Janata Bank vs. Respondent: M/S. Natun Pragoti Paribahan Sangstha and Others

IN THE SUPREME COURT OF BANGLADESH (APPELLATE DIVISION)

Civil Appeal No. 103 of 2004

Decided On: 27.04.2009

Appellants: Janata Bank
Vs.
Respondent: M/s. Natun Pragoti Paribahan Sangstha and Others
[Alongwith Civil Appeal No. 104 of 2004]

**Hon’ble Judges:**Md. Ruhul Amin, C.J., Md. Tafazzul Islam, Md. Abdul Matin and Md. Abdul Aziz, JJ.

Counsels:
For Appellant/Petitioner/Plaintiff: Shamim Khaled, Advocate, instructed by Md. Abu Siddique, Advocate-on-Record

For Respondents/Defendant: Khondaker Mahbubuddin Ahmed, Senior Advocate, instructed by Mr. Zahirul Islam, Advocate-on-Record

Subject: Civil Procedure

Catch Words

Mentioned IN

Case Note:
Banking - Interest - Exemption of - Present appeals, by leave, directed against judgment and order of High Court Division passed in Writ Petition making absolute Rule obtained challenging decision of Board of Janata Bank, appellant is not allowing prayer of respondent No. 1 for exemption of interest - Whether against judgment and order of High Court Division - Held, no requirement to assign reason where parties were engaged in purely contractual relationship - Failures of respondents to avail of previous exemption of interest are admitted facts - High Court Division erred in not considering that benefits of exemption of interest, previously granted in favour of respondents, not availed by them - Board of appellant reasonably decided against requests made by respondents for exemptions - Impugned judgment and order set aside - Appeal allowed. [7]

Disposition:
Appeal Allowed

Industry: Banks

JUDGMENT

Md. Tafazzul Islam, J.

1. These appeals, by leave, is directed against the judgment and order dated 30.11.2000 of the High Court Division passed in Writ Petition Nos. 4986 and 4987 of 1996 making absolute the Rule obtained challenging the decision of the Board of Janata Bank, the appellant is not allowing the prayer of the respondent No. 1 for exemption of interest. Facts of Civil Appeal No. 103 of 2004 in brief, are that the respondents of the above appeal filed the above Writ Petition No. 4986 of 1996 on the averments that the respondent No. 1 which is a partnership firm, on 20.3.1974, obtained a loan of TK. 37,00,000.00 from the appellant hypothecating the two cargo vessels proposed to be purchased with the above loan money and also upon equitable mortgage of the landed properties owned by the respondent No. 2 but due to lot of formalities and other various impediments, they could not start their business in time and thereby they having failed to repay the loan, the appellant instituted Money Suit No. 835 of 1975 against them to recover TK. 42,82,543.00 which included the principal loan amount and also the interest and on 30.8.1985 the above suit was decreed on contest with a direction that the respondents are to pay monthly installments of TK. 50,000/- with interest at the rate of 13% to adjust the decretal dues; Bangladesh Bank, by Circular dated 7.10.1991, directed the banking institutions to exempt interest upto 75% of interest on the fulfillment of conditions laid down in the above circular and in the light of the above circular the appellant also, by notice published in the Daily ‘Ittefaq’ on 14.11.1991, offered exemption of interest on the terms of payment of part of the defaulted loan amount and on an undertaking to pay the balance amount of the loan within a specified time and also invited applications to avail the privileges of exemptions of interest upto 75%; in response, the respondent No. 1, on 29.12.91 after complying with the conditions as laid down in the Circular dated 7.10.1991 filed an application for exemption but the appellant did neither grant the desired exemption nor gave any reply to the above application and on the other hand started Money Execution Case No. 151 of 1992, even though the period of filing the same expired, claiming TK. 2,99,12,751.90 from the respondents and then attached not only the cargo vessels but also the mortgaged properties of the respondent No. 2 situated at Khilgaon, Dhaka; further on the representation of the respondents No. 1 for exemption, the appellant requested Mr. Ali Ahmed, one of its Directors, to make enquiry on the prayer made by the respondent No. 1 for exemption of interest and after enquiry, Mr. Ali Ahmed submitted his report to the Board of the appellant recommending 80% exemption of interest but inspite of that the Board of the appellant, without assigning any reason whatsoever, rejected the prayer of the respondents for exemption.

2. The appellant opposed the Rule and filed affidavit-in-opposition contending that the writ petition was filed with malafide intention only to drag the payment of the loan; the appellant remitted 50% of the applied interest and 50% of unapplied interest of the respondent No. 1 subject to payment of arrears of interest within six months but the respondents No. 1 failed to avail the above benefit and subsequently, upon the prayer of the respondent No. 1, the appellant decided to exempt the entire unapplied interest subject to payment of the balance dues within six months but again the respondent No. 1 failed to avail the same; then the respondent No. 1, to avail the above benefit, prayed for extension of the time limit upto 30.6.93 which was allowed and accordingly no interest was charged for the period since 17.9.1990 but the respondent No. 1 again failed to avail the benefit; the respondent No. 1, in order to liquidate their liabilities, deposited in total TK. 27,12,000.00 in the loan account but did not deposit 15% down payment as required under the above Circular dated 7.10.1991 and the application dated 29.12.91 for exemption of interest was not sent to concerned authority of the appellant for consideration; while other defaulter borrowers, as shown in Annexure-E, having complied with the terms and conditions laid down in the aforesaid Circular dated 7.10.91 got benefit of exemption, the conduct of the respondent No. 1, being found not bonafide, the Board of the appellant, the final authority, found no reasonable ground to consider the prayer of the respondent No. 1 to exemption of interest because of part failures.

3. The High Court Division, after hearing, made the Rule absolute on the finding that exemptions having been granted to other defaulters but denied to the respondent No. 1 though they repaid the principal loan amount and also the costs of the suit, the action of the appellant is discriminatory and further the appellant, while refusing the prayer of the respondent No. 1 exemption of interest, did not assign any reason whatsoever specially when the respondent No. 1 was eligible for such exemption in terms of the inquiry report submitted by Mr. Ali Ahmed, a Director of the Board of the appellant bank and further the respondents, who by making payments in installments fully liquated the entire principle loan amount, became eligible for being considered for exemption of interest and the appellant ought to have considered the prayer of the respondent No. 1 for exemption of interest on humanitarian ground.

4. The facts of Civil Appeal No. 104 of 2004, in brief, are more or similar.

5. Common leave order was granted to consider the submissions that the High Court Division acted on unfounded assumption that other defaulting borrowers, who were similarly placed with the respondents, have obtained the benefit of exemption of interest; the High Court Division erred in law in misconstruing and misunderstanding Bangladesh Bank Circular dated 7.10.91 to the effect that the contents of the said circular conferred right or entitlement to the exemption of interest without at all considering that exemption of interest is not a vested right and until and unless the application for exemption of interest is sanctioned by the Board of the appellant in exercise of its discretion, the respondents had no enforceable right; the high Court Division also erred in law in holding that the appellant, while refusing the desired exemption of interest claimed by the respondents, did not assign any reason; the High Court Division also fell in error in not considering the appellant and the respondents were engaged in purely contractual relationship and earlier there were admitted failures on the part of the respondents to avail the benefit of previous exemption of interest.

6. We have heard the learned counsels and perused the impugned judgment and order of the high court Division and also other connected papers.

7. As it appears that before the High Court Division there was no materials to show that the respondents were similar placed with the other defaulting borrowers as shown in Annexure E of the writ petitioner who have been given the benefit of the exemption of interest particularly and the appellant, in their affidavit-in-opposition, specifically asserted that there was no such similarity between the respondents and the borrows shown in Annexure E and as such the finding of the High Court Division that the action of the appellant was discriminatory has no basis in the absence of any evidence before the High Court Division to sustain the above finding. It also appears that the High Court Division misconstrued and misunderstood Bangladesh Bank Circular dated 7.10.91 in the manner as if the contents of the Circular conferred a right or entitlement to the defaulted borrowers for exemption of interest; further the said Circular was valid upto 31.12.1991 to avail of the opportunity and the respondents did not avail the opportunity and even did not deposit the required down payment which is a precondition for availing the opportunity and the High Court Division completely ignored this aspect of the matter; there is also nothing on record to show that the appellant gave 80% waiver of interest to all its clients and further this benefit of waiver of interest depended on the performance of the clients and their relations with the appellant and accordingly the respondents are not entitled to claim the benefit of waiver as matter of right; further the amount repaid by the respondent going into detailed arithmetic calculation of figures has been disputed by the appellant; moreover the report given by Mr. Ali Ahmed was an internal matter of the appellant and it is the Board of the appellant which is the sole authority for allowing any waiver of interest and the exemption of interest is also not a vested right and accordingly unless and until the prayer for exemption of interest is allowed by the Board of the appellant in exercise of its discretion, the respondents had no enforceable right; further there is no requirement to assign reason where the parties were engaged in purely contractual relationship and moreover the failures of the respondents to avail of previous exemption of interest are admitted facts and the High Court Division fell in error in not considering the assertions of the appellant that the benefits of exemption of interest, who were previously granted in favour of the respondents, were not availed by them and Board of the appellant having considered that the exemption of interest applied for would also not be availed of by the respondents, reasonably decided against the requests made by the respondents for exemptions.

8. It also appears that the principle laid down in 51 DLR(HC) 350 placed before the Court Division from the side of the appellant was applicable in the instant appeal. So the impugned judgment and order of the High Court Division can not be sustained.

9. Accordingly the appeal is allowed, the judgment and order dated 30.11.2000 passed by the High Court Division in Writ Petition Nos. 4989 and 4987 of 1996 is set aside. There will be no order as to costs. The appellant may however consider the prayer of the respondents in accordance with law if found tenable.