Legal Opinion regarding encashment of a TDR A/C Mr. x & Mrs. A.

Mr. Z


Dear  Sir,

Re: Legal Opinion regarding encashment of a TDR A/C Mr. x & Mrs. A.

We refer to your letter dated May 24, 2007 on the above subject.

From perusal of your letter and the documents forwarded to us, it appears that Mr. x & Mrs. A purchased Term Deposit Receipt (“TDR”) under joint signature from Company 1 (“COMPANY  1”) bearing #COMPANY  1B/0125 dated 25.04.2006 of Tk. 62,00,000/- which matured on 25. 04.2007. The TDR application form was signed with the clause “either or survivor” and a nominee with 100% benefit was fixed. A loan of Tk. 8,75,000/- was availed by keeping the TDR under lien to COMPANY  1. In the meantime, COMPANY  1 has come to know that Mr. x has expired. Now the surviving client Mrs. A wants to encash the TDR.

In these circumstances, you have sought our legal opinion as to whether COMPANY  1 may encash the TDR to the survivor.


Normally COMPANY  1 would have been able to encash the TDR to the surviving client as the TDR contained the clause “either or survivor”. However, in the present situation, COMPANY  1 has a lien on the TDR of Tk. 8,75,000/- on account of the loan taken by the clients. [Please note that, we were not provided with copies of the letter of lien or any other documents in connection with the lien].

As such, as long as COMPANY  1 has lien on the TDR, COMPANY  1 may not encash the TDR to the surviving client. COMPANY  1 may give the following two options to Mrs. A:

a)      COMPANY  1 shall set off the loan amount from the TDR, cancel the lien and then encash the remaining amount of the TDR to Mrs. A; OR

b)      COMPANY  1 shall hold on to the TDR  until the loan has been fully repaid by the client, then COMPANY  1 shall cancel the lien and encash the entire amount of the TDR to Mrs. A.

If you have any further query, please do not hesitate to contact the undersigned.

Thanking you.

Yours faithfully,


For: “The Lawyers & Jurists”