Yaqub Mohammad and another (Petitioner)
Bangladesh Bank and others (Respondents)
Latifur Rahman J
Bimalendu Bikash Roy Choudhury J
AM Mahmudur Rahman J
Mahmudul Amin Choudhury J
August 10, 1999.
The Bank Companies Act, 1991 (XIV of 1991), Section 17(1)
Consequence of default of payment by the directors- Directorship of the defaulter loanee is vacated on the expiry of the period of two months notwithstanding the subsequent rescheduling of the loan and repayment of ten percent of the outstanding loan.
A Rokonuddin Mahmood Senior Advocate instructed by Md. Nawab Ali, Advocate-on-Record— For the Petitioners.
Tawfique Nawaz, Advocate (Amirul Islam, Senior Advocate with him) instructed by Aftab Hossain, Advocate-on-Record—For the Respondent Nos. 1 & 2,
Not represented—Respondent Nos. 3 & 4.
Civil Petition for leave to Appeal Nos. 724 and 726 of 1999.
(From the Judgment and order dated 10 May 1999 and 19 July 1999 passed by the High Court Division in Writ Petition Nos. 3388 and 3724 of 1998).
Bimalendu Bikash Roy Choudhury J.- Chandra Spinning Mills Ltd. hereinafter called the company took certain project loan from respondent No. 4 Pubali Bank Ltd. The leave petitioners, namely, Mohammad Yaqub and Habibur Rahman both Directors of the said Bank furnished personal guarantee for payment thereof. Pubali Bank issued notices on 20 August 1995 under section 17(1) of the Bank Companies Act, 1991, hereinafter referred to as the Act, to the petitioners individually through respondent No. 2, General Manager (BRPD), Bangladesh Bank, who forwarded the same under two covering letters dated 23 August 1995. On receipt of the same the petitioners submitted their respective representations to respondent No. 1. Bangladesh Bank which communicated its decision thereon by letters dated 2 October 1995 and directed payment of the loan in terms of the notices. It was specifically mentioned therein that in the event of their failure to pay the money their Directorship in Pubali Bank would be deemed to have been vacated after the expiry of two months from the service of the notice under section 17(1) of the Act. These letters were challenged in two separate Writ Petitions, being Nos. 2185 and 2186 of 1995. A Division Bench of the High Court Division, by a common judgment dated 1 July 1997 discharged the Rules. Against this judgment the petitioners filed Civil Petition for leave to appeal Nos. 18 and 19 of 1998 which were eventually disposed of on 28 November 1998.
2. In the meantime the lending Bank, upon the prayers of the petitioners, gave a proposal to the Bangladesh Bank for rescheduling the loan. In its letters dated 25 January 1998 the Bangladesh Bank gave no objection to the proposal subject to 10% down payment of the overdue loan. In that letter, it was also stated that the borrower company would have to pay the usual rate of interest on the rescheduled amount. On 30 September 1998 the Bangladesh Bank through its Joint Director wrote a letter to the Chairman of the Board of Directors of Pubali Bank stating that if the overdue loan had not been paid within two months from the date of receipt of the notice under section 17(1) of the Act, the Directorship of the petitioners would be deemed to have been vacated after the expiry of the said period. Mohammad Yaqub challenged this letter of the Bangladesh Bank in Writ Petition No. 3724 of 1998 while Habibur Rahman challenged it in Writ petition No. 3388 of 1998. Their common ground was stated to be that after the rescheduling of the loan, 10% of the overdue loan had already been paid and that consequently the petitioners did not make any default
3. On consideration of the materials on record a Division discharged the Rules by a common and Judgment dated 19 July 1999.
4. The petitioners now seek leave to appeal from the said judgment of the High Court Division.
The self-same point has been urged before us as before the High Court Division. We have heard the learned Counsel for the petitioners at length. It appears that the High Court Division has correctly held that the petitioners/company did not pay the entire outstanding dues of Pubali Bank within the specified time and that the impugned letter of the Bangladesh Bank could not, therefore, be said to have been issued without any lawful authority. We see no ground for grant of leave and dismiss the petitions accordingly.
Source: 52 DLR (AD) (2000) 159