Sarkar Flour & Rice Mills Ltd. & another Vs. Bangladesh & others, 3 LNJ AD (2015) 20

Case No: Civil Petition Nos. 2453-2454 of 2010

Judge: Syed Mahmud Hossain,

Court: Appellate Division ,,

Advocate: Mr. Rokanuddin Mahmud,Mr. Ajmalul Hossain QC,,

Citation: 3 LNJ AD (2015) 20

Case Year: 2014

Appellant: Sarkar Flour & Rice Mills Ltd. & another

Respondent: Bangladesh & others

Delivery Date: 2013-07-29


APPELLATE DIVISION
(CIVIL)
 
Md. Muzammel Hossain, C.J
Surendra Kumar Sinha, J
Md. Abdul Wahhab Miah, J
Syed Mahmud Hossain, J
AHM Shamsuddin Choudhury, J.

 
Judgment on
29.07.2013
  Sarkar Flour & Rice Mills Ltd.
. . .Petitioner
(In C. P. No. 2453/10).
Zayeda Cold Storage Ltd.
. . .Petitioner
(In C. P. No. 2454/10).  
-Versus-
Bangladesh Bank and others
. . . Respondents.
 
Bank Companies Act (XIV of 1991)
Section 25
It is contended on behalf of the petitioners that the provisions of BRPD circular No. 1 dated 13-01-2003 being directive issued by respondent No. 1 are mandatory and are required to be followed by all the schedule bank’s including the respondent No. 4 bank under section 25 of the Bank Companies Act, 1991 and by not rescheduling the liabilities of the petitioners despite the down payment of the required amount, the respondent No. 4 acted in violation of the provisions of the said circular and hence the impugned judgment should be set aside.
The High Court Division has found that the petitioners have failed to repay the loan in spite of getting reschedulement and extension of validity period on several occasions. Taking into consideration of the financial condition etc. of the petitioners, the City Bank Ltd. took decision not to grant any more reschedulement of the petitioners outstanding loans which calls for no interference. . . . (11 and 14).
 
For the Petitioners: Mr. Rokanuddin Mahmud, Senior Advocate, instructed by Mr. Bivash Chandra Biswas, Advocate-on-Record.

For the Respondents: Mr. Ajmalul Hossain, Senior Advocate, instructed by Mr. Mvi. Md. Wahidullah, Advocate-on-Record.

Civil Petition Nos. 2453-2454 of 2010
 
JUDGMENT
Syed Mahmud Hossain, J:

These civil petitions for leave to appeal are directed against the judgment and order dated 03.06.2010 passed by the High Court Division in Writ Petition Nos. 4334 and 4339 of 2008 discharging the Rules in both the writ petitions.
 
Both the civil petitions for leave to appeal involving similar questions of laws and almost identical facts having been heard together are now disposed of by this common judgment.

The relevant facts for the purpose of disposal of these civil petitions for leave to appeal are as follows:

Both the petitioners-companies of these writ-petitions were sanctioned various loan facilities by respondent No.5 bank under different sanction letters during the period from March, 2003 to March, 2007. The total amount of loan sanctioned to the Sarkar Flour and Rice Mills Ltd. was Tk. 22.10 crore and the total amount of loan sanctioned to Zayeda Cold Storage Ltd. was Tk. 4.00 crore and in all those loan transactions petitioner No. 2 furnished personal guarantee along with other securities to secure the repayment of the loans. But because of  certain unavoidable circumstances both these companies failed to maintain their repayment schedules. In such situation, a Memorandum of Agreement dated 22.04.2007 was entered into between respondent Nos.4 and 5 and petitioner No.2 stood as the guarantor of the said loans. Under the terms and conditions of the said agreement, the outstanding liabilities of Sarkar Flour & Rice Mills Ltd. were fixed at Tk. 11.07 crore and those of Zayeda Cold Storage Ltd. were fixed at Tk. 4.20 crore and respondent No.5 bank issued sanction letters dated 21.06.2007 on the basis of that memorandum of understanding. But petitioner No.2 detected that the installments mentioned in the said sanction letter included interest calculated on compounded basis and not on simple interest basis as agreed upon in the said memorandum of understanding. Consequently there was exchange of corresp-ondences between the petitioners and the representatives of respondent No.4 bank and finally it was understood by the parties that the loan liabilities of both the petitioner companies would be rescheduled upon down payment. Accordingly, respondent No.4 bank issued a letter dated 08.01.2008 to petitioner No. 2 asking him to make down payment of Tk. 7500000/- for rescheduling the loans of both the companies. Petitioner No.2 paid Tk. 7500000/- as down payment from which Tk. 5400000/- was credited to the loan accounts of Sarkar Flour & Rice Mills Ltd. and Tk. 2400000/- credited to the loan account of Zayeda Cold Storage Ltd. and also submitted a proposal for rescheduling the liabilities of both the companies by his letter dated 13.02.2008. But respondent No.4 bank again by a letter dated 25.02.2008 requested petitioner No.2 for payment of further Tk. 6600000/- for rescheduling the loans of both the companies. Petitioner No.2 paid that amount also of which Tk. 3800000/- was credited to the loan account of Zayeda Cold Storage Ltd. Thus the total amount paid by petitioner No.2 exceeded 10% of the total liabilities of both the petitioners-companies. But notwithstanding the fact that petitioner No.2, on behalf of both the petitioners- companies paid required amount as down payment respondent No.4 failed to take any steps towards rescheduling the liabilities of the petitioners-companies. Rather without any prior notice or intimation to the petitioners, respondent No. 4 on 21.04.2008 caused publi-cation of newspaper notice for auction sale of the mortgaged properties of the petitioners for which the petitioners had to file Writ Petition Nos. 3464 and 3466 of 2008 and got orders of stay against that auction sale. Respondent No.4 bank also circulated a memo dated 28.04.2008 amongst all banks and financial institutions describing the petitioners as defaulting clients stating that their amounts have been classified. Respondent No.4 also informed that to the Credit Information Bureau. After that, respondent No.4 bank instituted Artha Rin Suit Nos. 2 and 7 of 2008 in the Artha Rin Adalat, Rajshahi against the petitioners for realization of outstanding loan in spite of the fact that the petitioners were entitled to get their liabilities rescheduled as per BRPD circular No.1 dated 13.01.2003.

The petitioners have submitted that BRPD circulation No.1 dated 13.01.2003 issued by the Bangladesh Bank has laid down some guidelines/directives which are required to be followed by all scheduled banks while considering applications for re-schedulement of loans. Clause 1.02(Ka) of this BRDP circular No.1 has provided that an application for rescheduling shall be considered by a bank upon payment by the borrower of either 15% of the overdue installments or 10% of the total liability, whichever is less. The down payments made by petitioner No.2 upon the request of respondent No.4 exceeds 10% of the total loan liabilities of both the borrower companies and thus according to the terms of BRDP circular No.1 of 2003, the petitioner companies are entitled to have their liabilities rescheduled. In the circumstances, petitioner No.2 caused service of notices demanding justice dated 28.05.2008 upon respondent Nos.1 and 4 asking for compliance with BRPD circular No.1 of 2003 and rescheduling of the liabilities but did not get any response. Section 45 of the Bank Companies Act, 1991 has conferred powers upon respondent No.1 to issue directives for the proper management of the bank companies and it is mandatory for the bank companies to comply with such directives. The BRPD circular No.1 dated 13.01.2003 contains such directives of Bangladesh Bank and it is mandatory for all he scheduled banks to comply with the directives of this BRPD circular No.1 of 2003. If any bank does not comply with these directives of BRDP circular No.1 of 2003 it is incumbent upon Bangladesh Bank to issue specific direction to that bank for compliance with the directives of this BRPD circular.

Respondent No.4 has acted in breach of the mandatory provisions of BRPD circular No.1 dated 13.01.2003 by failing to reschedule the liabilities of the petitioners- companies in spite of their making down payment of more than the required amount for re-schedulement. Therefore, the Bangladesh Bank is now duty bound to take such action as is necessary to ensure compliance with the provisions of the BRPD by respondent No.4 bank so that the liabilities of the petitioners-companies with the respondent No.4 bank are rescheduled.

Being aggrieved by and dissatisfied with the BRPD circular No.1 dated 13.01.2003 issued by the writ-respondent No.4, the writ-petitioners moved the High Court Division by filing Writ Petition Nos. 4334 and 4339 of 2008 and obtained Rules Nisi in both the writ-petitions.

Writ-respondent Nos. 4 contested both the Rules by filing affidavits-in-opposition controverting the material statements made there. Writ-respondent No.4 took the plea that BRPD circular No.1 of 2003 was directory and not mandatory in character. 

The learned Judges of the High Court Division upon hearing the parties discharged both the Rules by the impugned judgment and order dated 03.06.2010. 

Feeling aggrieved by and dissatisfied with the impugned judgment and order passed by the High Court Division, the writ-petitioners in both the writ-petitions have filed Civil Petitions for Leave to Appeal Nos. 2453 and 2454 of 2010 before this Division.

Mr. Rokanuddin Mahmud, learned Senior Advocate, appearing on behalf of the leave-petitioners in both the civil petitions for leave to appeal, submits that the High Court Division failed to appreciate that the provisions of BRPD circular No.1 dated 13.01.2003 being directive issued by respondent No.1 are mandatory and are required to be followed by all scheduled banks including respondent No.4 bank under section 25 of the Bank Companies Act, 1991 and as such the impugned judgment should be set aside. He further submits that by not rescheduling the liabilities of the leave-petitioners despite the down payment of the required amount as requested, respondent No.4 has acted in violation of the provisions of BRPD circular No.1 dated 13.01.2003.

Mr. Ajmalul Hossain, learned Senior Advocate, appearing on behalf of the respo-ndents in both the leave petitions, on the other hand, supports the impugned judgment.

We have considered the submissions of the learned Advocates of both the parties, perused the impugned judgment and the materials on record.

The High Court Division came to a finding that the petitioners have failed to repay the loan of respondent No. 4, City Bank Ltd. in spite of getting re-schedulement and extension of validity period on several occasions. The High Court Division noted that the contesting respondent in its affidavit-in-opposition stated that considering the present financial condition, repayment record and management of the loanee companies and also the liabilities of the loanee companies with other financial institutions, the City Bank Ltd. took decision not to grant any more re-schedulement of the outstanding loans of this petitioners-companies. The High Court Division found that respondent No.4 has also stated that the petitioners-companies did not submit any proper application with Board Resolution for re-schedulement of outstanding loans.

Having considered the affidavit-in-opposition of respondent No.4, the High Court Division found that loan granting bank already instituted Artha Rin Suit against the loanee companies, the guarantor and others for realization of outstanding loan and that the petitioners could make proper prayer for settlement/compromise with the loan granting bank in those suits. The High Court Division took notice that the Artha Rin Adalat Ain,2003 has kept specific provisions for taking initiatives for settlement of dispute between the plaintiff /financial institution and the defendant, loanees, guarantors and others.

The findings arrived at and the decision made by the High Court Division having been made on proper appreciation of laws and facts do not call for interference. Accordingly, both the civil petitions for leave to appeal are dismissed.

End.