High Court Division
(Special Original Jurisdiction)
Sheikh Hassan Arif J
Mustafa Zaman Islam J
ABM Liton ……….
…………… Petitioner
vs
Bangladesh and others
…………Respondents*
Judgment
June, 3rd 2013.
Artha Rin Adalat Ain (VIII of 2003)
Section 34(9)
Since the Bank and the Adalat proceeded against the petitioner before exhausting all the processes against the main borrower, the orders of arrest as well as the refusal of bail should not sustain in the eye of law. . ….. (6)
Helal Uddin Mollah, Advocate-For the Petitioner
AZM Mohiuddin. Advocate-For the Respondent No. 3.
Judgment
Sheikh Hassan Arif J : The Rule was issued calling upon the respondent to show cause as to why the impugned Order dated 1-8-2012 passed by the Artha Rin Adalat No-3, Dhaka (respondent No.4) in Artha Jari Case No. 86 of 2012, arising out of Artha Rin Suit No.145 of 2011, issuing warrant of arrest against petitioner (Annexure-E), and the order of rejection of bail of the petitioner dated 27-9-2012, passed by the same Adalat (Annexure-B), should not be declared to be without lawful authority and are of no legal effect. Short facts, relevant for the disposal of the Rule, are that the Eastern Bank United, Head Office, 10 Dilkusha Commercial Area, Jiban Bima Bhaban (2nd Floor), Dhaka-l000 (respondent No.3), as plaintiff, filed Artha Rin Suit No. 145 of 2011 before the Artha Rin Adalat No.3, Dhaka against the petitioner and others for realization of loan of 45,83,628.47 as on 31-3-2011. The petitioner was impleaded in the said suit as defendant No.3. Since no defendants entered appearance, the suit was decreed ex-parte by the judgment and decree dated 5-11-2012. Respondent No.3 Bank then filed Artha Jari Case No. 86 of 2012 for execution of the said decree. After service of notice of execution case through newspapers, the decree holder-Bank filed an application before the Adalat under section 34 (1) read with section 57 of the Artha Rin Adalat, 2003 (“the said Ain”) for civil detention of all the judgment-debtors including the petitioner, whereupon, the Adalat, by first impugned order dated 1-8-212, passed the order of civil detention and issued warrant of arrest against the petitioner ‘and others. In execution of the said warrant of arrest, the petitioner was arrested on 20-9-2012 and was forwarded before the Adalat below. Thereupon, when the petitioner prayed for bail, the same was rejected by the Adalat vide second impugned order dated 20-9-2012 (though in the Rule, the date is mentioned as 27-9-2010). Being aggrieved by these orders, the petitioner moved this Court and obtained the aforesaid Rule. At the time of issuance of the Rule on 7-10-2012, this Court also enlarged the petitioner on bail.
2. The Rule is opposed by the respondent No 3-Bank through Mr AZM Mohiuddin, learned advocate, who has filed, an Affidavit-in-Opposition. Mr Md Helal Uddin Mollah, learned advocate appearing for the petitioner, submits that the respondent-Bank as well as the Adalat committed illegality in issuing the warrant of arrest against the petitioner in view of the fact that the petitioner was admittedly not the main borrower, but a third party guarantor, and, as such, in view of the provisions under section 6(5) of the said A in. he may be proceeded against only after exhausting entire processes against the main borrower for realization of loan, if it is found that the main borrower has failed to repay the loan. Learned Advocate further submits that it is apparent from the plaint that even the Bank did not issue any legal, notice on the petitioner, rather the legal notice demanding repayment of loan was issued only against defendant No.1, who was admittedly the main borrower. Mr AZM Mohiuddin, learned advocate appearing for the respondent No. 3 Bank, on the other hand, submits that since no property was mortgaged in favour of the Bank, the Bank had no option but to proceed under section 34(1) of the said Ain for an order of civil detention of all the judgment-debtors. Mr. Mohiuddin further submits that the Bank having failed to find any property of the petitioner or others, it filed applications seeking civil detention of the petitioner.
3. Considered the submissions of the learned advocates, perused the writ petition as well as the Affidavit-in-opposition and the materials on record. Artha Rin Adalat Ain, 2003 is a special law solely enacted for the purpose of realization of loan from the defaulter-borrowers of Bank or financial institutions.
Stringent and harsh provisions have been made in the said Ain so that the Bank or financial institutions can realize the said loan in a smooth and expeditious way. Very minimum protection or advantages have been provided in the said Ain to the defendants in a case filed by the Bank or financial institutions.
One of such few protections is provided by the first proviso to sub-section (5) of section 6 which provides that while a decree passed by the Artha Rin Adalat is to be executed through execution process, the Adalat will first attract the properties of the main borrower and then will attract properties of the third party mortgagor and the third party guarantor. Although this first proviso speaks of the property and not of the body, but the intention of the legislature is clear, which is that any action to be taken through the execution process, the first person to be attracted is the main borrower, and if the main borrower fails to repay the said loan or it becomes impossible to realize the loan from the properties of the main borrower, only then the Adalat will proceed against the third party mortgagor and the third party guarantor. The very essence of the Contract of Guarantee as envisaged under section 126 of the Contract Act, 1872 is also compatible with that.
4. It appears from the Plaint of the Artha Rin Suit No.145 of 2011 (Annexure-A), in particular from Paragraph Nos. 2, 4, 6 and 7 of the same, that the petitioner has been mentioned therein as a third party guarantor, who executed letter of guarantee in favour of the Bank. This means, the petitioner agreed to repay the loan only when the main borrower, defendant No.1, failed to repay the same or it became impossible to realize the said amount from the main borrower. Therefore, this Court is of the view that every provision of the said Ain including the provisions under, section 34 has to be read with the said first proviso to sub-section (5) of section 6. But, in the instant case, the Bank filed application seeking civil detention and warrant of arrest against all the defendants at the same time. In the said application, the Bank mentioned that since there was no property mortgaged in favour of the Bank, it could not take any steps for auction sale of the same in view of section 33 of the said Ain.
However, the application did not mention a single word as to whether or not the Bank conducted any search for any other property of defendant No.1. It also did not mention as to why it needed to proceed for issuance of warrant of arrest against the petitioner who was admittedly the defendant No.3 and third party guarantor. Apart from that, when the Bank was seeking warrant of arrest against the defendant No 1, the defendant No.3 might only become liable if and when defendant No.1 failed to repay the said decreetal amount. There is nothing in the said application as to whether or not the Bank conducted any search as regards the availability of any property of the petitioner and whether it was possible on the part of the Bank to at first attract the said property through attachment and take steps for selling of the same on auction and then to proceed against his body for realization of the decreetal amount.
5. The body of a human being is the most valuable thing in his life. Even the Artha Rin Adalat Ain, 2003 has recognized that and, accordingly, made provisions under sub-section (9) of section 34 requiring at least one attempt for selling of property before issuance of warrant of arrest or before passing any order of civil detention. However, in the instant case, both the Bank and the Adalat proceeded against the body of the petitioner without making any search as to whether or not the main borrower did have any property available for attachment or the petitioner at least did have any property for such attachment.
6. Considering the above discussions on law and facts, we are of the view that since the Adalat as well as the Bank proceeded against the body of all the defendants including the petitioner before proceeding against their properties, and since the Bank and the Adalat proceeded against the petitioner before exhausting all the processes against the main borrower, the impugned orders of arrest as well as the refusal of bail should not sustain in the eye of law. This being so, this Rule should succeed.
7. In the result, the Rule is made absolute.
According, the impugned orders of arrest as well as the refusal of bail are set-aside in so far as the petitioner is concerned.
Communicate this order.