Chapter One

Introduction
1.1 Rational of the study

In our legal system, money lent by financial institutions/banks to individuals, private limited
companies, public limited companies, corporations, partnership firms, societies, co-
operatives, proprietorship firms etc. when due for default, is realized through money suits,
suits for foreclosure, mortgage by instituting the same to competent civil courts. The civil
courts were burdened with other businesses and such suits of banks consumed time for
disposing of. The delay caused made the bank sector suffer for non-realization of dues in time
and the bankers gathered bitter experience in realizing the same. To remove this difficulty, the
government enacted a special piece of legislation named "The Artha Rin Adalat Ain, 1990"
which had gone under some changes by way of amendments since its inception. The law
brought changes to a great extent in the administration of justice delivery system for
regulating those suits but it failed to fulfill the expectation of the legislators/bankers to
recover the dues expeditiously from the defaulters. The thinkers on the subject gave second
thoughts to frame a new law and ultimately the legislature passed "The Artha Rin Adalat Ain,
2003" (hereinafter Adalat) by repealing the earlier one1.

1.2 Background of the study

The present study is on The Present Scenario of the Artha Rin Adalat Ain, 2003 and Its Legal
Perspective and the issues about the scope of the statute and procedures to be followed for
filing cases under Artha Rin Adalat Ain 2003. I will try to put important information
regarding different statutes or case laws containing procedural and legal provisions and
commentaries to complete this study. Sometimes, comparative analogy will be drawn in order
to find out the distinctions and/or solutions. This study is an endeavor to identify some
practical problems prevailing in the Artha Rin Adalat Ain 2003 (ARAA) and its
enforcement.
The study will be conducted disregarding some other inconsistencies or limitations of this
Act, more or less the Act is exhaustive and good in nature. It ensures effective and prompt
remedy regarding loan dues of financial institution specially for saving the interest of

1 The Artha Rin Adalat Ain/2003: A review, Syed Jahed Monsur, Judge, Artha Rin Adalat No. 4,
Dhaka

1
financial condition and for checking balance of our economy this country, the requirement
this loan is doubtless. Even, though for making this loan more effective, prompt and for
practical application some of the like provision (as stated above) need to be revised and
amended immediately. The contents of the laws have been divided into six chapters having
60 sections. Chapter-1 deals with preliminary (sections 1-3); Chapter-2 deals with
establishment of Adalat (section-4); Chapter-3 deals with power and jurisdiction of Adalat
(section-5); Chapter-4 deals with institution of suit, practice and procedure of Adalat (sections
6-20), Chapter-5 deals with alternative dispute resolution (sections 21-25); Chapter-6 deals
with execution (sections 26-39); Chapter 7 deals with appeal & Revision (sections 40-44)
Chapter 8 deals with miscellaneous (sections 45-60). I will try to deep discussion on these
contents.

1.3 Problem Statement of the study

The law came into force on 1st May 2003 except sections 46/47 which came into operation
on 1st May 2004. Within a short span of time, the law has gone under an amendment by the
Artha Rin Adalat (Amendment) Ain, 2004 which reflects weak draft of the law. The law
begins with a preamble which speaks of the purpose of the law. The purpose of the law as it is
visualised from the preamble is that the existing laws relating to recovery of loans of
financial institutions/banks are needed to be amended and consolidated. When the question of
amendment of any statute comes, then this demands strong, specific legal and logical
arguments by way of explanation in favour of the need for amended. The adverse effect of
this proposition is that it fails to amalgamate all the loan recovery disputes between and
among the financial institutions and parties. Besides this only confirms recovery of loan
which is not as extensive as the word dues. These limitations primarily frustrates the
amalgamation purpose of loan of financial institutions. I shall make an endeavour to focus on
those and other allied subjects in this study. For this obvious reason I will point out some
lacunas and propose some recommendations thereto. Obviously, the purpose which expedites
the adoption of Artha Rin Adalat Ain, 2003 (Act no. 8 of 2003) is very efficacious and
specific. This is an Act specially framed for amalgamating all the claims of dues of loan of
financial institutions, so far, it relates to recovery of loan.
Two objectives of this Act are palpable which are1. this Act only confines to the loan
recovery by financial institution and 2. this only confines to loan2.

2 http://www.banglanews24.com/law/article/19765/Fallouts-of-Artha-Rin-Adalat-Ain-Call-for-
Amendment, [last visited on 02-12-2016]

2
There is no legal bar upon the financial institution that once a civil suit is filed by the parties
regarding the same cause of action before the customary civil court, and then no financial
institution can file Suit before the Artha Rin Adalat. There is no stay of suit or res judicata.
This provision needs to be amended immediately.
1.4 Objectives of the study
The study will be conducted two objectives. They are-
General Objective:
The general objective of the study is to focus the present scenario and perspective of Artho
Rin Adalot Ain, 2003.
Specific Objectives:
To deep discussion on Artho Rin Adalot Ain, 2003
To focus the problems and possible solutions of this law
To focus the necessities of this law
To evaluate the law as per its implementation.

1.5 Scope of the study

The scope of the research, therefore, will be confined to only some specific financial cases
due to time limitations.
The scope of this research paper is as follows:

The present scenario of Artho Rin Adalot Ain, 2003.

Discussion on contents of the law

Identifying the loopholes of the law

Discussion and data analysis

Main findings of research

Recommendation with legal aspects

1.6 Methodology of the study

3
The present study will be based on analytical method where, I will need to collecting data
from the secondary sources. Secondary data will be collected from revealing relevant
literature review included with books, journals, articles, previous research work and desk
report on relevant topic.

1.7 Review of the Literature

For conducting this study, I have reviewed a number of relevant literatures to get clear
idea on this topic. We have studied different literatures from online journals, thesis
papers, articles and other relevant literatures through internet.

In Efficiency and Effectiveness of Alternative Dispute Resolution Schemes Towards the

Promotion of Access to Justice in Bangladesh, " Under sections 21 and 22 of the Artha Rin
Adalat Ain 2003, two modes of the ADR, settlement conference and arbitration, have been
introduced in the commercial dispute. Section 21 defines the Settlement Conference as a
conference comprising the parties, their lawyers and their representatives and presided over
by the judge of the Artha Rin Adalat for disposing of the suit in an informal, non-binding,
confidential and non-adversarial manner on the basis of mutual cooperation and
understanding of all concerned."

In the article of Fallouts of Artha Rin Adalat Ain: Call for Amendment, "The cause of
action is loan and the contesting party is the financial institutions but the individual/natural or
legal person has no right to invoke the jurisdiction of this Act. This also causes multiplicity of
suits. Because, such aggrieved party has to file civil suit before the cumbersome civil courts
in our country."

The published Article of Md. Rizwanul Islam " LAW ANALYSIS Artha Rin Adalat Ain,
2003" stated - "Section 32(4) of the ARAA provides that if the court while rejecting
a petition filed by a third party feels that the petition was presented with the mala fide
intention of delaying the execution suit, it would forfeit the deposit and pay it to the decree-
holder."

4
In "The Artha Rin Adalat Ain/2003: A review" Syed Jahed Monsur has stated that, " The
law has defined 'loan' under section 2 (ga) wherein compensation as claimed by Islamic
banks has not been included. The Islamic banks have been claiming compensation along with
profit. Under the law of the land, compensation can be claimed as a remedial measure of
breach of contract. The laws should incorporate an explanation to this aspect. Section 3 has
an overriding effect over other laws."

In Bank loan default: Prevention and cure, Zia Uddin Mahmud noted in his article, The
words 'Loan Default' have become common in the banking sector of Bangladesh these days.
Because, commercial banks as well as non-banking financial institutions (NBFIs) have been
experiencing frequent loan default cases which have resulted in huge profit cut and low return
on their investment. This is an unpleasant and undesirable situation for a banker in the life-
cycle..

Critical Review of the Court Based ADR in Bangladesh: Prospects and Challenges, Md.
Khairul Islam, Department of Law, Northern University Bangladesh, Bangladesh reviewed in
his research work that, Various types of ADR practiced in Bangladesh may be classified
under three major categories, namely, (i) Court based ADR or judicial; (ii) quasi-formal,
statutory ADR; and (iii) informal/non-statutory ADR. The primary focus of this study is on
the first category, i.e., court based ADR through civil courts.

Problems of Alternative Dispute Resolution Mechanisms and Proposals for Improvement: A

Study in Bangladesh, Md. Nannu Mian and Shaikh Rajib Hossain stated that, ADR is a term
generally used to refer to informal dispute resolution processes in which the parties meet with a
professional third party who helps them resolve their dispute in a way that is less formal and often
more consensual than is done in the courts.1 While the most common forms of ADR are
mediation and arbitration,

1.8 Limitation of the Study

5
I have faced some unexpected obstacle which were-

Lack of enough relevant research work for why the study could not be reviewing the
literature perfectly

Insufficient data sources and methodological limitation also the big restriction

Time limitation one of the major factor when done this research work

6
 Chapter Two
Alternative Dispute Resolution and Their Application

2.1 Introduction:

Alternative Dispute Resolution refers to the means of settling disputes without going through
legal procedures. Through ADR settlement of disputes can be done in many formal and
informal ways but here ADR emphasis is mainly on the settlement of disputes by local
community initiatives. It is an age-old tradition of society through which disputes are
resolved amicably and which concerned parties accept. Normally authority does not
challenge it. It is not institutionalized, but both the community members and the disputants
accept it. There are different ways to resolve disputes. Some are resolved formally, others
informally, and some are resolved as by time passes3.

2.2 Objectives of ADR

In the recent past the alternative dispute resolution system (ADR) has been developed in the
USA and the rate of success of ADR is significantly high, as the parties have been able to
come forward to sit together to talk together and finally resolving their disputes. The prime
aim of alternative dispute resolution system in civil justice delivery system in Bangladesh is
closing the hostility between the disputing parties and restoration of harmony. In this system
a high degree of public participation and co-ordination is badly needed. A general sense of
satisfaction develops which helps in enforcement of the decision, when peoples participation
is ensured as to tending evidence, asking questions and making opinions. Thus the
reconciliation can be eased, which is the fundamental objective of ADR system.

2.3. Classes of ADR in Bangladesh

Various types of ADR practiced in Bangladesh may be classified under three major
categories, namely, (i) Court based ADR or judicial; (ii) quasi-formal, statutory ADR; and
(iii) informal/non-statutory ADR. The primary focus of this study is on the first category, i.e.,
court based ADR through civil courts.

Table 1: Classes of ADR under different laws in Bangladesh

3 Hazel Genn, Mediation in Action: Resolving, 2001, pp. 38-41

7
Status of Relevant Legislations Relevant Methods Key actors
ADR sections applied
The Code of Civil S.89A, 89B, Mandatory The court itself
Procedure, 1908 (as 89C, 89D & mediation/ or a third party
Formal/ amended up to 2012) 89E arbitration neutral
court The Artha Rin Adalat Ain Chapter on Mandatory The court itself
based (Money Loan ADR, mediation/ or a third party
ADR Court Act), 2003 Ss. 22-25, arbitration neutral
(as amended up to 2010) 38, 44A, 45
The Family Courts Ss.10(3),(4) Reconciliation/ The court itself
Ordinance,1985 & 13 compromise
Quasi- The Conciliation of Esp. Ss.3, 4 Local
formal/ Disputes (Municipal Area) and government
Almost formal
statutory Board Act, 2004 schedule representatives,
civil and
ADR paurashava only
criminal
The Village Court Act, Ss.1-2 and Local
adjudicatory
2006 schedule government
jurisdiction in
representatives,
specified cases
union parishad
only
The Arbitration Act, 2001 Esp. S.22 Arbitration Arbitration
(as amended up to 2004) Tribunal
Income Tax Ordinance, Ss.152F- Facilitation Selected or
1984 152S appointed
facilitator
The Value Added Tax Act, Ss. 41A- Facilitation Selected or
1991 41K appointed
facilitator
The Customs Act, 1969 Ss. 192A- Facilitation Selected or
192K appointed
facilitator
The Legal Aid (Legal Rules 4-17 Settlement Legal aid officer
Advice and conference
Alternative Dispute
Resolution) Rules,
2015 under the Legal Aid
Act, 2000
The Muslim Family Laws S. 6, 7(4), Arbitration Local
Ordinance, 1961 9(1) government
representatives
(up &
paurashava)
The Labour Act, 2006 S. 210 Conciliation, Selected
arbitration conciliator or
arbitrator

8
 The EPZ Trade Union and Ss. 47-49 Conciliation, Selected
Industrial Relation Act, arbitration conciliator or
2004 arbitrator
The EPZ Trade Welfare Ss. 39-45 Conciliation, Selected
Society and Labour arbitration conciliator or
Industrial Relation Act, arbitrator
2010
Mediation NGO mediators
Informal/ Informal ADR by NGOs on civil matters
nonformal
ADR

2.4 Different forms of ADR and their application in civil justice system:

Negotiation, mediation and arbitration are the most common features of ADR techniques in
Bangladesh. Let us discuss the three important ways of dispute resolution.

Mediation is voluntary process where a natural mediator attempts to help the disputing
parties to reach an agreement that is acceptable to both sides and that will bring the dispute to
an early conclusion without having to go to Court.4

Arbitration means a process of adjudication of a dispute or controversy on fact or law or

both outside the ordinary civil courts, by one or more persons to whom the parties who are at
issue refer the matter for decision.5

Negotiation is a non-binding procedure in which discussions between the parties are

initiated without the intervention of any third party with the object of arriving at a negotiated
settlement of the dispute6.

4 Ibid, page no. 45-46

5 SK Golam Mahbub, Alternative Dispute Resolution in Commercial Disputes: The UK and

Bangladesh Perspective 2005, at p. 21.

6 P. C Rao, Alternative to Litigation in India, 1997, p.26

9
 Med-Arb is a procedure which combines, sequentially, conciliation/mediation and where
the dispute is not settled through conciliation/mediation within a period of time agreed in
advance by the parties, arbitration7.

2.5 Laws pertaining to ADR in Bangladesh:

a) Code of Civil Procedure,1908

For the first time in our legal system the provision with regard to ADR has been introduced
by amending the Code of Civil Procedure. In chapter V of Artha Rin Adalat Ain, the
provisions of ADR have also been incorporated. Surely, this concept is a denovo in our civil
justice delivery system. Now ADR has come within the domain of civil procedure code.
By the recently enacted sections 89A/89B of CPC, the ADR system (mediation and
arbitration) has been introduced, the two terms mediation and arbitration. Section 89A lays
down that except in a suit under the Artha Rin Adalat Ain, 1990 (Act. no 4 of 1990)

after filing of written statement, if all the contesting parties are in attendance in the court in
person or by their respective pleaders, the court many by adjourning the hearing, mediate in
order to settle the dispute or disputes in the suit or refer the dispute or disputes in the suit to
the engaged pleaders of the parties, or the party or parties, where no pleader or pleaders have
been engaged, or to a mediator form the panel as may be prepared by the District Judge under
subsection 10, for undertaking efforts for settlement through mediation. Similarly, the term
settlement conference has been used to denote mediation process in the part V of Artha Rin
Adalat. The provisions have been made in this regard that the court can mediate the suit
matter after filing the written statement by the defendant or defendants, by adjourning the
subsequent procedures of the suit

The government by amending the Code of Civil Procedure expands the avenue for
shalishi. By The Code of Civil Procedure (Amendment) Act, 2003 two new sections were
incorporated (section 89A, 89B) in the code. It empowers the court to solve the matter
through mediation or conciliation before the beginning of the trial except case under Artha

7 Ibid, pp. 29

10
Rin Adalat Ain. However there remain some limitations too, it will not exempt the disputant
parties from the appearance before the court. This law is only relating to the pending cases,

The Civil Procedure Code (Amendment) Act, 2002 has been enacted to introduce Alternative
Dispute Resolution (ADR) system for early and consensual disposal of civil suits. Section
89A and 89B have been inserted to allow parties to settle their disputes in suits, through
mediation or arbitration. In the mediation procedure, the court may take initiative to settle the
dispute in the suit by itself or by making reference to independent mediators. Under section
89B parties will be allowed to withdraw pending suits and have those settled through
arbitration. The provisions have been made effective from 1st July 2003.

ADR system is gaining popularity. This procedure will help to reduce the huge backlogs of
civil cases in courts. Public confidence in the judiciary will thereby increase. Access to justice
will be expanded. The provisions will also help develop a new culture of consensual
settlement of disputes doing away with the existing adversarial procedure. It will help protect
and preserve cohesion and fraternity in society. Of the mediator here the advocate or any
other person may be hired for mediation.

b) Artha Rin Adalat Ain, 2003

In our legal system, money lent by financial institutions/banks to individuals, private limited
companies, public limited companies, corporations, partnership firms, societies, co-
operatives, proprietorship firms etc. when due for default, is realised through money suits,
suits for foreclosure, mortgage by instituting the same to competent civil courts. The civil
courts were burdened with other businesses and such suits of banks consumed time for
disposing of. The delay caused made the bank sector suffer for non-realisation of dues in time
and the bankers gathered bitter experience in realising the same. To remove this difficulty, the
government enacted a special piece of legislation named The Artha Rin Adalat Ain, 1990
which had gone under some changes by way of amendments since its inception. The law
brought changes to a great extent in the administration of justice delivery system for
regulating those suits but it failed to fulfil the expectation of the legislators/bankers to recover
the dues expeditiously from the defaulters. The thinkers on the subject gave second thoughts

11
to frame a new law and ultimately the legislature passed The Artha Rin Adalat Ain, 2003
(hereinafter Adalat) by repealing the earlier one.

The law came into force on 1st May 2003 except sections 46/47 which came into operation
on 1st May 2004. Within a short span of time, the law has gone under an amendment by the
Artha Rin Adalat (Amendment) Ain, 2004 which reflects weak draft of the law.

I have been working as a Judge of the Adalat for more than two years. I have taken no pain to
apply the laws during my business hours but at the same time I have seen that some
provisions of the laws are acting as barriers in discharging my responsibilities. I shall make
an endeavour to focus on those and other allied subjects in this writing.

There is no such legal provision in the Environment Court Act, 2000 like the present one.
Therefore, section 4 (4) and section 4 (10) should be omitted, and the provisions if so
omitted, there would be no practical difficulty to appoint the Joint District Judges to the
Adalat like the Environmental Courts.

Section 19 has provided provisions for setting aside the ex parte decree but it does not make
any provision for notifying the plaintiff bank like Order 9 Rule 13 of the Code of Civil
Procedure 1908. As a result, the plaintiff remains ignorant about restoration of the suit. This
anomaly should be removed by inserting appropriate provision. Section 20 of the law has
given finality to the order, judgment and decree of the Adalat. In spite of that the
defaulter(s)/borrower(s) is/are challenging the same in the writ jurisdiction of the High Court
Division under Article 102 of the Constitution of the Peoples Republic of Bangladesh and
obtaining stay orders from the High Court Division.

In a recent discussion on Money Loan Court Act 2003 organized by the Association of
Bankers, Bangladesh (ABB), the Governor of Bangladesh Bank asked the banks to take
special measures to recover bad loans as the defaulters filed 1,768 writ petitions in the High
Court for such loans amounting to Tk 6445 core. He told that the banks cannot recover the
loans due to stay orders from the court, and asked the monitoring cells of banks to take up
these issues seriously and hire efficient lawyers to move the cases of loan default.The Daily
Star dated June 2, 2006). It is observed from regular business of court that the banks have
been refraining from taking any step against the stay orders in writ petitions. It is seen that the

12
banks let them (the defaulters) do the same with consent. This attitude of the bank should be
changed and effective steps should be taken to face the legal battle with the defaulters.

Apart from the aforementioned barriers, the law has been playing a very vital role in realising
the loan from the defaulter(s). Its achievement in loan recovery has been so immense that the
scenario of defaulting loan has improved significantly with number of pending Artha Rin
Suits reducing with expectancy rate. The loan defaulting culture would further be reduced if
the barriers can be removed as soon as possible.

c) Family Courts Ordinance, 1985:

Generally disputes relating to property, family matter i.e. distribution of property, dissolution
of marriage, maintenance, guardianship could be dealt by shalish. The Family Courts
Ordinance, 1985 speaks for the settlement of dispute through conciliation inside the Court
before the formal proceeding of the trial started. The court may initiate a pre trial hearing to
settle the disputes relating to dissolution of marriage, maintenance, and dower, restitution of
conjugal rights as well as guardianship and custody of children. Besides, the Muslim Family
Laws Ordinance 1961 empowers the Union Parishad to form an Arbitration Council for
reconciliation between the parties wishing to dissolve their marital tie through Talaq and to
deal with the polygamy.

ADR in family court

If ye fear a breach between them twain, appoint (two) arbiters, one from his family, and the
other from hers; if they wish for peace, Allah will cause their reconciliation: for Allah hath
full knowledge, and is acquainted with all things8.

Settlement of Dispute through Mediation in family court is started in Dhaka Jugde Court
from 2000. Then, it was expanded in different cities and districts. Family Court Ordinance
1985 in its section 10 and 13 is said about the Mediation process. The procedure provides in
family court is-

8 http://www.guidedways.com/chapter_display.php?chapter=4&translator=2, last accessed on

18.12.2016

13
i) When the written statement is filed, the Family Court shall fix a date ordinarily of not more
than thirty days for a pre-trial hearing of the suit9.

ii) On the date fixed for pre-trial hearing, the Court shall examine the plaint, the written
statement and documents filed by the parties and shall also, if it so deems fit, hear the
parties10.

iii) At the pre-trial hearing, the Court shall ascertain the points at issue between the parties
and attempt to affect a compromise or reconciliation between the parties, if this be possible11.

iv) Then, where a dispute is settled by compromise or conciliation, the Court shall pass a
decree or give decision in the suit in terms of the compromise or conciliation agreed to
between the parties12.

v) If no compromise or reconciliation is possible, the Court shall frame the issues in the suit
and fix a date ordinarily of not more than thirty days for recording evidence13.

vi) After the close of evidence of all parties, the Family Court shall make another effort to
effect a compromise or reconciliation between the parties14.

vii) If such compromise or reconciliation is not possible, the Court shall

pronounce judgment and, on such judgment either at once or on some future day not beyond
seven days of which due notice shall be given to the parties or their agents or advocates, a
decree shall follow15.

9 Section 10 of the Family Court Ordinance 1985

10 Ibid

11Ibid

12 Ibid

13 Ibid [9] Section 14 (1) of the Family Court Ordinance 1985

14 [11] Section 13 (1) of the Family Court Ordinance 1985

14
2.6 Arbitration Act 2001.

Arbitration Law in Bangladesh

Bangladesh has enacted the Arbitration Act 2001 (the Act). It came into force on 10 April
2001, repealing the Arbitration (Protocol and Convention) Act 1937 and the Arbitration Act
1940, legacies of the British Raj in India. The new Act was again amended in 2004 in certain
respects. Such legislative steps were urgent in the face of increasing foreign investment in
Bangladesh in various sectors, especially in natural gas and power, and the ever-growing
export trade with the rest of the world. The Act consolidates the law relating to both domestic
and international commercial arbitration. It thus creates a single and unified legal regime for
arbitration in Bangladesh. Although the new Act is principally based on the UNCITRAL
Model Law, it is a patchwork quilt as some unique provisions are derived from the Indian
Arbitration and Conciliation Act 1996 and some from the English Arbitration Act 1996.

In Bangladesh, the present law of arbitration is contained mainly in the Arbitration Act, 1940,
there being separate Acts dealing with the enforcement of foreign awards. There are also
stray provisions as to arbitration, scattered in special Acts. Three types of arbitration are
contemplated by the Arbitration Act of 1940, namely (i) Arbitration in the course of a suit, (ii)
Arbitration with the intervention of the court, and (iii) Arbitration otherwise than in the
course of a suit and without the intervention of the court in practice, the last category attracts
the maximum number of cases.

Under the Act of 1940, an arbitration agreement must be in writing, though it need not be
registered.This also amounts to an arbitration agreement for the purposes of the Arbitration
Act, 1940. Once an arbitration agreement is entered into for submitting future differences to
arbitration, it is not, necessary to obtain the fresh consent of all the parties for a reference to
arbitration at the time when the dispute actually arises.

15 [12] Section 13 (2) of the Family Court Ordinance 1985

15
2.7 ADR in the Artha Rin Adalat Ain (Money Loan Court Act), 2003
The Artha Rin Adalat Ain (Money Loan Court Act), 2003 is a special law that laid down, for
the very first time, the foundation for speedy disposal of money suits connected with the
banking and non-banking financial institutions. The end in view, inter alia, was the quick
recovery of loan amount advanced by the financial institutions within the shortest possible
time. Before the amendment in 2010, the provision of ADR was incorporated into the Act in
the form of 'settlement conference'. The court could mediate the suit after the written
statement was filed by the defendant or defendants, by adjourning the subsequent procedures
of the suit. According to the provision, the presiding judge would call for a settlement
conference with a view to settle the dispute at an early stage of the case. The settlement
conference would be held in camera. Nonetheless, the Artha Rin Adalat Ain (Money Loan
Court Act) as it stands now after amendment in 2010 has incorporated the provisions of
mediation both at trial as well as the appellate stage repealing the provisions relating to
settlement conference.
Section 22 of the amended Artha Rin Ain (Money Loan Act) incorporated the provisions of
mediation almost in the same words and manners as is provided for under section 89A of the
CPC but with the exception that in the former case a special resolution providing for
authorization of the Board of Directors of the concerned financial institution authorizing one
of its officers must be passed and submitted with the concerned Artha Rin Adalat (Money
Loan Court). The Court will take special care as to whether the authorized officer has acted,
during the mediation process, in consonance with the said authorization. 16 Unlike the ADR
provisions in the CPC, the Artha Rin Adalat Ain (Money Loan Court Act) created a scope for
the Artha Rin (Money Loan) Courts according to which the courts may employ another
attempt in order to effect compromise at the post trial stage before passing a final judgment or
order in accordance with the provisions of chapter four of the Act. 17 The statute has taken a
precautionary measure in respect of disputes having monetary value exceeding take five
crore. In this connection, section 25 provides that a special authorization needs to be obtained
from the managing director or the chief operating officer, as the case may be, of the
concerned financial institution before concluding a deal by way of ADR mechanisms under

16 See section 24 of the Artha Rin Adalat Ain (Money Loan Court Act), 2003.

17 See section 23, ibid

16
section 22. The Act takes one step ahead of the Civil Procedure Code in the sense that it
provides for mediation provisions not only at the appellate stage, but even at the revision and
execution stage of an Artha Rin (Money Loan) suit as well.18

2.8 Concluding Recommendation:

The key to success of A.D.R. in Bangladesh lies in the manner of its introduction. A.D.R. is
no longer an unheard of concept of dispute resolution among judges, litigants and lawyers of
Bangladesh. The Family Courts all over Bangladesh are actively engaged in A.D.R. The pilot
family courts are only exclusively engaged in mediation, but other Assistant Judges, who
received training in mediation, are also mediating apart from trying cases. The mediation
output of all the Assistant Judges, taken together, is something to be proud of. The Ministry
of Law only needs to collect maintain and update all relevant statistics in this regard. To make
ADR more effective, extensive, and pro-active, coordination is needed among different
agencies. Other initiatives are given below:

1) Creating awareness about ADR

2) Spreading the success story of ADR

3) Encouraging NGOs to become involved in ADR

4) Involving the Bar Associations in ADR

5) Providing training for mediators

6) Matching Government and NGO efforts.

7) A. D. R. will have a-smooth transition if it is introduced on a pilot court basis. The

performances, results, reactions among pilot court judges, practicing lawyers and the litigants
should be carefully monitored and recorded and suitable adjustments in the A. D. R. project
should be made at each stage of extension after an exhaustive study of the experiences
gained.

18 See section 44A and 38 respectively, ibid

17
18
 Chapter Three
Artha Rin Adalat Ain 2003: A Review

This chapter is an endeavor to identify some practical problems prevailing in the Artha
Rin Adalat Ain 2003 (ARAA) and its enforcement. The problems are analysed below19:

3.1 Two Tier System

It is widely acknowledged that procedural loopholes are partly responsible for the
inefficiency of the court system. The Code of Civil Procedure (1908) allows for numerous
applications, counter-applications and special leaves by both the plaintiff and the
defendant. Evidence must be presented orally, and hearings tend to be long. Judges have
wide latitude in determining whether hearings should be adjourned or new claims added
to the plaint.
ARAA made an effort to avoid the above problems by introducing its own procedure in
some respect and at the same time failed to do so in may respect. Generally, recovery of
loan does not demand detailed trial for recovery, as there are relatively few issues are in
dispute. Rather execution should be given more importance. At present, under ARAA a
separate suit is filed for the execution of the decree obtained. This is not necessary. The
Artha Rin Adalat can be made into a quasi-legal tribunal like India by creating a provision
for recovery officer in the ARAA for directly executing the decree without the need for
filing another suit for it. Further, the main suit can follow a streamlined summary
procedure. Evidence can be accepted in writing so that hearings can take shorter amount
of time.

3.2 Time Killing Mechanism

19 Artha Rin Adalat Ain 2003: A Review, Forrukh Rahman, Barrister-at-Law, LLB Hons.
(London), practising advocate. Panel Lawyer/ Adviser: Bangladesh Bank, Islami Bank Ltd., Prime
Bank Ltd, Uttara Bank Ltd, National Bank Ltd, Bank Al-Falah Ltd., South East Bank Ltd., Pubali
Bank Ltd., Mercantile Bank Ltd. EXIM Bank Ltd, UCBL, First Security Bank Ltd., Islamic Finance
and Investment Limited Oriental Bank Ltd.; Legal Consultant: Power Division, Ministry of Power,
Energy and Mineral Resources. Ex Legal Counsel, Central Bank Strengthening Project, Bangladesh
Bank (Composed of Gide Loyrettee Nouel of France, Fox Mandal of India & A Hossain & Associates
of Bangladesh); Ex Associate, A Hossain & Associates; Ex Associate, Lee, Khan & Partners.

19
A recovery proceeding is generally initiated when all out of court effort fails. Although
section 21 of ARAA invited settlement conference in the judicial process, in most of the
cases, being cases of willful default, the borrowers abuses the system. Killing time is
quite often the sole aim of the defendants in a recovery proceeding pending against them.
They abuse the system by willfully going though the settlement conference procedure
with no intention of settlement. They take advantage of this stage by holding the suit and
by taking a transfer of the suit to another Court. As a result, they drag the hearing of the
suit.

The banks and financial institutions (FI) do not want to bring a positive result at this
level. They rather prefer to obtain a decree to create pressure upon the judgment debtor(s)
through execution of proceedings.
It should be left to the discretion of the parties to decide whether they would like to settle
the dispute themselves out of court as under section 38 & 45. Section 21 is not likely to
serve its purpose.

3.3 Taking Possession

Bank/FI faces problems to take possession of the mortgaged land after execution of a
particular case. No rule as to taking possession of the land given to the bank/FI through a
certificate under section 33(5) and 33(7) when the land concerned could not be sold in
auction. This causes problem in the disposal of the land, when the bank can not take
possession by themselves. The property does not have much of a market value unless
vacant possession is given to lending institutions. There is need to take suitable measures
in this regard.

ARAA should be amended for FIs. In case of lease it is the possession of the property,
which is most important. FI in particular face the problem of recovery of possession of
the asset from the defaulted borrower under a lease agreement where FI is the legal owner
of the asset. Sometimes in some unpleasant situations, FI has no other option but to
engage private agencies to recover possession of such assets.

The ARAA may help lender to recover the asset by sending police subject the payment of
fees to the court. Alternatively a direct provision can be created in ARAA empowering the
lender to recover the asset with the help of the police or similar agency.

20
3.4 Judge-Population Ratio
Most civilised countries spend huge amount on the building capacity of the judiciary. As a
result of the neglect by the Governments, the judge-population ratio in Bangladesh is one
of the lowest in the world. The ratio should be immediately raised to at least 100 judges
per million. The reason why we do not have more judges across the board is that the
government is simply not willing to provide the finances required. The Court should have
not more than 30 cases on board on any given date and there should not be more than 800
cases pending before it at any given point of time.
However, at present, the court has at least a few thousand cases at any given point of
time. There is a provision in the ARAA that a loan default case is to be settled within six
months, but it is not becoming effective. When there was no such provisions relating to
time limits for settlement of loan cases during 1960s, yet the cases were then used to be
settled within one to three months. But, now even after having legal provisions, the time
limits for settling loan cases are not being maintained.
There should be adequate courtroom facilities. If there are insufficient courtroom
facilities for Judges, they can not render full time court work. For efficient and effective
functioning of the judiciary, there is a need for proper atmosphere.

3.5 Ethics
Sometimes, the legal processes have been observed to be delayed because of lack of
Cooperation of bank officials and legal advisers. The parties, which are involved in
lawsuits, are plaintiff or complainant, defendant, lawyer and judges. Without having
proper ethics, cooperation and sincerity of the involved parties, not only the legal process
will be delayed, but also to be obstructed. The problem of loan recovery cannot be
addressed only by undertaking legal reforms, at the same time the issues like ethical
standard and accountability of the concerned individuals and the overall law and order
situation must be improved. Unethical practices of the personnel involved in the process,
political lobbying by influential defaulters makes the entire judicial mechanism
ineffective.

3.6 Creation of Mortgages since 2004 Amendments in Laws

A mortgage is a transfer of an interest in specific immovable property as security for the
repayment of money advanced or to be advanced by way of loan, or an existing or future
debt etc. The right created by the transfer is accessory to the right of recovery of debt. The

21
 nature of the interest transferred depends on the form of the mortgage. On the other hand,
a charge is the creation of a right of payment out of an immovable or movable asset. It is
not a transfer of interest.
Until amendment of the Transfer of Property Act 1882 and the Registration Act, 1908 in
2004, Further Charge on mortgaged property for enhanced loan used to be created
through creating mortgage by deposit of title-deeds with a memorandum under section 59
of the Transfer of Property Act 1882, known as equitable mortgage, coupled with a Deed
of Agreement for Further Charge, for the entire loan amount on condition that the
registered mortgage already created would not be redeemed prior to the redemption of
equitable mortgage.
The amendment made provision for compulsory registration of the memorandum creating
equitable mortgage by deposit of title deed. Registration of Memorandum of deposit of
title deed involves payment of registration fees on the enhanced amount under new
section 78A of Registration Act 1908. Additional stamp duty is also payable on the
enhanced amount under Article 40 of the Stamp Act 189920.
Under the present legal framework, the lender has the following option if the loan amount
is enhanced on the same security: (a) Registered second mortgage may be created for the
amount enhanced only. (b) Equitable mortgage by deposit of title deed with registered
Memorandum may be created on the enhanced amount as used to be the practice,
however, this will attract same registration fee and stamp duty as legal mortgage. (c)
Creation of "Further Charge" only by executing and registering (Under section 17 (1)(b)
of the Registration Act 1908) a "Deed of further Charge" under section 100 Transfer of
Property Act, 1882. This also involves payment of Stamp duty under Article 32 of the
Schedule I of the Stamp Act 1899.
The Redemption of the existing mortgage for the original loan and thereafter creation of
fresh mortgage on the whole amount (original loan and also enhanced loan) would be
double taxation from the customer's perspective paying for the mortgage on the original
loan amount for which he has already paid. This option therefore may not be preferred.
The Sub-Registrars however generally decline to register equitable mortgage, option (b)
above, on the plea that since the fees for registration has been reduced significantly,
equitable mortgage should not be allowed. They also refuses second mortgage, option (a)
above, of the same property for enhanced loan amount only. The same problem occurs

20 Ibid, Pp. 3

22
when a customer approaches for enhancement of the loan facilities under same sanction
letter by providing new collateral.
Under the present legal framework, none of the above denial seems to be tenable and may
be challenged under Section 72 of the Registration Act 1908.

23
 Chapter Four
Present Scenario of Artho Rin Adalat Ain, 2003

4.1 Poor Performance

Financial sector in Bangladesh comprises of mainly banking sector, insurance companies,

stock market, non-bank financial institutions and micro financing institutions. Out of these,
banking sector dominates the financial system, accounting for more than 95% of its total
assets. Banking sector in Bangladesh suffers from chronic inefficiency. According to FSAC
(Financial Sector Adjustment Credit) Report of the World Bank, problems in banking sector
in Bangladesh can be generally categorized into four main groups:

(a) Economic - such as, when the loan rate of interest does not reflect real risk and price
because of excessive control.

(b) Prudential such as, when the capital adequacy requirements are not effectively enforced or
there does not exist any appropriate loan classification mechanism.

(c) Institutional such as, when there exist weaknesses in relation to loan screening and
supervision or weak management information system.

(d) Legal such as, the loan default system was perpetuated because of the delays and
inadequacy originating the system.

However, at this moment, the biggest problem of Bangladesh banking system is the bank loan
default problem. There are various reasons for loan default problem in Bangladesh, such as,
inefficient loan classification mechanism, improper banking supervision, lack of
accountability on the part of bank officials, high loan price, risky economic environment,
corruption, unethical use of political power, ineffective and inadequate judicial remedy for
financial corruption or frauds etc.

In past, various initiatives have been undertaken to tackle the loan default problem in
Bangladesh. Initiatives included prosecuting willful defaulters; imposing prohibitions against
defaulters holding public offices or bank directorships; putting limitations on access to new

24
loans; denying import licenses to industrial loan defaulters; shaming defaulters by publishing
lists; setting up Credit Information Bureau to record the performance of borrowers;
establishing a large Loan Review Cell in Bangladesh Bank to review all newly sanctioned
bank loans over Tk. 10 million etc.

However, the above measures, adopted overtime, were found to be inadequate in tackling the
massive loan default problem of the country. In early 1990s, it was strongly realized that "a
weak legal infrastructure" is mainly responsible for non-recovery of default loan and thus for
"deterioration in the quality of overall credit management in Bangladesh". Accordingly, a
number of new acts have been enacted (such as, Money Loan Court Act 1990, Bank Company
Act 1991 and Bankruptcy Act 1997) and old Acts have been necessarily amended.

In 1990, the Money Loan Court Act was enacted with a view to (a) establishing loan courts at
district level; (b) closing the legal loopholes; and (c) ensuring prosecution of defaulters more
rigorously than ever before. However, the Task Force Report on Financial Sector Reforms,
Government of the People's Republic of Bangladesh, 2000 concluded that: " the progress
in relation to recovery of default loan is not significant even after formulation of new Acts
and formation of new courts that too only for recovery of default loans."

It was observed in 1999 that even though there were ninety (90) Money Loan Courts in
overall Bangladesh, the performance of these courts has been disappointing. Until the end of
1999, only 9.41% of total litigated amount in the Money Loan Courts could be recovered. As
of March 2003, over 40,000 cases were pending with Money Loan Courts, depriving the
government of realizing more than US $ 1550 million. Among the 40,000 pending cases,
22,000 were pending for over five years, 5,700 for four years, 4,600 for two years. Hearing of
3,400 cases was pending for previous one year. [Staff Correspondent, "40,000 cases pending
with Money Loan Courts", 3(1241) Onirban (March 9, 2003)]. In addition, most of the
settled loan cases of the Money Loan Courts are small loan defaulters leaving the major loan
defaulters to perpetuate their default culture for ever.

4.2 Reasons of Poor Performance

The reasons, identified in various studies, for such poor performance of the Money Loan
Courts are:

25
(a) Money Loan Courts suffer from inefficient case management system. As a result, the
courts fail to strictly follow the legal time limits by which they are supposed to settle the
claims between parties.

(b) Frequent stay orders from the High Court Division of the Supreme Court of Bangladesh
obstruct the usual proceeding of the Money Loan Courts.

(c) There exists an overall culture of non-cooperation by bank officers, judicial officers, legal
professionals and the parties involved to expedite the case disposal.

(d) Corrupt and unethical practices of banking administration inhibit the proper functioning
of the Money Loan Courts.

(e) Political lobbying by influential defaulters makes the entire judicial mechanism
ineffective.

As the 1990 Act proved to be less effective, the government has recently enacted the Money
Loan Courts Act 2003 with a view to 'inspire and encourage efficient entrepreneurship' as
well as to 'protect interest and security of financial institutions restoring discipline in the
financial sector'. Under the new Act, the Money Loan Courts are to dispose cases within three
months.

It is too early to comment as to whether the new Act has been successful in enhancing a better
case management system than under that of the old Act. However, some critical observations
can be made. Since its adoption in May 1, 2003, the new Act has aimed at disposing the cases
of Money Loan Courts at the shortest possible time. One striking feature of the new Act is of
course to utilize the 'alternative dispute resolution' mechanism along with the formal court
system. The huge success of alternative dispute resolution at family courts in 12 districts of
Bangladesh since June 2000, has prompted the government to incorporate similar provisions
for mediation in the Money Loan Courts Act 2003. The government claims in October 17,
2003 that the Money Loan Courts could successfully resolve more than 9,000 cases, within
only 5 months (May September, 2003) of enactment of the new Act21. This does portray a
positive picture of the workability of the Money Loan Courts regime under the new Act.

21 Report, The Bangladesh Observer (October 17, 2003).

26
It is, however, stated that these disposed off cases are only 22% of the total pending cases of
the Money Loan Courts. If this speed of resolving the cases (9,000 cases in 5 months)
remains, then just to resolve the already pending cases at Money Loan Courts (40,000 in
number, pending as of March 2003), it will take almost 23 months i.e. nearly two years. Also,
while resolving the pending cases, new cases will be initiated and as such, the huge backlog
of cases will remain forever. Even though the government claimed to have achieved success
in speedy disposal of loan default cases within 5 months of enactment of the new Act, the
volume of overall default amount is still very high. The Finance Minister, M. Saifur Rahman,
in mid-November 2003 declared that Banks in Bangladesh are in fact currently stacked with
US $ 3515 million in default loans. [Staff Correspondent, "Tk 20,736 Crore Loans in Default
Hands"22.

4.3 Loan Default Problem in Bangladesh

Loan default problem in Bangladesh is like a chronic disease, which will take long time to
cure. The fast disposal of pending cases may help to tackle the problem up to certain extent.
However, it is stated that the major evils behind the loan default problem still remain outside
the purview of regulatory bodies. They are:

(1) Wide spread 'corruption' and 'unethical practice' that leads to the over all default culture in
Bangladesh.

2. Political lobbying by major and powerful loan defaulters.

Unless and until, these evils are fought back furiously, by taking recourse only to speedy
disposal of cases will be a futile attempt to tackle loan default problem in Bangladesh. The
efforts of the Money Loan Courts will have to be much more rigorous, while dealing with
corruption, unethical practices and/or major loan defaulters in disposing of the cases. In this
regard, Money Loan Courts will have to boldly avoid the scope of any political pressure, no
matter even if it comes from the Prime Minister's Office. The common men have lot to expect
from the Money Loan Courts. These courts should in disposing of the cases keep in mind that
it is the people's money that is being held up by the defaulters. If the loaned amount is not

22 The Daily Star (November 17, 2003)

27
repaid in due time, it raises the cost of lending substantially. Due to increase in cost of
lending, good borrowers are adversely affected as there is an erosion of capital from banks.
Also, due to loan default, many prospective investment ventures are hauled, which further
degenerates income and employment of the common people. Such macro-economic turmoil
puts the national economy in 'growth crisis' and the 'poorest of the poor' of the economy
suffer. Therefore, the Money Loan Courts should deal default cases with explicit courage,
notwithstanding any pressure from any corner of the society. The courts should diligently opt
for not only 'fast' but also 'furious' disposal of cases.

4.4 Bank loan default: Prevention and cure

The words 'Loan Default' have become common in the banking sector of Bangladesh these
days. Because, commercial banks as well as non-banking financial institutions (NBFIs) have
been experiencing frequent loan default cases which have resulted in huge profit cut and low
return on their investment. This is an unpleasant and undesirable situation for a banker in the
life-cycle of a loan but still bankers have to meet the situation when a loan seems to be
unrecoverable within the stipulated time period or as per agreed terms of the loan contract.
It may not be realistic to expect that one hundred per cent of the loan disbursed will be
recovered. Some of these may remain unrecoverable. Internationally-accepted rate of loan
classification in a bank is not higher than 2.0 per cent. But in Bangladesh, the rate of loan
classification is on average 8-11 per cent. The rate is around 17 per cent in case of state-
owned commercial banks. This is an alarming situation for our banking sector which
ultimately affects smooth growth of the economy. When a loan becomes default, the bank has
to face multifarious problems. Cost of fund of a classified loan is much higher than that of an
unclassified loan. A classified loan does not yield to any income however it bears cost. On the
other hand, the bank has to keep provision against classified loan ranging from 20-100 per
cent on the basis of different stages of classification which shrink investment scope of the
bank as well as income. Due to provision against the classified loan, the bank loses
opportunity to use the fund for further investment. Besides, reputation of the bank is also
hampered due to high rate of classification which may affect the stock price of the bank in the
capital market. So, we should immediately come out from this situation and should develop a
strong culture in the banking sector so that this situation can never recur. But how will it be
possible? To find the answer, this writer, from his banking experience and knowledge, can
outline some solutions.

28
There is a very famous proverb: "Prevention is better than cure". This proverb is also very
true in case of bank loan default. It is always better to take preventive measures than to cure
so that a loan cannot be default in its life cycle. So, at first we will look how to prevent loan
from being default and then will look as to how to combat the situation if a loan becomes
default despite its prevention.

The following measures should be taken to prevent a loan from being default:
1. Preventive measure to arrest a loan from being default should start from the very day of
processing of loan i.e. when a loan proposal is submitted by a customer. The genuine loan
requirement of the client has to be scrutinised very judiciously. There should be an analysis
whether the loan amount is sufficient or not and if the loan amount applied for by the client is
insufficient to run his proposed business or the project may finally face problem in future to
pay off the loan due to capital shortage. On the other hand, if the loan amount is more than
actual requirement, then there has a chance to divert the fund which is one of the main causes
of loan default.

2. Purpose of the loan has to be carefully examined. Loan fund to be used in any
unproductive sector like purchase of land or luxurious goods has to be strictly prohibited. On
the other hand, loan sanctioned for a particular purpose and used in another area is also a
great cause for loan default. This should be monitored before and after disbursement of the
fund. The 5 Cs of a loan applicant must be considered while sanctioning a loan. The 5 Cs are
Character, Capital, Collateral, Capacity, and Condition. Loan sanctioned to a dishonest person
has a great chance to be default. Generation of income of the client's business should be
examined. Consistent income of the client increases the chance to recover the loan in time.
Credit history of the client has to be collected from the market or from other sources.
Experience is an effective tool. Experience of the borrower to run the business should be
taken into consideration.

3. Standard leverage should be maintained while giving loan to an individual or a business

entity. Ratio between net worth of the borrower and total loan amount including proposed
loan should not exceed 2:1. It is observed with great concern that bankers often do not
accurately examine the leverage which is also a reason for loan default. A borrower, who uses
most of the fund through loan to run a business or project may not give coverage in times of
any operating loss which results in failure to repay the loan.

29
4. Relationship Manager (RM) should prepare the loan proposal without any interference of
any third party, top management of the bank or the client. He will follow all the banking
norms and rules as well as CRM (Credit Risk Management) guideline while preparing a loan
proposal for the best interest of the bank. In our country, this is common that sometime the
loan proposal has to be prepared with bias of any interested group which ultimately may
cause a loan to be default.

5. Security against the loan should be adequate. Both value and quality of security should be
taken into consideration. In case of collateral security like land, stress value should cover the
loan amount plus 10 per cent interest amount. Besides correct sale value of the land must be
considered. Moreover, genuineness of property documents should be examined from the
respective Sub-registry office, AC Land Office, Tehsil Office by RM to avoid any hassle in
future. Because, now-a-days residual risk of documentary error of property has increased. In
case of hypothecation or pledge, date of expiry, condition of the goods and age of receivables
should be considered. In case of guarantee from an individual, credit worthiness as well as
net worth of the guarantor should be examined and in case of corporate guarantee of a limited
company, the company's financial position as well as its Memorandum of Association should
be examined to see whether the company has any such power to provide corporate guarantee.
A good coverage loan (secured loan) cannot be default in the long run. If so, it can be
recovered easily by releasing the security.

6. Monitoring process has to be proper after disbursement of the loan till full recovery. It is
proved that most of the loan has become default due to lack of proper monitoring after
disbursement. Bankers should ensure that loan amount is being used properly and the
borrower is repaying the loan regularly. Loan provided to a business entity should be
monitored regularly. The banker shall ensure that the business is running well and generating
sufficient income for servicing the debt. On the other hand, loan provided to an individual
should also be monitored regularly. The banker has to ensure that both the financial position
of the borrower as well as Income are in good condition to service the debt.

7. Say 'hello' to borrower on every working day. Keep good banker-customer relationship
with the borrower so that the banker can closely monitor the borrower. To know the weakness
of the client, there is no alternative to keep good relationship with the client. This will also
help a banker to get early alert before a loan becoming bad.

30
8. Visit the borrower's business house on a regular interval. Monitor the operations of the
business of the client closely. Ensure that the loan fund is used only for the purpose for which
it is disbursed. Any deviation must be noticed in a proper way to call back the loan.

9. Documentation should be carefully and properly completed as per sanction terms of a loan.
This will also increase the chance to recover the loan in time and prevent it from being
default.

10. It has been observed that in recent past, most of the default cases happened as loan was
taken in the form of local LC (Inland Letter of Credit) and LTR (Loan against Trust Receipt)
facilities. So, while granting such loan, actual transfer of goods under local LC must be
ensured and the RM must ensure that this is not an accommodation bill. In case of LTR
facilities, stock of goods under LC must be monitored on a regular basis so that all the sale
proceeds of the goods under LTR facility are deposited towards adjustment of outstanding
liabilities, not diverted elsewhere.

4.5 Relevant Case Study

IN THE SUPREME COURT OF BANGLADESH
HIGH COURT DIVISION
(SPECIAL ORIGINAL JURISDICTION)
Writ Petition No. 3363 of 2013
In the matter of:
An application under Article 102 of the Constitution of the Peoples
Republic of Bangladesh.
AND
In the matter of:
Osman Gazi Chowdhury
.....defendant-Petitioner
-Versus-

Artha Rin Adalat, 4th Court, Dhaka and another.

... Plaintiff-Respondents

Mr. S.N. Goswami, Advocate

......For the petitioner

31
 Mr. Mohammad Saiful Karim with
Mr. Md. Musharraf Hussain, Advocates
....For respondent no. 2

Heard on 03.09.2015, 15.09.2015, 09.12.2015, 13.12.2015 and

Judgment on 27.01.2016.

Present:
Mr. Justice Md. Emdadul Huq
&
Mr. Justice Muhammad Khurshid Alam Sarkar

Head Notes:

Section 6(4) of the Artharin Adalat Ain, 2003:

Whether plaint/WS is to be considered by the Adalat in exparte disposals;
Section 6(4) of the Ain, 2003 mandates the Adalat to dispose of an Artharin suit exparte or
instantly by simply considering the plaint (prepared under affidavit) or written statement
(made with affidavit) and the documents filed therewith, upon treating all of them as
substantive evidence and, thus, pleadings with affidavits is the focal-point of this provision
and any formal examination of witnesses has got less emphasis in the Ain, 2003.

Whether the plaint or W/S or both should be considered in ex-parte disposal;

The expression qmgejk BlS h Shh incorporated in Section 6(4) of the Ain,
2003 has been used in the context of Le jjm HLalgp h avreL efl r-

For application of the above expression in an exparte disposal situation, when the word h
(or) would be read as the disjunctive one, an unworkable situation would arise for the Adalat.
Because, in that event the Adalat shall have to consider either the plaint only or the written
statement only in the backdrop of impossibility of disposal of a suit solely on the basis of
written statement. Furthermore, disposal of a suit solely based on the written statement will
render the provisions of Section 19(6) of the Ain, 2003 nugatory.

32
On the contrary, if the word h (or) employed in Section 6(4) of the Ain, 2003 is read as a
conjunctive word in an exparte disposal situation, it will mean that even if the defendant is
absent, the Adalat must consider both the plaint and written statement making the provisions
of Section 19(1) of the Ain 2003 redundant, for, this Section requires exparte disposal
(HLalgp) in the absence of defendant.
When in an Artharin suit the defendant-side would not participate in the hearing, what would
the Adalat do with the written statement? The normal presumption would be that by his non-
participation in the hearing he was not placing before the Adalat his claims, which were
raised in the written statements. And keeping this scenario in mind, the Legislature made the
provision in Section 19(1) of the Ain, 2003 for the Adalat to dispose of the suit exparte
(HLalgp). The expression HLalgp in Section 19(1) of the Ain, 2003 has been
purposefully employed debarring the Adalat from considering the defendants case.
The above analysis on the different provisions of the Ain, 2003, which had been carried out in
an effort to lay down a workable statutory interpretation, leads us to take a view that the
meaning of the expression qmgejk BlS h Shh employed in Section 6(4) of the
Ain, 2003 is that the plaint (made with affidavit) is to be considered and where necessary the
written statement (made under affidavit) is also to be considered. Hence, in Bangla the
following expression qmgej k BlS Hhw kbkb r hhcl qmgejk
Shh would sound more appropriate.

Section 19(1) of the Artharin Adalat Ain, 2003:

Whether the Artharin Adalats should go for ex-parte disposal;

From the language employed in Section 19(1) of the Ain, 2003, the literal meanings of the
language gives us two situations, namely; on the date of hearing if the defendant does not
register his/her presence before the Adalat by filing Hazira (Av`vjZ AbycwZ _vwKj)
or if after recording his/her presence in paper, s/he is found absent when the case is taken up
for hearing (WvwKqv weevw`K DcwZ cvIqv bv Mj), to proceed towards
disposal of a case exparte. However, the spirit that derives from the provision of Section
19(1) of the Ain, 2003 is that if the Adalat finds that the manner and style of conducting the
case by the defendant is to avoid or refrain from hearing (bvbx bv Kiv), the Adalat should
go for exparte disposal of the suit.

Section 19(2) of the Artharin Ain, 2003:

The Legislature has eased the task of restoration of an Artharin suit for an alleged loan-
defaulter by incorporating the above provisions. Because of the percentage of deposit being
only 10% of the decretal amount, the timelimitation of filing the application being sufficient
(30 days from the date of knowledge of passing the exparte decree plus further 15 days for
deposit) and the mode of payment being flexible, for, it is permissible to pay in cash or
submit bank draft, pay order, cheque and any other negotiable instrument, it would not be
irrational to view these conditions as affordable for an aggrieved party.

Section 41 of the Artharin Ain, 2003:

No writ is maintainable against a decree or post-decree order passed by Artharin
Adalats:

33
It is the clear intention of the Legislature that a party to an Artharin Suit if aggrieved by a
decree, must prefer an appeal. Since the Ain, 2003 is a special law with an overriding
provision over other laws and has prescribed a special procedure, there is no scope to
bypass the appellate forum, if the forum under Section 19(2) of the Ain,
2003 against an exparte decree is already not availed of by the party.
About 10 (ten) years ago, our Apex Court in the case of BADC Vs Artharin Adalat 59
DLR(6) urged the learned Advocates of this Court to be susceptive in filing a writ petition
against any decree of the Artharin Adalat. But unfortunately the learned members of the Bar
are coming up with the said writ petitions indiscriminately and thereby causing wastage of
valuable time of this Court which is overwhelmingly overburdened with huge backlog of
cases.

Writ is maintainable against a pre-decree order passed by Artha rin Adalat.

The only exception is that before passing the decree, if a party to an

Artharin Suit feels aggrieved by an order, writ jurisdiction may be invoked
as has been held in the case Sonali Bank Ltd Vs Asha Tex International 20
BLC 185.

For time-barred Artharin Cases, with 50% deposit of the decretal amount, a writ
petition may be entertained:

However, when an aggrieved party to an Artharin suit, when comes with

clean hands and his move is a bonafide one directed at examining a clear-
cut factual issue or legal point and not to frustrate the Artharin suit, and
files a writ petition by making a 50% down payment of the decretal
amount to the lender Bank/financial institution and furnishes detailed
reasons for not being able to prefer an appeal within the prescribed time,
in the aforesaid rarest of rare situations, this Court by exercising its
special jurisdiction under Article 102(2)(a)(ii) of the Constitution may
entertain the application, for, being barred by limitation there is no other
forum for the aggrieved party.

Suggestions for Artharin Adalats of Bangladesh:

The overall suggestion for the Adalat is that the Ain, 2003 is aimed at
expeditious disposal of the Banks/Financial Institutions claim for recovery
of money which is, in fact, the money of the State. If the Adalat, after
putting its best effort to serve the notice upon the defendant/s, is satisfied
that the notice has been served properly, it should proceed towards the
disposal of the suit. The Adalat should bear in mind that while there are
unscrupulous defendant/s to delay the disposal of the Artharin suits and
thereby frustrate the scheme of the Ain, 2003, however, there are also
bonafide defendant/s who might be victimised by the Adalats
inconsiderate hurriedness. The Adalat being in a better position to assess
the above issues/factors from the manner and style of conducting the
case by the defendant-side, it should pass appropriate order as per the
demand of the circumstances invoking its inherent power under Section
57 of the Ain, 2003.

34
The bottomline for the Adalat is to ensure fair justice for the parties to the
suit and, in doing so, when the Adalat shall endeavour to protect the
interest of a clean and bonafide defendant, the Adalat shall also not allow
the cunning loandefaulters to abuse the process of the Adalat. To save a
vulnerable defendant from the unreasonable demand of the
Banks/Financial Institutions and also to save the defendants property
from selling at a shockingly low-price, which very often takes place in
connivance with the staff of the Bank/Financial Institution and the
concerned Court staff, if needed, the Adalat may exercise its inherent
power recording the detailed reasons to substantiate its order.

Observations for Law Commissions:

The Commission may make the following proposals to the
Legislature;
(1)In order to remove the ambiguity in the phrase njdbvgvhy
AviRx ev Reve, the same may be replaced by the following
expression njdbvgvhy AviRx Ges h_vh_ weev`xi njdbvgvhy
Reve with an
Explanation of the word h_vh_ to be incorporated
underneath of the Sub-Section 6(4) of the Ain, 2003. h_vh_
means when the Adalat is required to dispose of an Artharin Suit
under the provisions of Section 19(6) of the Ain, 2003 in the
absence of the plaintiff and defendant, it shall consider the case
of the defendant as well, if the written statement (made under
affidavit) and any other documents have been filed.
(2)The word GKZidvmy, as occurs in section 19(1) of the Ain,
2003 should be given a definition clarifying that when the
defendant upon appearing in the suit files written statement and
after framing issue does not attend hearing, the Adalat shall
consider only the case of the plaintiff and ignore the written
statement and issues framed.
(3)Section 19 (1) of the Ain, 2003 should prescribe two more
reasons for proceeding with exparte disposal. The first reason
should be aviv 7 Gi Kvh g mb nIqvi ci hw` cieZx
wbav wiZ ZvwiL weev`x bv Avm and, thereafter, the present
two reasons would come and, then, the last reason should be
incorporated in the following phrase gvgjvi h Kvb chv q hw`
weev`x cici wZb evi mgqi Ave`b Ki.

Observation for JATI:

We further feel that the Judicial Administration Training Institute (JATI)
should undertake a training program for the learned judges who are
presiding over the Artharin Adalats with an aim to familiarize them with
the interpretation of the different provisions of the Ain, 2003 so as to
ensure that all the Adalats of the land use and take uniform meaning of
the provisions of the Ain, 2003 and thereby help minimize preferring
appeal or filing writs against the orders passed by them.

35
Judgment

MUHAMMAD KHURSHID ALAM SARKAR, J:

This Rule was issued calling upon the respondents to show cause as to
why the exparte decree dated 22.04.2012, passed by the Artha Rin Adalat,
4th Court, Dhaka in Artha Rin Suit no. 124 of 2010, should not be declared
to have been passed without lawful authority and is of no legal effect.

Succinctly, the facts of the case, as stated in this writ petition, are that on
04.08.2010, the ICB Islami Bank Ltd (hereinafter referred to as respondent
no. 2 or the Bank) as plaintiff instituted Artharin Suit no. 124 of 2010
against the present petitioner impleading him as defendant for realization
of the Banks loan of Tk. 8,10,09,374/- (eight crore ten lacs nine thousand
three hundred and seventy four). The petitioner-defendant, upon receipt of
the summons, appeared before the Artharin Adalat (hereinafter referred to
as the Adalat) on 03.11.2010 and, then, on 09.03.2011 he filed a written
statement. Thereafter, a mediator was appointed by the Adalat on
28.03.2011, and 31.05.2011 was fixed for submission of the report by the
Mediator. Thereafter, on 24.08.2011 the issues for the suit were framed,
fixing 25.09.2011 for peremptory hearing. On 20.03.2012 the P.W.1 Abu
Jafar gave his deposition before the Adalat and 10.04.2012 was fixed for
further hearing when the petitioner made a prayer for adjournment of the
hearing, but the Adalat rejected the prayer and ordered that the exparte
judgment and decree shall be pronounced on 22.04.2012. On the said
scheduled date for pronouncement of exparte judgment and decree, the
petitioner came up with an application for recalling the previous order, by
which the date for delivery of exparte judgment and decree was ordered.
But the Adalat rejected the petitioners application and decreed the suit
exparte.

Being aggrieved with the said order of exparte judgment and decree dated
22.04.2012, the petitioner by invoking Article 102 of the Constitution
approached this Court and obtained the instant Rule.

The Rule is contested by the Bank (respondent no. 2) through filing an

affidavit-in-opposition containing typical general denials to the statements
of the writ petition. The Banks core contention is that the petitioners
intention was to protract disposal of the suit by making prayer for
adjournments one after another before the Adalat and the suit has rightly
been decreed exparte.

Mr. S. N. Goswami, the learned Advocate appearing for the

defendantpetitioner, takes us through the impugned judgment and decree

36
dated 22.04.2012 intandem with the plaint, written statement and the
application for recalling the order fixing the date of delivery of exparte
judgment and submits that the impugned exparte judgment and decree has
been passed by the Adalat without applying its judicial mind inasmuch as
since on the same day the petitioner filed the application for recalling the
previous order with an expectation to enable him deducing his deposition,
the Adalat ought to have entertained and allowed the application. He
terms the Adalats exparte judgment and decree to be an outcome of its
whimsical and arbitrary thoughts and actions given that since the said
application was filed on the same day with a prayer for cross-examining
the D.W.1, the Adalat could have adjudicated upon the suit justly on the
basis of the witnesses deposition and cross-examination. He refers to the
order portion of the impugned exparte decree and submits that the
impugned order has been passed by the Adalat mechanically without
discussing the averments of the plaint, written statement and the
contention of the deposition made by the PW 1. In an effort to
substantiate his submissions on this point, he places provision of Section
6(4) of the Artha Rin Adalat Ain, 2003 (Ain, 2003) and submits that
whenever any Adalat would consider to pass an exparte decree, it is
incumbent upon the Adalat that it shall go through the averments made in
the plaint and the written statement and also examine the documents
submitted by the parties. He alleges that the Adalat, without going
through the plaint, the written statement and without looking at the
documents and papers submitted before it, hurriedly disposed of the case
by pronouncing an exparte decree simply by making a cursory findings that
those have been considered. In support of his above submissions, the
learned Advocate for the petitioner refers to the cases of Pabna Mental
Hospital Vs Tossadek Hosain & others 13 BLC(AD)91, Rupali Bank Ltd and
others Vs Tafazal Hossain and others 44 DLR (AD) 260 and Arfanuddin
Akand and another Vs Artharin Adalat 15 BLT(HCD) 243.

With regard to the issue of maintainability of this writ petition on the

ground of bypassing the appellate forum, Mr. Goswami refers to the case
of (i) Collector of Customs, Chittagong Vs M. Hannan 10 BLD (AD) 216, (ii)
Tafijul Huq Sarker Vs Bangladesh 4 MLR (AD) 19, (iii) Bangladesh Vs Iqbal
Hasan Mahmud Tuku 60 DLR (AD) 147 and (iv) Mayor, Chittagong City
Corporation Vs Md. Jahangir Faruk and other 14 BLT (AD) 24 and submits
that in spite of the availability of forum of appeal, the present writ petition
is to be held maintainable on the strength of the ratio laid down in the
afore-referred cases.

By making the aforesaid submissions, the learned Advocate for the

defendantpetitioner prays for making the Rule absolute.

37
Per contra, Mr. Mohammad Saiful Karim, the learned Advocate appearing
on behalf of respondent no. 2 (plaintiff), at the very outset, places the
provisions of Section 19 (2), 19(3) & 19(4) of the Ain, 2003 and submits
that the writ petition is not maintainable as the petitioner did not avail
himself of an opportunity for restoration of the suit by depositing 10% of
the decretal amount within 30(thirty) days before the concerned Adalat
No. 4, Dhaka. He next reads Section 41 of the Ain, 2003 and submits that
he had also the option to prefer an appeal against the impugned judgment
and decree and could have agitated all the issues before the appellate
Court. By taking us through the order sheets of the Adalat, he seeks to
impress upon this Court that the petitioner was never willing to proceed
with the trial of the suit as he persistently tried to prolong the disposal of
the suit and finally when the learned Judge of the Adalat came to realise
the ill motive of the cunning petitioner as to dillydallying the disposal of
the suit, the concerned Adalat has rightly passed the exparte decree and,
therefore, he submits that there is no illegality in passing the impugned
order.

In support of his submissions as to non-maintainability of this writ petition,

he refers to the following cases; (i) Zahirul Islam Vs National Bank 46 DLR
(AD) 191, (ii) Gazi M. Towfiq Vs Agrani Bank 54 DLR (AD) 6, (iii) BADC Vs
Artharin Adalat 59 DLR (AD) 6, (iv) ACC Vs Enayetur Rahman 64 DLR (AD)
14 and (v) Sonali Bank Ltd Vs Asha Tex International 20 BLC 185.

We have heard the learned Advocates for both the sides at length,
perused the writ petition, the affidavit-in-opposition, examined the
materials on record as well as the relevant laws and decisions, and
considered the same very carefully.

The apparent legal issues require to be considered by this Court are;

whether the Adalats decision to dispose of the suit exparte is lawful,
secondly whether the petitioners allegation against the trial Court as to
non-consideration of his written statement as well as the issues that were
already framed is true, in other words, whether the trial Court has failed to
apply the provisions of Section 6(4) of the Ain, 2003 in passing the
impugned exparte decree and thirdly whether in the backdrop of operation
of the provisions of Sections 19(2) and 41 of the Ain, 2003, the present
writ petition is maintainable.

Let us first take up the above first issue as to the lawfulness of the order
by which the Adalat fixed the suit for exparte hearing. In this case, it is
evident from the order-sheets that the very pattern of handling the suit by
the defendant compelled the Adalat to record the following order on
10.04.2012;

38
 27---10/4/12 --- A` Gd.GBP Gi Rb w`b avh AvQ| ev`xc
nvwRi| weev`xc GK `iLv `vqi Kwiqv ewbZ Kvib mgq
cv _b v KwiqvQb| bjvg| bw_ ch vjvPbvq `Lv hvq
weev`xc BwZc~e GKvwaKevi mgq bqvq, mgqi cv _b
v bvgyi| GbB cywZi wb`k (wf.I.wc)| cieZx Z
weev`xc Kvb c`c bq bvB| AvMvgx 22/8/12 wLt ZvwiL
GKZidv bvbx| (underlined by us)

The above order shows that the defendants application for adjournment
was rejected as he was trying to protract the disposal of the suit by
seeking repeated adjournments on different occasions and, at the stage of
giving oral evidence by the DW, when the Adalat took up the suit but the
defendant-side did not participate in the hearing of the case (cieZx Z
ev`xc Kvb c`c bq bvB), the matter was fixed for exparte judgment.
Given the above scenario, we are to look at Section 19 of the Ain,

2003, which regulates the aspect of exparte disposal of an Artharin

Suit. dl-19z HLalg X pfLa hdez-
(1) jjml eel Se dk Le alM hhc Bcma Aefqa
bLm, Lwh jjm eel Se Nqa qChl fl XLu hhcL
Efqa fJu e Nm, Bcma jjm HLlag p ef Llhz

From the language employed in Section 19(1) of the Ain, 2003, the literal
meanings of the language gives us two situations, namely; on the date of
hearing if the defendant does not register his/her presence before the
Adalat by filing Hazira (Av`vjZ AbycwZ _vwKj) or if after recording
his/her presence in paper, s/he is found absent when the case is taken up
for hearing (WvwKqv weevw`K DcwZ cvIqv bv Mj), to proceed towards
disposal of a case exparte. However, the spirit that derives from the
provision of Section 19(1) of the Ain, 2003 is that if the Adalat finds that
the manner and style of conducting the case by the defendant is to avoid
or refrain from hearing (bvbx bv Kiv), the Adalat should go for exparte
disposal of the suit.

Let us now see whether the conduct of the petitioner in dealing with the
suit compelled the Adalat to go for exparte disposal. After scrutinizing the
order-sheets of the suit, it transpires that the suit was registered on
04.08.2010 and when this petitioner was not appearing before the
concerned Adalat, on 04.10.2010 by order no. 4 the Adalat fixed
20.10.2010 for pronouncing exparte decree of the suit. However, on
03.11.2010, the petitioner entered his appearance and filed an
application, having prayed for time to submit written statement, which
was allowed by the Adalat and, consequently, the suit was withdrawn from

39
the status of exparte disposal. Since then, the petitioner sought for time on
this or that plea on 3 (three) occasions (on 28.11.2010, 13.01.2011 &
08.02.2011) for filing written statement. Thereafter, in between the time
of filing of the written statement (on 09.03.2011) and the framing of
issues (on 24.08.2011), the petitioner applied for time on 15.06.2011 and
19.07.2011 and then the Adalat fixed a date for peremptory hearing on
15.11.2011, on which date the Bank was ready for hearing with its
witness, but due to the petitioners adjournment application the hearing
did not take place. Thereafter, on 26.02.2012, when the petitioner prayed
for adjournment, the Adalat allowed it with a cost of Taka 2000/- and on
20.03.2012 the Adalat took deposition of the PW1 fixing 10.04.2012 for
further hearing. This time when the petitioner again came up with an
application for adjournment, the Adalat listed the suit for exparte disposal.
Thus, the Adalat, in fact, showed leniency to the petitioner in the light of
the fact that, as per the provisions of Sections 16 & 17 of the Ain, 2003,
although it is directory, the suit ought to have been disposed of within 170
days (under Section 16 # 20 days + under Section 17 # 150 days) from
the institution of the suit.

Thus, it appears that the petitioner was trying to delay the disposal of the
suit from the very beginning and the Adalat decided to go for exparte
disposal when the petitioner was coming up with adjournment applications
with an intention to refrain from participating in the hearing of the case. It
is the legal duty of the trial Court that once deposition of any witness is
taken, it shall continue with the hearing of the suit without allowing any
adjournment application. Therefore, we do not find any illegality in
proceeding with the exparte disposal of the suit by the Adalat and,
accordingly, we hold that the Adalat rightly fixed 22.04.2012 for exparte
judgement.

After the foregoing conclusion as to the correctness of the Adalat in going

for disposing of the suit exparte, we may now undertake the examination of
the second issue as to whether the Adalat committed an error in not
considering the written statement and in not disposing of the suit on the
basis of the issues that had already been framed.

In order to examine the above issue, it would be profitable if we look at

the impugned exparte judgement which is reproduced below:

22/4/12--- A` GKZidv bvbxi Rb w`b avh AvQ| ev`x c I

weev`x c nvwRi| weev`x c njdbvgv mn GK `iLv `vqi
Kwiqv gvKgv GKZidv nZ Dvjb KiZt mvxK Riv Kivi
AbygwZ cv _b v KwiqvQb|

40
 weev`xc A_FY Av`vjZ AvBb 2003 Gi 57 Zrmn 151 avivi weavb
gZ njdbvgv mn Aci GK `iLv `vqi Kwiqv ewbZ Kvib
Bmjvgi kixqv gvZveK (evswKs) Fb Av`vq Kivi Rb ev`xcK
wb`k c`vbi cv _b v KwiqvQb| bw_ ck Kiv njv| bjvg|
bw_ ch vjvPbvq `Lv hvq h, 1bs weev`x c MZ 15/11/11
wL. ZvwiL, 12/1/12 wL. ZvwiL, 26/2/12 wL. ZvwiL Ges me
kl 10/4/12 wL. ZvwiL mgq wbqQb| A` `iLv `vqi Kwiqv
GK-Zidv bvbx nZ Dvjbi cv _b v KwiqvQb| BwZga
AvBb wbav wiZ mgq AwZevwnZ nIqvq `iLv bvgyi Kiv
njv| ev`x c wdwiw viv

`vMRc `vwLj KwiqvQb| bw_ ck Kiv njv| bw_ GKZidv bvbxi

Rb MnxZ njv| ev`xci we AvBbRxexi ee bjvg| Bnv Dj-
L h, A_F Y Av`vjZ AvBb 2003 Gi 6(4) avivi weavb ev`xc
gvKgv `vqiKvj AviwR I KvMRvw`i mv_ GwdWweU `vwLj
Kij gvKgv GKZidv ev ZvrwbK wbwi Kvb mvxK
cixv ewZiK njdbvgvhy AviwR `vwjwjK cg vbvw` wek-lb
Kwiqv ivq ev Av`k c` vb Kiv hvq| ev`xc GwdWweU mn
AviwR `vwLj KiQb|

A gvKgvi AviwR, ev`x ci `vwLjx KvMRc Ges bw_ chv

jvPbv Kijvg| ev`x evsKi `vex AvBbvbyMfve cg vwbZ nq|
dj ev`xc cv _xZ cw ZKvi cvBZ nK`vi| c` KvU wd
mwVK|

AZGe,

Av`k nq h,

G gvKgvwU weev`xMYi wei GKZidv m~ LiPv mn MZ

30/6/10 wL. ch 8,10,09,374/- (AvU KvwU `k j bq nvRvi
wZbkZ Pyqvi) UvKvi wWw njv| 01/07/10wL. ZvwiL _K
UvKv Av`vq bv nIqv ch ev`xc A_F Y Av`vjZ AvBb 2003
Gi 50(2) avivq ewYZ my`mn cv ne| weev`xcK ivq cP
vii 60 (lvU) w`emi ga wWxKZ UvKv my` mn ev`xci
AbyK~j cwikvai wb`k `qv njv| e_Z vq ev`x c Av`vjZ
hvM AvBb I cwZ gvZveK wWxKZ UvKv Av`vq Ki wbZ
cvie|

gvKgv `vqi cieZx weev`xc Kvb UvKv Rgv c` vb Kij,

ev`xcK D UvKv ev` w`q cieZx Kvh g Mn Y Kivi
wb`k `qv njv|

Avgvi Kw_Z gZ gyw`Z I mskvwaZ| (underlined by us)

It is evident from the above-quoted impugned judgement and order that

the learned Judge of the Adalat heard the defendant sides two
applications; one is for withdrawing the suit from the list under the
heading of delivery for judgment and the other application is for

41
realization of loan under the Sharia Law, both of which were filed under
Section 57 of the Ain, 2003 read with Section 151 of the Code of Civil
Procedure (CPC), and the same were rejected by the Adalat on the ground
that the applications were filed for delaying the disposal of the suit. Then
the Adalat disposed of the case on consideration of the plaint made under
affidavit and the documents filed therewith. It is, however, evident that
the Adalat did not consider the written statement, nor did it dispose of the
suit upon examining the issues which the Adalat had framed upon
receiving the written statement.

Now, the pertinent question comes up for examination is whether the

Adalat was under a legal duty to consider the written statement of the
defendant-petitioner, in a situation, when he failed to participate in the
hearing of the case or purposefully refrained from attending the hearing of
the case.

To have a resolution of the above query, we need to look at Section 6(4) of

the Ain, 2003, which is quoted below :

6z hQl fa- (1), (2), (3) ................................................

(4) HC BCel Ade AbGZ Bcma jjm efl r Ef-dl (2) J (3)-Hl
hde
Aeku pwk qmgej (Affidavit) jML pr (substantive
evidence) qph Ne qCh, Hhw Bcma Le jjml
HLalg h avreL efl r Le prL flr halL, Lhm
HClf qmgej-kJ BlS h mMa Shh J pwr cmmL
fjec hnoZ Llu lu h Bcn fce Llhz
(underlines added)

Our unambiguous understanding on the above provisions of the law is that

Section 6(4) of the Ain, 2003 mandates the Adalat to dispose of an
Artharin suit exparte or instantly by simply considering the plaint (prepared
under affidavit) or written statement (made with affidavit) and the
documents filed therewith, upon treating all of them as substantive
evidence and, thus, pleadings with affidavits is the focal-point of this
provision and any formal examination of witnesses has got less emphasis
in the Ain, 2003.

Whether in the expression qmgejk BlS h Shh incorporated in

Section 6(4) of the Ain, 2003, the word h (or) is to be read as a
conjunctive word or as a disjunctive word requires some examination and
discussion for effective disposal of not only of this Rule, but also of the
other cases with the similar background.

To carry out the above scrutiny, we need to look at the provisions of

Sections 6(4), 13 and 19(1) of the Ain, 2003 side-by-side, for, Section 6(4)

42
of the Ain, 2003 does not outline the procedure to be followed in a
situation requiring exparte disposal or instant disposal and it is Section 13 of
the Ain, 2003 which seeks to provide the grounds and procedures for
instant (ZvrwbK/Awej) disposal of an Artharin suit and Section 19 of
the Ain, 2003 outlines the reasons for taking up an Artharin suit for exparte
disposal and also the procedures to be followed.

We would quote only the provisions of Section 13 of the Ain, 2003 herein
under, as the other two Sections have already been embodied in this
judgment hereinbefore. Section 13 of the Ain, 2003 reads as under:

13| (1) weev`x KZK wjwLZ Reve `vwLj nIqvi cieZx Z avh
GKwU wbav wiZ ZvwiL Av`vjZ Dfq cK, hw` DcwZ _vK,
bvbx Kwiqv Ges AviwR I wjwLZ eYbv chv jvPbv Kwiqv
gvgjvi wePvh welq, hw` _vK, MVb Kwie; Ges hw` wePvh
welq bv _vK, Av`vjZ Awej ivq ev Av`k c` vb Kwie|

(2)Dc-aviv (1) G wbav wiZ ZvwiL, Kvb ev Dfq c hw`

AbycwZ _vK, Zvnv nBj Av`vjZ, AviwR I wjwLZ eYb v chv
jvPbv Kwiqv gvgjvi wePvh welq, hw` _vK, MVb Kwie; Ges
hw` wePvh welq bv _vK, Av`vjZ Awej ivq ev Av`k c`
vb Kwie|
(3)gvgjvi h Kvb chv q, wjwLZ eYb vq wKsev Ab Kvbfve
weev`x KZK ev`xi AvwRi ee x^ KZ nBqv _vwKj, Ges
Dic x^ KwZi wfwZ hic ivq ev Av`k cvBZ ev`x
AwaKvix, mic ivq ev Av`k cv _b v Kwiqv ev`x Av`vjZi
wbKU `iLv Kwij, Av`vjZ, ev`x I weev`xi ga we`gvb Acivci
wePvh welq wbwi Rb Acv bv Kwiqv, Dchy ivq ev
Av`k c` vb Kwie|
(4)gvgjvi bvbxi Rb avh c_ g ZvwiL A_ev gvgjvi h Kvb
chv q hw` Av`vjZi wbKU cZxqgvb nq h, cqi ga
NUbv A_ev AvBbMZ welq Kvb weev` bvB, Zvnv nBj, Av`vjZ
Awej ivq ev Av`k c` vb Kwiqv gvgjv Pyovfve wbw
Kwie|
(underlined by us)

From a concurrent reading of the aforesaid three Sections, it appears to us

that the expression qmgejk BlS h Shh incorporated in Section
6(4) of the Ain, 2003 has been used in the context of Le jjm HLalgp
h avreL efl r and, accordingly, we are to see whether the
expression qmgejk BlS h Shh relates only to a situation of exparte
disposal or only to a situation of instant disposal.

For application of the above expression in an exparte disposal situation,

when the word h (or) would be read as the disjunctive one, an
unworkable situation would arise for the Adalat. Because, in that event the
Adalat shall have to consider either the plaint only or the written

43
statement only in the backdrop of impossibility of disposal of a suit solely
on the basis of written statement. Furthermore, disposal of a suit solely
based on the written statement will render the provisions of Section 19(6)
of the Ain,

2003 nugatory. The said Section 19(6) of the Ain is quoted below:

19(6) Ab-GZ Bcma hQlde Le jjm, hcl Aefqa

h hba qa MlS Ll kCh e, Hhw HClf r Bcma, e
ba Efqfa LNSc flr Llu ee hnoZ jjm ef
Llhz

From a plain reading of the above law it appears that this provision
requires consideration of the plaintiffs case on merit, irrespective of the
fact as to whether the plaintiff is present in the Adalat or not. The
provision is about a situation where only the plaintiff is absent as reflected
in the words hcl Aefqa h hbal qaz. It further speaks of
ee hnoZ jjm ef Llh. From the practical view point, when the
plaintiff is absent or fails to appear, two situations, namely (i) the plaintiff
is absent but defendant is present or (ii) both the parties are absent,
would arise. Given that Section 19(6) of the Ain, 2003 is silent about
presence or absence of the defendant, an assessment is required to be
made to know the real intention of Section 19(6) on the Ain, 2003. The
straight-forward reply is that in both the situations, while it is mandatory
for the Adalat to consider the plaintiffs case on merit, for, Section 6(4) of
the Ain, 2003 dictates the Adalat to consider the plaint (made under
affidavit) and the documents, it is discretionary for the Adalat whether to
consider the defendants case or not. Our view is that in disposing of a suit
under Section 19(6) of the Ain, 2003, since there is no prohibition to
consider the defendants case in the event of the defendants absence,
the case of the defendant should also be considered, and not of the
plaintiff alone. However, when the defendant is present his case is also to
be considered either by way of production of formal evidence through
witness or without examination of witnesses as stipulated in Section 6(4)
of the Ain, 2003.
On the contrary, if the word h (or) employed in Section 6(4) of the Ain,
2003 is read as a conjunctive word in an exparte disposal situation, it will
mean that even if the defendant is absent, the Adalat must consider both
the plaint and written statement making the provisions of Section 19(1) of
the Ain 2003 redundant, for, this Section requires exparte disposal
(HLalgp ) in the absence of defendant.
Similarly, when the expression qmgejk BlS h Shh in the context
of instant disposal situation, as occurs in Sections 6(4) (avreL efl

44
r) and 13(1), 13(2), 13(3) & 13(4) (Av`vjZ Awej ivq ev Av`k c`
vb Kwie) of the Ain, 2003, would be applied, the Adalat would face the
same dilemma, as discussed above in the event of exparte disposal, if the
word ev (or) is taken in the conjunctive sense or disjunctive sense.

Thus, apparently there is a bit of lack of clarity in the provisions of Section

6(4) of the Ain, 2003 and it has inevitably become a bounden duty for this
Court to interpret the provisions of Section 6(4) of the Ain, 2003 on the
touchstone of the scheme of the Ain, 2003 and, thereby, attribute a
cohesive meaning of it.

By Section 6(4) & 19(6) of the Ain, 2003 the Legislature has created a
device for the Adalat that if the parties to the Artharin suit fail to produce
witnesses for the purpose of proving their cases by way of formally stating
it on the witness box, as in an ordinary Civil Case, or they do not want to
face the hassle of attending the Court premise for giving evidence, they
will be allowed to prove their respective cases by way of submitting
documents. While Section 6(4) of the Ain, 2003 directs that in the event of
absence of the defendant, the Adalat would dispose of a suit upon
considering the plaint or/and written statement together with
documentary evidence, Section 19(6) provides that due to the plaintiffs
absence the Adalat cannot dismiss the suit, for, the law obliges the Adalat
to consider the merit of the plaint with affidavit and also the documents
filed in the Adalat.

The legislative intention behind enactment of this special law is to set up

special Courts for recovery of the Banks/Financial Institutions loan from
the defaulters. For achieving the target, the Legislature has sought to
incorporate a shortcut procedure in disposing of the Artharin Suits and
avoid lengthy procedures as being followed in the ordinary civil Courts.
With this aim, the Legislature has provided the procedure for the Adalat to
be followed in an exparte disposal scenario or instant disposal situation. An
exparte disposal may be done, both, before and after receiving the written
statement. If the suit is decreed exparte before receiving the written
statement, then there is no difficulty in reading and applying the
provisions of Sections 6(4) & 19(1) of the Ain, 2003. However, once the
Adalat receives the written statement and the defendants inaction or
failure to pursue the suit compels the Adalat to opt for exparte disposal,
then the question comes for consideration as to whether the Adalat should
consider the written statement.

When in an Artharin suit the defendant-side would not participate in the

hearing, what would the Adalat do with the written statement? The normal
presumption would be that by his non-participation in the hearing he was

45
not placing before the Adalat his claims, which were raised in the written
statements. And keeping this scenario in mind, the Legislature made the
provision in Section 19(1) of the Ain, 2003 for the Adalat to dispose of the
suit exparte (HLalgp). The expression HLalgp in Section 19(1) of
the Ain, 2003 has been purposefully employed debarring the Adalat from
considering the defendants case.

The above analysis on the different provisions of the Ain, 2003, which had
been carried out in an effort to lay down a workable statutory
interpretation, leads us to take a view that the meaning of the expression
qmgejk BlS h Shh employed in Section 6(4) of the Ain, 2003 is
that the plaint (made with affidavit) is to be considered and where
necessary the written statement (made under affidavit) is also to be
considered. Hence, in Bangla the following expression qmgej k BlS
Hhw kbkb r hhcl qmgejk Shh would sound more
appropriate.

It is a finding of fact, this Court already arrived at hereinbefore by

examining the background-events, that the petitioners failure to
participate in the hearing led the Adalat to proceed towards exparte
disposal under Section 19(1) of the Ain, 2003. The facts of the case, thus,
show that the Adalat has exercised its jurisdiction as a competent Court,
so far the framing of issues and the passing of the exparte decree in the
absence of the defendant are concerned and, therefore, we do not find
that the Adalat had no jurisdiction to pass the impugned order and, thus,
the ratio of the cited case of Pabna Mental Hospital Vs Tossadek Hossain &
others 13 BLC (AD) 91, wherein the concerned State-functionary had
exceeded its jurisdiction, and the case of Rupali Bank Ltd Vs Tafazal
Hossain 44 DLR (AD) 260, wherein the civil Court had tried the suit without
having jurisdiction, has no manner of application in the present case, and
the case of Md. Arfanuddin akand & another Vs Artharin Adalat and others
15 BLT 243 is not applicable here in this case, for, the decision arrived at
by the High Court Division is per incurium inasmuch the Court missed
examination of Section 19 (1) of the Ain, 2003. In the instant case, thus,
the Adalat was not under a legal duty to consider the case of the
defendants as made out in the written statements or the issues that had
been framed earlier.

Let us now deal with the issue of maintainability of this writ petition. In
order to examine the said issue, we need to look at the provisions of
Section 19(2), 19(3) &

19(4) of the Ain, 2003 which is quoted below:

46
 19 (2) Le jjm HLalg p X qCm, hhc E
HLalg Xl alMl Abh E HLalg X pfL AhNa
qChl 30 (n) chpl jd, Ef-dl (3) Hl hde pfr, E
HLalg X lcl Se clM Lla flhez
19 (3) Ef-dl (2) Hl hde Aeku clM cMml r
hhcL E clM cMml alMl flha 15 (fel) chpl jd
XLa Abl 10% Hl pjfljZ VL hcl chl pC fljZl
Se Lalf eNc pwn BbL fae, Abh Sjealf
hwL XgV, f-AXl h Ae Le fLl eNcuekN heju
cmm (Negotiable
Instrument) BLl Sjea qph Bcma Sjce Lla qChz
19 (4) Dc-aviv (3) Gi weavbgZ wWxKZ A_I 10% Gi
mgcwigvY UvKv Rgv`vbi msM msM `iLvwU gyi
nBe, GKZidv wWx i` nBe Ges g~j gvgjv Dnvi bi I
bw_Z cybixweZ nBe, Ges Av`vjZ H gg GKwU
Av`k wjwce Kwie; Ges AZtci gvgjvwU h chv q GK
Zid wbw nBqvwQj, H chv qi AeewnZ c~ee Zx
chv q cwiPvwjZ nBe|

It appears that the Legislature has eased the task of restoration of an

Artharin suit for an alleged loan-defaulter by incorporating the above
provisions. Because of the percentage of deposit being only 10% of the
decretal amount, the time-limitation of filing the application being
sufficient (30 days from the date of knowledge of passing the exparte
decree plus further 15 days for deposit) and the mode of payment being
flexible, for, it is permissible to pay in cash or submit bank draft, pay
order, cheque and any other negotiable instrument, it would not be
irrational to view these conditions as affordable for an aggrieved party.

In the case at hand, the impugned exparte judgment and decree has been
passed on 22.04.2012 and the petitioner could have filed an application
for restoration of the suit within 22.05.2012 with the opportunity of
depositing the 10% of the decretal amount within next 15 (fifteen) days of
filing the aforesaid application. The petitioner, instead of availing himself
of the above route, opted to file the instant writ petition and that too was
done after 1 (one) year of passing the impugned exparte judgment and
decree. It is evident from the statement of the Bank that the Execution
Case no. 110 of 2012, having been started on 24.09.2012, has its final
disposal still awaiting and, in fact, issuance of the instant Rule has halted
the further process of the Execution case, albeit there is no direction or
injunction restraining its process.

47
The petitioner could also have sought remedy in the form of preferring an
appeal under Section 41 of the Ain, 2003 within the time as prescribed
therein. The appellate Court is competent to examine any factual issue
and law point, including the issue of passing the impugned judgment and
decree exceeding its jurisdiction, and take fresh or further evidence for
effective disposal of an appeal. However, the petitioner purposefully
refrained from availing himself of the aforesaid remedy. Section 41 runs as
follows:

dl-41z Bfm cul J ef pfLa hno hdez -(1)

jjml Le fr, Le AbGZ Bcmal Bcn h X l pwr qC-
m, kc XLa VLl fljZ 50 (fn) mr VL Afr AdL qu,
aq qCm Ef-dl (2) Hl hde pfr, flha 30 (n) chpl jd
qCLV hiN, Hhw kc XLa VLl fljZ 50 (fn) mr
VL Abh acAfr Lj qu, aq qCm Sm SS Bcma Bfm Lla
flhez
(2)BfmLl, XLa VLl fljZl 50% Hl pjfljZ VL hcl chl
BwnL Lalf eNc Xcl BbL fae, Abh hcl
ch Ll e Llm, Sjealf X fceLl Bcma Sj L
lu Elf Sjl fjZ clM h Bfml jjl pqa
Bcma cMm e Llm, Ef-dl (1) Hl Ade Le Bfm Lkb
Nqa qCh ez
(3)Ef-dl (2) Hl hde pJ, hhc-cuL Cajd 19(3) dll hde
ja 10% (cn nawn) fljZ VL eNc Abh Sjea qph Sj L
lu bLm, A dll Ade Bfm cull r E 10% (cn nawn)
VL Efl-EMa 50% (fn nawn) VL qCa hc qChz
(4), (5), (6).....................................................................

It is the clear intention of the Legislature that a party to an Artharin Suit if

aggrieved by a decree, must prefer an appeal. Since the Ain, 2003 is a
special law with an overriding provision over other laws and has
prescribed a special procedure, there is no scope to bypass the appellate
forum, if the forum under Section 19(2) of the Ain, 2003 against an exparte
decree is already not availed of by the party.

The only exception is that before passing the decree, if a party to an

Artharin Suit feels aggrieved by an order, writ jurisdiction may be invoked
as has been held in the case Sonali Bank Ltd Vs Asha Tex International 20
BLC 185. However, after passing a decree, if the party of an Artharin Suit,
becomes aggrieved by any type of order, there is no forum other than
preferring an appeal under Section 41 of the Ain, 2003.

The cases referred to by the learned Advocate for the petitioner are
factually different in nature inasmuch as those did not arise out of any

48
order or decree of an Artharin Suit. In the celebrated case of the Collector
of Customs Vs Mr. A. Hannan 10 BLD (AD) 216, the appellate forum was
held to be not equally efficacious as the provision requires deposit of
50% of the penalty. But in the Artharin suits the required deposit is of the
decretal amount and it is the money of the Bank/financial institution, as
opposed to levying any duty or penalty. In the case of Tafijul Huq Sarker Vs
Bangladesh 4 MLR (AD) 19, the appellate forum for a terminated Mutawalli
was held to be not equally efficacious as the precondition for preferring an
appeal is to hand over the charge first and, thus, the fact being
completely different bypassing the appellate forum was held to be
justified in the said case. The ratio laid down in the case of Bangladesh Vs
Iqbal Hasan Mahmeed Tuku 60 DLR (AD) 147 has been overruled by the
Apex Court by their decision passed in the case of ACC Vs Enayetur
Rahman 64 DLR (AD) 14. The case of Mayor, Chittagong City Corporation
Vs Md Jahangir Faruk and others 14 BLT (AD) 24 is about dismissal of the
writ petitioner who directly had invoked writ jurisdiction without preferring
an appeal to the appellate authority and the said appellate authority,
being an Administrative higher authority, the forum cannot be termed to
be an equally efficacious forum in the backdrop of apparent ex-facie
illegality in the dismissal order which was passed without carrying out any
departmental proceeding. Thus, none of the said cases ratio is applicable
in this case.

Therefore, the writ petition is not maintainable, for, there are alternative
efficacious remedies available to the petitioner. Our above view gets
support from the principles laid down in the cases of (i) Zahirul Islam Vs
National Bank 46 DLR (AD) 191, (ii) Gazi M. Towfiq Vs Agrani Bank 54 DLR
(AD) 6, (iii) BADC Vs Artharin Adalat 59 DLR (AD) 6, (iv) Oriental Bank Vs
AB Siddiq 13 BLC (AD) 144, (v) ACC Vs Enayetur Rahman 64 DLR (AD) 14
and (vi) Sonali Bank Ltd Vs Asha Tex International 20 BLC 185.

The petitioner has resorted to a wrong forum by invoking the writ

jurisdiction of this Court. He cannot now avail himself of the remedy under
Section 41 of the Ain, 2003, for, evidently he is out of time. Had this writ
petition been filed within 30 (thirty) days of the decree, he could have
enjoyed the benefit of the provisions of Section 14 read with Section 29 of
the Limitation Act as was viewed by a Division Bench of the High Court
Division in the case of Sharifa Begum Vs Bangladesh (Writ Petition no.
15331 of 2012) (unreported). However, it is our view that when an
aggrieved party to an Artharin suit, when comes with clean hands and his
move is a bonafide one directed at examining a clear-cut factual issue or
legal point and not to frustrate the Artharin suit, and files a writ petition by
making a 50% down payment of the decretal amount to the lender
Bank/financial institution and furnishes detailed reasons for not being able

49
to prefer an appeal within the prescribed time, in the aforesaid rarest of
rare situations, this Court by exercising its special jurisdiction under
Article 102(2)(a)(ii) of the Constitution may entertain the application, for,
being barred by limitation there is no other forum for the aggrieved party.

Before parting with the judgment, we find it proper to have a survey on

the manner and style of handling the present case by the learned
Advocate for the petitioner and thereby make an assessment as to
whether he has performed his professional duty in conformity with the
norms and etiquette of the legal profession in the backdrop of the
Appellate Divisions following observations made at Para 21 in the case of
BADC Vs Artharin Adalat 59 DLR(AD) 6;

Before we part, we would like to put it on record that in spite of the

fact that the law in the matter has been settled long back,
petitions are unnecessarily filed under Article 102 of the
Constitution challenging the judgment of the Artharin Adalat
without making any case covered under the aforesaid Article,
not to speak of any ground touching fundamental rights of the
petitioner. As a result, the superior Courts are wasting public
time which should be discouraged by all concerned including
the learned members of the Bar, who are as well officers of the
Court.

About 10 (ten) years ago, our Apex Court urged the learned Advocates of
this Court to be susceptive in filing a writ petition against any decree of
the Artharin Adalat. But unfortunately the learned members of the Bar are
coming up with the said writ petitions indiscriminately and thereby
causing wastage of valuable time of this Court which is overwhelmingly
overburdened with huge backlog of cases.

More so, after obtaining the Rule on 29.04.2013 no step was taken by the
petitioner to get the matter heard. It is only when the matter was sent to
this Bench by the concerned office of this Court (Writ Section) to dispose
of the Rule, did the learned Advocate for the petitioner appear on
19.08.2015 before this Court and the matter was fixed for hearing.
However, since the date of fixing the matter for hearing, the learned
Advocate for the petitioner was not appearing before this Court and,
consequently, the matter was placed in the Daily Cause List under the
heading For Order. Thereafter, on the verbal promise of the learned
Advocate for the petitioner that he shall assist this Court in disposing of
the Rule, the matter was again taken back in the category of the items
under the column For Hearing. Since then, every day at the Mentioning
Hour the learned junior Advocate attached to Mr. S.N. Goswami was

50
coming up with a prayer to pass over the item on the ground of Mr.
Goswamis engagement in the Appellate Division and eventually the
matter was heard-in-part and adjourned to 15.09.2015. Thereafter, the
learned Advocate for the petitioner took adjournment on several occasions
by sending his junior on his personnel ground. In the meantime, the
jurisdiction of this Bench changed from writ matters to criminal cases and
the Honble Chief Justice, upon receiving administrative note from this
Bench, asked us to continue with the hearing of all the part-heard writ
matters in addition to exercising the criminal jurisdiction. Accordingly, for
nearly two weeks the matter was appearing in a separate Cause List and
when the learned Advocate for the petitioner was not turning up, this
Court informed the learned Advocate for the petitioner through the Banks
lawyer about this Courts intention to dispose of the Rule, whether or not
the learned Advocate for the petitioner attend this Court to make any
submissions. On 08.12.2015, Ms. Afsana Begum, the associate Advocate
of the learned Advocate for the petitioner, prayed for time on the plea that
Mr. Goswami wants to make some submissions on the issue of
maintainability of the writ petition and on 09.12.2015 when the matter
was taken up for hearing, neither the learned Advocate Mr. Goswami nor
his junior Ms. Afsana Begum complied with their promise to attend the
hearing and, under the circumstance, this Court fixed the next day for
delivery of judgment and on 10.12.2015 when this Court took up the case
for pronouncement of the judgment, unfortunately, no one was present,
not even his junior, to receive the judgment. However, on 10.12.2015
pronouncement of the judgment could not be finished due to ending the
working hour of the day and this Court had to adjourn the pronouncement
of the rest of the judgment. Today, (27.01.2016) when this Court is about
to accomplish the unfinished judgment, Ms. Afsana Begum, the learned
junior to Mr. Goswami, appeared and placed some decisions in support of
their argument on the issue of maintainability of this writ petition. The
above pattern of handling the case by the learned Advocate for the
petitioner amply suggests that the petitioner filed the instant writ petition
for delaying the execution process through abusing the process of this
Court and the above style of dealing with this case leads us to hold that
the petitioner managed to resort to this extreme extent of abuse of the
process of the highest Court with the assistance of the learned Advocate
for the petitioner for which both of them deserve to be penalised by
slapping exemplary costs to be paid from the pocket of the learned
Advocate for the petitioner in addition to ordinary statutory costs to be
paid by the petitioner, as was ordered in the case of Bandar Nagari
Bahumukhi Samabay Samity Ltd Vs Bangladesh 5 ALR-2015 (1) 194.
However, Given the fact that Mr. Goswami has showed this attitude for the
first time before this Bench, we refrain from passing any order of payment

51
 of costs from his pocket, as was done in the case of AKM Asaduzzaman Vs
Public Service Commission 4 ALR-2014(2)278. Accordingly, the petitioner
shall pay the costs to be imposed upon him hereinafter.

There is something more to pen through before we quit this judgment.

This is for the Artharin Adalats who are everyday dealing with the Ain,
2003 and, as a part of our obligation under Article 109 of the Constitution,
it would be an incomplete job for this Court if we do not prescribe their
tasks in clearer terms after making the above lengthy discussions and
analysis, which may seem to be cumbersome to the readers, on the
provisions of Sections 6(4), 13 and 19 of the Ain, 2003.

(i) In disposing of the exparte disposal of the Artharin suits, the Adalat must
record its reasonings in detail. If the exparte disposal is required for the
defendants non-appearance after complying with the provisions of
Section 7 of the Ain, 2003, the Adalat should give at least one chance to
the defendant to enable the latter to register its presence in the suit and
contest it.
(ii) Upon receiving the summons, when the defendant appears and seeks
adjournment for filing written statement, the Adalat should not allow more
than two adjournments and, accordingly, the Adalat should go for exparte
disposal if the defendant approaches for third adjournment without
submitting the written statement.
(iii) After filing the written statement and framing issues, when the date is
fixed for peremptory hearing, the Adalat should not allow more than two
adjournments and on the prayer for third-time adjournment for attending
hearing, the Adalat should dispose of the suit exparte.
The overall suggestion for the Adalat is that the Ain, 2003 is aimed at
expeditious disposal of the Banks/Financial Institutions claim for recovery
of money which is, in fact, the money of the State. If the Adalat, after
putting its best effort to serve the notice upon the defendant/s, is satisfied
that the notice has been served properly, it should proceed towards the
disposal of the suit. The Adalat should bear in mind that while there are
unscrupulous defendant/s to delay the disposal of the Artharin suits and
thereby frustrate the scheme of the Ain, 2003, however, there are also
bonafide defendant/s who might be victimised by the Adalats
inconsiderate hurriedness. The Adalat being in a better position to assess
the above issues/factors from the manner and style of conducting the case
by the defendant-side, it should pass appropriate order as per the demand
of the circumstances invoking its inherent power under Section 57 of the
Ain, 2003. The bottomline for the Adalat is to ensure fair justice for the
parties to the suit and, in doing so, when the Adalat shall endeavour to
protect the interest of a clean and bonafide defendant, the Adalat shall
also not allow the cunning loan-defaulters to abuse the process of the
Adalat. To save a vulnerable defendant from the unreasonable demand of

52
 the Banks/Financial Institutions and also to save the defendants property
from selling at a shockingly low-price, which very often takes place in
connivance with the staff of the Bank/Financial Institution and the
concerned Court staff, if needed, the Adalat may exercise its inherent
power recording the detailed reasons to substantiate its order.

We feel it pertinent to opine that the Law Commission of Bangladesh

should look into our observations as to the ambiguities of some
phraseology used in Sections 6 (4), 13 of 19(1) of the Ain, 2003 and take
necessary steps for incorporation of appropriate expressions or deletion
thereto. The Commission may make the following proposals to the
Legislature;

(1) In order to remove the ambiguity in the phrase njdbvgvhy AviRx

ev Reve, the same may be replaced by the following expression
njdbvgvhy AviRx Ges h_vh_ weev`xi njdbvgvhy Reve with an
Explanation of the word h_vh_ to be incorporated underneath of
the Sub-Section 6(4) of the Ain, 2003. h_vh_ means when the Adalat
is required to dispose of an Artharin Suit under the provisions of Section
19(6) of the Ain, 2003 in the absence of the plaintiff and defendant, it
shall consider the case of the defendant as well, if the written statement
(made under affidavit) and any other documents have been filed.
(2) The word GKZidvmy, as occurs in section 19(1) of the Ain, 2003
should be given a definition clarifying that when the defendant upon
appearing in the suit files written statement and after framing issue does
not attend hearing, the Adalat shall consider only the case of the plaintiff
and ignore the written statement and issues framed.
(3) Section 19 (1) of the Ain, 2003 should prescribe two more reasons
for proceeding with exparte disposal. The first reason should be aviv 7 Gi
Kvh g mb nIqvi ci hw` cieZx wbav wiZ ZvwiL weev`x bv
Avm and, thereafter, the present two reasons would come and, then,
the last reason should be incorporated in the following phrase gvgjvi h
Kvb chv q hw` weev`x cici wZb evi mgqi Ave`b Ki.
We further feel that the Judicial Administration Training Institute (JATI)
should undertake a training program for the learned judges who are
presiding over the Artharin Adalats with an aim to familiarize them with
the interpretation of the different provisions of the Ain, 2003 so as to
ensure that all the Adalats of the land use and take uniform meaning of
the provisions of the Ain, 2003 and thereby help minimize preferring
appeal or filing writs against the orders passed by them.

With the above observations and direction, the Rule is discharged with a
cost of Tk. 20,000/- (twenty thousand) to be paid by the petitioner in the
national exchequer by way of submitting Treasury Challan within 30
(thirty) days from the date of receiving this judgment.

53
Office is directed to communicate this order to the learned presiding
judges of all the Artharin Adalats functioning all over the Bangladesh so as
to let them be acquainted with the above analysis on the Ain, 2003 and
the ratio derived therefrom.

The Artharin Adalat, Court No. 4, Dhaka is directed to complete the

execution process without any further delay.

Office is further directed to send a copy of this judgement to the

Bangladesh Law Commission and the Director General, JATI for their
perusal and necessary action.

MD. EMDADUL HUQ, J:

I agree.

B) Sitting Judge: Md Abdul Wahab Miah J

Brief Statement of Facts:

One Nurul Islam Chowdhury availed a credit facility from Social Investment Bank Limited
by mortgaging the property in question. When he defaulted in paying back the loan, the Bank
sold the property in auction for the purpose of realization of the decretal amount. At this stage
the Petitioner filed an application under Order XXI rules 90 and 91 of the Code of Civil
Procedure and section 32 of the Artha Rin Adalat Ain, 2003 ( the Ain of 2003) claiming
the mortgaged property as their own and also asserting their possession therein. However, no
security equivalent to 25% (after amendment the amount required to be deposited is 10%
now) of the decretal amount was furnished as required by section 32 of the Ain of 2003
along with the application to the Artha Rin Adalat. Hence the court rejected the application by
an order dated 16 February 2010. Against this order, the Petitioner filed an application in the
High Court Division and obtained a rule. This rule was contested by the Bank stating, inter
alia, that the mortgaged property had already been sold. Hearing the Writ Petition, the HCD
discharged the Rule and hence the Petitioner filed a petition for leave to appeal before the
Appellate Division.

Judgment:

The Leave to Appeal Petition was dismissed as AD held that there was no merit in the
Petitioners case. It upheld the HCDs view that Artha Rin Adalat was right in rejecting
Petitioners application for not depositing security along with the application. The AD
observed that a mere reading of sub-section (2) of section 32 shows that it is the precondition
to deposit security equivalent to 25% of the decretal amount in order to lay claim to an
immovable property involved in an execution case by a third party.

The AD also held that as the sale of the mortgaged property was made absolute by issuing
and registering sale certificate before the issuance of the Rule, the Rule is rightly discharged.

54
The Petitioner has no right to raise any claim in respect of the Mortgaged property sale of
which is made absolute.

End Note:

For a third party to raise any claim to a property against the execution of a decree of Artha
Rin Adalat, conditions mentioned in section 32 of the Ain of 2003 has to be followed. He has
to deposit 10% of the amount of the decretal amount with the application. This is a defence
mechanism against vexatious claims designed to delay the execution of a decree or order of
the court. Because the court can seize the deposited money and give it to the decree holder in
case of vexatious claims.

55
 Chapter Five
Findings, Recommendations and Conclusion

5.1 Major Findings

(a) Money Loan Courts suffer from inefficient case management system. As a result, the
courts fail to strictly follow the legal time limits by which they are supposed to settle the
claims between parties.

(b) Frequent stay orders from the High Court Division of the Supreme Court of Bangladesh
obstruct the usual proceeding of the Money Loan Courts.

(c) There exists an overall culture of non-cooperation by bank officers, judicial officers, legal
professionals and the parties involved to expedite the case disposal.

(d) Corrupt and unethical practices of banking administration inhibit the proper functioning
of the Money Loan Courts.

(e) Political lobbying by influential defaulters makes the entire judicial mechanism
ineffective.

5.2 Recommendations

The preventive measures described here may not absolutely prevent the loan to become
default but it will help recover the loan if it becomes default.
The following are the steps that can help recover a default loan:
1. When a loan becomes default or seems to be unrecoverable, then our first job is to find out
the main causes of the default. Because, it will help us find out our projected course of action
to recover the loan. A loan can be default due to different reasons despite taking various
preventive measures. The reasons are shortage of adequate capital in business, lack of
knowledge to handle the business, operational loss in business due to adverse external
economic factors like unstable political situation, deflation, stagnant economy, diversion of
fund from key business, investment in unproductive sectors, wilful default etc. So, if we can
find out the real causes of default of a loan, we will easily find ways to recover the loan.

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2. When a loan becomes default, a banker has to keep in touch with the borrower on a
regular basis and to convince him to repay the loan in a gentle way. Never behave rudely with
the borrower to recover the loan. This may aggravate the future chance to recover the loan.
Try to find out different sources of borrower from where he can repay the loan. Counsel the
client by which he can repay the loan from his different alternative sources.

3. If the business of the borrower is running or if the borrower has other sources to repay the
loan gradually, then the banker can motivate the borrower to reschedule the loan as per the
Bangladesh Bank rules so that borrower can repay the loan gradually. If there is any chance
to reinstate the business of the client by further investment, the bank may provide finance
further the client. In that case bank has to be ensured that further finance will generate
sufficient income to recover the dues.

4. Where there is no scope to recover the loan from any sources of the borrower, then the
bank can take steps to sell the mortgaged property through public auction under section 12 of
Artha Rin Adalat Ain-2003 for adjustment of the liabilities.

5. If sale proceeds of the mortgaged property through public auction does not cover
repayment of the loan, then the bank can take legal action against the borrower as per Artha
Rin Adalat Ain-2003 before it becomes time-barred as per Limitation Act or under section
138 or 140 of Negotiable Instrument Act-1881.

6. Filing of a suit in the court against the client does not give relief to a banker from his/her
responsibility to recover the default loan. Proper monitoring of the court cases has to be
ensured for early settlement so that decree of the case comes in favour of the bank. Recovery
of the default loan through legal action is a lengthy process. So different alternative actions
may be taken under the provision of law like settlement through mediation under section 22
of Artha Rin Adalat Ain, 2003.

7. Besides legal ways, a banker may continuously pursue the client to repay the loan keeping
good banker-customer relationship.

All the above are not the standards for preventing or recovering the default loan. Rather these
are different alternative ways. Style of recovery of the loan may be different from borrower to
borrower or prevention of loan from being default may differ due to different natures of

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loans. But a banker should be highly judicious in selecting borrowers, should be honest and
careful while disbursing a loan and should be responsible to recover it in time. These will
ultimately reduce the risk of loan default. If we can learn from the recent scams in the
banking sector and become more aware, we can surely bring back the banking sector to a
good shape which will ultimately improve the financial health of a bank.

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5.3 Conclusion

Equality before the law stands for application of the same law without discrimination to all
persons similarly situated. This principle has been incorporated in the Article 27 of
Bangladesh Constitution. Article 31 ensures that no action detrimental to the life, liberty,
body, reputation or property of any citizen shall be taken except in accordance with the laws
of Bangladesh.

The Artha Rin Adalat Ain 2003 is related to the loan recovery process. Section 19 of the Act
deals with the process for a loan defaulter's application to set aside an ex-parte decree and
Section 41 of the Act provides special provisions relating to filing of appeal and settlement.
This Act under Section 19, gives right to the borrowers to redress grievances against
judgment and decree, whether ex-parte or contested. And under Section 41, it grants a right of
appeal to a party which has been aggrieved by order or decree passed by the Artha Rin
Adalat.

The civil society has challenged the Sections 19 and 41 of the Act (Remedial Provisions) on
the ground that the fundamental rights of a defaulter borrower under Articles 27 and 31 of the
Constitution are compromised when Section 19 of the Act is applied attaching a condition to
deposit 10 per cent of the decretal amount to apply for setting aside an ex-parte decree and
Section 41 is applied, requiring to deposit in cash an amount equivalent to 50 per cent of the
decretal amount for filing an appeal against the order or decree passed by Artha Rin Adalat.
They argue that the remedial provisions have arbitrarily imposed onerous requirements for
filing set-aside application and appeal by attaching a financial condition for availing the
rights guaranteed under the Constitution. These remedial provisions, they point out, deal with
the defaulter borrowers disproportionately and irrationally. These remedial provisions, they
add, were enacted in the name of special laws in excess of the requirements to ensure
government interest in quick realisation of banks' dues and have detrimental effect on
business and property of the defaulter borrowers.
As such, it is in violation of the fundamental rights of the borrowers under Articles 27 and 31
of the Constitution and it also breaches the human rights notions of access to justice and right
to fair trial.
These human rights principles require a solid legal framework consistent with the
Constitution and international conventions to which Bangladesh is a party. The right to equal

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treatment before the courts is guaranteed under the Universal Declaration on Human Rights
(UDHR). Moreover, the rule of law is a priority of the government of Bangladesh. Therefore,
this matter should be scrutinised by the government with greater care and the judiciary may
step in to uphold the international commitments of our government while applying these two
sections.

However, the judiciary has dealt with the matter several times. For example, in Anisur
Rahman and KM Ziaul Haque vs. Government of Bangladesh case, following an Artha Rin
suit, the petitioner filed a writ petition asserting that Section 41 (1) (2) of the Act is
unreasonable, oppressive and arbitrary as it requires deposit of 50 per cent of the decretal
amount at the time of preferring an appeal. In this case, the court said that depositing 50 per
cent of the decretal amount at the time of preferring an appeal does not violate any
fundamental right guaranteed under the Constitution. Moreover, the Appellate Division in
Zahirul Islam vs. National Bank Limited and others justified the condition of appeal through
referring it as a mere condition of appeal in a regular suit, which cannot be equated with other
laws. In Mosammat Nilufa Yasmin (Nila) vs. Artha Rin Adalat, Khulna, the court decreed that
the defaulter borrower cannot challenge the legality of Section 19 of the Act through filing a
writ petition for enforcement of their fundamental rights.

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References

[1] Hazel Genn, Mediation in Action: Resolving

[2] SK Golam Mahbub, Alternative Dispute Resolution in Commercial Disputes: The UK and
Bangladesh Perspective 2005, at p. 21.

[3] P. C Rao, Alternative to Litigation in India, 1997, p.26

[4] ibid

[5] found in http://www.guidedways.com/chapter_display.php?chapter=4&translator=2, last

accessed on 18.04.2010

[6] Section 10 of the Family Court Ordinance 1985

[7] Section 14 (1) of the Family Court Ordinance 1985

[8] Section 14 (2) of the Family Court Ordinance 1985

[09] Section 13 (1) of the Family Court Ordinance 1985

[10] Section 13 (2) of the Family Court Ordinance 1985

[11] Barrister Tureen Afroz is an Advocate of the Supreme Court of Bangladesh. She is
currently doing her PhD in Law at Monash University, Australia.

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