Appellate Division Cases
(Civil)
PARTIES
Bangladesh Shilpa Rin Sangstha and others ………………..Appellants.
-VS-
S.H. Enterprises Ltd. Noorun Building, West Madar Bari, Chittagong……………………………….Respondent.
JUSTICE
Md. Ruhul Amin J
M. M. Ruhul Amin J
Md. Tafazzul Islam J
JUDGEMENT DATE: 5th February 2006
Article 34 of Bangladesh Shilpa Rin Sangstha Order, 1972
President Order No. 128 of 1972
Appellant No.l, having not advanced any loan to the respondent till 8.7.96 and the possession of the two vessels having also not been handed over to the respondent, they were not entitled to claim any amount from the respondent; the amount of Tk. 0.500 million which has been confiscated was deposited by the respondent to the appellant No.l as equity participation money and not as a bid or earnest money; further no show cause notice was issued upon the respondent before confiscating the said amount which is a gross violation of the principle of natural justice; the vessels having not been transferred to the respondent they did not incur any liability against those; there is also no provision in Bangladesh Shilpa Rin Sangstha Order 1972 empowering the appellant No.l to confiscate the money deposited to it by the respondent as equity participation money to the rehabilitation project; the two vessels, been respondent by letter dated 25.7.96, Annexure-H, would have been accepted by the appellant No.l then public money would have been saved and further the records show that the whole approach of the appellant No.l in this regard is malafide and was taken for collateral purpose ……………….(7)
It is only after transfer of ownership for the said vessels by Nawada to the respondent that the rehabilitation project could be carried out for converting the grounded passenger vessels into two cargo vessels; further only after successful operation of above project, the respondent from the third year after the commercial operation of the cargo vessels, was to start repayment of Tk. 34,80,298.42 kept in a interest free blocked account in 24 half yearly installments. Accordingly since the ownership of the two vessels was not transferred to the respondent for implementation of the rehabilitation project …………………(8)
Civil Appeal Nos. 211 of 2002 (From the judgment and order dated 8.11.2000 passed by the High Court Division in Writ Petition No. 7783 of 1998).
A.K.M. Nurul Islam, Senior Advocate, instructed by A.S.M. Khalequzzaman, Advocate-on-Record…………………. For the Appellants
Moinul Hosain, Senior Advocate, instructed by Md. Nawab AH, Advocate-on-Record……………For the Respondent
JUDGMENT
1. Md. Tafazzul Islam J : This appeal, by leave, arises out of the judgment and order dated 8.11.2000 passed by the High Court Division in Writ Petition No. 7783 of 1997 making the Rule absolute.
2. The respondent filed the above writ petition impugning the letter dated 8.7.96 of the appellant No.l, Annexure-A, confiscating Tk. 0.500 million deposited by the respondent ;
with the appellant No.l as equity participation. The case of the respondent in brief, is
that the appellant No. 1 gave loan of Tk. 1.709 million to Nawada Navigation Limited, hereinafter referred to as Nawada, for acquisition of two passenger vessels but from the very beginning said vessels could not be operated with commercial viability due to technical and mechanical faults for which the project was recognized as a sick project: then the Board of the appellant No.l in its 175th general meeting held on 14.12.92, in order to rehabilitate the above sick project, decided to allow Nawada to transfer of the said two vessels to the respondent and also sanctioned additional loan of Tk. 2.700 million to the respondent to transform the said two vessels into two cargo vessels of 250 tons capacity each; by letter dated 19.1.1993, Annexure B, the appellant No.l informed the respondent about the said decision and also the concerned terms and conditions which, amongst others, provided that Nawada will transfer to the respondent the said two vessels and the amount of Tk. 34,80,298.42 which remained outstanding in the loan account of Nawada as on 30.06.1989 will be put into an interest-free blocked account and the respondent will repay the said amount by 24 half-yearly installments commencing
from the third year of the commercial operation of the rehabilitation project and Nawada shall be absolved of its liabilities with appellant No. 1 after the respondent completes all the legal formalities with appellant No.l; the respondent, being the promoter of the rehabilitation project, will furnish collateral security worth Tk. 2.000 million as
additional security, but however, the Managing Director of the appellant No. 1 shall take the final decision regarding the amount of this additional security; then by letter dated 18.7.93, Annexure-C, the respondent submitted land documents worth Tk. 12.8 million
to the Managing Director of the appellant No. 1 requesting him to accept the same in
place of Tk. 2.000 million as in similar cases collateral security for less amount have been accepted and then by letter dated 23.6.94, Annexure-D(l). the Managing Director of the appellant No.l accepted collateral security worth Tk. 12.8 lacs in place of Tk. 2.000 million as requested on the condition that the respondent shall deposit with the appellant
No.l and amount of Tk. 0.500 million as equity participation out the additional aid-up capital of Tk. 1.70 million which was to be invested by the respondent in the project as
per terms of the sanction letter dated 19.1.93; the respondent then along with forwarding letter dated 29.1.95, Annexure-E, deposited Tk. 0.500 million which the appellant No. 1 duly received; the respondent then by a letter dated 28.3.95, Annexure-F, requested the appellant No.l to expedite the preparation and execution of the agreements and also other formalities for transfer of ownership of the above vessels; however on 18.5.1995 the Managing Director of the respondent having went to the anchorage site of the above vessels along with the engineer and the contractor of the respondent found both the vessels submerged under water and the engineer as well as the contractor on physical verification opined that the vessels, being submerged under water for long time, became scrap and so the cargo vessels would have to be built up afresh with new materials; in the aforesaid circumstances the respondent by letter dated 20.06.95, Annexure-G, appraised the appellant No.l about the aforesaid situation and also expressed their frustration regarding the rehabilitation project due to the non co-operation of Nawda for last five years and also sought advice from the appellant No.l but the appellant No.l neither gave any reply to the above letter nor came up with any advice or solution; however the respondent, who in the meantime already furnished collateral security worth Tk. 12.8 million and also deposited Tk. 0.500 million as additional paid up capital, by letter dated 22.06.96. Annexure G-l, requested the appellant No.l to allow them to implement the rehabilitation project under revised/updated project cost as the prices of construction
materials had in the meantime inflated but the appellant No.l also kept silent; then after
more then one year the appellant No.l by the impugned letter dated 8.7.96 Annexure-A,
referring to the above letter dated 20.6.95, informed the respondent that Tk.0.500 million
deposited by them as equity participation has been confiscated and by another letter of same date, Annexure G-2, also informed the respondent that the proposals put forward by
them by letter dated 22.06.96 were not acceptable; then the respondent, to save their investment, by letter dated 25.07.96, Annexure H, requested the appellant No.l to allow them to implement the rehabilitation project undertaking that they would implement the same at the project cost and financial plan as originally approved on 14th December 1992 and the escalation in the project cost will also be borne by the respondent themselves but the appellant No. 1 by letter dated 3.8.96, Annexure H-l, informed the appellant that there was no scope to consider the above proposal and hence the writ petition.
3. The appellant No.l contested the Rule by filing affidavit-in-opposition and also supplementary affidavit-in-opposition stating, inter alia, that the Board of Directors of the appellant No.l in its General Meeting held on 14.12.1992 allowed Nawada to transfer the
two vessels to the respondent with the objective of rehabilitating the project and also sanctioned loan of Tk. 2.700 million to the respondent on conditions, amongst others, that the respondent will furnish collateral security worth Tk. 2.00 million but as will be evident from letters dated 26.8.93, 20.3.94 and 4.4.94, Annexures Dl, D2, D3, respectively, the respondent failed to furnish collateral security worth Tk. 2 million and further to though the appellant No.l allowed the Nawada to transfer the two vessels to the respondent but the respondent did not take delivery of the same in time; after 2 Vi years the respondent, vide letter dated 20.6.95, Annexure-G, expressed their unwillness to proceed with the rehabilitation project raising the ground that as the vessels remained submerged under water the engines became junk, the proposed rehabilitation scheme will have to be done afresh involving extra costs; further by letter dated 22.6.96, Annexure G-l, the respondent, long after initiation of proceedings under Article 34 of BSRS Order, 1972 for auction sale of the two vessels, gave their proposal for rehabilitation of the project at revised cost as the price of the materials increased in the meantime and in the above circumstances the Board of Directors of appellant No.l refused the above proposal and by letter 8.7.96, Annexure-G-2, the appellant No.l communicated the same to the respondent; subsequently the two vessels were sold in open auction under Articales 34 of the above Order, 1972 and possession of those were also handed over to the auction purchaser; since the respondent, for long time, did not take any step to rehabilitate the project according to the terms of sanction letter, the amount of Tk. 0.500 million deposited by them as equity participation money was rightly confiscated as the appellant
No.l incurred huge loss.
4. The High Court Division, after hearing, made the Rule absolute holding that in the
sanction letter, Annexure B, the appellant No.l was not give the right to confiscate the said amount of Tk. 0.500 milion; according to the terms of the sanction letter the outstanding loan given to Nawada was to be kept in a interest free blocked account and the said loan was to be repaid by the respondent in 24 half yearly instalments commencing from the 3rd year of the commercial operation of the cargo vessels but due to various dispute between the parites the two passenger vessels could not be handed over to the respondent for transforming those to cargo vessels and so the commercial operation of cargo vessels did not commence; it was incumbent upon the appellant No.l to fulfill their part of agreement for transfer of the two vessel to the respondent for implementation of the rehabilitation project; Nawada is the loanee of the appellant No.l and under the rehabilitation scheme, the respondent, as transferee of the two vessels, was to repay the loan incurred by Nawada but the respondent having not received delivery of the two vessels for rehabilitation of those by way of converting those to cargo vessels from
passenger vessels and then operation of those as cargo vessels after rehabilitation, they can not be held responsible for the loan incurred by Nawada; the respondent with sincere intention deposited Tk. 0.500 million as equity participation and for no fault of the respondent did not get possession of two vessels; further no show cause was also issued before confiscation of the above Tk. 0.500 million and the provisions of President Order No. 128 of 1972 also did not authorise the appellant No.l to confiscate the above Tk. 0.500 million deposited by the respondent as equity participation and accordingly the impugned order confiscating Tk. 0.500 million can not be sustained.
5. Leave was granted on the submissions that the respondent is the loanee as such the appellant No.l adjusted Tk. 0.500 million against the loan liability of the respondent; in the present writ petition disputes facts are involved which cannot be adjudicated in writ
jurisdiction and filing of a money suit, being the appropriate remedy, mandamus will not
also lie and the High Court Division, by issuing a writ, can not compel the appellant No. 1 to pay Tk. 0.500 million to the respondent.
6. The learned counsel for the appellants submitted that the respondent failed to take steps for rehabilitating the project as planned and further by letter dated 20.6.95 they informed the appellant No.l that they lost their interest in both the vessels and as such the appellant No.l, to minimize the huge losses it suffered due to the delay of the respondent in taking decision, confiscated the amount of Tk. 0.500 million deposited with them by the respondent and further though subsequently the respondent, by letter dated 22.6.96, requested the appellant No.l to allow them to implement the rehabilitation of the project but the above request being not at all acceptable to the appellant No.l as they already initiated proceeding for auction sale of the vessels under Article 34 of the above Order 1972, they by letter dated 8.7.96 informed the respondent accordingly.
7. The learned counsel for the respondent submits that the appellant No.l, having not
advanced any loan to the respondent till 8.7.96 and the possession of the two vessels
having also not been handed over to the respondent, they were not entitled to claim
any amount from the respondent; the amount of Tk. 0.500 million which has been confiscated was deposited by the respondent to the appellant No.l as equity participation money and not as a bid or earnest money; further no show cause notice was issued upon the respondent before confiscating the said amount which is a gross violation of the principle of natural justice; the vessels having not been transferred to the respondent they did not incur any liability against those; there is also no provision in Bangladesh Shilpa Rin Sangstha Order 1972 empowering the appellant No.l to confiscate the money deposited to it by the respondent as equity participation money to the rehabilitation project; the two vessels, been respondent by letter dated 25.7.96, Annexure-H, would have been accepted by the appellant No.l then public money would have been saved and further the records show that the whole approach of the appellant No.l in this regard is malafide and was taken for collateral purpose.
8. As it appears the respondent did not receive any loan from the appellant No.l and according to the terms of the sanction letter, Annexure-B, the loan to the Nawada amounting to Tk. 34,80,298.42 as on 30.6.1989 was to be kept in a interest free blocked account and the passenger vessels were to be converted into cargo vessels under the rehabilitation scheme and then the cargo vessels were to be put into commercial operation and then the respondent was to repay the same by 24 half yearly installment commencing from the third year of the commercial operation of the cargo vessels and Nawada was to be absolved of its liabilities against the above loan only after completion of the formalities between appellant No.l and the respondent and transfer of
the two vessels to the respondent for conversion of those from passenger vessels to cargo
vessels under the rehabilitation project; as it appears the said two vessels were not properly maintained by Nawada and the vessels were not even handed over to the respondent; for rehabilitation of those vessels additional loan of Tk.2.700 million were to be disbursed by the appellant No. 1 to the respondent in four installments 1st, 2nd and 3rd installment, being of Tk. 8 lacs each and the 4th installment being of Tk.3 lacs and at the same time the respondent was to make investment and raise up the additional paid up capital to Tk. 1.700 million at different stages of the payment of the above 1st, 2nd, 3rd and 4th installments; further it is only after transfer of ownership for the said vessels by Nawada to the respondent that the rehabilitation project could be carried out for converting the grounded passenger vessels into two cargo vessels; further only after successful operation of above project, the respondent from the third year after the commercial operation of the cargo vessels, was to start repayment of Tk. 34,80,298.42 kept in a interest free blocked account in 24 half yearly installments. Accordingly since the ownership of the two vessels was not transferred to the respondent for implementation of the rehabilitation project, the respondent can not in any way be held responsible for causing delay to the rehabilitation project. Moreover the respondent, with all good intention, deposited Tk. 0.500 million as equity participation and also provided collateral security worth Tk. 12.8 million. Over and above no show cause was also issued upon the respondent before confiscating the deposited amount of Tk. 0.500 million. Further Bangladesh Shilpa Rin Sangstha Order 1972 did not also authorize the appellant No.l to confiscate the amount deposited by the respondent as equity participation. Further if Annexures D, D(2) and D(3) are read with Annexure D(4) it will appear that the respondent duly furnished the collateral security which was duly accepted by the
appellant No. 1.
9. From the contents of paragraph 3 of Annexure-1 of the supplementary affidavit
dated 17.8.2000 filed by the appellant No. 1 it also appears that by letter dated 27.11.96, the Secretary of the Board of the appellant No.l informed the Legal Department of the appellant No.l that in order to sell the above two vessels under section 34 of the Bangladesh Shilpa Rin Sangstha Order 1972 the appellant No.l on five occasions i.e. 16.4.96, 12.5.96, 17.6.96, 17.7.96 and 28.8.96, invited tenders and only one tender was received against invitation dated 17.6.96 with offer of Tk. 6,14,172.00 only including earnest money and than on 22.9.96, the appellant No.l again invited tender for the sixth time in response to which one Tota Mia of M/S. Famous River Transport submitted tender for Tk. 5,57.000 only stating that since the vessels remained submerged their engineers could not locate the engines and subsequently Tota Mia, in response to another tender, agreed to pay Tk.6,15,000/- provided the engines are located by them and thereafter inspite of negotiations made by the appellant No.l. Tota Mia did not agree to raise the tender price further. So it remains unexplained as to why, even though by letter dated 25.7.96 the respondent agreed to implement the project at the original project cost the appellant No.l issued the letter dated 3.8.96, Annexure-H, specially when till then not a single furthering was paid by the appellant No.l to the respondent in terms of the condition as provided in the sanction letter, Annexure-B. In any view of the matter if
the appellant No.l would have disbursed any amount to the respondent out of the additional loan of Tk.2.700 million then only situation would have arisen for return by the respondent of any such amount disbursed.
10. So we are of the view that the High Court Division on proper consideration of the materials on record and applying the appropriate provision of law as applicable made the Rule absolute and there is no infirmity or illegality in the decision of the High Court Division calling for interference.
11. Accordingly the appeal is dismissed with costs.
Ed.
Source: IV ADC (2007), 367