New Ideal Engineering Works Ltd. Vs. Bangladesh Shilpa Bank and others, 42 DLR (AD) (1990) 221

Case No: Civil Petition for Leave to Appeal No. 112 of 1990

Judge: ATM Afzal ,

Court: Appellate Division ,,

Advocate: S.R. Pal,Mr. Mokhlesur Rahman ,,

Citation: 42 DLR (AD) (1990) 221

Case Year: 1990

Appellant: New Ideal Engineering Works Ltd.

Respondent: Bangladesh Shilpa Bank and others

Subject: Banking,

Delivery Date: 1990-05-21

Supreme Court of Bangladesh
Appellate Division
(Civil)

 
Present:
Shahabuddin Ahmed, CJ.
MH Rahman, J.
ATM Afzal, J.
Mustafa Kamal, J.
Latifur Rahman, J.
 
New Ideal Engineering Works Ltd.
…......Petitioner
Vs.
Bangladesh Shilpa Bank and ors.
…......Respondents
 
Judgment
May 21, 1990
 
The Bangladesh Shilpa Bank Order, 1972
Articles 33, 34 & 35
The Constitution of Bangladesh, 1972,
Articles 32 & 47
Upon a close examination of the provisions of Articles 33, 34 and 35 of the Order, it will appear that different means have been provided for enforcement of claims and realization of dues of the Bank provided the conditions mentioned in the opening clauses of the respective Articles are satisfied. The management and administration of the industrial concern may be taken over and the property pledged/ mortgaged may be sold for realisation of the claims and dues of the Bank both under Article 33 and Article 34, the difference is that whereas it can be done through the intervention of Court under Article 33, it can also be done without such intervention under Article 34. The argument that Article 34 cannot be resorted to without complying with Article 33 overlooks the absurd consequence that in that case Article 34 is rendered otiose altogether, for, the same relief can be had under both the Articles………………(8)
 
Lawyers Involved:
Md. Moksudur Rahman, Senior Advocate, instructed by Md. Aftab Hossain, Advocate-on-Rccord— For the Petitioner.
S R Pal, Senior Advocate (Tofazzal Islam, Advocate with him) instructed by Shamsul Hoque Siddique, Advocate-on-Record — For the Respondent Nos. 1-3.
Not Represented— Respondent No.4.
 
Civil Petition for Leave to Appeal No. 112 of 1990
(From the Judgment and Order dated 22 April, 1990 passed by the High Court Division, Dhaka in Writ Petition No. 763 of 1990.)
 
JUDGMENT
ATM Afzal J.
 
1.         This petition is from an or­der dated 22 April, 1990 passed by the High Court Division, Dhaka summarily rejecting the Writ Peti­tion No.763 of 1990, filed by the petitioner.
 
2.         The petitioner in the said writ petition chal­lenged the decision of the Bangladesh Shilpa Bank (briefly BSB), respondent No.1, dated 10.4.90 (Annexure P) for sale of the industrial concern under Ar­ticle 34 of the Bangladesh Shilpa Bank Order, 1972, hereafter referred to as the Order and the notice for sale of the same (Annexure Q) published in the daily newspaper "Dainik Bangla" on 12.4.90.
 
3.         Facts of the case, briefly, as in the writ peti­tion are, that the BSB sanctioned a local currency loan of Tk. 23,00,000/- to the petitioner for setting up a light engineering workshop at the BSCIC In­dustrial Estate, Tongi, Dhaka vide memo No.06/4226/4576 dated 3.6.80. Out of the said amount the BSB disbursed a total of Tk. 17,00,000/- to the petitioner on different dates in three phases including part of 1st instalment on 17.10.80. It was stipulated in the sanction letter that the entire amount of the loan would be repaid in 21 half-yearly instalments of which 20 instalments are to be of Tk. 1,10,000/-each and the last instalment to cover the entire bal­ance due and that the repayment of loan money would commence from 30.9.82. The petitioner paid the first and second instalments on 27.8.82 and 31.3.83 and by June 1984 in all paid Tk. 17,75,000/-. The Bank by its letter dated 26.7.86 issued notice for recovery of dues under Article 35(1) of the Order claiming Tk. 20,92,787/- as on 30.6.86 and started a certificate case being CC No. 28-BSB/86 for realisa­tion of Tk. 21,11,411/- under the Public Demands Recovery Act, 1913. The petitioner filed Title suit No. 5 of 1987 challenging the certificate case and the order cancelling the loan agreement which, however, ended in a compromise and the suit was dismissed for non-prosecution on 13.12.87. The petitioner paid a sum of Tk. 6,50,000/- and the Bank by its letter dated 28.5.88 re-scheduled the outstanding dues for repayment by 31.12.89.
 
4.         The BSB, however, issued a notice on 17.8.89 (Annexure F) under Rule 4(1) of the Bangla­desh Shilpa Bank (Direct Sale of Mortgaged Proper­ty) Rules, 1980 asking the petitioner to show cause as to why the Bank should not take over the manage­ment and administration of the project of the Com­pany under Article 34 of the Order and sell the mort­gaged project, assets for realisation of its dues of Tk. 23,01,144/- as on 30.6.89 alleging "admitted de­faults in payment and performance of the loan agree­ments". In reply (Annexure G) the petitioner request­ed the BSB to afford him an opportunity to repay the outstanding dues in instalments of Tk. 40,000/- per month. The petitioner also made representation to the Vice-President, who is in charge of the Ministry of Industries, but the BSB upon considering every­thing took the decision to sell the industrial concern.
 
5.         Mr. M. Moksudur Rahman, learned counsel for the petitioner, it appears, raised two points for consideration of the High Court Division, 1) that the BSB having recalled the loan under Article 32 of the Order, it cannot proceed under Article 34 without first taking recourse to Article 33 thereof and 2) that without determining the liability of the petitioner the BSB had no authority to order direct sale under Article 34.
 
6.         As to the second contention, the High Court Division found that the petitioner in his reply (Annexure G) to the claim of the Bank (as in Annexure F) nowhere challenged the said claim and that the petitioner did not disputes that there was default in paying the installments of loan as per agreement with the BSB. As to the first contention it was found that Articles 33 and 34 of the Order are exclusive of each other and vest the BSB with independent power to proceed either under Article 33 or 34.
 
7.         The learned Counsel now seeking leave to appeal from the impugned order reiterated his first contention and submitted that the interpretation giv­en by the High Court Division of Articles 33 and 34 of the Order is wrong in that it was not appreciated (1) that the non-obstante clause in Article 34 does not give the Bank an option to proceed either under Article 33 or 34 for realising its loan inasmuch as it cannot be the intention of the legislature that some claims will be investigated by the District Judge and in respect of some claims the Bank can avoid inves­tigation which would be violative of Article 31 of the Constitution; (2) that in the scheme of recovery of loans, the non-obstante clause in Article 34 intro­duces only an additional step in the event the liabili­ty found by the District Judge remains undischarged despite the steps taken by him under Article 33; (3) that Articles 33 and 34 visualise two different situa­tions not inconsistent with each other and the non-obstante clause in Article 34 does not override the provision of Article 33 and (4) that the claim or de­mand made by the Bank does not become a liability unless it is adjudicated upon and determined and found to be established by the District Judge under Article 33.
 
8.         Mr. Rahman gave his interpretation of Articles 33 and 34 unaided by any reference to any prin­ciple or precedent. To answer his submissions, brief­ly, it may be observed that the Order is a protected legislation under Article 47(2) of the Constitution and no provision thereof shall be deemed to be void or unlawful on the ground of inconsistency or repugnance to any provision of the Constitution. Second­ly, it is to be observed that a non-obstante clause is usually used in a provision to indicate that, that pro­vision should prevail despite anything to the con­trary in the provision mentioned in such non-obstante clause. The High Court Division, therefore, rightly referred to the said clause in Article 34 in tak­ing the view that recourse to Art 34 is not dependent upon compliance of the provisions of Article 33. In­deed, upon a close examination of the provisions of Articles 33, 34 and 35 of the Order, it will appear that different means have been provided for enforce­ment of claims and realisation of dues of the Bank provided the conditions mentioned in the opening clauses of the respective Articles are satisfied. The management and administration of the industrial con­cern may be taken over and the property pledged/ mortgaged may be sold for realisation of the claims and dues of the Bank both under Article 33 and Arti­cle 34, the difference is that whereas it can be done through the intervention of Court under Article 33, it can also be done without such intervention under Article 34. The argument that Article 34 cannot be resorted to without complying with Article 33 over­looks the absurd consequence that in that case Article 34 is rendered otiose altogether, for, the same relief can be had under both the Articles.
 
9.         In Ocean Industries Ltd. Vs. IDBP 18 DLR (SC) 354 the Supreme Court of Pakistan considered sections 39, 40 and 41 of the Industrial Development Bank of Pakistan Ordinance, 1961 which corresponds to Articles 33, 34 and 35 of the Order. It has been held that, "Upon a careful examination of those pro­visions we are unable to agree that the ordinance pro­vides these methods as alternative methods of enforc­ing the claims of the Bank. Section 40 itself indicates that the taking over of the management of the concern can be made notwithstanding anything contained in section 39. Thus it cannot be said that if action under section 39 is taken action under sec­tion 40 cannot thereafter be taken. It is equally incor­rect to say that if the management is taken over un­der section 40 then the provisions of section 39 cannot be resorted to. The terms of section 40 itself show that the bank can even after taking over the management of the concern sell or realise any prop­erty pledged, mortgaged or hypothecated. There is nothing in these sections to indicate that the bank cannot obtain such an order for sale by resorting to the provisions of section 39 or under the latter sec­tion obtain an order for the transfer of the manage­ment of the concern, even though it can itself enter upon such management and sell the property under section 40. Again, section 41 clearly indicates that the power thereunder given to the bank is without prejudice to the provisions of either section 39 or section 40. The fact that recourse has been had to the provision of section 39 or 40 does not preclude the bank from resorting again to its rights under section 41 to recover its dues as arrears of land revenue."
 
         The aforesaid observation supports the view that any of the Articles can be resorted to by the Bank and may even be combined and it is not incumbent upon the Bank to take recourse to Article 33 at the first instance before proceeding under Article 34 as contended by the learned advocate for the petitioner. Furthermore, in view of the fact that the liability as claimed by the Bank is not disputed by the petition­er, we do not find any merit in the contention raised.
 
The petition is dismissed.
 
Ed.