Bangladesh Shilpa Rin Sangstha (Appellant)
Azir Uddin Chowdhury (Respondent)
ATM Afzal CJ
Mustafa Kamal J
Latifur Rahman J
Md. Abdur Rouf J
April 29, 1998.
The Bangladesh Shilpa Rin Sangstha Order, 1971 (President’s Order No. 128 of 1972) Articles 33, 34 & 35
It is palpably clear that the learned trial Judge as well as the learned Judges of the High Court Division acted illegally and without jurisdiction in granting temporary injunction in a matter covered under Article 34 of the BSRS Order which is a special enactment and it will prevail over general law……. Article 34 of the BSRS Order being special law for the special purpose, no relief under the ordinary law in the form of temporary injunction is available….(13)
AKM Nazrul Islam, Advocate, instructed by Sharifuddin Chaklader, Advocate-on-Record — For the Appellant.
SK Sinha, Advocate, instructed by Md Sajjadul Huq, Advocate-on-Record—For the Respondent.
Civil Appeal No. 46 of 1997
(From the Judgment and order dated 27-2-97 passed by the High Court Division in First Miscellaneous Appeal No. 23 of 1996).
Latifur Rahman J.- This appeal following leave, at the instance of Bangladesh Shilpa Rin Sangstha appellant is against the judgment and order dated 27-2-97 passed by a Division Bench of the High Court Division in First Miscellaneous Appeal No. 23 of 1996 dismissing the appeal, thereby affirming Order No. 27 dated 7-10-96 passed by the Subordinate Judge, First Court, Moulvibazar granting temporary injunction under Order 39 rules 1 and 2 read with section 151 of the Civil Procedure Code in favour of the plaintiff-respondent restraining the appellant from taking over the management and administration of the plaintiff- respondent company and selling it under Article 34 of the BSRS Order, 1972 read with BSRS (Direct Sale of Mortgaged Property) Rules, 1981 till disposal of Money Suit No. 5 of 1994.
2. The short facts necessary for disposal of the appeal is that, defendant-appellant Bangladesh Shilpa Rin Sangstha (hereinafter referred to as ‘BSRS’) is a Sangstha established by the BSRS Order, 1971 (President’s Order No.128 of 1972) to provide credit facilities and other assistance to industrial concerns and encourage and broaden the base of investment in Bangladesh.
3. The respondent is the Managing Director of Al-Helal Rice Mills Limited, which is financed by BSRS. BSRS sanctioned and disbursed loan in favour of the Rice Mills under different terms and conditions of loan agreement. Under the terms and conditions of the loan agreement dated 27th April, 1978 executed between the appellant and the respondent, loan of US $ 133,000.00 (equivalent to Taka 2,060 million) and Taka 6 lac in local currency was sanctioned to the respondent-company. The respondent, it is alleged, despite repeated requests and reminders did not liquidate the dues/overdue amounting to Taka 25,567 million.
4. The respondent instituted Money Suit No.5 of 1994 against the appellant BSRS in the Court of Subordinate Judge, First Court, Moulvibazar for a decree of Taka 1,00,00,000.00 (one crore) as damages and loss sustained by him by reason of alleged corrupt practices adopted by the officers of BSRS in sanctioning and installing the Automatic Rice Mills Ltd.
5. In the meanwhile, the appellant— instituted Miscellaneous Case No.260 of 1997 in Artha Rin Adalat No.2, Dhaka under Article 33 of the BSRS Order of 1972 against the respondent for attaching certain properties mentioned in the schedule to the application and for realisation of loan money. On 25-8-95 the appellant published a Notification in the daily Inqilab for selling in auction the said Al-Helal Rice Mills acting under Article 34 of the BSRS Order of 1972. In such circumstances, the respondent filed an application under Order 39 rules 1 and 2 of the Code of Civil Procedure for temporary injunction in Money Suit No.5 of 1994 of the First Court of Subordinate Judge, Moulvibazar restraining the appellant from taking over the management and administration of Al-Helal Rice Mills Limited and selling the same till disposal of Money Suit No.5 of 1994. The learned Subordinate Judge by his Order No.27 dated 7-10-95 granted temporary injunction as prayed for. Being aggrieved by the said order the appellant preferred FMA No.23 of 1996 in the High Court Division. A Division Bench upon hearing the matter dismissed the appeal and directed the trial Court to dispose of the suit within 3 months.
6. Leave was granted to consider the submission of the learned Advocate for the appellant that the proceeding under Article 34 of the BSRS Order, 1972 being a substantive, independent and alternative mode of recovery of BSRS dues/overdue under a special law and Article 34(5) of the said order having specifically precluded the courts from issuing any order of injunction the learned Judges of the High Court Division acted illegally and without jurisdiction in affirming the order of temporary injunction granted by the trial Court in a pending money suit filed by the respondent. Leave was granted to consider the submission of the learned Advocate for the appellant that granting of temporary injunction is contrary to the scheme of the legislation as the legislature enacted the law providing for speedy remedy against non-payment of dues or breach of any obligation and a provision of the special law will prevail over the general law and the assumption of jurisdiction in granting injunction by the courts below was contrary to the special law itself. Leave was also granted to consider whether the learned Judges of the High Court Division correctly appreciated the decisions cited at the Bar and upheld the order of temporary injunction on untenable grounds.
7. The only material question for consideration in this appeal is, whether an order of temporary injunction can be granted by a civil Court in respect of a sale notice published under Article 34 of the BSRS Order, 1972 in view of the embargo put under Article 34(5)(a)(iii) of the said Order.
8. The respondent instituted Money Suit No.5 of 1994 against the appellant in the Court of Subordinate Judge, 1st Court, Moulvibazar. In that suit, respondent prayed for temporary injunction. The trial Judge granted ad interim injunction on 3- 9-95 and the said ad interim order was made absolute on 7-10-95, on the finding that if during the pendency of the Money Suit of the respondent sale takes place under Article 34 of BSRS Order and if the Mill is sold then that will be violative of the principles of natural justice.
9. The order of the trial Judge was upheld by a Division Bench of High Court Division on the findings, inter alia, that BSRS is not conducting itself with clean hands; that the respondent has an arguable case and that justice will be met if the order of temporary injunction is maintained with a direction to dispose of the suit within three months.
10. In the Memo of appeal before the High Court Division, amongst other grounds, two grounds, namely ground Nos. II and I, were taken by the appellant, which read as follows:
“I. For that the learned First Court of Subordinate Judge had no jurisdiction to entertain Money Suit No.5 of 1994 and granting temporary injunction inasmuch as when the defendant-appellant takes over the management and administration of an industrial concern under Article 34 of the President’s Order No.128 of 1972, the jurisdiction of the court is excluded.
II. For that since the jurisdiction of the civil Court has been excluded/ousted expressly and without any ambiguity under Article 34 of the President’s Order No.128 of 1972, the learned Court ought to have dismissed the application under Order 39 rules 1 and 2 and by granting temporary injunction the learned court committed an error of law and fact.”
Unfortunately, the learned Judges did not decide the point regarding the power of the civil Court in granting injunction in a matter covered under Article 34 of President’s Order No. 128 of 1972.
11. The Bangladesh Shilpa Rin Sangstha Order, 1972 was promulgated with the prime object of providing credit facilities and other assistance to industrial concerns and encourage and broaden the base of investment in Bangladesh. Under this BSRS Order, BSRS sanctioned and disbursed loan in favour of Al-Helal Rice Mills Ltd. which stood at Taka 25.567 on 1-1-95. The amount having remained outstanding the appellant published the sale notice under Article 34 of the Order. The BSRS Order is a special law which provides for three independent and alternative mode of recovery of BSRS dues as contained in Articles 33, 34 and 35 of the Order. Article 33 provides for filing of an application before the District Judge. Article 34 speaks of taking over management and administration of an industry and sale Article 35 provides for taking recourse to Public Demands Recovery Act.
12. Reading Articles 33, 34 and 35 of the BSRS Order it appears that there are three independent, substantive and alternative modes of recovery of BSRS dues and loans.
The material and relevant portion of Article 34 is quoted below:
“34. (1) Where any industrial concern which is under a liability to the Sangstha under an agreement makes any default in payment or otherwise fails to comply with the terms of its agreement with the Sangstha, the Sangstha may, notwithstanding anything contained in Article 33, take over the management and administration of industrial concern, and may sell or realise any property pleaded, mortgaged, hypothecated or assigned by the industrial concern to secure its liability to the Sangstha.
(5) Where the Sangstha takes over the management and administration of an industrial concern under Clause (1) or transfers any property in exercise of its powers of sale or realisation under that clause, such taking over or transfer shall not be called in question in or before any Court; and no Court shall—
(a) entertain any suit, application or other legal proceeding—
(iii) for an order of injunction or any other order prohibiting or restraining the Sangstha or any of its officers from such taking over or transfer; or
(b) Issue, make or pass any order of ad interim or temporary injunction or any of the orders prohibiting or restraining the Sangstha or any of its officers from such taking over or transfer.”
Thus, it appears that when an industrial concern under an agreement fails to pay the liability of the Sangstha, the Sangstha may take over the management and administration of the industrial concern or may sell or realise by sale of any mortgaged, pledged and hypothecated property of any industrial concern to secure the liability of the Sangstha. Thus it is very clear that the Sangstha has got the authority to publish the sale notice for the purpose of selling the industrial concern. Article 34(5)(a)(iii,) as quoted above, in clear terms puts an embargo on any court to pass any order of injunction or any other order prohibiting or restraining the Sangstha with regard to such taking over, sale or transfer. Even Article 34(5)(b) precludes the court of civil jurisdiction to grant an ad interim or temporary injunction in a matter covered by Article 34 of the Order.
13. The decision cited at the Bar was also not considered by the High Court Division. It may be mentioned that in the case of Delwar Coil Foam Industries Ltd. vs Bangladesh Shilpa Rin Sangstha and others, 1991 BLD 317, the learned Judges of the High Court Division in deciding the question of rejection of a plaint under Order 7 rule 11 of the Code of Civil Procedure held as follows:
“So it is apparent no suit lies in respect of any sale under Article 34 and no injunction permanent and temporary can be granted in such case.”
This decision of the High Court Division was upheld by this Division in CP No.415 of 1980. The learned Judges left the question of jurisdiction of the civil Court in granting injunction undecided though that was specifically raised by the appellant before them. It is palpably clear that the learned trial Judge as well as the learned Judges of the High Court Division acted illegally and without jurisdiction in granting temporary injunction in a matter covered under Article 34 of the BSRS Order which is a special enactment and it will prevail over general law. The temporary injunction order in this case had been passed contrary to the scheme of the legislation and the purpose of the special law providing for speedy recovery of the dues of the Sangstha.
14. Before parting with the case it may be stated that there being a legal embargo on granting temporary injunction by the civil Court, the considerations of an arguable case and the BSRS not coming with clean hands are not at all relevant considerations in such a matter.
Consequently, the appeal is allowed without any order as to costs.
Source: 51 DLR (AD) (1999) 96