X -Versus- Government of the People’s Republic of Bangladesh and others

In the Supreme Court of Bangladesh

High Court Division

(Special Original Jurisdiction)

WRIT PETITION NO. __________OF __________

IN THE MATTER OF:

X

Petitioner

-Versus-

Government of the People’s Republic of Bangladesh and others

Respondents

AFFIDAVIT-IN-OPPOSITION ON BEHALF OF RESPONDENTS NO. 5 AND 6

I, G, son of Mr. H of Pubali Bank Limited, Foreign Exchange Branch, Motijheel Commercial Area, P.S. Motijheel, Dhaka, aged about 45 years, by faith Hindu, profession service, nationality Bangladeshi by birth, do hereby solemnly affirm and say as follows:

01. That I am Assistant General Manager of the respondents No. 5 and 6 in the above Writ Petition and acquainted with the facts and circumstances of the case and as such competent to swear this affidavit.

02. That the contents of the above Writ Petition (hereinafter referred to as the “petition”) whereupon the instant Rule was issued by this Hon’ble Court have been read over and explained to me. I have been advised to controvert those statements which are misleading, malafide and incorrect and to place the facts and materials which are relevant for the purpose of proper disposal of the Rule.

03. That the statements which have not been specifically admitted herein shall be deemed to have been denied.

04. That the statements made in paragraph 1 of the petition relate to the personal details of the petitioner with which the respondents No. 5 and 6 are not concerned. As such, no comments are offered.

05. That the statements made in paragraph 2 of the petition are matters of record and as such no comments are offered.

06. That the statements made in paragraph 3 of the petition are matters of record and as such no comments are offered.

07. That with regard to the statements made in paragraph 4 of the petition, it is submitted that under section 12(1) of the Artha Rin Adalat Ain, 2003, no suit shall be filed in the Artha Rin Adalat by a financial institution without selling the property of the defendant which is in possession or control of the financial institution and liened or pledged as security of loan, and which can be lawfully sold by the financial institution or the power to sell which has been vested in favour of the plaintiff and without adjusting the sale proceeds of the property with the outstanding loan.

Under section 12(2) of the Artha Rin Adalat Ain, 2003, if a financial institution files a suit without selling the property in its possession or control, liened or pledged as security of loan, it shall immediately sell the said property and adjust the sale proceeds with the outstanding loan and shall inform the same to the Court in writing.

Similarly, section 12(3) of the Ain provides that if any financial institution sanctions loan against security of mortgage of immovable property or hypothecation of movable property of the defendant and at the time of mortgage or hypothecation, power of attorney is given in favour of the financial institution to sell the mortgaged or hypothecated property, no suit shall be filed in the Artha Rin Adalat without selling the said property and adjusting the sale proceeds with the outstanding loan or without trying to sell the said property and failing to sell the same.

08. That with regard to the statements made in paragraph 5 of the petition, it is denied that section 12 of the Artha Rin Adalat Ain, 2003 is inconsistent with Article 26 and violative of Article 27 of the Constitution of the People’s Republic of Bangladesh. It is submitted that there is no inconsistency between the provisions of the Artha Rin Adalat Ain, 2003 and Part III of the Constitution under which the fundamental rights of the citizens of Bangladesh are guaranteed.

09. That with regard to the statements made in paragraph 6 of the petition, it is correct that Part II of the Constitution deals with Fundamental Principles of State Policy and Article 8(2) states inter alia that the principles set out in Part II shall be applied by the State in the making of laws. It is, however, denied that the Artha Rin Adalat Act, 2003 is violative of Article 9 or any other Article of the Constitution.

10. That the statements made in paragraph 7 of the petition are matters of record. It is correct that section 2(Ga)(4) of the Artha Rin Adalat Ain, 2003 in the definition of “loan” includes interest, penal interest or profit or rent legally imposed on the finances made by financial institutions. It is further submitted that the respondents No. 5 and 6 are entitled to charge interest as per terms of the sanction letter till the date of recovery of the loan. It is also submitted that without charging interest bank cannot run its business since bank has to pay interest to its depositors.

11. That the statements made in paragraph 8 of the petition that it is stated in section 5(4) and 5(5) of the Artha Rin Adalat Ain, 1990 that the Artha Rin Adalat will be treated as a Civil Court and will have the same power and jurisdiction of a Civil Court as given by and under the Code of Civil Procedure, 1908 and that the Code of Civil Procedure, 1908 was applicable in Artha Rin Suit subject to the provisions of the Act of 1990 are matters of record. It is submitted that both under the Artha Rin Adalat Ain, 1990 and the Artha Rin Adalat Ain, 2003 the petitioner had/has opportunity to defend himself in a special Court namely, the Artha Rin Adalat. The Artha Rin Adalat, 2003 mainly reflects the various decisions of the High Court Division and the Appellate Division of the Supreme Court arising out of cases under the Artha Rin Adalat Ain, 1990. The new Artha Rin Adalat Ain, 2003 has filled in the lacuna that was present in the earlier Artha Rin Adalat Ain, 1990. It is denied that under the Artha Rin Adalat Ain, 2003 the petitioner or anyone else is subjected to the whim and sweet will of the bankers. It is also denied that section 12 of the Artha Rin Adalat Ain, 2003 is inconsistent with and violative of Article 26 of the Constitution of the People’s Republic of Bangladesh. It is submitted that under section 69 of the Transfer of Property Act, 1882, where a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage deed, the mortgagee has power to sell the mortgaged property without the intervention of the Court. Similarly, section 12(3) of the Artha Rin Adalat Ain, 2003 provides as follows:

“If any financial institution sanctions loan against security of mortgage of immovable property or hypothecation of movable property of the defendant and at the time of mortgage or hypothecation, power of attorney is given in favour of the financial institution to sell the mortgaged or hypothecated property, no suit shall be filed in the Artha Rin Adalat without selling the said property and adjusting the sale proceeds with the outstanding loan or without trying to sell the said property and failing to sell the same.” [The original Act is in Bengali]

Thus, where the loan is secured by mortgage of immovable property or hypothecation of movable property coupled with a power of attorney to sell the said property, the financial institution must sell the said property and adjust the proceeds thereof with the outstanding liabilities of the borrower prior to filing suit. Hence, the provision laid down in section 12 of the Artha Rin Adalat Ain, 2003 is not a new concept. The purpose of the legislature in inserting section 12 of the Artha Rin Adalat Ain, 2003 was to limit the number of cases filed in courts, because the courts in Bangladesh are already overburdened with pending cases. If the outstanding liabilities of the borrower can be adjusted with the sale proceeds of the mortgaged property, then there will be no need to file suit. This is beneficial for the country and is in no way inconsistent with or violative of the Constitution of the People’s Republic of Bangladesh. It is submitted that the new provision which has been inserted in section 12 is that if the immovable property is not in possession or control of the financial institution, after sale of the said immovable property, if the financial institution fails to hand over actual possession of the property in favour of the purchaser, then the financial institution may by an application to the District Magistrate of the concerned jurisdiction seek assistance regarding transfer of possession of the property. This is beneficial for the financial institutions and the intending purchasers and is not contrary to any provision of the Constitution.

12. That with regard to paragraph 9 of the petition, it is admitted that Part III of the Constitution deals with fundamental rights and Article 26(2) stipulates that the State shall not make any law inconsistent with any provisions of that Part and any law so made shall to the extent of such inconsistency be void. However, it is denied that Artha Rin Adalat Ain, 2003 is inconsistent with any provisions of Part III of the Constitution or that it is void.

13. That the statements made in paragraph 10 of the petition are matters of record and as such no comments are offered.

14. That the statements made in paragraph 11 of the petition are mostly matters of record. It is, however, denied that the property was mortgaged for a period of one year.

15. That the statements made in paragraph 12 of the petition mostly relate to matters with which these respondents are not concerned. It is, however, denied that these respondents claimed inflated and imaginary amount from the petitioner or that the petitioner is not liable to make payment of the said amount to these respondents. It is submitted that the respondents No. 5 and 6 being a financial institution have charged interest and penal interest on the outstanding liabilities of the petitioner strictly in accordance with law, which the petitioner is legally obliged to pay to these respondents.

16. That the statements made in paragraph 13 of the petition are based on misunderstanding and misconception of law and as such denied by these respondents. It is submitted that the Artha Rin Adalat Ain, 2003 came into force on May 01, 2003 and if any immovable property is mortgaged with a financial institution and is coupled with a power of attorney to sell the said property, in order to sell the said property for recovery of loan of the financial institution, the financial institution must follow the provisions laid down in the Artha Rin Adalat Ain, 2003. It is immaterial when the mortgage was created. The material issue is whether the sale is made after May 01, 2003 and in such a situation there is no need to give retrospective effect to section 12 of the Artha Rin Adalat Ain, 2003. It is also denied that the respondent bank is not authorized to sell the mortgaged property without intervention of the Court. With regard to the statement that if there were existence of any law like the Artha Rin Adalat Ain, 2003 at the time when the petitioner availed credit facilities from these respondents, the petitioner would not have availed credit facilities from the respondent bank, it is submitted that without obtaining security in the form of mortgage of properties, these respondents would not have extended credit facilities to the petitioner.

17. That with regard to the statements made in paragraph 14 of the petition, it is denied that the Legal Notice dated 09.07.2003 is a violation of the principles of natural justice or that the Bank cannot sell the mortgaged property or that the Legal Notice dated 09.07.2003 is liable to be declared to have been made without lawful authority and is of no legal effect.

It is submitted that despite repeated requests and reminders, when the petitioner failed to adjust his liabilities with these respondents, these respondents having no other alternative to recover their legal dues were compelled to serve legal notice upon the petitioner intimating that if the petitioner fails to adjust his liabilities within 15 (fifteen) days of receipt of the notice, these respondents will have no other alternative but to sell the mortgaged property in accordance with section 12(3) of the Artha Rin Adalat Ain, 2003.

18. That in the facts and circumstances explained above, these respondents submit that the writ petition has been filed with an ulterior motive based on misconception and misrepresentation of fact and law.

19. That the grounds set forth in the petition are all vague, baseless, false, without any basis, unspecified, indefinite, without any law. The prayers made by the petitioner are also untenable in law. As such, the writ petition is liable to be rejected and the rule issued upon the same is liable to be discharged with cost.

20. That the statements made above are true to the best of my knowledge and belief and rests are respectful submission before this Hon’ble Court.