When the question of amendment of any statute comes, then this demands strong, specific legal and logical arguments by way of explanation in favour of- the need for amended. My trial here is to raise awareness and gather consensus in favour of the amendment of this Act as earlier as possible.
For this obvious reason I will point out some lacunas and propose some recommendations thereto.
Obviously, the purpose which expedites the adoption of Artha Rin Adalat Ain, 2003 (Act no. 8 of 2003) is very efficacious and specific. This is an Act specially framed for amalgamating all the claims of dues of loan of financial institutions, so far, it relates to recovery of loan.
Two objectives of this Act are palpable which are—1. this Act only confines to the loan recovery by financial institution and 2. this only confines to loan.
The adverse effect of this proposition is that it fails to amalgamate all the loan recovery disputes between and among the financial institutions and parties. Besides this only confirms recovery of ‘loan’ which is not as extensive as the word ‘dues’. These limitations primarily frustrates the amalgamation purpose of loan of financial institutions.
The parties seeking relief before this court must be a financial institutions as defined under section 2(K) (1) of this Act. It authorises only the financial institutions who can invoke the jurisdiction of Court i.e. for filing any suit under this Act. This is absolutely a bad provision because if any party becomes victim of the settlement of his/her loan or find discrepancies about the amount of loan or interest amount or if such financial institution recover or impose loan in violation of Bangladesh Bank circular or it’s loan sanction letter, then he has no right to protect his right under this Act.
The cause of action is loan and the contesting party is the financial institutions but the individual/natural or legal person has no right to invoke the jurisdiction of this Act. This also causes multiplicity of suits. Because, such aggrieved party has to file civil suit before the cumbersome civil courts in our country.
But there is no legal bar upon the financial institution that once a civil suit is filed by the parties regarding the same cause of action before the customary civil court, and then no financial institution can file Suit before the Artha Rin Adalat. There is no stay of suit or res judicata. This provision needs to be amended immediately.
So, ultimately the borrowing party has no remedy at all even though financial institutions are taking more interest than that of as permitted by Bangladesh Bank Circular.
The provision of S.4(8) of this Act exclusively authorises the government to decline all the Artha Rin Adalat of this country at any time vide a gazette circular. This is purely unjustified. It should be amended. It should be like this-‘Govt. in consultation or with the previous satisfaction of Hon’ble Supreme Court of Bangladesh may decline the Artha Rin Adalat at any time when both of them think fit and necessary, whereas; such satisfaction must be subjective and objective and shall be in writing.”
The notorious provision as described under section 12 of this Act which makes the financial institution very arbitrary and ex partee beneficiary as well. This is an absolute bias law in favour of financial institutions.
Clause (1) of section 12 makes a provision that before selling of mortgage property the financial institution can not file suit. And clause 8 of the same section denotes that once a mortgage property is sold in auction no question can be raised against it. That means once sold the mortgage property is sold forever.
Moreover, in purview of Banking companies Act, 1991 the company (means financial institution) can sell the mortgage property in default of payment of any loan or any installment within 6 (six) months thereof, the financial institution get exclusive authority to sell the mortgage land. So, if any person for any unavoidable or grave necessity or danger fails to pay his loan or any schedule thereof and without any compromise the financial institution sell that mortgage land, then party has no remedy at all to get back his property; most of the time this vanishes the bright future of many growing corporation and business institution.
Only for preventing such danger the borrowing party compels to reschedule of loan with unusual and extra-ordinary payment of loan including interest. For this reason this provision need to be changed. Because if there remains gross discrepancies regarding loan amount, the borrowing party fails to repay at a time as for any unavoidable reason or, for the fraud and sham of the financial institution when it keeps the matter pending for settlement for six months or more (which is very usual in our country), but the individual (borrowing) party wants to pay all the dues after settlement of the exact amount by court, even through there is no provision for such borrower who is aggrieved/victim indeed loan.
Even such borrower proves that the dues is pending for 6 (six) months because of their mutual understanding to settle the discrepancies of loan of for other reason, but if such financial institution does not later agree to fix or settle the loan after six and keep the borrowing party pending, such party has no remedy against such correspondence or promise of settlement of loan by the financial institution.
Ultimately, such financial institution becomes free to sell the mortgage land after said six months and it has not to explain for such pendency.
Let me draw an example to clarify this- Tk.5 lacs borrowed from a Bank securing a land of 5 kathas including its structures. The borrower has paid the 1st, 2nd and 3rd payment duly. Meantime, he finds that the bank is claiming Tk. 4 lacs but according to his calculation bank will get Tk. 3 lacs 50 thousands. The 4th date of installment payment is fixed on 16.05.2010 just after the 3 months of later date of payment of 3rd installment.
Now, the parties contact with the bank for the discrepancies of loan amount and bank keeps him for six months after the last date of payment of 4th installment. During this time there continues regular correspondences between the bank and borrower. Though this correspondences signify that both party are aware of the dues and same is pending because of the procedural encumbrances of the bank itself, even though, the bank gets full right to sell the mortgage property on auction and party has no right to call into question of such sale on auction. This illustration may be one very simple case, where there are other serious and available reasons too. These provisions not only help the financial institution to defraud borrowers but also make scope to justify such defraud and aid to hide the mendacity behind the shield of legality.
Another provisions of clause 2 of Section 41 where for filing the appeal the party needs to deposit 50% of decreed amount which tantamount very hazardous, unethical, cumbersome. This provision should be abolished. There arises a practical problem where consequences are so acute and distressing that it makes the authority of financial institution rich and richer. On the other hand this adverse effect destroys such private industry, business etc.
Practically in the auction sell, one of the collusive party purchase the same property at lower price on condition that he backs the property to any of the interested party of such financial institution to the financial institution itself. And the intermediate party receives some interest is middle.
Disregarding some other inconsistencies or limitations of this Act, more or less the Act is exhaustive and good in nature. It ensures effective and prompt remedy regarding loan dues of financial institution specially for saving the interest of financial condition and for checking balance of our economy this country, the requirement this loan is doubtless. Even, though for making this loan more effective, prompt and for practical application some of the like provision (as stated above) need to be revised and amended immediately.
The writer is an Advocate and Legal Associate of Hoque and Associate