Banking Companies Act, 1991

 

 

Section—10g/ill with Article—56 of P.O. 127 of 1972, Clause-4 of the Non-Banking Financial Order, 1989

The company advanced a huge to the accused petitioner with 19 other directors of the Bangladesh Commerce and Investment Ltd. (BCI Ltd.) and their relations in violation of the laws. Warrant of arrest being issued, the petitioner was arrested on 1.8.92. He was granted an ad interim bail on 22.2.93 on condition of his depositing the entire loan money & filing certificate from the Bangladesh Bank. On the expiry of extended period on 29.6.93. the accused petitioner, having not surrendered in the Court of M. M. is a fugitive from law and justice and he is not entitled to bail. Surrender in the Court of C. M. during the pendency of the bail. This will not prejudge what view the other courts will take in respect of future bail application filed by him. [Paras-4 & 5]

Md. SaiduL Islam Chowdhury Vs. The State & others 3 BLT (AD)-144

BANKING COMPANIES ACT, 1991

 

BANKING COMPANIES ACT, 1991 (XIV OF 1991)

 

Section—37

Bangladesh
Bank, whether is not entitled to publish the statement regarding the position
of dues of an account—holder as on 31 St December, 1990, which is the last day
of 2nd half of the year, 1990.

Held—The
argument that since the Banking Companies Act, 1991, came into force on 24th
February, 1991, the Bangladesh Bank is not entitled to publish the statement
regarding the position of outstanding dues of an account—holder as on 31st
December, 1990, has no substance, as section 37, without putting any time
limit, has clearly empowered the Bangladesh Bank to publish any such
information obtained by it in a consolidated form in the public interest.

M/s. Paul
and Co. Narayanganj Vs. Bangladesh Bank, represented by its Governor and
others; 11 BLD (HCD) 484.

 

Banking Companies Act, 1991

Banking Companies Act, 1991


 

Principle-in
disposing of the goods by the bank

In the
instant case, the plaintiff-bank took initiative to release the goods from the
seaport at Chittagong, brought those to Dhaka and stored in a godown. The
officials of the bank were aware that those imported clothing and fabrics were
very expensive and its quality would certainly deteriorate with the passage of
time, as such, they ought to have taken practical steps from commercial point
of view, to dispose of those goods as soon as possible, to the relief of the
borrower as well as of the bank both. In this case, the bank in its prudence,
ought to have taken effective steps to dispose of the imported goods soon after
its release from the port in 1977, on information to the defendant-borrower.
The delay in such disposal in 1981 shows inefficiency on the part of the
officials of the bank, during which period the dues of the bank mounted to the
prejudice of the defendant while the quality of the goods continued to
deteriorate. Had those goods were disposed of earlier, it would have not only fetched
better price but also the dues of the defendant might have been substantially
adjusted to the relief of both. In these circumstances, the bank cannot avoid
its part of the responsibility altogether.

Janata Bank Vs.
Alhaj Abdul Hannan Chowdhury 10 BLT (HCD)-482

Section-5

ITCL is
a business company and undergoing simple business on dividend and profit basis
and it receives money from different persons and invest the same for different products
as contended by the petitioners counsel.

Held:
The ITCL do not come either within the ambit of Mudaraba or Musharik Method of
business.

Islamic Trade &
Commerce ltd. Vs. Bangladesh Bank & Ors. 9BLT (HCD)-183

Section-5 read with Artha Rin Adalat Ain, 2003
Section —2

Whether a guarantor would he come a defaulter
within the meaning of the Bank Company Act.

A
defaulter shall mean a person or institution that obtained advance or loan or
interest thereupon which becomes ????????????? within the meaning as notified by the
Bangladesh Bank and already expired six months. The
‘??’ what is popularly known loan has not been
defined in the Bank Company Act but exhaustibly defined by Clause (kha) of
section 2 of the Am as quoted above. Such definition includes amongst other a
guarantor of a loan. It is true clause (chha) of section 5 of the Bank Company
Act defines a
“???????” that is a debtor which includes a “????????” that is a guarantor and in the definition of defaulter in said clause
(t1) of section 5 such guarantor is not
mentioned.
Use of the word guarantor in such definition of a defaulter is not at all
necessary. When a guarantor is clearly intended to be covered by the sweep of
the above definition of a defaulter non-mention of the word
“????????” does not make any difference.

IFIC Bank Ltd. & Ors Vs. M/S. Beximco Holding Ltd &
Ors. 13 BLT (HCD)23

Section 5(Ga)(Ga) read with Bangladesh Bank
Order, 1972
Article —42(b)

Whether a guarantors can be regarded as
defaulting borrower

Since
the petitioners ceased to be the Shareholders and directors of the Company,
they ceased to be liable even as guarantors to repay the Loan of the financial
institution as Contended by the learned Counsel as the petitioners —Held the
word “borrower” is not defined in the Bank Companies Act, 1991 but it is
defined under Article 42(b) of the Bangladesh Bank Order, 1972 as any person to
whom any credit limit has been sanctioned by any banking company, whether
availed or not. In view of this legal pension, the petitioners cannot be regarded
as defaulting borrowers of the loan financial accommodations obtained by the
said three companies inasmuch as the said loan etc. was not given to them nor
the said three companies can be considered or regarding as ??????? ????????? ?????????? of the petitioners within the meaning of section 5(Ga)(Ga) and its
first proviso. Hence they cannot be regarded
either as defaulting borrowers (?????? ?? ???????) for obtaining the loans in question for themselves
nor the said three defaulting borrower companies can be said to be the
??????? ????????? ?????????? of the petitioners.

Md. Mostafa Kamal
& Ors Vs. Bangladesh Bank & Ors 14 BLT (HCD)492

Section- 17

We are
of the opinion that since the said section if concerned with the subject matter
of vacancy of the office of directors which is an additional occasion for
vacancy other than those contained in the Companies Act. 1994 and since the
entire scheme of the said Act is to bestow upon the Bangladesh Bank a strong
regulatory power over the functioning and business of bank companies, it is
enough if the offending director is intimated in a notice under section 17 of
the said Act that he has a personal liability to repay a loan of the kind
described in section 17 and that on the date of notice the loan remains
liquidated upon expiry of the stipulated date of repayment of either the whole
loan or an installment thereof. It is not necessary to describe in the notice
the nature and number of document on the basis of which the offending director
is claimed by the lender Bank to be personally responsible for repayment of a
loan or an installment. But if offending director denies his personal liability
to repay the loan in his written representation the Bangladesh Bank may send
for the incriminating materials and confront the offending director with the
same.

Masudul Alam
Chowdhury Vs. Bangladeshn Bank & Ors 8BLT(AD)-13

Section-17

Admittedly,
the petitioner took loan after providing adequate security and she did not
repay her loan liabilities and as such the notice under Section 17 of the Act
is valid notice.

Mrs. Khushi Akhter
Vs. Bangladesh Bank & Ors 8BLT(AD).145

Section- 17

Held: In
the case of Md. Saiful Alam alias Masudul Alam Chowdhury vs. Bangladesh Bank
and others, C.P. 529 of 1999 we have held that it is the Bangladesh Bank which
is authorized under the Act to determine the relevance, genuineness; connection
between the lender Bank’s documents and the loans in question and the liability
or ‘non liability of the offending director and that the High Court Division is
not, the forum for adjudication upon the documents of the offending director
and the lender Bank.

Aminul Haque
Chowdhury Vs. Bangladesh Bank & Anr. 10 BLT (AD)-36

Section-31(1) read with Section-52(1)

The ITCL
has been carrying on Banking business, whatsoever be its now and the Bangladesh
Bank after examining the necessary documents legally, holding the enquiry after
observation all the necessary legal formalities formed its legal opinion that
ITCL is a Banking Company based on which it can be called sufficient materials
and it has been made on the basis of records of ITCL itself.

Islamic Trade &
Commerce Ltd. Vs. Bangladesh Bank & Ors. 9BLT(HCD)-183

Section-45

In the
public interest or in the interest of the depositors or the banking policy or
even in the interest of the bank, the Bangladesh Bank as a central bank of the
Country is empowered to determine banking policy in relation to loan or
advances to be followed by the bank companies in general or any bank company in
particular, and when a policy is so determined it shall have a binding effect.
In particular, the Bangladesh Bank may time to time give directions with regard
to the rate of interest and other terms and conditions for giving loan, advance
or other financial accommodation. Such directions are always binding upon all
bank companies. These powers are common and universal to all regulatory banks
the world over.

Uttara Bank Ltd. Vs.
Mrs. Ayesha Siddique & Ors. 12 BLT (HCD)-106

Section-46

The
facts and circumstances prima facie indicate that the proceeding that has been
initiated is only to circumvent the order passed by this Division in civil
Miscellaneous Petition No. 534 of 1999 of which Bangladesh Bank was fully
aware. When Bangladesh Bank petitioner is fully aware of this Division’s order
or had knowledge of the order they are bound to honour the same. Reliance is
placed on the principle of law enunciated by the House of Lords in the case of
Attorney General Vs. Times Newspapers Ltd. and another reporter in (1991)2 All
England law Reports Page- 398 wherein it has been held that a person who is
aware of an order of the Court is bound to obey the same even though he was not
a party to that when it affects the result of the earlier order. Here in the
present case earlier order of this Division was to maintain status quo in
respect of composition of the Board of Directors of the Bank and a copy of that
order was sent to Bangladesh Bank by UCBL and in such a situation the
Bangladesh Bank is bound to honour the order passed by this Division.

Bangladesh Bank
& Ors. Vs. Zafor Ahmed Chowdhury&Anr. 9BLT (AD)-230

Section-46 read with the Section-48(1)

Subsection
(1) of section 48 clearly provides that no order under section 46 shall be made
except by the Governor of the Bangladesh Bank on the report by the standing
Committee. So, the law itself provides that the order may be passed only on the
basis of a report of the Standing Committee and as such the governor of
Bangladesh Bank had no scope of forming any independent opinion and he had to
take action on the basis of the report of the standing Committee:

Kamal Uddin Ahmed
&. Ors Vs.. Bangladesh Bank & Ors. 12 BLT (HCD)223

Section-46(2)

A
reasonable opinion is formed by a reasonable person when he finds something
relevant in existence in the objective world concerning any question or issue.
If a person without the existence of any such relevant objective phenomenon
fancies something and then forms an opinion concerning any question or issue
such opinion is neither a reasonable opinion nor a reasonable person holds such
an opinion. We have already noticed that the ‘opinion” of respondent No. I
concerning the appellant is based on the inspection report and the report and
recommendation of the Standing Committee. So it cannot be said that the
“opinion” held by the respondent No. 1 concerning the appellant is not a
reasonable opinion of a reasonable person.

Abdur Rahim
Chowdhury Vs. Bangladesh Bank & Ors 8BLT (AD)-146

Section-46(2)

Under
the service jurisprudence when an employee is charge sheeted he is also put
under suspension till conclusion of the inquiry proceedings. A Director,
Managing Director or Chairman of a banking company does not serve under the
Bangladesh Bank which has been merely entrusted with the powers of supervision
and control of the banking Companies Act, 1991. So the requirement of formation
of an opinion by the Bangladesh Bank has been made before directing a Director
Chairman of Chief Execute of a banking company to refrain from performing
functions of his office during the pendency of the enquiry proceedings against
him for his removal from office under Section him for his removal from office
under Section 46 of the Act. Such opinion must be formed on the basis of
relevant materials on record and not fancifully without any such material nor
on the basis of irrelevant materials. But such opinion need not be mentioned in
the order communicated to Director, Chairman or Chief Executive of the banking
company.

A Rahim Chowdhury
Vs. Bangladesh Bank & Ors
8BLT (AD)-280

Section—109/111 with Article—56 of P.O. 127 of
1972,

Clause-4 of the Non-Banking Financial Order,
1989

The
company advanced a huge to the accused petitioner with 19 other directors of
the Bangladesh Commerce and Investment Ltd. (BCI Ltd.) and their relations in
violation of the laws. Warrant of arrest being issued, the petitioner was
arrested on 1.8.92. He was granted an ad interim bail on 22.2.93 on condition
of his depositing the entire loan money & filing certificate from the
Bangladesh Bank. On the expiry of extended period on 29.6.93, the accused
petitioner, having not surrendered in the Court of M. M. is a fugitive from law
and justice and he is not entitled to bail. Surrender in the Court of C. M.
during the pendency of the bail. This will not prejudge what view the other
courts will take in respect of future bail application filed by him.

Md. Saidul Islam
Chowdhury Vs. The State & Anr. 3BLT (AD)-144.

 

Banking Companies Act, 1991

 

Banking Companies Act, 1991

 

Principle—in disposing of the goods by the bank

In the instant case, the
plaintiff-bank took initiative to release the goods from the sea-port at
Chittagong, brought those to Dhaka and stored in a godown. The officials of the
bank were aware that those imported clothing and fabrics were very expensive
and its quality would certainly deteriorate with the passage of time, as such,
they ought to have taken practical steps from commercial point of view, to
dispose of those goods as soon as possible, to the relief of the borrower as
well as of the bank both. In this case, the bank in its prudence ought to have
taken effective steps to dispose of the imported goods soon after its release
from the port in 1977, on information to the defendant-borrower. The delay in
such disposal in 1981 shows inefficiency on the part of the officials of the
bank, during which period the dues of the bank mounted to the prejudice of the
defendant while the quality of the goods continued to deteriorate. Had those
goods were disposed of earlier, it would have not only fetched better price but
also the dues of the defendant might have been substantially adjusted to the
relief of both. In these circumstances, the bank cannot avoid its part of the
responsibility altogether.

Janata Bank Vs. Alhaj Abdul Hannan Chowdhury
10 BLT (HCD)-482.

 

Section-5

ITCL is a business
company and undergoing simple business on dividend and profit basis and it
receives money from different persons and invest the same for different
products as contended by the petitioner’s counsel—Held : The ITCL do not come
either within the ambit of Mudaraba or Musharik Method of business.

Islamic Trade &
Commerce ltd. Vs. Bangladesh Bank & Ors. 9BLT (HCD)-183.

 

Section-17

We are of the opinion
that since the said section if concerned with the subject matter of vacancy of
the office of directors which is an additional occasion for vacancy other than
those contained in the Companies Act. 1994 and since the entire scheme of the
said Act is to bestow upon the Bangladesh Bank a strong regulatory power over
the functioning and business of bank companies, it is enough if the offending
director is intimated in a notice under section 17 of the said Act that he has
a personal liability to repay a loan of the kind described in section 17 and
that on the date of notice the loan remains liquidated upon expiry of the
stipulated date of repayment of either the whole loan or an installment
thereof. It is not necessary to describe in the notice the nature and number of
document on the basis of which the offending director is claimed by the lender
Bank to be personally responsible for repayment of a loan or an installment.
But if offending director denies his personal liability to repay the loan in
his written representation the Bangladesh Bank may send for the incriminating
materials and confront the offending director with the same. 13]

Masudul Alam Chowdhury
Vs. Bangladesh Bank & Ors 8BLT(AD)-13.

 

Section-17

Admittedly, the
petitioner took loan after providing adequate security and she did not repay
her loan liabilities and as such the notice under Section 17 of the Act is a
valid notice. 5.

Mrs. Khushi Akhter Vs.
Bangladesh Bank & Ors 8 BLT(AD)-145.

 

Section-17

Held: In the case of Md.
Saiful Alam alias Masudul Alam Chowdhury vs. Bangladesh Bank and others. CP.
529 of 1999 we have held that it is the Bangladesh Bank which is authorized
under the Act to determine the relevance, genuineness, connection between the
lender Bank’s documents and the loans in question and the liability or non
liability of the offending director and that the High Court Division is not the
forum for adjudication upon the documents of the offending director and the
lender Bank.

Amiul  Haque 
Chowdhury Vs. Bangladesh Bank
& Anr. 10 BLT (AD)-36.

 

Section-31(l) read
with Section-52(l)

The ITCL has been
carrying on Banking business, whatsoever be its now and the Bangladesh Bank
after examining the necessary documents legally, holding the enquiry after
observation all the necessary legal formalities formed its legal opinion that ITCL
is a Banking Company based on which it can be called sufficient materials and
it has been made on the basis of records of ITCL itself.

Islamic Trade Commerce
Ltd. Vs. Bangladesh Bank & Ors. 9BLT(HCD)-183

 

Section-46

The facts and
circumstances prima facie indicate that the proceeding that has been, initiated
is only to circumvent the order passed by this Division in Civil Miscellaneous
Petition No. 534 of 1999 of which Bangladesh Bank was fully aware. When
Bangladesh Bank petitioner is fully aware of this Division’s order or had
knowledge of the order they are bound to honour the same. Reliance is placed on
the principle of law enunciated by the House of Lords in the case of Attorney
General Vs. Times Newspapers Ltd. and another reporter in (1991)2 All England
law Reports Page-398 wherein it has been held that a person who is aware of an
order of the .Court is bound to obey the same even though he was not a party to
that when it affects the result of the earlier order. Here in the present case
earlier order of this Division was to maintain status quo in respect of
composition of the Board of Directors of the Bank and a copy of that order was
sent to Bangladesh Bank by UCBL and in such a situation the Bangladesh Bank is
bound to honour the order passed by this Division.

Bangladesh Bank &
Ors. Vs. Zafor Ahmed Chowdhury & Anr. 9 BLT (AD)-230.

 

Section-46(2)

A reasonable opinion is
formed by a reasonable person when he finds something relevant in existence in
the objective world concerning any question or issue. If a person without the
existence of any such relevant objective phenomenon fancies something and then
forms an opinion concerning any question or issue such opinion is neither a
reasonable opinion nor a reasonable person holds such an opinion. We have
already noticed that the “opinion” of respondent No. 1 concerning the
appellant is based on the inspection report and the report and recommendation
of the Standing Committee. So it cannot be said that the “opinion”
held by the respondent No. 1 concerning the appellant is not a reasonable
opinion of a reasonable person.

Abdur Rahim Chowdhury
Vs. Bangladesh Bank & Ors 8BLT (AD)-146

 

Section-46(2)

Under the service
jurisprudence when an employee is charge sheeted he is also put under
suspension till conclusion of the inquiry proceedings. A Director, Managing
Director or Chairman of a banking company does not serve under the Bangladesh
Bank which has been merely entrusted with the powers of supervision and control
of the banking Companies Act, 1991. So the requirement of formation of an
opinion by the Bangladesh Bank has been made before directing a Director.
Chairman of Chief Execute of a banking company to refrain from performing
functions of his office during the pendency of the enquiry proceedings against
him for his removal from office under Section him for his removal from office
under Section 46 of the Act. Such opinion must be formed on the basis of
relevant materials on record and not fancifully without any such material nor
on the basis of irrelevant materials. But such opinion need not be mentioned in
the order communicated to Director, Chairman or Chief Executive of the banking
company.

A Rahim Chowdhury Vs.
Bangladesh Bank & Ors 8 BLT(AD)-280.