Appellate Division Cases
Bangladesh Shilpa Rin Sangstha …………………Appellant (In both the appellant)
Rahman Textile Mills Limited and ors…………… Respondents (In C.A.No. 34/98)
A.T.M. Afzal CJ
Mustafa Kamal J
Bimalendu Bikash Roy Choudhury J
A.M. Mahmudur Rahman J
JUDGEMENT DATE: 25th March 1999.
The Code of Civil Procedure, Order 7, Rule
Clause (1) of Article 34 of the Bangladesh
Shilpa Rin Sangstha Order, 1972 (P.O. No.
128 of 1972)
Secretary of State vs. Mask & Company,
AIR 1940 PC 105
Abdur Rouf and others-vs-Abdul Hamid,
Federation of Pakistan -vs- Saeed Ahmed,
PLD 1974 (SC) 151
Under section 9 of the Code of Civil Procedure any civil Court has jurisdiction to try all suits of civil nature excepting suits of which their cognizance is either expressly or impliedly barred………………………. (10)
It has to be noticed that there has been no provision for appeal or no forum provided in the Order for redress of genuine grievances of any body or person when
injustice is perpetrated on them. It cannot be imagined that such a body or person should be precluded from received that such a body or person should be precluded from receiving assistance from a court of law. Civil Court is a court of ultimate jurisdiction, and in cases where no other remedy is provided for, the door of the civil court should not be closed and hermetically sealed against one who had been subjected to injustice …………………………(16)
Civil Appeal Nos. 34 and 35 of 1998. (From the judgment and order dated 5 November 1997 passed by the High Court Division, Dhaka in Civil Revision Nos. 1050 and 1051 of 1994 respectively).
Azizui’ Rahman and ors…………… Respondents (In C.A. No. 35/98)
Rafique-ul-Huq, Senior Advocate, instructed by Mvi. Md. Wahidullah, Advocate -on-
Record ………………………For the Appellant (In both the appelant)
Dr. M. Zahir, Senior Advocate, instructed by Sharifuddin Chaklader, Advocate-on-
Record ……………………..Respondent No. I (In both the respondent)
Respondent Nos. 2-6 (In C.A.No. 34/98) …………….Not represented.
Respondent Nos. 2-11 ( In C.A. No. 35/98) ……………………Not represented.
1. Bimalendu Bikash Roy Choudhury J: I have had the advantage of going through the judgment proposed to be delivered by learned brother Mustafa Kamal, J. With great respect to his deliberations I am unable to persuade myself to subscribe to his decision.
2. Civil Appeal Nos. 34 and 35 of 1998 have been filed by way of leave by Bangladesh Shilpa Rin Sangstha (briefly the Sangstha) against the separate judgments and orders of a Division Bench of the High Court Division, dated 5 November 1997, discharging the Rules in Civil Revision Nos. 1050 and 1051 of 1994 respectively. Both the revision cases arose out of the orders of the Subordinate Judge, Gazipur, dated 2 February 1994. refusing to reject the plaints of Title Suit Nos. 24 and 23 of 1993 under Order 7 rule 11 of the Code of Civil Procedure.
3.These suits relate to certain properties belonging to the plaintiffs which were taken
over and sold by the Sangstha under clause (1) of Article 34 of the Bangladesh Shilpa
Rin Sangstha Order, 1972 (P.O. No. 128 of 1972), hereinafter referred to as the said
4. Rahman Textile Mills Ltd., hereinafter called the company, brought Title Suit No.
24 of 1993 while Azizur Rahman and others who happen to the heirs of late Abdus
Sattar, the sponsor-Chairman of the company brought the other suit. The principal
defendants are common, namely, the Sangstha, its Assistant General Manager and the Uttara Chemical Industries Ltd., the transferee.
5. Facts stated in the plaints of the suits are substantially the same. They are these. The
company took loan of £ 8175 equivalent to Rs. 416.000.00. from PICIC, the predecessor
of the Sangstha. The letter of credit was opened in 1971 with a condition that the
machineries would be hypothecated. But due to the war of liberation the company did not receive the machineries. As a result the Textile Mills could not be established. Shortly after the independence the company was nationalised under P.O. No. 27 of 1972 and was placed under the Bangladesh Textile Mills Corporation (briefly BTMC) which ultimately received the machineries and distributed those to different Textile Mills. No machineries were ever installed in the premises of the company. Afther the death of Abdus Sattar his heirs became the share-holders of the company. Pursuant to a decision of the Government to transfer the nationalised industries owned by the Bangladeshi nationals they had had the company transferred to them. The properties of the company and the personal properties of the heirs of late Abdus Sattar were, however, collusively sold to defendant
No.3. Uttara United Chemical Industries Ltd and the plaintiffs were forcibly evicted
therefrom on 3 March 1993 when they were ” not even informed of the so-called sale.
Those properties were never charged or mortgaged with the erstwhile PICIC or its
successor Sangstha. The plaintiffs had at all times disputed the claim of the Sangstha but
it wilfully did not disclose the actual fact that the BTMC had already paid the Sangstha the full amount of loan/dues on account of the company vide cheque No. CJD 700325 dated 30 June 1985. The auction sale was fraudulent and collusive amongst defendant Nos. 1-3. The provision of Article 34(1) of the said Order were not attracted by the facts of the case particularly as the outstanding loans of the company had been paid and statisfied by the BTMC. Furthermore, the entire transaction was collusive and malafide. It was specifically alleged in the plaints that since defendant No. 1 did not act in accordance with Article 34(1) of the said Order the court can see and has jurisdiction to see the malafide and illegal acts and deeds of the defendants. Accordingly the company made the following prayers in respect of its properties: “a) A decree be passed in favour of the , plaintiff against the defendant No.l, 2 & 3 declaring that the auction sale of schedule property and taking over possession of the properties from the plaintiff on 03.03.93 are illegal, collusive, vide inoperative is of no legal effect and not binding up on the plaintiff. b) A decree be passed declaring that the possession of the schedule properties taken by the defendant No. 1 & 2 from the plaintiff on 33/93 and made over to
the defendant No. 3 is collusive illegal and is .liable and bound to restore to the plaintiff.
c) A decree be passed for Khas possession of the schedule properties to plaintiff. d) A decree be passed for the cost of suit against defendants. e) Any other relief or reliefs to which the plaintiff is entitled.”
6. Similar prayers were made by the plaintiffs of Title Suit No. 23 of 1994 in respect of the their personal properties.
7. The Sangstha (defendant No. 1) made applications under Order 7 rule 11 of the Code of Civil Procedure for rejection of the plaints on the ground that the suits were barred under Article 34(5) of P.O. No. 128 of 1972.
8. The learned Subordinate Judge rejected the applications. The Sangstha took revision to the High Court Division, Civil Revision Nos. 1050 and 1051 of 1994. A Division Bench, by judgments and orders dated 5 November 1997, discharged the Rule upheld the orders of the Subordinate Judge refusing to reject the plaints.
9. The crucial question raised before us by Mr. Rafiq-ul-Huq is whether the civil court
can entertain the suits despite the bar imposed by the provisions of clause (5) of Article 34 of the said Order. Mr. Huq offered his views in the negative. Dr. M. Zahir, on the order hand, canvassed the contrary views. I lend my support to the views of Dr. Zahir for the reasons below.
10. Generally speaking, under section 9 of the Code of Civil Procedure any civil Court
has jurisdiction to try all suits of civil nature excepting suits of which their cognizance is
either expressly or impliedly barred. But it has been consistently held since the decision
in Secretary of State vs. Mask & Company. AIR 1940 PC 105 that “the exclusion of the jurisdiction of the courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.”
11. In the vein of this decision there are numerous decisions, some of them with extended principles. In the case of Abdur Rouf and others-vs-Abdul Hamid, 17 DLR (SC) 515 cerain proceedings were challenged in the civil court amongst other grounds on the ground of malafide. The civil court declined jurisdictions in view of the ouster clause. The High Court on appeal set aside the order and remanded the case to the trial court holding that the court had jurisdiction to try the suit. The High Court’s order was approved by the Supreme Court of Pakistan with the following observation: “The decision of the question whether the Civil Court had jurisdiction in the present case would depend on whether the impugned orders and proceedings were without jurisdiction. There is in this case an attack on the proceeding on the ground of malafide too. A malafide act is by its nature an act without jurisdiction. No legislature when it grants power to take action or pass an order contemplates as malafide exercise The of power. A malafide order is a fraud on the statue. It may be explained that a malafide order means one which is passed not the purpose contemplated by the enactment granting the power to pass the order, but for some other collateral or ulterior purpose.”
12. Hamoodur Rahman, CJ. speaking for the Supreme Court of Pakistan had occasion to take a similar view in the case of Federation of Pakistan -vs- Saeed Ahmed, PLD 1974 (SC) 151. In course of his speech he laid great stress upon the malafide acts under a special statute ousting jurisdiction as an element to make the ouster clause ineffectual. He said: ” Indeed malafide acts stand on the same footing as acts done without jurisdiction.
Similarly coram non judice also stand on the same footing because these words would literally mean that they have been done by an authority or body exercising judicial or quasi-judicial powers which was not properly constituted even under the law under which it was set up and that its decision is not a decision of a competent authority. If this be so then such acts do not also qualify for validation and they have not been saved from scrutiny by the ouster clause, no matter how widely that ouster clause may be worded.”
13. In this back ground I proceed to consider the provisions of Article 34 of the said
Order visa-vis the plaint-allegations. The relevant provisions of the article are as follows:
“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 the industrial concern, and may sell or realise any property pledged, mortgaged, hypothecated or assigned by the industrial concern to secure its liability to the Sangstha. (2)……………… (3)………….
(4)………………..(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 (i) for a declaration that such taking over or transfer is illegal, ineffective or void, or (ii) for setting aside or annulling any order or decision of the Sangstha relating to such taking over or transfer; or (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;”
14. A close scrutiny of clause (1) and (5) of the Article discloses that the ouster of civil
court’s jurisdiction under clause (5) though expressed is not without conditions. First
there has to be an existence of a liability or re-payment of a loan. Secondly, there has to
be default in re-payment of loan in terms of the agreement. Thirdly, the properties to be
taken over and/or sold by the Sangstha must have to be a property pledged, mortgaged,
hypothecated or assigned by the industrial concern to secure its liability to the Sangstha. The power under clause (1) can be exercised of the aforesaid conditions are fulfilled and the ouster clause (5) comes into play when the Sangstha acts in consonance with clause (1) and not otherwise. In this regard the expression” under clause (1)” occurring in clause (5) and the expression “such taking over or transfer” in the said clause and clause (5) (a) (i) (ii) are particularly noticeable. In other words, if the conditions of clause (1) are not fulfilled the ouster clause (5) does not operate. In that case the purported action under clause (1) would be taken without jurisdiction. Such a case will not come within the mischief of clause (5).
15. The plaints and the prayers of both the suits show that the plaintiffs have disowned
liability of loan alleging re-payment of the same by the BTMC on their behalf and
asserted that the properties concerned were not mortgaged or hypothecated with the
Sangstha and that the action taken by the Sangstha was malafide.
16. It has to be noticed that there has been no provision for appeal or no forum provided
in the Order for redress of genuine grievances of any body or person when injustice
is perpetrated on them. It cannot be imagined that such a body or person should be
precluded from received that such a body or person should be precluded from receiving
assistance from a court of law. Civil Court is a court of ultimate jurisdiction, and in cases where no other remedy is provided for, the door of the civil court should not be closed and hermetically sealed against one who had been subjected to injustice.
17. In the view I have taken of the legal position I am constrained to find that in the
instant case the civil court has jurisdiction to entertain the plaints. The correctness of
the allegations can be resolved only at the trial.
18. In the result, I would, therefore, dismiss the appeals.
Source: IV ADC (2007), 325