BANGLADESH
SHILPA BANK (DIRECT SALE OF MORTGAGED PROPERTY) RULES, 1980

Rule—7(3)

Bank
jurisdiction to sell mortgaged property of the borrower directly under Article
34 of the B.S.B Order and Rules—The Bank has jurisdiction to sell the mortgaged
property of the borrower directly under Article 34 of P.O. 129 of 1972—The
power of the Bank to take over the management and administration of the
industrial concern and to sell its property have been set out in Article 34 (1)
with the conjunction ‘and’ which are undoubtedly independent and alternative
powers to enforce repayment of the loan—This is the true import of sub-article
(1)—Practical reasons however necessitate taking over of the industrial concern
before putting it to sale but that does not mean that taking cannot take place
afterwards before completion of sale.

Mere
irregularity in holding the sale by public tender does not divest the Bank of
its power to sell the property by private negotiation—According to Rules 4 and
5 of the procedure for selling by public auction or by calling public tender or
otherwise are alternative methods and any defect in one procedure does not
vitiate the transaction. The High Court Division has rightly interpreted the
rules.

The
Bank did not go for selling the vessels all at once but. gave due notice and
other opportunities to the petitioners to settle the outstanding dues—The
Banks, even in its letter offered to examine the petitioner’s proposal for
replacement of over dues/loan outstanding subject to payment of specified sums
by a certain date—But the petitioners made no response to the same—The High
Court Division upon a scrutiny of the correspondence clearly found that there
was neither any malafide nor arbitrariness on the part of the Bank—Bangladesh
Shilpa Bank Order, 1972 (P.O. 129 of 1972), Article 34.

Fairtech Limited
and others Vs Bangladesh Shilpa Bank Ltd. and others; 10 BLD (AD) 226.

Bangladesh
Shilpa Bank (Direct Sale Of Mortgaged Property) Rules, 1980

Rule—7(3)

It
cannot be laid down as a general rule that a sale by private negotiation which
the Bank has got power to do under rule 5 generally will be invalid ab initio because the auction or tender
process which has begun has not been exhausted. When such a sale by private
negotiation takes place and the matter is brought to the Court, the question
for consideration should be whether there was any malafide or lack of proper
consideration in the transaction.

M/S. New
Ideal Engineering Works Ltd. Vs. Bangladesh Shilpa Bank and others, 13BLD (AD)
136.

Ref:
Fairtech Limited and others Vs. Bangladesh Shilpa Bank and others, 42 DLR (AD)
216-Cited.