Artha Rin Adalat Ain 2003 Section 33: Auction, Possession & Ownership Transfer

Introduction to Section 33 of Artha Rin Adalat Ain 2003

The Artha Rin Adalat Ain 2003 (Money Loan Court Act 2003) is Bangladesh’s key legislation for expedited recovery of loans by financial institutions like banks. Section 33 outlines the execution process for decrees in loan suits, focusing on auction sales of mortgaged properties, issuance of possession certificates, and ownership transfers. This section ensures efficient debt recovery while protecting procedural fairness. Enacted to address delays in civil suits, it mandates auctions before ownership vesting and was amended in 2007 (gazetted 23.12.2007) to allow banks to apply for ownership certificates within 6 years of possession.<grok:render card_id=”acc7aa” card_type=”citation_card” type=”render_inline_citation”> 22</grok:render> This guide covers the full provisions, the 2007 amendment’s impact, and practical application, including a real legal opinion example.

Key Provisions of Section 33

Section 33 governs the sale of mortgaged properties (movable or immovable) in execution of a decree. It prioritizes auction sales to recover dues, with fallback options if auctions fail. Here’s a breakdown:

  • Subsection 33(1)–33(4): Auction Process
    The decree-holder (e.g., bank) must publish a notice of auction in a daily newspaper at least 15 days before the sale.<grok:render card_id=”f229df” card_type=”citation_card” type=”render_inline_citation”> 2</grok:render> The notice details the property, reserve price, and sale date. The court supervises the auction, and the highest bidder pays 25% immediately, with the balance within 7 days. If no bidder appears or the sale fails, the process can be repeated.

  • Subsection 33(5): Possession and Enjoyment Certificate
    If the property isn’t sold in auction (e.g., no bidders), the court issues a certificate vesting possession and enjoyment of the mortgaged property to the decree-holder bank. This certificate is conclusive evidence of the bank’s right to possess and use the property for recovery. The execution case is then disposed of under 33(9).<grok:render card_id=”ab1cd3″ card_type=”citation_card” type=”render_inline_citation”> 0</grok:render><grok:render card_id=”fe5bd3″ card_type=”citation_card” type=”render_inline_citation”> 20</grok:render> Case law like Mohiuddin (SK) vs Joint District Judge (13 MLR (AD) 356) clarifies this as interim relief, not final disposal—further action under 33(7) may follow.

  • Subsection 33(6)–33(7): Ownership Transfer Certificate
    Post-possession, the bank can apply to the executing court for a certificate transferring full title (ownership) of the mortgaged property. Under the original Act, this was immediate if auctions failed. The 2007 amendment (via Artha Rin Adalat (Amendment) Ordinance 2007) introduced a 6-year window from the 33(5) certificate date for filing this application, balancing borrower rights with bank recovery needs.<grok:render card_id=”fe5158″ card_type=”citation_card” type=”render_inline_citation”> 22</grok:render> Once issued, the certificate is irrevocable and registrable without fees at the sub-registrar’s office.

  • Subsection 33(8)–33(9): Registration and Finality
    The ownership certificate must be registered, after which the bank mutates the property in its name at the tahsil/land office. The execution ends, and the certificate is final—no cancellation possible.

The 2007 Amendment’s Impact on Section 33(7)

The amendment (gazetted 23.12.2007) modified Section 33(7) to prevent hasty ownership transfers. Previously, banks could claim title immediately post-auction failure. Now, banks have up to 6 years from the 33(5) possession date to apply, allowing time to assess property value, explore resale, or negotiate settlements. This protects borrowers from undervalued forced sales while ensuring banks recover dues. If the property’s forced sale value exceeds the claim, banks often opt for 33(7) over re-auction.<grok:render card_id=”76336d” card_type=”citation_card” type=”render_inline_citation”> 22</grok:render> Failure to apply within 6 years may bar ownership claims, though case law emphasizes procedural compliance.

Practical Application: Legal Opinion Example (Artha Jari Case No. 73/03)

In a 2008 legal opinion for a bank regarding Company 1’s mortgaged property, possession was vested under Section 33(5) on 18.06.2005. Post-2007 amendment, the bank could apply for an ownership certificate under Section 33(7) within 6 years (by 18.06.2011). The opinion advised applying promptly, noting the certificate’s irrevocability once issued—no cancellation option exists. This mirrors standard practice: banks must weigh property value against dues before proceeding, as in Rupali Bank Limited vs Judge, Artha Rin Adalat No.4 (2019), where failed auctions led to 33(5) certificates upheld despite challenges.<grok:render card_id=”ccbba9″ card_type=”citation_card” type=”render_inline_citation”> 0</grok:render>

Steps for Banks in Execution Under Section 33

  1. File Execution Case: Post-decree, apply under Section 26–27 with details of mortgaged property.

  2. Attempt Auction: Publish notice (15 days prior); hold sale. If successful, transfer to bidder.

  3. If Auction Fails: Apply for 33(5) possession certificate—court issues if no objections.

  4. Apply for Ownership (33(7)): Within 6 years of 33(5), file application. Court verifies and issues if compliant.

  5. Post-Certificate Actions: Register at sub-registrar (no fees), mutate at land office, take physical possession (via magistrate if needed).

  6. Timeline: Entire execution must conclude within 60 days (extendable to 90 with reasons) under Section 37, excluding delays like installment payments.

Practical Implications and Case Law Insights

Section 33 streamlines recovery but is strictly procedural—non-compliance (e.g., improper notice) can void sales (Bakul Aktar vs Bangladesh, 16 BLC (AD) 4). Borrowers can’t challenge via writs if alternative remedies (appeal under Section 41) exist (Gazi M Towfic vs Agrani Bank, 2002). For third-party mortgagors, properties can be sold jointly (Rupali Bank case). The 2007 amendment promotes fairness, but banks must act timely manner to avoid laches. This provision upholds Article 27 (equality) while enabling economic stability by curbing defaults.

At The Last

Master Section 33 of Artha Rin Adalat Ain 2003 for effective loan recovery or defense. Consult a lawyer for case-specific advice, especially post-2007 amendment applications. Explore the full Act on bdlaws.minlaw.gov.bd for the official text.

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