kwiqv Avw_©K cÖwZôvb A_ev, †ÿÎgZ Avw_©K cÖwZôv‡bi cÿ nB‡Z ‡µZvi AbyK‡j ~ mgc©Y Kwi‡eb|

6.              †Kvb Avw_©K cÖwZôvb Dc-aviv (2) I (3) Gi weavb cvjb bv Kwi‡j, Av`vjZ ¯^-

D‡`¨v‡M A_ev `vwq‡Ki wjwLZ Av‡e`bµ‡g, wWµx cÖ`vb Kwievi mgq D³ Avw_©K cÖwZôvb KZ…©K D³ m¤úwËi cÖ`wkZ© g~j ¨vq‡bi, hw` _v‡K, mgcwigvb A_© gvgj vi

`vex nB‡Z ev` w`qv wWµx cÖv`b Kwi‡e Ges cÖ`wk©Z g~j¨ bv _vwK‡j, Av`vjZ, m¤úwËi ¯’vbxq Awa‡ÿ‡Îi  mve-‡iwR÷ ªv‡ii cÖwZ‡e`b  MnÖY Kwiqv, g~j ¨ wba©viY

Kwi‡e Ges wba©vwiZ D³ g~‡j¨i mgcwigvY A_© gvgjvi `vex nB‡Z ev` w`qv wWµx

cÖ`vb Kwi‡e|

7.              Dc-aviv (6) Gi Aax‡b †h m¤úwËi wba©vwiZ g~j¨ gvgjvi `vex nB‡Z ev` w`qv

wWµx cÖ`vb Kiv Bn‡e, D³ m¤úwËi gvwjKvbv aviv 33 Gi Dc-aviv (7) Gi

weav‡bi Abyiƒc c×wZ‡Z Avw_©K cÖwZôv‡bi Aby‡j K ~b¨¯Í nB‡e|

8.              AvcvZZt ejer Ab¨ †Kvb AvB‡b wfbœiƒc hvnv wKQzB _vKzK bv †Kb, GB avivi Aax‡b Avw_©K cÖwZôvb KZ…©K lien, pledge, hypothecation A_ev mortgage Gi Aaxb cÖvß ÿgZve‡j †Kvb RvgvbZx ¯’vei ev A¯’vei

m¤úwË weµq Kiv nB‡j, D³ weµq †µZvi AbyK‡j ~ ˆea ¯^Ë m„wó Kwi‡e Ges

†µZvi µq‡K †Kvbfv‡eB ZwK©Z Kiv hvB‡e bvt

Z‡e kZ© _v‡K †h, Avw_©K cÖwZôvb KZ…©K weµq Kvh©µ‡g †Kvbiƒc A‰eaZv ev c×wZMZ Awbqg _vwK‡j , RvgvbZ cÖ`vbKvix FY-MnÖxZv Avw_©K cÖwZôv‡bi weiæ‡×

ÿwZc~iY `vex Kwi‡Z cvwi‡eb| "

If we meticulously examine the various provisions of section 12 of the Ain,2003, in particular sub-sections 2, 3, 6 and 7 it will be abundantly clear that the provision of sub-section 1 of the said section cannot be said as mandatory provision of law.

Sub-section 1 though stipulates, [subject to the provision of sub-section 2] a financial institution without selling any property and adjusting the sale proceeds thereof in repayment of land money, shall not institute any suit in the Artha Rin Adalat against any property of the defendant which has been mortgaged liened or pledged, upon which the plaintiff has right to sell or is vested such right and also in possession or control of said financial institution.

But sub-section 2 of section 12 speaks that notwithstanding the provisions of sub-section (1), where a financial institution institutes any suit without selling the liened or pledged property which is in his possession or control, it shall immediately sell the said property in the aforesaid manner and adjust the sale proceeds thereof with the money loan and shall inform the court, in writing relating thereto and sub-section 6 of section 12 speaks that if any financial institution does not comply with the provisions of sub-section (2) and (3), the court shall, either on its own motion or on a written prayer of the judgment debtor, award a decree deducting from the claim of the suit the sum equal to the value, if any, of the said property shown by the said financial institution at the time of awarding such decree, and in the absence of any shown value, the court shall on the basis of a report from the sub-registrar of the local jurisdiction, determine the value of such property and shall award a decree deducting from the claim of the suit the sum equal to the value so determined.

Sub-section 3 of section 12 stipules that no financial institution shall, when it advances loan by taking any immovable property in mortgage or taking any movable property in hypothecation from the defendant and at the time of giving mortgage or hypothecation the financial institution is given the power to sell the mortgaged or hypothecated property, without selling such property and adjusting the sale proceeds thereof in repayment of loan or without failing on trying to sell such property institute any suit in the Artha Rin Adalat.

From the combined reading of the above provisions of law it cannot be said that unless and until mortgaged property is not sold in auction as per sub-section 1 of section 12 of the Ain,2003 the Bank/financial institution(s) is precluded to file any suit, in other words selling the mortgaged property before institution of the Artha Rin Suit is not sino qua non.

Law clearly provides that despite due initiative and diligence by the Bank/Financial institutes the sale of mortgaged property is not completed as per provision of sub-section-1, in that event the Bank/Financial institutions has got the authority to sell the mortgaged/liened/hypothecated property and adjust the sale proceeds with the decreetal amount at the time of passing the decree.

Sub-section 3 of section 12 of the Ain,2003 provides that the Bank/financial institution(s) cannot file a suit without taking  steps  to sell the mortgaged property and failing to sell the same. It does not mean that the Bank/ financial institution(s) is to be halted to file the suit.  

Thus, the High Court Division committed serious error

in halting the further proceeding of the suit. The observations of the High Court Division are contrary to the order of halting the further proceeding of the suit before selling the mortgaged-property. If, we hold that the provision of sub-section 1 is mandatory one, in that event provision of sub-section 2, 5, 6 will be nugatory.

Further, another pertinent question has been involved in this case i.e. whether a defaulter borrower can seek direction upon the plaintiff regarding the procedure that will be taken in realization of loan. The answer is simply ‘no’. A borrower defendant cannot dictate the plaintiff as to his course of action for realization of loan. In the instant case the defaulter loanee had filed an application before the Adalat for selling the mortgaged property before proceed further with the suit. This attempt of the defaulter loanee, whose property was not mortgaged, not only surprises us but also we are constraint to hold that he has taken a device to delay the disposal of the suit as well as and to pay the outstanding money to the Bank.

In the instant case it is undeniable fact that the Bank, before filing the suit had taken steps as per provision of section 12(3) of the Ain,2003 for selling the property but auction was not done due to the filing of the writ petition before the High Court Division by the mortgagors. Thus, there is no room to say that Bank before filing the suit did not take any steps to sell the mortgaged property.

Having considered and discussed as above, we are of the view that the High Court Division committed serious error in passing the impugned judgment and order by halting the proceeding of the suit and thus, same is required to be interfered. 

However, since we have heard the learned Advocates for the respective parties at length, thus, we are inclined to dispose of the civil petition for leave to appeal without granting any leave to avoid further delay of disposal of the suit.

Accordingly, the civil petition for leave to appeal is disposed of. The impugned judgment and order dated 30.05.2023 passed by the High Court Division is hereby set aside.

The Artha Rin Adalat is directed to proceed with the case in accordance with the law.

However, the Bank is at liberty to sell the mortgaged property during pendency of the suit by way of auction or negotiation with the approval of the Artha Rin Adalat and the Adalat is at liberty to deal with the matter in accordance with the law.

However, there is no order as to cost.  

J. J. J. J.

B/O.Imam Sarwar/ Total Wards:3,115.