Sonali Bank Vs. Md. Sirajul Hoque Chowdhury and oth­ers, I ADC (2004) 394

Case No: Civil Appeal No. 90 of 1998

Judge: Md. Ruhul Amin ,

Court: Appellate Division ,,

Advocate: Mr. Abdur Razzaque Khan,,

Citation: I ADC (2004) 394

Case Year: 2004

Appellant: Sonali Bank

Respondent: Md. Sirajul Hoque Chowdhury and oth­ers

Subject: Artha Rin,

Delivery Date: 2004-06-28

Supreme Court
Appellate Division
(Civil)
 
Present:
Md. Ruhul Amin J
MM Ruhul Amin J
Md. Tafazzul Islam J
 
Sonali Bank
………………Appellant
Vs.
Md. Sirajul Hoque Chowdhury and oth­ers
………………Respondent
 
Judgment
June 28, 2004.
 
Artha Rin Ain 1990
Section 2(kha)
The obligation of repayment of rin as defined in section 2(kha) of  the Ain is of the one who has availed the same from financial institution as well as of the one who either facilitated the one to avail rin or secured repayment of the rin and only these categories are to be held responsible in case of default in the repayment of the amount became due as against the rin availed from financial institution. …. (11)
 
Code of Civil Procedure
Order I, Rule 3, 10 (2)
Order 1 Rule 3 of the Code of Civil procedure contemplates as situation where several persons may be impleaded in the suit as defendants if relief so sought for has arisen against them out of the same act or transaction or series of acts or transactions. In the background of the said fact it cannot be said that the loan as the bank granted to the defendant Nos.1 & 2 and utilized by them and the transaction that took place between defendant Nos.1 & 2 and defendant nos. 3 & 4 is same or one, As such upon restoring to the provision of order 1, Rule 3 of the Code of Civil Procedure it cannot be held that bank has quite legally filed that suit impleading the defendant Nos. 3 & 4 as the defendants along with others. …. (18)
 
Cases Referred To-
Bangladesh Railway Vs. M/S Sinaf Racht Chartering and Ship Broking Corporation, 5 BLD (AD) 115.
 
Lawyers Involved
Abdur Razzaque Khan, Senior Advocate, instructed by A. K. M. Shahidul Huq, Advocate-on-Record-For the Appellant.
Not Represented- the Respondents.
 
Civil Appeal No. 90 of 1998.
(From the Judgment and Order dated March 30, 1997 passed by the High Court Division in Civil Order No. 1383)
 
JUDGMENT
 
Md. Ruhul Amin J.
 
The appeal by leave is against the judgment and Order dated March 30, 1997 of a Division Bench of the High Court Division passed in Civil Order No. 1383 of 1997 rejecting the revisional application summarily. The revisional application was filed against the order dated 19. 2. 1997 of the Court of Subordinate Judge and Artha Rin Adalat, Jessore allowing an application filed under order 1 Rule 10 (2) of the Code of Civil Procedure and thereupon striking out the name of defendant Nos. 3 and 4 (herein respondent Nos.1 and 2).
 
2. Facts, in short, are that appellant Bank has filed suit, Money Suit No. 7 of 1996, in the Court of Subordinate Judge and Artha Rin Adalat, Jessore for realization of Tk. 39,32,725,92/- (as on 24.6.1996) impleading as many as 7 defendants including the present Respondent Nos. 1 and 2 stating, inter alia, that on the prayer of the defendant Nos. 1 and 2 the Bank by its sanction letter dated 16.7.1995 allowed loan of Tk. 5,00,000/- by way of Cash credit (hypothe­cation) and Tk. 30,00,000/- by way of Cash Credit (pledge) and the loanees executed charge documents in favour of the Bank, that propri­etors (defendant Nos. 3 and 4) of M/S Chowdhury Trading, a dealer of the defendant No. 7 (Zia Fertilizer Company Limited) got allotment of 1,000 metric tons of Urea fertilizer from the said defendant but due to paucity of fund they were not in a position to withdraw the said fertilizer and in that situation they entered into an agreement with the defendant Nos.1 and 2 for sale of the said fertilizer and made an advance sale of fertilizer upon concluding writ­ten agreement for sale, that the defendant Nos.1 and 2 on the basis of said agreement for sale obtained a demand draft in favour of defendant No. 7 for the price of the fertilizer from the bank as against the loan sanctioned in the name of said defendants, that while the defendant Nos.1 and 2 obtained demand draft from the Bank, the defendant Nos. 3 and 4 executed a receipt acknowledging receipt of said demand draft as well as promised to deliver the letter of allotment to the Bank and also undertook to give necessary letter of authority in favour of the designated person of the Bank so that the said agent of the Bank can lift the fertilizer from the defendant No. 7 (Zia Fertilizer Company Ltd.) that in due course the demand draft obtained from the Bank was deposited in the office of the fertilizer factory. It may be mentioned that the defendant Nos. 3 and 4 made over to the Bank letter of allotment issued by the fertilizer factory, the receipt granted by defendant No.7 acknowledging receiving of the Bank draft and the letter of authorization exe­cuted in favour of Bank's nominee authorizing lifting of fertilizer allotted to defendant Nos. 3 and 4.
 
3. It is the case of the Bank that allotted consignment of fertilizer was not delivered to the authorized officer of the bank by the fertil­izer factory and that the Bank could not realize the amount of the Bank draft.
 
4. The Respondent Nos. 1 and 2 (defendant Nos. 3 and 4) entered appearance in the suit and filed written statement denying the material averments made in the plaint.
 
5. Thereafter Respondent Nos.1 and 2 filed an application under Order 1, Rule 10 (2) of the Code of Civil Procedure praying for striking out their names from the plaint on the ground that they were neither the borrowers of the Bank nor they are the guarantors in respect of the amount which was sanctioned as loan in favour of the defendant Nos. 1 and 2.
 
6. The Court of Subordinate Judge upon hearing the parties allowed the application filed under Order, 1, Rule 10(2) of the Code of civil Procedure by the Respondent Nos.1 and 2. Thereupon the appellant moved the High Court Division in revisional jurisdiction. The High Court division summarily rejected the revision­al application.
 
7. Leave was granted to consider the sub­missions that liability of the defendant Nos.3 and 4 for the loan in question has been clearly made out in paragraphs 4 and 5 of the plain, but the High Court Division as well as the court below upon a total non consideration of the facts of the case and the law on the subject ille­gally caused the names of the defendant Nos. 3 and 4 to be struck out from the plaint, that defendant Nos. 3 and 4 having admitted, under­taken and declared their liability to the Bank the High Court Division was wrong in upholding the finding of the trial Court to the effect that plaintiff will get no decree against them as they were not borrowers and that their presence will serve no purpose, in as much as the Artha Rin Adalat Ain, 1990 nowhere provides that the suit may only be filed in the Artha Rin Adalat only against the borrower, and further that the court could not at this stage give any finding or spec­ulate about the decree that may be passed, that Section 5(1) of the Ain Provides that all suits concerning realization of loans of a Bank will be filed in the Artha Rin Adalat, that there is no provision that such a suit may only be filed against a borrower/guarantor, that High Court Division was in error in upholding the order of the Artha Rin Adalat inasmuch as the suit for being realization of a loan which is within the definition of loan as given in section 2 (kha) of the said Ain inasmuch as there are documents signed by the defendant Nos. 3 and 4 showing their liability for it and therefore the finding that the suit will serve no purpose as against those defendants is erroneous in law, that the defen­dant Nos. 3 and 4 having received and utilized the loan granted by the Bank, which is well within the definition of loan as in section 2 (kha), the High Court Division is wrong in upholding the order of striking out the names of the said defendants who were necessary and property parties in the suit.
 
8. It is seen from the plaint that the Bank sanctioned loan of Tk. 5, 00,000/- by way of cash credit (hypothecation) and Tk. 30, 00,000/- by way of Cash Credit (pledge) in favour of the defendant Nos.1 and 2. As it appear the defen­dant Nos. 1 and 2 got sanction of the aforesaid loan to lift 1,000 metric tons of fertilizer from the Zia fertilizer factors which they purchased in advance from Defendant Nos. 3 and 4, who got allotment of 1,000 metric tons of fertilizer, to be lifted from Zia fertilizer factory. The said defendants made advance sale of the fertilizer to the defendant Nos. 1 and 2 and in that regard the said defendants and the defendant Nos.1 and 2 entered into an agreement representing the sale of the fertilizer. The Bank on the repre­sentation of the defendant Nos. 1 and 2 made upon presenting agreement of sale entered into between the said defendants and defendant Nos.3 and 4 issued a Demand Draft in Favour of the defendant No.7, Zia fertilizer factory. It may be mentioned the defendant Nos.3 and 4 being the allottee acknowledged the receipt of the Demand Draft and gave an undertaking to deposit in the bank letter of allotment and other connected papers. It appears that the said papers were deposited with the Bank along with a let­ter of authorization of favour of authorized offi­cer of the Bank authorizing him to withdraw 1,000 metric tons fertilizers from the Zia fertil­izer factory. It is apparent from the papers on the record that since defendant Nos. 3 and 4 made advance sale of 1,000 metric fonts of fer­tilizer to the defendant Nos. 1 and 2, they obtained loan from the Bank upon hypotheca­tion/pledge of the said fertilizer and the Bank vacated the said defendants of utilize the loan money on the basis of their agreement of pur­chase with defendant Nos. 3 and 4.
 
9. It appears from the pleading of the plain­tiff that ultimately the Bank could not take delivery of the fertilizer from the Zia fertilizer factory and that also did not get the amount the Demand Draft and in that state of the matter Bank filed the suit impleading as many as 7 per­sons as defendants. It is seen from the materials on record that defendant Nos. 3 and 4 having had allotment of 1,000 metric tons of fertilizer from the Zia Fertilizer Factory (defendant No.7) they made advance sale of the said fertilizer to the defendant Nos.1 and 2 by an agreement of sale. The defendant Nos. 1 and 2 upon present­ing to the Bank the aforesaid agreement of pur­chase got the Demand Draft issued in favour of the Defendant No.7 as against the loan sanc­tioned in their favour in respect of the price of 1,000 metric tons of fertilizer. It also appears from the papers in the record that the Demand Draft issued by the bank was in favour of the fertilizer factory and the said Demand Draft was deposited in the office of the Zia Fertilizer Company Ltd.
 
10. The Bank in its plaint has stated that as the defendant Nos. 3 and 4 were unable to lift the fertilizer, which they got allotted in their favour, because of paucity of fund they sold in advance the said fertilizer to the defendant Nos. 1 and 2 upon entering into an agreement. It is also the case of the Bank that after entering into the agreement the defendant Nos.1 and 2 as well as defendant Nos.3 and 4 appeared before the Bank and on the application of defendant Nos. 1 and 2 a Demand Draft of Tk. 37,25,000/- was issued in favour of the defendant No.7. It is seen from the averments made in the plaint that the defendant Nos. 3 and 4 for enabling the defendant Nos. 1 and 2 as well as the Bank to lift the fertilizer from the defendant No. 7 executed the necessary papers and in pursuant there to the Bank approached the defendant No.7 for getting delivery of 1,000 metric tons of fertiliz­er but the defendant No. 7 did not deliver the fertilizer. From the papers on record it is seen that defendant Nos.3 and4 after having had made advance sale of the fertilizer, where of they got allotment from Respondent No.7, to the defendant Nos. 1 and 2 upon entering into an agreement the defendant Nos. 1 and 2 as loanee's of the Bank obtained Demand Draft in favour of the defendant No.7 towards the price of the fertilizer. It also appears from the papers on record that defendant Nos.3 and 4 did the necessary things to enable the Bank and the defendant Nos. 1 and 2 to get delivery of the fer­tilizer. The admitted position is that Bank advanced loan to the defendant Nos. 1 and 2 towards advanced purchase of the fertilizer, allotment where of was obtained by the defen­dant Nos.3 and 4. In the background of the facts and circumstances as transpire from papers in record it appears the defendant Nos.3 and 4 were not the borrowers from the Bank and whatever they did, they did so to enable to the borrowers of the Bank, i.e. defendant Nos. 1 and 2, being advance purchasers to get delivery of the fertilizer so sold.
 
11. The Bank has filed the suit for realiza­tion of the loan amount.
In the Artha Rin Ain, 1990 (the Ain) in Section 2(kha) “ঋন” has been defined as:
 
"(১) অগ্রিম ধার নগদ ঋন,ওভার ড্রাফট ব্যাঙ্ককিং ক্রেডিট, বাটাকৃত বা ক্রয়কৃত বিল বা অন্য যে কোন আর্থিক আনুকুল্য বা সুযোগ-সুবিধা, যে নামেই অভিহিত হউক না কেন ।
(২)গ্যারান্টি, ইনডেমনিটি, ঋনপত্র বা অন্ন কন আর্থিক বন্দোবস্ত, যাহা কোন আর্থিল প্রতিষ্ঠান ঋন গ্রহিতার পক্ষে প্রদান বা জারী করে দায় হিসাবে গ্রহন করে।"
 
12. As per provision of the Ain financial institution, as the appellant, is required to file suit in the Artha Rin Adalat established under the Ain against the person who has/hade availed the facility or has facilitated one to avail the facility as in section 2(kha) of the Ain and failed to discharge the obligation with in stipu­lated time as per undertaking given at the time of availing one or more of the species as in Section 2(kha) of the Ain. The obligation of repayment of 'ঋন' as defined in section 2(kha) of the Ain is of the one who has availed the same from facilitated the one to avail ‘ঋন’  or secured repayment of the 'ঋন' and only these categories are to be held responsible in case of default in the repayment of the amount became due as against the ' ঋন’ availed from financial institution. The provisions of the Ain and par­ticularly the provision of Section 2(kha) of the Ain do not contemplate that the person to whom loanee (S), in the instant case defendant Nos.1 and 2, had an obligation and the loanee with the loan amount discharged his obligating to that person and in such situation the person as regard whom loanee discharged his obligation would be considered a loanee or that would be under obligation to discharge loanee's obliga­tion in case of loanee’s failure to pay the amount became due against the loanee. The provisions of the Ain also do not contemplate that a loanee who at one time entered into an agreement of advance purchase of certain mer­chandise and upon presenting such agreement he utilized the amount sanctioned by the finan­cial institution as loan and that the other part to agreement of advance purchase did the con­comitant/necessary things for the materization of the agreement in such a situation the other party to the agreement would be considered as lance or that would be under an obligation to discharge the obligation of the persons (s) in whose favour the financial institution in fact sanctioned money as loan or 'ঋন'.
 
13. From the averments made in the plaint it is seen that Cash Credit (hypothecation) and Cash Credit (pledge) facilities were allowed to the defendant Nos.1 and 2. It also appears from the averments made in the plaint and the papers placed on the record that said loans were given to the defendant Nos.1 and 2 to enable them to lift the fertilizer which they have purchased in advance from the defendant Nos. 3 and 4 who got the allotment of the fertilizer from defen­dant No.7. In our opinion upon making advance sale of the fertilizer the defendant Nos. 3 and 4 had hardly anything to do except facilitating the defendant Nos.1 and 2 to lift the fertilizer, which the defendant Nos. 3 and 4 did as regard the fertilizer in question. From the papers on the record it is seen that the defendant Nos.3 and 4 to make the agreement of advance sale fruitful they did everything to enable the Bank and the defendant Nos. 1 and 2 to lift the fertilizer from Respondent No.7.
 
14. In the background of the materials on record and the discussions made hereinbefore in our view it cannot be said that defendant Nos. 3 and 4 obtained loan from the Bank or received any financial facilities from the Bank and that they are also not the guarantors in respect of the loan made available by the defendant Nos. 1 and 2.
 
15. The learned Counsel appearing for the appellant wants us to read in the definition of ‘ঋন’ as given in section 2(kha) of the Artha Rin Adalat that whatever facility or facilities one obtains even though not a lance out of the loan sanctioned by the Bank such person shall also be considered as lance of the Bank. This sub­mission as appears to have been made in the Background of the fact that defendant Nos. 1 and 2 made advance purchase of the fertilizer in respect where of defendant Nos.3 and 4 got a Setter of allotment from defendant No. 7 and that the defendant Nos. 1 and 2 on the basis of the agreement of advance purchase obtained loan from the Bank to lift the fertilizer so advance purchased from the defendant Nos. 3 and 4. It is difficult to read, as the learned counsel intends, in the definition of the ‘ঋন' as in section 2(kha) of the Ain that in the background of particular transaction one of the party to the transaction obtains loan for materialization of the transac­tion to his benefit or to discharge his obligation to the other pray arising out of said transaction, the party as regard whom the loanee has dis­charged his obligation such party would also be considered a loanee of the Bank being the ben­eficiary. The definition of the ‘ঋন' as given in the Ain cannot be stretched in the manner as the learned counsel wants us to stretch since the Bank, as in the instant case, did not sanction and allow any loan to the defendant Nos.3 and 4, rather the Bank sanctioned loan to the defen­dant Nos.1 and 2 allowed said defendants to avail the loan granted and as such it is the liabil­ity to the defendant Nos. 1 and 2 to pay back the dues against the loan.
 
16. It is a hard proposition as because the defendant Nos.1 and 2 in utilization of the loan placed before the Bank the agreement entered into on one part defendant Nos.1 and 2 and the other part defendant Nos. 3 and 4 making advance sale of fertilizer allotment where of defendant Nos.3 and 4 got from defendant No.7 and as such defendant Nos. 3 and 4 are also the loanees of the Bank.
 
17. In the afore state of the matter we are of the view the High Court division has committed no error in refusing to interfere with the order of the trial court striking out the names of the defendants Nos. 3 and 4.
 
18. The learned Counsel for the appellant upon referring to the provision of order 1 Rule 3 of the Code of Civil procedure submitted that in the background of the facts of the case impleading of the defendant Nos. 3 and 4 was quite legal and that High Court division erred in refusing to interfere with the order of he trial court striking out the names of the defendants. In support of the aforesaid submissions the learned counsel has referred to the case of Bangladesh Railway Vs. M/S Sinaf Racht Chartering and Ship Broking corporation report­ed in 5 BLD (AD) 115. Suffice it to say the facts of the reported case is quite distinct from the facts of the instant case. The provision of order 1 Rule 3 of the Code of Civil Procedure con­templates as situation where several persons may be impleaded in the suit as defendants if relief so sought for has arisen against them out of the same act or transaction or series of acts or transactions. From the materials on record it is seen that defendant Nos. 3 and 4 were not par­ties to the transaction i.e. sanctioning of loan by the Bank to the defendant Nos. 1 and 2 and also availing of loan facility allowed by the Bank. The Bank on the application 01 the defendant Nos. 1 and 2 allowed loan to enable them to lift the fertilizer which they purchased from the defendant Nos. 3 and 4. An Agreement was entered into between the defendant Nos. 1 and 2 and the defendant Nos. 3 and 4 as regarded sale of the fertilizer and the defendant No.1 and 2 by placing the said agreement for sale, as it appears, obtained loan and utilized the same for lifting the fertilizer from the defendant No. 7. In the background of the said fact it cannot be said that the loan as the Bank granted to the defen­dant Nos. 1 and 2 and utilized by them and the transaction that took place between the defen­dant Nos. 1 and 2 and defendant Nos.3 and 4 is same or one. As such upon resorting to the pro­vision of Order 1, Rule 3 of the Code of Civil Procedure it cannot be said that Bank has quite legally filed the suit impleading the defendant Nos. 3 and 4 as the defendants along with oth­ers.
 
Accordingly the appeal is dismissed.
 
There is no order as to costs.
 
Ed.