IN THE ARTHA RIN ADALAT, 4th COURT AT DHAKA
ARTHA RIN SUIT NO. ___ OF 2004
Uttara Bank Limited
Ramna Branch
68/1, Purana Paltan
Dhaka 1000.
PLAINTIFF
-Versus-
1. X Fashions Limited
Road No. 24
House No. 340
New DOHS
Mohakhali
Dhaka
And
1/2 – 1/3 (5th floor)
Block – KA
Uttar Bishil
Section 1
Mirpur
P.S. Mirpur
Dhaka.
2 Mr. Y
Son of Z
Road No. 24
House No. 340
New DOHS
Mohakhali
Dhaka
And
Vill. Gopinathpur
Ulanpara
P.S. Harirampur
Dist. Manikganj
3 Mr. A
Son of B
Road No. 24
House No. 340
New DOHS
Mohakhali
Dhaka
DEFENDANTS
SUIT FOR RECOVERY OF MONEY
SUIT VALUED AT TK. 66,84,604.00
ONLY AS ON 31.12.2003.
The plaintiff above-named most respectfully states as
FOLLOWS:
01. That the plaintiff is a banking company incorporated under the relevant Companies Act. It carries on banking business within the territory of Bangladesh through its various branches including the Ramna Branch, Dhaka as stated in the cause title (hereinafter referred to as the “plaintiff bank”).
02. That the defendant No.1 is the borrower who availed following facilities from the plaintiff as described hereunder and a limited company incorporated under the relevant Companies Act and carries on business of manufacturing of readymade garments and export the same. The defendant Nos.2 & 3 are the Managing Director and Director of the defendant No.1 respectively and stood as guarantors against the facilities availed by the defendant No.1. The defendants’ addresses in the cause title are correct to the best of the Plaintiff’s knowledge.
03. That in the course of business, the defendant No. 1 opened an account being No. CA5558 on 07.03.2000 with the plaintiff bank and availed various credit facilities from time to time, as stated hereunder.
04. That at the request of the defendant No.1, the plaintiff bank time to time opened Back to Back Letters of Credit (Back to Back L/Cs) upon receipt of the different Export L/Cs for procurement of fabrics and accessories in order to complete the manufacturing of the readymade garments under the Export L/Cs. Accordingly, the plaintiff bank opened the following Back to Back L/Cs:
| Back to Back L/C No. and date | Export L/C No. | Amount in US$ | Beneficiaries |
| 147/11/01/05, dated 14.01.2001 | BD/20868/S | 14,570 | Company 1, Seoul, Korea |
| 147/11/01/06, dated 14.01.2001 | BD/20870/S | 16,363.44 | Company 2, Bangkok, Thailand |
| 147/11/ILC/01/05
dated 11.01.2001 |
BD/20870/S and
BD/20868/S |
41,000 | Company 3, Dhaka,
Bangladesh. |
| 147/11/ILC/01/15
dated 07.02. 2001 |
BD/20870/S and
BD/20868/S |
10,000 | Company 4, Dhaka, Bangladesh. |
| 147/11/ILC/00/100
dated 05.07.2000 |
200104110 |
10,000 | Company 5 |
| 147/11/ILC/00/101
dated 05.07.2000 |
200104110 | 5,342 | Company 6, Dhaka, Bangladesh. |
| 147/11/ILC/00/106
dated 06.07.2000 |
DCMGL102002
DCMGL102003 DCMGL102004 |
5,544.45 | Company 6, Dhaka, Bangladesh. |
| 147/11/00/55 | DCMGL 102002, 102003 & 102004 all dated 17.05.2000 | 75,900 | Company 7
Taiwan |
05. That the above L/C facility was secured by Hypothecation of Machinery, Spare Parts, accessories, equipments, goods and other moveable assets stored and fixed in the factory premises, vide execution of an ‘Agreement for Hypothecation of Machinery’ dated 21.08.2001.
06. That further against repayment of the facilities, the defendant No. 1 executed various charge documents namely, Demand Promissory Note, Letters of Authority, Letter of Continuity, Revival Letter etc. all dated 27.01.2002 . The defendant Nos. 2 & 3 executed personal guarantees against the facilities availed by the defendant No.1.
07. That the Back to Back L/Cs were subject to Uniform Customs and Practice for Documentary Credits (ICC Publication No. 500) [hereinafter referred to as UCPDC]. The beneficiaries of the aforesaid Back to Back L/Cs shipped/supplied the goods and submitted the shipping documents to their respective Bank who in turn sent the said shipping documents to the plaintiff bank for acceptance and payment within due date
08. That the plaintiff bank received the shipping documents in terms of the Back to Back L/Cs and intimated the same to the defendant No.1. The defendant No.1 thereupon accepted the shipping documents by signing the Bill of Exchange.
09. That notwithstanding the acceptance of the documents as aforesaid and taking delivery of the fabrics and accessories under the said Back to Back L/Cs, the defendant No.1 did not execute the export orders effectively. In some cases shipments were not made in time, some times there were short shipments. In other cases though goods were shipped, the defendant No. 1 tendered discrepant documents which resulted in rejection of those documents. These resulted in non-repatriation of the export proceeds. The plaintiff bank submits that the liability of such non-execution of the Export Order is solely attributable to the deliberate/negligent failure of the defendant No.1.
10. That as per norms and practice, it was the responsibility of the defendant No.1 to settle the Back to Back L/Cs payment on or before the due dates of the respective L/C from the export proceeds or from the defendant No.1’s own source The beneficiary of an irrevocable documentary credit enjoys maximum protection against commercial risk since it is assured that the issuing bank will pay it even if the buyer defaults or is unable to meet its payment obligation. The defendant No.1 failed to act upon as per the said norms by failing to adjust the liabilities with the plaintiff bank within the maturity date. In the circumstances, full payment under the above Back to Back L/Cs could not be made out. The plaintiff bank on various occasions requested the defendant No.1 to arrange payment under all the Back to Back L/Cs but to no effect. Consequently, upon being found the documents in order, the plaintiff bank under a compelling situation had to effect payment under the Back to Back L/Cs by creating demand loan. The details of the demand loan that the plaintiff bank was compelled to create are as follows:
| No. | Demand
Loan No. |
Dated | Against Back to Back L/C No. | Amount |
| 01 | 61/13 | 21.08.2001 | 147/11/01/05
& 147/11/01/06 |
Tk.17,57,059.00 |
| 02 | 61/12 | 19.08.2001 | 147/11/ILC/01/05
& 147/11/ILC/01/15 |
Tk.28,71,280.00 |
| 03 | 61/14 | 26.07.2001 | 147/11/ILC/00/100
& 147/11/ILC/00/101 & 147/11/ILC/00/106 |
Tk.11,76,990.00 |
| Total | Tk.58,05,329.00 | |||
11. That further the plaintiff by creating 2 IFBC, being Nos. 00/196 and 00/222, dated 17/12/2000 & 17.08.2000 respectively released the shipping documents to the defendant No.1 in terms of Back to Back L/C, being No. 147/11/00/55. Thereupon despite taking delivery of the goods by the defendant No.1 under the said L/C, it did not adjust IFBC liability within due date. The plaintiff is now under an obligation to pay the Negotiating Bank an amount of US$ 43,467.78 equivalent to Tk. 22,99,000.00 (Taka twenty two lac ninety nine thousand) only (as contingent liability) in terms of the said Back to Back L/C. Upon payment of such amount, the plaintiff bank reserves the right to add the same to the suit value by way of amendment.
12. That the defendant No.1 thereafter failed to adjust the above demand loan & IFBC liabilities with the plaintiff bank. Despite repeated requests and reminders vide letters dated 28.03.2002, 29.04.2002, 19.02.2003 by the plaintiff bank, the defendant No.1 miserably failed to adjust the aforesaid liabilities with the plaintiff bank.
13. That in response to the reminders of the plaintiff bank, the defendant No.1 from time to time by its letters dated 04.10.2001 & 20.01.2002 acknowledged the liability with the plaintiff bank, including the letter dated 26.02.2003, wherein the defendant No.1 committed to adjust the outstanding liabilities within a short period, but to no effect. Meanwhile, the defendant No.1 on 27.01.2002 in acknowledgement of its debts executed all the necessary charge documents as mentioned in paragraph 6 above.
14. That the plaintiff bank has been persistently insisting the defendant Nos. 1 to make adjustment of the liabilities. The endeavour to avoid the liability by the defendant No.1 was clearly in contravention to the respective Sanction Advice issued by the plaintiff bank. The plaintiff bank being completely displeased with the defendant No.1, cause served Legal Notice dated 06.04.2003 through its lawyer upon all the defendants requesting them for adjustment of their liabilities with the plaintiff bank, with a note that the legal proceedings would be initiated against them if they fail to adjust their liabilities with the plaintiff bank within 15 (fifteen) days of the receipt of the notice. None of the defendants either deposited any amount of the outstanding liability nor took any concrete steps for adjustment of their loan liabilities.
15. That it is apparent from negative attitude of the defendant 1 along with other defendants that they have been evading liquidating the long outstanding dues of the defendant No.1 with the plaintiff bank in breach of their obligations under the terms and conditions of the UCPDC. The plaintiff bank made repeated reminders to the defendant No. 1 to liquidate his liabilities with the plaintiff bank but the defendant No.1 continued to fail paying any attention to the plaintiff bank in this regard. Despite repeated requests and reminders issued to the defendant No. 1 by the plaintiff bank to adjust their outstanding liabilities, none of the defendants came forward to adjust the over dues.
16. That no power of attorney to sell the Hypothecated Machinery was executed in favour of the plaintiff bank, as such, the Hypothecated Machineries could not be disposed off by the plaintiff bank in compliance with section 12 of the Artha Rin Adalat Ain 2003.
17. That none of the defendants are serious at all with regard to adjust their outstanding liabilities with the plaintiff bank. It is evident from the conduct of the defendants that they have no intention to make repayment of their entire outstanding liabilities lying with the plaintiff bank.
18. That the plaintiff bank gave the defendants ample time and opportunity to clear the outstanding liabilities of the defendant No. 1 but the defendants are reluctant in this regard. It is abundantly clear that the defendants would not adjust the plaintiff bank’s dues unless compelled by law. The plaintiff bank cannot wait for an indefinite period for the defendants to adjust the outstanding liabilities of the defendant No. 1 lying with the plaintiff bank. The defendants are wilfully resorting to delaying tactics to avoid repayment of the long outstanding dues. Having no alternative the plaintiff bank is compelled to file this suit against the defendants to realize its legitimate dues. The plaintiff bank states that the defendants are severally and jointly liable to repay the outstanding dues of the defendant No.1 lying with the plaintiff bank.
19. That the plaintiff bank submits that it cannot recover its dues amicably. The plaintiff bank endeavored all its efforts to recover its dues from the defendants but to no effect. The defendants made no effort to adjust their liability.
20. That the outstanding liability of the defendants is of Tk. 66,84,604.00 (Taka sixty six lac eighty four thousand six hundred four) only inclusive of interest and charges as on 31.12.2003, and the interest to be charged thereon, which the defendants are jointly and severally legally liable to pay.
21. That the cause of action of the suit arose in all the dates when the Back to Back L/Cs were opened, on all the dates when the plaintiff received the shipping documents of the L/Cs under this plaint, on all the dates when the L/Cs were accepted by the defendants No.1, on all the dates when the plaintiff created demand loan against the payment of the L/Cs, on all the dates including 28.03.2002, 29.04.2002, 19.02.2003 when the plaintiff requested the defendant No.1 to adjust the outstanding liabilities, on 04.10.2001 & 20.01.2002 when the defendant No.1 acknowledged their liabilities, on 06.04.2003 when legal notice was issued upon the defendants requesting the defendants to adjust the outstanding liabilities and on each and every date when the defendants continued to default in repaying their outstanding liabilities with the plaintiff bank and the said cause of action is continuing till date.
22. Thatthe suit is for realisation of a decree for a sum of Tk. 66,84,604.00 (Taka sixty six lac eighty four thousand six hundred four) only inclusive of interest and charges as on 31.12. 2003 of a commercial bank and the said suit is within the jurisdiction of this Court. For the purpose of court fees, the plaintiff bank values the suit at the said amount and pays the highest court fees on the said amount.
23. That the Authorised Representative of the plaintiff bank in the instant suit is Mr. P, Senior Principal Officer of the plaintiff bank who is well conversant with the facts of the case and shall be liable to testify on behalf of the plaintiff.
The plaintiff bank, therefore, prays for:
(a) A decree for a sum of Tk.. 66,84,604.00 (Taka sixty six lac eighty four thousand six hundred four) only inclusive of interest and charges as on 31.12. 2003 in favour of the plaintiff bank and against the defendants jointly and/or severally;
(b) A decree for the pendente-lite interest at the rate stipulated in the Artha Rin Adalat Ain, 2003 from the date of filing till the date of decree and from the date of decree till realisation of the decretal amount;
(c) A personal decree against the defendant Nos. 2 & 3;
(d) A decree for the entire costs of the Suit;
(e) Any other relief(s) to which the plaintiff bank is entitled in law and equity.
And for this act of kindness, the plaintiff bank as in duty bound shall ever pray.
SCHEDULE
{Schedule under section 8(2) Ka Artha Rin Adalat Ain 2003}
Description of Loan & amount outstanding
| Nature of Facilities | Limit
(in Tk.) |
Loan amount disbursed (in Tk.) | Interest
(in Tk.) |
Sub-total
(Principal + Interest) (in Tk.) |
Amount repaid as on 31.12.2003
(in Tk.) |
Outstanding amount as on 31.12.2003
(in Tk.) |
| Back to Back L/C
(demand loan) |
N/A | 58,05,329 | 21,01,803 | 79,07,132 | 12,22,528 | 66,84,604 |
AFFIDAVIT
I, P son of _______________-of Uttara Bank Limited, Ramna Branch having address at 68/1, Purana Paltan, Dhaka 1000, aged about 47 years, by faith Muslim Nationality Bangladeshi by birth, profession service, do hereby solemnly affirm and declare as follows:
1. That I am the officer of the Plaintiff of this plaint and well conversant with the facts of the case and competent to swear this Affidavit.
2. That the statements of facts made in this application are true to the best of my knowledge and belief and rests are submissions before this Hon’ble Court and in witness whereof I swear this affidavit and signed below on this the ______day of___________, 2004 at _________ a.m. before the Commissioner of affidavit.
| DEPONENT | |
| The deponent is known to me and identified by me. | |
| ADVOCATE |