Re: Legal Opinion on selling of mortgaged property through action notice for realising dues of Cox’s Bazar Branch
We refer to your letter dated 30.04.2005 regarding the subject above.
We have perused the letter and the documents/papers referred to us.
We understand that Mr. X availed loan amounting to Tk. 30 (thirty) lac only from the Bank. As security of the loan, Mr. X, Mr. Y and Mr. A mortgaged landed property measuring 13 (thirteen) decimals in favour of the Bank vide Deed of Mortgage No. 823 dated 13.04.1999 wherein Mr. y and Mr. A executed the mortgage through their constituted attorney i.e. Mr. X(the “Borrower”). Thereafter, empowered by the IGPA, the Borrower entered into a Lease Agreement with the Bank to give lease to the Bank space measuring 2095 square feet on the 1st floor of the building standing over the mortgaged land to set up its Branch Office. The loan amount of Tk. 30 Lac only was considered as advance payment for the lease premises and it was agreed that monthly rentals would be adjusted fully from the advance amount. It was also agreed that in addition to the monthly rentals, the Borrower would deposit Tk. 56,400.00 on monthly basis to the Bank towards adjustment of the loan. But the borrower failed to pay the monthly instalments regularly.
In the meantime, Mr. Y and Mr. A filed a Partition Suit being No. 21 of 2001 in the Sub-Judge, 1st Court, Cox’s Bazar for partition of the land and to appoint a receiver for collection and distribution of income of the shops and hotel remaining on the land. In the said suit, Bank was not made party. Subsequently, upon a petition of the Bank to be added as party Bank has been added as defendant in the suit. Bank has filed written statement in the suit opposing
partition of the land as the same is mortgaged with the Bank and the loan has not yet been adjusted.
The Hon’ble Court has appointed receiver and has ordered the receiver to pay monthly instalments to the Bank as per Lease Agreement upon collection from all other tenants. The order was confirmed by the Hon’ble Appellate Division of the Supreme Court of Bangladesh. The partition suit is pending and the Borrower is continuing to default in repayment of the loan.
In such a situation, in compliance with section 12 of the Artha Rin Adalat Ain 2003 and with a view to sell the mortgaged property in question Bank published an Auction Notice in ‘NEWSPAPER NAME 1’ and ‘NEWSPAPER NAME 2’, on 16.04.2005 requesting the interested bidder to participate the auction on 11.05.2005. Subsequently upon publishing of the auction notice under section 12 of the Artha Rin Adalat Ain 2003, Bank has received an application from Mr. Y and Mr. A with a prayer to stay the operation of the auction notice. Under such situation you have sought our opinion as to the next course of action of the Bank for recovery of the outstanding loan amount.
Since the Borrower himself and the other owners i.e. Mr. Y and Mr. A have mortgaged the landed property with the Bank, even if the land is partitioned between the owners, it will still be subject to the mortgage. However if the Bank fails to sell the mortgaged property by auction sale Bank may file Artha Rin Suit against the Borrower and the mortgagors in the concerned Artha Rin Adalat with a prayer to the Court to pass a decree to sell the mortgaged property for recovery of the loan.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”