Bangladesh Krishi Bank Vs. Meghna Enterprises and another, 52 DLR (AD) (2000) 57

Case No: Civil Appeal Nos. 93 and 94 of 1994

Judge: Latifur Rahman ,

Court: Appellate Division ,,

Advocate: Mr. Khandaker Mahbuhuddin Ahmed,Dr. Rafiqur Rahman,,

Citation: 52 DLR (AD) (2000) 57

Case Year: 2000

Appellant: Bangladesh Krishi Bank

Respondent: Meghna Enterprises and another

Subject: Banking,

Delivery Date: 1998-03-01

Bangladesh Krishi Bank

Vs.

Meghna Enterprises and another, 1998,

 52 DLR (AD) (2000) 57

 
Supreme Court
Appellate Division
(Civil)
 
Present:
ATM Afzal CJ
Latifur Rahman J
Md. Abdur Rouf J
Bimalendu Bikash Roy Choudhury J
 
Bangladesh Krishi Bank…………………………………………… Appellant
Vs.
Meghna Enterprises and another…………………………….. Respondents
 
Judgment
March 1, 1998.

The Public Demands Recovery Act, 1913 (III of 1913),
Section 10A
The Constitution of Bangladesh, 1972,
Article 65(1)  Articles 27 & 31
All the defaulting borrowers of Krishi Bank are entitled to equal protection of law provided by the Act by way of appeal, review and revision as contained in sections 51, 52 and 54 of the said Act and as such the learned Judges wrongly held that section 10A offends Articles 27 and 31 of the Constitution ……………(9)

Lawyers Involved:
Dr Rafiqur Rahman, Senior Advocate, (M A Baqui, Advocate with him), instructed by Serajur Rahman, Advocate-on-Record— For the Appellants in both the cases.
Khandker Mahbubuddin Ahmed, Senior Advocate (A W Khandker, Advocate with him) instructed by Sharifuddin Chaklader, Advocate- on-Record — For Respondent No.1 in both the cases.
Ex Parte — Respondent No.2 in both the cases.

Civil Appeal Nos. 93 and 94 of 1994
(From the Judgment and order dated 2-12-92 passed by the High Court Division in Writ Petition No.3 of 1989 (Comilla)
 
Writ Petition No. 1950 of 1991 (Dhaka)
and
Writ Petition No.2 of 1989 (Comilla), Writ Petition No.1949 of 1991 (Dhaka).
 
Judgment:
 
Latifur Rahman J.- These two appeals by leave at the instance of Bangladesh Krishi Bank are against a common judgment and order passed by Division Bench of the High Court Division on 2-12-92 disposing Writ Petition No.3 of 1989 (Comilla)/Writ Petition No.1950 of 1991 (Dhaka) and Writ Petition No.2 of 1989 (Comilla) Writ Petition No.1949 of 1991 (Dhaka) allowing the two writ petitions, making the Rules absolute declaring Certificate Case Nos.318 and 319 of 1986-87 and notice issued under section 10A of the Public Demands Recovery Act, 1913 are passed without any lawful authority and are of no legal effect.

2. Respondent No.1, namely, Meghna Enterprises Ltd. a cold storage and Ice plant at Barkamta under Debidwar Police Station, Comilla applied for loan from Bangladesh Krishi Bank, Monoharpur Branch, Comilla against pledge of goods. Bangladesh Krishi Bank sanctioned an amount of Taka 30 lakh, which was repaid by respondent No.1 with interest in full. Respondent No.1 thereafter applied for loan in the year 1982 and the appellant-Bank again sanctioned Taka 29.50 lakh against pledge of potatoes. In 1981-82, respondent No.1 suffered a business loss and consequently it failed to repay the loan with interest. In the year 1983, the appellant-bank sanctioned an amount of Taka 20 lakh to respondent No.1. Respondent No.1 applied for remission of interest of 1982 but that was turned down by the appellant. Again the appellant-Bank in 1984 sanctioned an amount of Taka 34 lakh in favour of respondent No.1. During the selling season the price of potatoes further dropped and respondent No.1 could adjust only 83% of the loan keeping the balance outstanding. The outstanding loan of the appellant having not been paid, Bangladesh Krishi Bank instituted two Certificate Cases in the Court of General Certificate Officer, Comilla, being, Certificate Case Nos.318 and 319/1986-87 for an amount of Taka 4,5,81,646.00 and Taka 32,22,646.50 along with expenses being the claim of Bangladesh Krishi Bank. The General Certification Officer, Comilla issued notices in the certificate cases demanding payment of the aforesaid sum of money from respondent No.1 within 30 days from the date of receipt of the notice and directed the company not to transfer any moveable or immovable properties. On receipt of the said notices under section 10A of the Public Demands Recovery Act the company on 3-12-88 filed a petition before the General Certificate Officer stating that the claim of the Bank is not correct and demanded determination of the amount by the General Certificate Officer. The General Certificate Officer on receipt of the petition of the company directed the defaulting company to appear through a lawyer and to file an oral or written statement regarding the correct statement of the loan amount. Thereafter respondent No.1 again on 4-12-88 filed a petition praying for directing the bank to submit the statement of accounts and also prayed for one month’s time. But that prayer was not allowed by the General Certificate Officer. Hence, these two writ petitions were filed by the company challenging the certificate proceedings taken by the appellant-Bank.

3. The case was contested by Bangladesh Krishi Bank by filing an Affidavit-in-opposition and supplementary affidavit contending that the writ petition was not maintainable and it is also hit by the provision of Bangladesh Bank Order No. 27 of 1973, President Order No.27 of 1973. The Krishi Bank also asserted that the writ petitioner made inordinate delay in filing the writ petition and the writ petitioner has come before the court with unclean hands. The Bank further asserted that in spite of repeated requests and reminders respondent No.1 having not repaid the loan amount the certificate proceedings were started in accordance with law.

4. A Division Bench of the High Court Division made the Rules absolute on the findings, inter alia, that there was no proper verification and there was no means to know how the amount due was ascertained by the Certificate Officer and the Certificate Officer had signed the Certificate in a mechanical manner without applying his mind as to whether the amount signed was actually due when the amount was not admitted or determined by an authorised person; that Section 10A of the Public Demands Recovery Act violates the principle of natural justice and it offends Articles 27 and 31 of the Constitution. The learned Judges, without striking down section 10A of the Public Demands Recovery Act granted relief to the writ petitioner.

5. Leave was granted to consider the following submissions of the learned Advocate for the appellant:

(1) Article 21 of the Bangladesh Krishi Bank Order, 1973 having authorised an officer of the rank of Manager or above with all the powers exercisable by the Certificate Officer under the Public Demands Recovery Act, 1913, briefly, the Act and the said Officer having signed and filed the Certificate in the prescribed form stating that the demand was due and the amount specified therein being the conclusive proof that the amount was due, there was nothing left to be determined and, as such, the learned Judges of the High Court Division have erred in law in holding that the Certificate Officer had signed the certificate in a mechanical manner without determining as to whether the amount was due or determined;

(2) The learned Judges of the High Court Division stifled the proceedings under the Act when respondent No.1 itself deliberately defaulted to appear before the Certificate Officer with any oral or written statement as earlier ordered by the Certificate Officer to appear and to show the correctness or incorrectness of the amount and, as such, sufficient opportunity was given to the Certificate debtor to rebut the correctness of the amount as determined by the Bank. There being sufficient compliance with the principles of natural justice the learned Judges of the High Court Division acted wrongly in holding that there was non-compliance of the principles of natural justice;

(3) The provision of section 10A of the Public Demands Recovery Act, 1913 provides for speedy recovery of the loan money from all the defaulting borrowers of Krishi Bank and, as such, the proceeding taken for recovery of such loan is not violative of Articles 27 and 31 of the Constitution as all the defaulting borrowers of Krishi Bank are treated equally and all are entitled to equal protection of law under the said Act by way of appeal, review and revision. The learned Judges of the High Court Division further committed an illegality in holding that section 10A of the said Act offends Articles 27 and 31 of the Constitution and even after holding that did not strike down section 10A of the said Act and wrongly held that relief can be given in spite of striking down the law; and

(4) The learned Judges of the High Court Division on a total misconception of law doubted whether the order was appealable under section 51 of the Act, whereas section 51 expressly provides for an appeal from any order of the Certificate officer under the Act.

6. The learned Judges wrongly held that resource could not be had under Public Demands Recovery Act, 1913 to recover the claim of the bank as the same has not been determined or admitted. The learned Judges failed to consider that Article 21 of President’s Order No. 27 of 1973, briefly, the Order, provides for recovery of Bank dues under the Public Demands Recovery Act. Sub-articles 2 and 3 of Article 21 President’s Order No.27 of 1973 read as follows:

“Sub-article (2): All sums due to the bank shall be recoverable as arrears of rent revenue;
“Clause (3) : In the application of the Public Demands Recovery Act, l913(Bengal Act III of 1913), for the purpose of the recovery of the dues of the bank, the provision of sections 7, 9, 10 and 13 of that Act shall not apply and the certificate issued under section 4 of the said Act shall be conclusive proof that the amount specified therein is due to the bank”.

In the present case, the requisition was signed by the Bank Manager showing that the amount was due and recoverable under the law. In that requisition the names of the loanees have been given and the amount recoverable under the Act has been mentioned. On the basis of the requisition, the Certificate Officer issued the certificate as contemplated under section 5 of the Act. Sub-article (3) of Article 21 of the Order clearly says that certificate issued under section 4 of the said Act shall be exclusive proof that the amount specified is due to the Bank. Thus under the law when a certificate is issued under section 4 of the said Act it shall be conclusive proof that the amount specified therein is due to the Bank. Thus according to the provision of Sub-article 3 of Article 21 of the Order no investigation, determination or ascertainment of the amount due is to be investigated. Further, Sub-article (3) of Article 21 of the Order also excludes the application of section 7, service of notice, section 9, filing the petition denying the liabilities, section 10, taking evidence and determination of the amount claimed under the said Act. Thus reading both the statutes it is palpably clear that the findings given by the learned Judges that the realisation of the amount could not be resorted to under the Act to recover Bank’s claim without verification and determination is contrary to the law as indicated above. The learned Judges by total non-application of their judicial minds failed to consider this vital aspect and illegally held that certificate was issued in a mechanical manner by the Certificate Officer on the basis of the requisition of the Bank officer. As a matter of fact, law does not prescribe any mode of determination of the amount due after investigation as has been observed by the learned Judges of the High Court Division. The learned Judges failed to advert their minds to this very material aspect that issuance of certificate under section 4 of the Act itself shall be conclusive proof that the amount specified therein is due to the Bank and further determination is excluded under law.

7. Apart from the legal aspect as indicated above, we find that after the Manager of Bangladesh Krishi Bank sent requisition to the Certificate Officer, Certificate Officer, Comilla sent notices under section 10A of the Act upon respondent No.1. As per section 10A(1) of the Act notice was served upon certificate debtor-respondent No.1 by registered post with acknowledgment due requiring the Certificate debtor to deposit with the Certificate Officer the amount of his debt within 30 days of the service of such notice. After receipt of the notice respondent No.1 disputed the claim and asserted that the amount is not correct and the amount is not due to the Bank. As the certificate-debtor disputed, the statement of accounts of the Bank time was granted by the Certificate Officer to respondent No.1 to appear through a lawyer and to submit either oral or written objection with regard to the demand notice of the Bank’s dues. It appears from the order-sheets of the certificate cases that the lawyer of the Bank was present, but neither the certificate debtor nor any one on his behalf was present on the next day when the matter was taken up for hearing. In that view of the matter, the Certificate Officer for realisation of demand issued notice under section 29 of the Act read with section 14(D) of the said Act. Though strictly speaking law does not require any investigation as to the certificate issued under sections 4 and 5 of the Act, yet in the present case as appears from the record of the certificate cases sufficient opportunity was provided to the certificate debtor to appear before the Certificate Officer and to lay his claim before the Certificate Officer. But the certificate-debtor did not care to take any step. Thus sufficient opportunity was given to respondent No.1, but it did not avail of the opportunity. So it is not factually correct that no opportunity was given to the respondent-company by the Certificate Officer.

8. Article 21 of the Order speaks that the recovery of Bank dues can be made under the Public Demands Recovery Act. Section 10A was inserted by the Bengal Public Demands Recovery (Amendment) Ordinance, 1961 (East Pakistan Ordinance No. XXXV of 1961) wherein special provision was incorporated for recovery of dues in respect of Bangladesh Krishi Bank including other Government agencies. As a policy decision of the government for early recovery of the loan of Bangladesh Krishi Bank by amendment the provision has been made in the Order itself for recovery of Bank dues under Public Demands Recovery Act and for speedy recovery some sections of the Public Demands Recovery Act shall not apply and section 10A has been inserted in the Act itself as a special provision for recovery of certain dues as public demand. So it is clear that the valuable right of hearing and determination by filing objection has been taken away. The Certificate Officer will only realise the dues by executing the same without any hearing whatsoever. Thus reading Bangladesh Krishi Bank Order, 1973 and Section 10A of the Act which prescribes special measure for recovery of loan it appears that the legislature as a policy decision made the changes in the law for quick recovery of the loan. Thus section 10A of the Act which provides for a special procedure relating to recovery of dues can not be said to be arbitrary and illegal. While considering section 10A of the Act, the learned Judges held that sections 7, 9 and 10 are in consonance with the principles of natural justice but those have been done away with by inserting section 10A of the Act. In the case of recovery of Bank dues under the order, sections 7, 9 and 13 of the Act, have been made non-applicable and special provision for realisation of loan of Bangladesh Krishi Bank has been enacted in the Act itself by incorporating section 10A.

9. The learned Judges of the High Court Division wrongly held that section 10A of the provides arbitrary power without a provision for hearing. It is the policy of the legislature to make an enactment to that effect. Can we say that the law is bad because it is not in consonance with the principle of natural justice and it is harsh and arbitrary certainly not. The learned Judges of the High Court Division wrongly held that section 10A of the Act is inconsistent with Article 31 of the Constitution. The learned Judges did not strike down section 10A of the Act as they thought that the respondent could succeed even without striking down section 10A of the Act. When the learned Judges held that section 10A of the Act offends Articles 27 and 31 of the Constitution they ought to have struck down section 10A as it offends the fundamental rights guaranteed under the Constitution. The subordinate legislation must be knocked down when it comes in conflict with the fundamental rights as guaranteed under the Constitution. As a matter of fact, the learned Judges of the High Court Division in their judgment did not elaborate as to how section 10A of the Act is violative of Articles 27 and 31 of the Constitution, other than mentioning that it is arbitrary and violates the principles of natural justice. It appears that the learned Judges failed to appreciate the true import of Article 27 which speaks equality before law and Article 31 which speaks of protection of the law and to be treated in accordance with law. On a total misconception the learned Judges held that section 10A of the Act offends Articles 27 and 31 of the Constitution. On a reference to other provisions of the Public Demands Recovery Act we find that all the defaulting borrowers of Krishi Bank are entitled to equal protection of law provided by the Act by way of appeal, review and revision as contained in sections 51, 52 and 54 of the said Act and as such the learned Judges wrongly held that section 10A offends Articles 27 and 31 of the Constitution.

         Thus on careful consideration of the facts and law involved in this case, we are of the view that the judgment of the High Court Division is not sustainable in law. Consequently, both the appeals are allowed with costs.

Ed.