Dhaka Bank Limited -Versus- Mr. X

IN THE 3RD ARTHA RIN ADALAT, DHAKA

ARTHA RIN SUIT NO. OF 2004

Dhaka Bank Limited

Foreign Exchange Branch

100, Motijheel Commercial Area

Biman Bhaban (1st Floor)

Dhaka-1000

Plaintiff

-Versus-

1. Mr. X

Son of Y

Proprietor

M/s. X

House No. 171/3

Housing Estate

Sopura

Rajshahi

Other Address:

Chand Mansion

66, Dilkusha Commercial Area (5th Floor)

Dhaka-1000

2. Major (Retd.) Z

Son of Late K

House No. 379, Lane No. 6

Momataz Mohal

DOHS

Baridhara

Dhaka

Other Address:

K.G. Shaha Road

Kakoli

Shalgaria, Pabna

Kotwali

Pabna

Defendants

SUIT FOR RECOVERY OF MONEY BY SALE OF THE MORTGAGED PROPERTY

SUIT VALUED AT TK. 25,23,885.57 (TAKA TWENTY FIVE LACS TWENTY THREE THOUSAND EIGHT HUNDRED EIGHTY FIVE AND PAISA FIFTY SEVEN) ONLY AS ON 22.01.2004

The plaintiff above-named most respectfully states as

FOLLOWS:

01. That the plaintiff is a banking company incorporated under the relevant Companies Act of Bangladesh. It carries on banking business within the territory of Bangladesh through its various branches including its Foreign Exchange Branch, Dhaka situated at the address mentioned in the cause title (hereinafter referred to as the “plaintiff bank”).

02. That the defendant No. 1 is proprietor of M/s. X and availed credit facilities from the plaintiff bank. The defendant No. 2 is guarantor of the credit facilities availed by the defendant No. 1 from the plaintiff bank and also mortgaged his property mentioned in the schedule below (the “Schedule Property”) as security of the credit facilities availed by the defendant No. 1 from the plaintiff bank. The defendants’ addresses in the cause title are correct to the best of the plaintiff’s knowledge.

03. That in the course of business, on 14.10.1999 the defendant No. 1 opened account No. 15001979 with the plaintiff bank. Subsequently, on 18.10.1999 the defendant No. 1 applied to the plaintiff bank for Overdraft (Work Order) facility to execute the works under Work Order No. LGED/NAT/XEN/RRMIMP-2/99/2048 dated 09.09.99 and Work Order No. LGED/NAT/XEN/RRMIMP-2/99/2089 dated 09.09.99 awarded by Local Government Engineering Department (“LGED”), Natore. On the application of the defendant No. 1, the plaintiff bank vide Sanction Letter No. DBL/FEX/CR/99/1449 dated 01.12.1999 sanctioned Overdraft (Work Order) facility of an amount of Tk. 45,00,000.00 (Taka forty five lacs) only to the defendant No. 1. The terms of the Sanction Letter was duly accepted by the defendant No. 1.

04. That thereafter by letter dated 16.10.2000, the defendant No. 1 again applied to the plaintiff bank for Overdraft (Work Order) facility to complete the remaining works of Work Order No. NIPRO/LGED/RAJ/1256 dated 01.03.2000 and Work Order No. LGED/PD/RRMIMP-2/R-32/99/3751 dated 10.09.2000 (revised) awarded by Local Government Engineering Department (“LGED”), Rajshahi and Dhaka. On the application of the defendant No. 1, the plaintiff bank vide Sanction Letter No. DBL/FEX/CR/3238/2000 dated 23.11.2000 sanctioned Secured Overdraft (Work Order) facility of an amount of Tk. 15,00,000.00 (Taka fifteen lacs) only to the defendant No. 1. The terms of the aforesaid Sanction Letter was also duly accepted by the defendant No. 1.

05. That the credit facilities i.e. Overdraft (Work Order) facility and Secured Overdraft (Work Order) facility extended to the defendant No. 1 were secured as follows:

(i) Assignment of bills, receivables in favour of the plaintiff bank by the Work Order awarding authority i.e. Local Government Engineering Department, Natore and Local Government Engineering Department, Rajshahi.

(ii) Equitable mortgage of 400 square yards of land situated as recorded in the General Land Register of the Dhaka Cantonment as Plot No. 293 at Joar Shahara D.O.H.S., Dhaka Cantonment comprising a part of Survey No. 12/1, Lane No. 04 along with all constructions and building to be constructed thereon together with all rights, interests, title, easements etc. attached thereto, standing in the name of the defendant No. 2 i.e. Major (Retd.) Z.

(iii) Personal guarantee of the defendant No. 2 i.e. Major (Retd.) Z.

(iv) Confirmation in writing furnished by the Local Government Engineering Department that they will issue all cheques payable against the Work Orders in favour of the plaintiff bank.

(v) Demand Promissory Note along with Letter of Continuity executed by the defendant No. 1.

(vi) Letter of Revival executed by the defendant No. 1.

06. That under the Sanction Letter dated 01.12.1999, the loan was to be repaid by deducting 25% from each running bill and the limit was to be scaled down proportionately. It was categorically stated in the Sanction Letter that full adjustment of the loan must be made within the validity i.e. 30.06.2000. Similarly, under the Sanction Letter dated 23.11.2000, the loan was to be repaid by deducting 30% from each running bill and the limit was to be scaled down proportionately. It was stated in the said Sanction Letter that full adjustment of the loan must be made within the validity i.e. 30.06.2001.

07. That thereafter by letter dated 11.06.2000, the defendant No. 1 prayed for extension of validity of the Overdraft (Work Order) facility of Tk. 45,00,000.00 (Taka forty five lacs) only up to 30.12.2000, in place of 30.06.2000. By letter dated 09.07.2000, the plaintiff bank approved extension of validity of the overdraft limit of Tk. 45,00,000.00 (Taka forty five lacs) only up to 30.12.2000.

08. That subsequently by letter dated 26.12.2001, the defendant No. 1 applied to the plaintiff bank for extension of validity of the overdraft limit up to 30.06.2002. Upon consideration of the application, the Management of the plaintiff bank by letter dated 13.01.2002 accorded approval of extension of validity of the overdraft limit up to 31.01.2002 for adjustment purpose only. Thereafter, on the application dated 19.06.2002 of the defendant No. 1, the validity of the overdraft limit was further extended on 17.07.2002 by the plaintiff bank up to 31.01.2003.

09. That although the defendant No. 1 availed the credit facilities in full, within a very short period of time, he started to default in repayment of his loan to the plaintiff bank. As a consequence, by series of letters dated 31.05.2001, 11.09.2001 the plaintiff bank requested to defendant No. 1 to adjust his liabilities with the plaintiff bank. But there was no reply from the defendant No. 1.

10. That subsequently the plaintiff No. 1 appointed one of its officers to visit Rajshahi, Natore and Sirajgonj from 22.09.2001 to 24.09.2001 to enquire about non-payment of bills by the defendant No. 1 against the works awarded by LGED, Rajshahi and Natore. When the concerned officer of the plaintiff bank went to meet the defendant No. 1, the defendant No. 1 could not provide reasonable explanation about the differences between the payments made by LGED, Natore and cheque amount deposited in the overdraft account maintained with the plaintiff bank for the works awarded by LGED, Natore. When the concerned officer of the plaintiff bank went to meet LGED, to enquire about the actual payment position, he was shocked to learn from the Accountant of LGED, Rajshahi that no payment has been made after the assignment of bills i.e. 08.11.2000. The Executive Engineer of LGED, Natore admitted verbally that he has issued cheques amounting to around Tk. 30,00,000.00 (Taka thirty lacs) only directly to the defendant No. 1 though the bills were assigned to the plaintiff bank. From these facts, it is evident that the defendant No. 1 managed to receive payments for around Tk. 30,00,000.00 (Taka thirty lacs) only directly from LGED and has intentionally and illegally deprived and defrauded the plaintiff bank from its legal dues.

11. That thereafter by letter dated 28.10.2001, the defendant No. 1 was requested to adjust his outstanding liabilities immediately, failing which it was stated that the plaintiff bank would initiate legal action against the defendant No. 1.

12. That by letters dated 28.10.2001 and 06.12.2001, the plaintiff bank requested LGED, Natore and LGED, Rajshahi respectively not to release the security money lying with them to the defendant No. 1 and to issue the cheques in favour of the plaintiff bank.

13. That thereafter by letter dated 06.12.2001, the defendant No. 1 was again requested to adjust his outstanding liabilities with the plaintiff bank, but to no avail. By another letter dated 06.03.2002, the plaintiff bank also requested LGED, Rajshahi not to release any amount directly to the defendant No. 1 and to issue the cheques in favour of the plaintiff bank since the bills, receivables are assigned to the plaintiff bank. But there was no reply from LGED.

14. That by letter dated 27.03.2002, the plaintiff bank requested the defendant No. 2, as guarantor of the credit facilities availed by the defendant No. 1 and mortgagor of the scheduled property to take necessary steps to adjust the outstanding amount immediately, failing which legal action would be initiated by the plaintiff bank to recover its outstanding dues. But the defendant No. 2 did not bother to send any reply.

15. That thereafter by letters dated 28.04.2002, 24.12.2002, 02.02.2003 and 18.05.2003 the defendants were again requested to adjust the outstanding liabilities, but to no avail. The defendant No. 1 was given final notice on 15.04.2004 to adjust his outstanding liabilities within 7(seven) days of the letter. Even then there was no reply from the said defendant. The defendants have miserably failed to adjust their outstanding liabilities with the plaintiff bank.

16. That the plaintiff bank has given the defendants ample time and opportunity to clear the outstanding liabilities, but the defendants are reluctant in this regard. It is abundantly clear that the defendants would not adjust the plaintiff bank’s dues unless compelled by law. Having no alternative the plaintiff bank has been compelled to file this suit against the defendants to realise its legitimate dues. The plaintiff bank states that the defendants are severally and jointly liable to repay the outstanding dues of the defendant No. 1 with the plaintiff bank.

17. That no Irrevocable General Power of Attorney to sell the mortgaged property was executed by the defendant No. 2 at the time of creating the mortgage, hence the plaintiff bank could not dispose of the mortgaged property pursuant to section 12(3) of the Artha Rin Adalat Ain, 2003 before filing of the present suit.

18. That the outstanding liabilities of the defendants with the plaintiff bank stands at Tk. 25,23,885.57 (Taka twenty five lacs twenty three thousand eight hundred eighty five and paisa fifty seven) only inclusive of interest as on 22.01.2004. The plaintiff bank is entitled to interest on the said amount @ 15% per annum from 23.01.2004 till the date of realisation.

19. That the cause of action of the suit arose on 14.10.1999 when the defendant No. 1 opened account with the plaintiff bank, on 18.10.1999 and 11.06.2000 when the defendant No. 1 applied to the plaintiff bank for Overdraft facility, on 01.12.1999 and 23.11.2000 when the plaintiff bank sanctioned Overdraft facility to the defendant No. 1, on the dates when the security documents were executed and equitable mortgage of the scheduled property was executed by the defendant No. 2 in favour of the plaintiff bank, on 09.07.2000 when the validity of the Overdraft facility was extended by the plaintiff bank at the request of the defendant No. 1, on the various dates when the plaintiff bank requested LGED to submit the cheques directly to the plaintiff bank, on 31.05.2001, 11.09.2001, 28.10.2001, 06.12.2001, 27.03.2002, 28.04.2002, 24.12.2002, 02.02.2003 and 18.05.2003 when the plaintiff bank requested the defendants to adjust their liabilities and the defendants miserably failed to adjust the said liabilities, on 15.04.2004 when final notice was issued to the defendant No. 1 requesting the defendant to adjust the outstanding liabilities and the said cause of action is continuing till date.

20. Thatthe suit is for realisation of a sum of Tk. 25,23,885.57 (Taka twenty five lacs twenty three thousand eight hundred eighty five and paisa fifty seven) only inclusive of interest as on 22.01.2004 and the said suit is within the jurisdiction of this Court. For the purpose of court fees, the plaintiff bank values the suit at the said amount and has paid ad valorem court fees on the said amount.

21. That the authorised representative of the plaintiff bank in the instant suit is Md. Q, Assistant Vice President of the plaintiff bank, who is well conversant with the facts of the case.

The plaintiff bank, therefore, prays for:

(a) A decree for a sum of Tk. 25,23,885.57 (Taka twenty five lacs twenty three thousand eight hundred eighty five and paisa fifty seven) only inclusive of interest as on 22.01.2004 in favour of the plaintiff bank and against the defendants jointly and/or severally;

(b) A decree for interest from 23.01.2004 till the date of filing the instant suit @ 15% per annum and pendente lite interest at the rate stipulated in the Artha Rin Adalat Ain, 2003 from the date of filing the suit till the date of decree and from the date of decree till realization of the decretal amount;

(c) A decree for sale of the mortgaged property described in the schedule “B” below;

(d) A personal decree against the defendant Nos. 1 and 2;

(e) A decree for the entire costs of the suit;

(f) Any other relief(s) to which the plaintiff bank is entitled in law and equity.

And for this act of kindness, the plaintiff bank as in duty bound shall ever pray.

SCHEDULE “A”

(Schedule under section 8(2)(ka) of the Artha Rin Adalat Ain, 2003)

Description of Loan & Amount Outstanding

Nature of Facilities Limit Total Cash Withdrawal Interest

Charged

Other Charges Total Bills Deposited

+

Deposit from defendant’s own source

Outstanding as on 22.01.2004
Secured Overdraft Tk. 60,00,000.00 Tk. 95,95,100.00 Tk. 20,63,412.57 Tk. 12,276.00 Tk. 85,56,903.00

+

Tk. 5,90,000.00

Tk. 25,23,885.57

SCHEDULE “B”

(Schedule under section 8(2)(kha) Artha Rin Adalat Ain, 2003)

[Description of mortgaged property]

All that piece and parcel of land measuring 400 square yards situated as recorded in the General Land Register of the Dhaka Cantonment as Plot No. 293 at Joar Shahara D.O.H.S., Dhaka Cantonment comprising a part of Survey No. 12/1, Lane No. 04 along with all constructions and building to be constructed thereon together with all rights, interests, title, easements etc. attached thereto.

A F F I D A V I T

I, Md. Q, son of ___________________, of Dhaka Bank Limited, Foreign Exchange Branch, 100 Motijheel Commercial Area, Biman Bhaban (1st floor), Dhaka-1000, aged about 38 years, by faith Muslim, nationality Bangladeshi by birth, profession service, do hereby solemnly affirm and declare as follows:

1. That I am Assistant Vice President of the plaintiff bank and well conversant with the facts of the case and competent to swear this affidavit.

2. That the statements of facts made in this application are true to the best of my knowledge and belief and rests are submissions before this Hon’ble Court and in witness whereof I swear this affidavit and signed below on this the ______day of April, 2004 at ____ a.m. before the Commissioner of Affidavit.

DEPONENT

The deponent is known to me and identified by me.

ADVOCATE