Sonali Bank Vs. Abdul Mannan and others, 34 DLR (AD) (1982) 21

Case No: Civil Appeal No. 117 of 1980

Judge: Badrul Haider Chowdhury,

Court: Appellate Division ,,

Advocate: Nurul Huq,Mr. Asrarul Hossain,,

Citation: 34 DLR (AD) (1982) 21

Case Year: 1992

Appellant: Sonali Bank

Respondent: Abdul Mannan and others

Subject: Banking,

Delivery Date: 1981-02-24

Supreme Court of Bangladesh
Appellate Division
Kemaluddin Hossain, CJ.
Fazle Munim, J.
Ruhul Islam, J.
Badrul Haider Chowdhury, J.
Shahabuddin Ah­med, J.
Sonali Bank
Abdul Mannan and others
Feb 24, 1981.
Words & Phrases
Bank’s function— Bank’s liability to pay when the position created is one of debtor and depositor.
Released amount becomes a deposit and the bank becomes a debtor.
The moment the release order was passed the character of the surrendered demonetized notes was completely changed and it became equivalent to the exchange amount of the depositor. Respondent is not claiming the demonetized notes. What he is claiming is the payment of the exchange value of note surrendered by him by the area Committee.
Lawyers Involved:
Asrarul Hossain, Senior Advocate, instruc­ted by Syed Sakhwat Ali, Advocate-on-Record.—For the Appellant.
Md. Nurul Huq, Advocate-on-Record—For the Respondent No. 1.
A. Salek, Advocate, instructed by A. W. Mallick, Advocate-on-Record.—For the Res­pondent No. 2.
Ex-parte.—Respondent No. 3.
Civil Appeal No. 117 of 1980
 (From the judgment and order dated 5th June 1980 passed by the High Court Division in Writ Petition No. 397 of 1978).
Badrul Haider Chowdhury J.
1.         This appeal by special leave is directed against the judg­ment of the High Court Division in Writ Petition No. 397 of 1978, directing the ap­pellant Sonali Bank to pay the respondent a sum of Tk. 46,500/00 within one month from the receipt of the order.
2.         Facts are simple. Respondent had dep­osited demonetised currency notes in pur­suance of MLR No. 81 declaring Pakistani currency notes, of 500/00 and 100/00 rupee denominations as demonetised notes. The res­pondent surrendered 80,000/00 rupee demonetised notes to the Feni Branch of the then National Bank of Pakistan. As per the Regulation the equivalent of 9000/00 rupee demonetised notes were exchanged for the legal tender and for the balance he applied to the Area Committee for release of the same. The said Committee finally passed an order on 11.12.71 forfeiting 25,000/00 rupees and releasing the amount 46.500/-. After the emergence of Bangladesh Sonali Bank came into existence as successor of National Bank of Pakistan. The respondent approached the Sonali Bank for the release of the amount and the Bank by its letter dated 6.8.77 informed him that the amount will be paid once it is cleared by Head Office. Thereafter, numerous reminders were given and the respondent was informed that the Government had decided not to pay the equivalent of the demonetized notes and hence the amount cannot be paid. Respondent challenged this decision by filing a writ petition in the High Court Division. The High Court Division noticed the corres­pondence that took place between the appellant and the respondent and was satisfied that the delay in filing the writ petition was solely due to the indecision on the part of the au­thorities of the Sonali Bank. The High Court Division repelled the contention of the app­ellant Bank by holding that the Circular No. DCM/53-75 dated 29th November 1975, had any bearing in the facts and circumstances of the case. The Circular and memo of the Mini­stry of Finance dated 27.10.75 to the effect that the Government had decided not to allow the payment of the exchange value of demone­tised Pakistani currency notes is irrelevant so far the facts of the case are concerned inasmuch as the question in this case is whether the respondent is entitled to the payment of an amount already released by the authorities concerned under MLR No. 81 upon surrendering the demonetised notes. The High Court Division considered that the release order was made by the competent authority after forfeiting Tk. 25,000/00 and the remaining amount was released. It then completely changed the character and it became a deposit by way of entrustment to the Bank in    question.  The High Court Division further found that the Bank became a debtor to the respondent. In this view of the matter, the rule was made absolute so far, as the Sonali Bank is concerned but it was discharged against the Bangladesh Bank and the Government of Bangladesh.
3.         Leave was granted to consider whether the Sonali Bank became a debtor in respect of the released amount and whether it   was a debt of the Bangladesh Bank as well as of the Government of Bangladesh.
The Release Order is in the following terms:
"Messrs Mannan Brothers have applied to this Committee for permis­sion to obtain exchange value of a sum of Rs. 71,500/00 (Rupees seventy one thousand five hundred only) stated to have been deposited by him/her/them in demonetised notes as per your receipts listed below:
Receipt No. 
 Total 71,600/00 

2. You are hereby authorised to pay to the applicant Rs. 46.500/00 (rupees forty-six thousand five hundred only) after de­duction of Rs. 25.000/00 which, has been forfeited, subject to compliance of the usual payment procedure issued by the State Bank of Pakistan.
3. This order should be attached to the discharged receipt and kept in safe custody till further orders.
4. Where para 3 applies, the amount forfeited   should  be surrendered to the State Bank of Pakistan according to the prescribed instructions. A spare copy of this order (enclosed) should be forwarded to the Head Office of the Bank who will transmit it to the State Bank of Pakistan along with the cheque/pay order for the total amount forfeited".
           2. “A copy of the Committee's order in respect of the amount forfeited is enclosed."
4.         The Sonali Bank has come in to exis­tence in pursuance of the President's Order NO.26 of 1972. Article 7 of the said Presi­dent's Order reads as follows:
7. (1) "the undertaking of each existing bank shall be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances reserve funds, investments and all other rights and interests in or arising out of, such property as were immediately before the commencement of this order in the ownership, possession, power or control of the existing bank in relation to the undertaking within the territory of Bang­ladesh or in relation to the business of such undertaking outside Bangladesh, and all books of accounts, registers, records and all other documents of what­ever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the existing bank in relation to the undertaking within the territory of Bangladesh.
(4) Unless otherwise expressly provided by this Order all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instru­ments of whatever nature subsisting or having effect immediately before the co­mmencement of this Order and to which the existing bank is a party or which are in favour of the corresponding new bank, and may be enforced or acted upon as fully and effectually as if in the place of the existing bank the corresponding new bank had been a party thereto or as if they had been issued in. favour of the corresponding new bank:
(5) If any suit, appeal or other procee­ding of whatever nature in relation to any business of the undertaking which has been transferred under Article 6 is pending by or against the existing bank, the same shall not abate, be discontinued or be in anyway prejudicially affected by reason of the transfer of the undertaking of the existing bank or of anything contained, in this Order but the suit, appeal or other proceeding may be-conti­nued, prosecuted and enforced by or against the corresponding new bank".
5.         It is clear from the sub-articles (1), (4) and (5) that Sonali Bank has stepped into the shoes of the National Bank. The respondent surrendered the demonetised notes in pursuance of MLR No.81 of 1971. It appears that this Martial Law Regulation was promulgated on 7-6-71 by the-Chief Martial Law Administrator, Pakistan taking action because a large quantity of Pakistani currency notes had been illegally removed from the Government Treasuries, State Bank and other Banks, etc and since those cur­rency notes may by used for prejudicial activities it was thought expedient to with­draw from circulation by demonetising the currency, e g. having (a  mark inscription the expression ‘Joy Bangla' or 'Bangladesh' having expression Dacca' (b) All the Pakis­tani currency notes of 500/ 00 rupees and 100 rupees denomination (vide paragraph 2). In paragraph 8 it is stated that the demo­netised notes mentioned in sub- paragraph (a) of paragraph 2 will not be given entitle­ment to demand from the State Bank of Pakistan or the Central Government the value of such currency, In other words, Pakistani currency notes of any denomina­tion having the inscription, embossed of expression "Joy Bangla' or 'Bangladesh' or 'Dacca  ceased to be a legal tender and no exchange value would be given in exchange of such currency notes. These have become useless pieces of paper. As for Pakistani currency notes of 500 and 100 denomina­tions paragraph 3 of MLR 8.1 has made provision for surrendering the same to the treasuries, commercial banks or designated authorities on the 8th and 9 th June, 1971 and in the case of 100 rupee notes time was extended to another date, that is, 10th June, 1971. It is stipulated that thereafter these currency notes shall not be accepted. By para­graph 4 the receiving banks were directed to give receipt duly signed and stamped' to the surrendering the same demonetised notes with their numbers in value. By paragraph 5 the Central Government was obliged to set up such committee to find out (I) which of the currency notes surrendered under sub-paragraph (b) of paragraph 3 were ille­gally removed from the State Bank of Pakis­tan or any of its branches or from any office or branch of any other bank or any Govt. treasury, and (ii) whether any person sur­rendering any such currency notes has evaded any tax payable to the Government. Sub-paragraph (2) of paragraph 5 provided that the decision of a committee under sub-para­graph (1) shall be final. Then solemn pro­nouncement has been made in paragraph 6 by providing that a person who has surren­dered currency notes as required by paragraph 3 "shall be entitled to receive" on produc­tion of the receipt that was issued to him under paragraph 4 "the amount equivalent to the value of the currency notes so surren­dered by him from such bank" provided (i) the currency notes have not been looted or illegally acquired from any branch of the State Bank of Pakistan or any other bank and (ii) such person has been found by 'he committee not to have evaded any tax payable of the Government. By paragraph 7 it is provided that the Central! Government or the State Bank of Pakistan may make such rules or issue such direction to such person or authority as it is considered necessary. Paragraph 9 bars the jurisdiction of the Court. Paragraph 10 provides for penalty if any false information is given or failure to com­ply with the direction as given in paragraph 7. In other words, if any direction is given as in under paragraph 7 by the Central Go­vernment or the State Bank of Pakistan such direction must be complied with failing which the breach will be visited by punish­ment.
6.         The Area Committee released Rs. 46,500/00 vide Annexure "D" after deducting Rs. 25,000/00 which were forfeited. The release order was addressed to the Manager of the Sonali Bank with the instruction "you are hereby authored to pay the applicant rupees 46 500/00". Clause 4 of the Order says that the amount forfeited should be surren­dered to the State Bank of Pakistan through the Head Office of the Bank who will trans­mit it to the State Bank of Pakistan along with the cheque and pay order for the total amount forfeited. It is thus clear the moment the release order was passed by the Area Committee the character of the surrendered demonetised notes was completely changed and it became equivalent to the exchange amount of the depositor. Respondent is not claiming the demonetised notes. What he is claiming is the payment of the exchange value of notes surrendered by him duly released by the Area Committee that is, rupees 46.500/00 after, forfeit of rupees 25,006/00. So far as further processing is involved it only concerns the forfeited amount (vide clause 4) of the release order. As for the released amount, the respondent is entitled to receive it from the bank and this amount now became a de­posit in his favour and new jural relationship is created between the depositor and the bank namely that of a creditor and debtor.- Mr. Asrarul Hossain argued that the appellant bank was merely acting as agent of the State Bank of Pakistan. His contention is that the respondent can only claim it from the State Bank of Pakistan or Government of Pakistan but not from the agent. The argument does not appear to be sound rather a fallacy is involved. The Area Committee which is the creation of MLR 81 released the amount. It became a direction on the so-called agent, namely, the bank, and the agent, therefore, is only obliged to pay the amount. There-lease order was made on 11-12-71 and the order by operation of law crated a debt. The released amount became a deposit and the bank became a debtor. The High Court Division has rightly issued the writ.
In the result, therefore, the appeal is dismissed without any order as, to costs.