Legal Opinion regarding Sale of Mortgaged Properties, A/C. M/S. Company 1.

Mr. Z

Address….

Dear Sir,

Re:        Legal Opinion regarding Sale of Mortgaged Properties, A/C. M/S. Company 1.

We refer to our letter dated 06.09.2005 your letter dated September 22, 2005 regarding the captioned subject.

We have perused the contents of your letter along with the record of the Artha Jari Case No. 112 of 2005.

It appears that, the decree holder Bank i.e. The Bank 1, Principal Branch (the “Bank”) filed Artha Jari Case No. 112 of 2005 on 16.05.2005 in the Artha Rin Adalat, 2nd Court at Dhaka to execute the decree passed in Artha Rin Suit No. 79 of 2004 for realisation of Tk. 1,38,53,942.00 (Tk. one crore thirty eight lac fifty three thousand nine hundred forty two) as on 30.04.2005 along with interest as per terms of the decree, by sale of the mortgaged properties.

Next date of the above Artha Jari Case has been fixed for taking step for 1st Auction under section 33 (1) of the Artha Rin Adalat Ain, 2003 on 17.10.2005. In such situation two queries have been referred to us. We have perused the queries and our comments are given hereinafter.

Query No. 1

“If the Bank can hold second auction at this stage for sale of the mortgaged properties, and if it can do so then what procedure to be precisely followed.”

After approval of the auction notice under section 33 (1) of the Artha Rin Adalat Ain, 2003 by the learned Court we shall send you the same for publishing the auction notice in the daily news paper(s). Pursuant to section 33 of the Artha Rin Adalat Ain, 2003, the said auction notice is required to be published at least 15 (fifteen) working days prior to the date fixed for auction. The auction notice must also be published by affixing the same in the notice board of the concerned Court and in the locality where the property in question is situated by drum beating by the process server of the Court. If the property can not be sold in auction in terms of the section (1), (2) and (3) then the Bank can arrange second auction under section 33 (4) of the Artha Rin Adalat Ain, 2003.

“If buyers are found willing to purchase the mortgaged properties then what legal procedures to follow regarding transfer of title of the properties and handing over the possession of the same.”

Bank is not the owner of the property, but has obtained a decree for sale of the mortgaged property. Any sale in execution of a decree must be made in compliance with the procedure laid down in section 33 of the Artha Rin Adalat Ain, 2003. However section 33 of the Artha Rin Adalat Ain, 2003 provides two types of certificates-one is certificate of Possession under sub-section (5) and the other is Certificate of Ownership under sub-section (7). In this connection it is mentionable that pursuant to the provision of sub-section (5) of the section 33 of the Artha Rin Adalat Ain, 2003, if the property can not be sold in auction in terms of the sub-sections (1), (2), (3) and (4) of section 33 of the said Ain, the possession of the property shall be vested upon the decree holder and the Court shall issue Certificate of Possession. As such it is clear that if the property can not be sold in 2nd auction under section 33 (4) of the said Ain, vesting of the possession upon decree holder and issuance of Certificate of Possession under sub-section (5) is mandatory. However, pursuant to the provision of sub-section (7) of section 33 of the said Ain, it is the option of the decree-holder as to whether he/it will acquire the title of the property or not. If the property can not be sold in 1st auction and the decree-holder wishes to acquire the title of the property, then the decree-holder has to apply for the Certificate of Ownership under section 33 (7) of the said Ain before publication of notice for the 2nd auction under sub-section (4) of section 33 of the Artha Rin Adalat Ain, 2003.

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

Thanking you.

 

Yours faithfully,

 

………………….

For: “The Lawyers & Jurists”

Legal Opinion regarding Sale of Mortgaged Properties, A/C. M/S. Company 1.

Mr. Z

Address….

Dear Sir,

Re:        Legal Opinion regarding Sale of Mortgaged Properties, A/C. M/S. Company 1.

We refer to your letter dated August 27, 2005 regarding the captioned subject.

We have perused the contents of your letter along with the record of the Artha Jari Case No. 112 of 2005.

It appears that, the decree holder Bank i.e. The Trust Bank Limited, Principal Branch (the “Bank”) filed Artha Jari Case No. 112 of 2005 on 16.05.2005 in the Artha Rin Adalat, 2nd Court at Dhaka to execute the decree passed in Artha Rin Suit No. 79 of 2004 for realisation of Tk. 1,38,53,942.00 (Tk. one crore thirty eight lac fifty three thousand nine hundred forty two) as on 30.04.2005 along with interest as per terms of the decree, by sale of the mortgaged properties.

Next date of the above Artha Jari Case has been fixed for filling of paper cutting on 11.09.2005 of the show cause Notice to the judgment debtors as to why the decree shall not be execute against them. In such a situation, you have sought our opinion whether the Bank can sell (through private sale) the mortgaged properties during the pendency of the Artha Jari Case No. 112 of 2005.

Our Opinion:

Bank is not the owner of the property, but has obtained a decree for sale of the mortgaged property. Any sale in execution of a decree must be made in compliance with the procedure laid down in section 33 of the Artha Rin Adalat Ain, 2003. However, if the property cannot be sold in the first auction, the Bank as decree-holder has the option to acquire the ownership of the property under section 33(7) of the said

Act, whereupon the Bank as owner of the property may sell the property in any manner it wishes.

Please note that if the Bank wishes to acquire the ownership under section 33(7) of the said Act, it has to make application for the same after the first auction, but before the publication of notice for the second auction. Once the notice for the second auction is published and the property is not sold through auction, the Court will have to hand over the possession of the property to the Bank under section 33(5) of the said Act and there will be no scope of acquiring ownership of the property.

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

Thanking you.

Yours faithfully,

 

………………….

For: “The Lawyers & Jurists”