Re: Legal Opinion regarding payment of accrued interest of FDRs of Company 1.
We refer to your letter dated 29.08.2007 on the captioned subject.
From perusal of your letter it appears that, the authorised representative of China Company 1 (“COMPANY 1”), Mr. x has requested Bank 1 (“the Bank”) to furnish them with all information regarding six Bank Guarantees Nos. ……….. (“Bank Guarantees”) and FDR Nos. …………… (“FDRs”).
As per request of COMPANY 2-COMPANY 1 (Company 2 (“COMPANY 2”) and Company 1) the Bank had issued the Bank Guarantees in favour of Roads and Highway Department. Subsequently, Roads and Highway Department terminated their contract and claimed to encash the Bank Guarantees. Consequently, upon filing two writ petitions being no. 7124 of 2003 and 7141 of 2003 by COMPANY 2, the Hon’ble Court issued Rule and order of stay in the Writ Petitions. Thereafter, a Division Bench of the Hon’ble High Court, Supreme Court of Bangladesh vide judgment dated 10.05.06 made the rules absolute in part and the memos of the Roads and Highway Department so far as it relates to encashment of the Bank Guarantees have been made without lawful authority and have no legal effect.
Thereafter, the Roads and Highway Department filed Civil Miscellaneous Petitions No. 627 of 2006 and 638 of 2006 against the judgement dated 10.05.06 of the High Court Division and the Hon’ble Chamber Judge of the Appellate Division vide order dated 26.06.2006 directed the parties to maintain status-quo.
In the circumstances stated above, we are of the view that since the Hon’ble Chamber Judge of the Appellate Division has directed the parties to maintain status-quo, the Bank should not consider any request of COMPANY 1 regarding payment of interest against the FDRs in question. COMPANY 1 may be informed accordingly.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”