RE: LEGAL OPINION REGARDING RECOVERY OF OUTSTANDING LATR # 40/99 DATED 20.12.1999 OF Company 1, A/C. Company 2.
We refer to your letters dated 05.07.2004 received by us on 10.07.2004 on the above subject.
We have perused the papers/documents referred to us. We understand that at the request of Company 1 (COMPANY 1), Bank 1, (the Bank) opened L/C No. ……………. in favour of Celli S. P. A., Via Romna Ovest, Porceri, Italy. The L/C was opened at the request of COMPANY 1 on account of Company 2. At the time of retirement of documents under the L/C, COMPANY 1 requested the Bank vide letter dated 14.12.1999 for TR facility for 90 days as they were in liquidity problem. The validity of the facility was extended up to the year 2002.
After receiving several reminders from the Bank, COMPANY 1 has deposited all together Tk.1,52,50,000.00 on various dates as partial adjustment of TR facility. The last payment was made on 26.06.2002. The COMPANY 1 vide letter dated 02.04.2003 informed the Bank that as per decision of the Government of Bangladesh, Company 2 has been listed to be acquired by Privatization Board and its liability has been taken over by the Government. As per request of the Privatization Board, the Bank has provided details of outstanding liabilities of COMPANY 1 on account of Company 2. In such situation, the matter has been referred to us and we are asked to advise as to the possibilities of recovering of the outstanding dues of COMPANY 1 on account of Company 2.
Our opinion is as follows:
Upon perusal of the documents, it appears that COMPANY 1 availed the TR facility for US$ 307,915.00 from the Bank and so far repaid Tk.1,52,50,000.00. COMPANY 1 is liable to pay the remaining outstanding dues on account of Company 2. Although Company 2 has been listed to be acquired by Privatization Board, the take over has not been completed as yet. Even if Company 2 is taken over by the Privatization Board, COMPANY 1 is liable to pay the outstanding dues to the Bank as borrower and applicant of L/C and the TR facility.
Although COMPANY 1 vide its letter dated 02.04.2003 informed the Bank that the Government has taken over the entire liabilities of Company 2, from the papers/documents it appears that the Ministry of Industries has only asked for the detailed account statements including liabilities of the companies listed to be privatised by the Privatisation Commission. Unless and until the entire liabilities of COMPANY 1 on account of Company 2 are taken over and accepted by the Government, COMPANY 1 will remain liable to repay and adjust the outstanding liability. If Government accepts the liability, a specific agreement to that effect will have to be executed between the Bank and the concerned Ministry.
In the premises stated above, we are of the opinion that since the Government has not yet accepted the liabilities of COMPANY 1 on account of Company 2, Bank may serve legal notice upon COMPANY 1 requesting them to pay the outstanding dues. However, if COMPANY 1 fails to repay the dues within time stipulated in the notice, Bank may initiate legal action against COMPANY 1 under Artha Rin Adalat Ain, 2003 to realise the outstanding dues along with up to date interest on account of Company 2.
If you have any further query, please contact the undersigned.
For: “The Lawyers & Jurists”