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Auction of mortgaged property be made first

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23rd-Dec-2017       
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High Court Division :
(Special Original Jurisdiction)
Md Ashfaqul Islam J
Md Ataur Rahman     
Khan J
Ali Ajgar (Md)...........
..........................Petitioner
vs
Bangladesh represented by the Secretary Ministry of Finance, Bangladesh & others ..... ............. Respondents*
Judgment
July 28th, 2016
Artha Rin Adalat Ain
(VIII of 2003)
Section 34(9)
Order of warrant of arrest is not a punishment but only a specific tool for recovery of outstanding dues. The law is well settled which is no longer a res integra. Section 34(9) of Ain enjoins that at least one attempt should be made for auction if there is any mortgaged property before issuance of order of warrant of arrest. If no property is mortgaged then Section 34(10) comes into play. ........(10 & 11).
Contract Act (IX of 1872)
Section 123
The liability of the principal debtor is coextensive with that of the guarantor. A creditor is at liberty to pursue either the principal debtor or the guarantor according to his sweet will for realization of his dues or he can proceed against both of them simultaneously . .. . (12)
Artha Rin Adalat Ain (VIII of 2003)
 Section 30
There is no criterion fixed to judge which one of the journals is to be treated as widely circulated one and which is not. The question of deciding the scope of issuing order of warrant of arrest would not depend on the provisions of Section 30 of the Ain. . ..... (20)
Artha Rin Adalat Ain (VIIl of 2003) Section 34
Section 34 of the Ain is an independent section making provisions for issuing order of warrant of arrest in a fit case. .,., ., (20)
Provat Kumar Das vs Agrani Bank, 15 MLR (AD) 96 = 15 BLC (AD) 96; Manik K. Bhattachayria vs Artha Rin Adalat, 16 BLC 195; Hazera Begum vs Artha Rin Adalat, 5 ADC 220; Rahima Auto Rice Mill vs Pubali Bank Ltd., 60 DLR 313; Sheikh Nazmul Hug vs Bangladesh, 14 BLC 107; Jahangir Chowdhury vs Artha Rin Adalat, 61 DLR 167; MM Ispahani Ltd vs Sonali Bank, (1984) BLD (AD) 242 = 37 DLR (AD) 1 Sonali Bank vs Hare Krishna Das, 49 DLR 282; Mahanth Singh vs UBa Yi AIR 1939 PC 11 and Bank of Hiber Ltd vs Damodar Prasad, AIR 1969 SC 297 ref.
AKM Rezaul Karim Khandaker, Advocate-For the Petitioner.
Md Arifur Rahman, with Najmul Karim and Debashis Bhatta charjgh Advocates-For Respondent No.3-bank.
Judgment
Md Ashfaqul Islam J : The Rule under adjudication, issued on 28-2-2016 was in the following terms:
"Let a Rule Nisi be issued calling upon the respondents to show cause as to why Order No.2 dated 29-1-2014 passed by the respondent No.2 Artha Rin Adalat No.3, Dhaka in Artha Jari Case No. 372 of 2013 arising out of Artha Rin Suit No.48 of 2013, now pending in the Court of Artha Rin Adalat No.3, Dhaka, permitting publish of notice through only the Daily Banik Barta instead of 2 daily newspapers (Annexure- E) should not be declared illegal, arbitrary, malafide without lawful authority and is of no legal effect and as to why Order of Civil custody for a period of 6(six) months and also issued warrant of arrest so far relates to the petitioner vide order No.7 dated 29-6-2014 and order No.12 dated 23-11-2015 passed by the respondent No.2 the learned Judge, Artha Rin Adalat No.3, Dhaka in Artha Jari Case No. 372 of 2013 arising out of Artha Rin Suit No.48 of 2013, now pending in the Court of Artha Rin Adalat No.3, Dhaka, (Annexure E), should not be declared illegal, arbitrary, malafide, without lawful authority and is of no legal effect."
2. At the time of issuance of the Rule order of civil imprisonment and warrant of arrest was stayed by this Division for a period of 6 (six) months.
3. The averments figured in the petition leading to the Rule are as under:
The respondent No.3 Eastern Bank Limited as plaintiff filed Artha Rin Case No.48 of 2013 in the Court of Artha Rin Adalat No.3, Dhaka on 20-2-2013 for recovery of outstanding amount of Taka 52,29,552.49 up to 31-12-2012 against the proprietor of M/s Tanu Electronics as well as Principal Borrower and 3 other guarantors including, the present petitioner. The plaintiffs case in a nutshell is that the respondent bank sanctioned a loan for an amount of Taka 70,00,000 only with interest at 18% repayable in 60 monthly installments. vide sanction letter being No. CR. ADMN. (Dhaka Area)Mu-1409/2009 dated 28-6-2009. The defendant No.1 Mis Tanu Electronics accepted the terms and conditions contained in the said sanction letter and signed the same and thus availed the said loan accordingly. Defendant Nos.2-4 furnished personal guarantee as a supplementary source for repayment of credit facility. Defendant No.1 availed of the aforesaid investment facility, but did not adjust the same in full within the stipulated time. As a result the plaintiff bank constrained to file the suit for realization of outstanding liabilities amounting to Taka 52,29,552.49 only (Annexure- A). After filing of the suit summons were served under section 7(I) of the Artha Rin Adalat Ain, 2003 (hereinafter referred to as Ain) illegally and the Trial Court without serving the summons decreed the suit exparte on 12-8-2013 (Annexure-C).
4. The respondent bank put the decree into execution in Artha Jari Case No.372 of 2013 on 1-12-2013 for recovery of decreetal amount of Taka 58,63,670.08 (Taka fifty eight lac sixty three thousand six hundred seventy and paisa eight). It is stated that the said Artha Jari Case most illegally proceeded without serving summons upon the petitioner in compliance with the provisions of Section 30 of the Ain and secondly without any legal basis upon an application filed by the decree holder bank the order of warrant of arrest was issued on 3-6-2014 against the petitioner. It is at this stage the petitioner mainly assailing the non service of summons under Section 30 of the Ain and the illegal order of warrant of arrest moved this Division and obtained the present Rule and order of stay.
5. Mr AKM Rezaul Karim Khandaker, the learned counsel appearing for the petitioner after placing the petition, the order impugned against and other materials on record submits that the original suit was defective since Section 7 of the Ain in respect of service of summons was not complied with and subsequently in Artha Execution Case No. 372 of 2013 there was also a violation of Section 30 which also relates· to service of summons and for that reason consequent order of warrant of arrest was also passed without any lawful authority. In elaborating his contention he submits that the petitioner is a third party guarantor and in gross violation of second proviso to Section 6(5) of the Ain, the impugned order was passed which should be declared illegal. His further submission is that Section 30 of Ain specifically details the terms how the summons has to be served. Focal point of his submissions in this regard is that the journal Daily Banik Barta' is not a widely circulated daily and there is a clear violation of mandate of Section 30 of Ain and, as such, issuance of order of warrant of arrest under Section 34 of the Ain is without lawful authority having no legal effect.
6. Mr Md Arifur Rahman, the learned counsel appearing with Mr Debashis Bhattacharjgh by filing Vokalatnama on behalf of the respondent No.3-bank opposes the Rule. He submits that the order of warrant of arrest is not a punishment and in terms of Section 34(9)(1) the Court can issue such order and in so doing the said order cannot be circumvent by any other provisions of the Ain itself. In support of his contention he has cited the decision of Provat Kumar Das vs Agrani Bank, 15 MLR (AD) 96 = 15 BLC (AD) 96, viz-a-viz 15 BLC (AD) 113, Manik K. Bhattachayria vs Artha Rin Adalat 16 BLC 195. Hazera Begum vs Artha Rin Adalat 5 ADC 220 viz-a-viz 12 BLC (AD) 153, Rahima Auto Rice Mill vs Pubali Bank Ltd. 60 DLR 313, Sheikh Nazmul Huq vs Bangladesh 14 BLC 107, Jahangir Chowdhury vs Artha Rin Adalat 61 DLR 167 and so on. .
7. We have heard the learned counsel of both sides and considered their submissions and also perused the petition, the order impugned against and other materials on record carefully.
 (To be continued)
8. The. only question that calls for consideration by us in this Writ Petition is whether· under the governing law and the decisions of the Appellate Division and this Division the impugned order would sustain.
9. At the very outset it would be worthwhile to address the first part of the Rule which relates to improper service of summons being affected in violation of Section 30 of the Ain. Before addressing the issue it is to be noted that the suit was decreed ex parte and the petitioner did not proceed for setting aside the ex parte decree in terms of Section 19 and subjected himself to the execution proceeding. Now when the order of warrant of arrest was issued he has jumped upon this Division under Article 102 of the Constitution mainly assailing the impugned order of warrant of arrest by bringing an analogy of violation of Section 30, Section 6(5) second proviso and even Section 7 (which is the procedure for service of summons in respect of trial) of the Ain. In the case of Provat Kumar as referred to above the Appellate Division in clear terms observed:
"We have perused the application and heard the learned Advocate. The learned Advocate appearing for the leave petitioner submitted that the provision of Section 33 of the Artha Rin Adalat Ain, 2003 having not been complied with, the order for civil imprisonment under Section 34 of the Artha Rin Adalat Ain, 2003 was bad in the eye of law and the High Court Division arrived at its decision in not considering such aspect of law and that the Artha Rin Adalat passed the order for civil imprisonment ex parte without providing any opportunity of hearing to the judgment debtor the writ Petitioner, which is ex facie a violation of the principle of natural justice and thus the High Court Division acted illegality in passing, the impugned order.
"We have perused the leave petition and considered the submissions of the learned Advocate. We have also perused the provisions of Sections 33 and 34 of Artha Rin Adalat Ain, 2003. It appears that Section 34 of the Artha Rin Adalat Ain, 2003 is clear and provides for ordering civil imprisonment lip to 6 months against a judgment-debtor for compelling to satisfy the decree. Section 34 is not dependent upon Section 33. In the instant case, the decree holder has taken' step for auction sale of the property but there being no response, auction sale could not be held. Further, it appears from the provisions of Section 34 of the Artha Rin Adalat Ain, 2003 that the law provides for simple civil imprisonment of the judgment-debtor to compel to make the payment for satisfaction of the decree and is not an alternative punishment in lien of payment of the decretal amount. Civil imprisonment will not exempt payment of the decretal amount."
10. The proposition that laid down by the Appellate Division is well settled. By now this Division followed the same principle in many a decisions. The learned counsel appearing for the respondent-bank has cited those decisions as quoted above. The pith and substance of the decisions is that order of warrant of arrest is not a punishment but only a specific tool for recovery of outstanding dues. The law is well settled which is no longer a res integra. Section 34(9) of Ain enjoins that at least one attempt should be made for auction if there is any mortgaged property before issuance of order of warrant of arrest. If no property is mortgaged then Section 34(10) comes into play which enjoins:
“যদি কোন কারণে উপ-ধারা (৯) এর অধীন একটিও নিলাম বিক্রয় কার্যক্রম অনুষ্ঠান করা সম্ভব না হয়, তবে সেই ক্ষেত্রে দায়িককে সরাসরি গ্রেফতার ও দেওয়ানী কারাগারে আটক করা যাইবে।”
11. On perusing the plaint of the case Annexure- 'A' to the petition we have found that no property was mortgaged as collateral security with the bank. Therefore, the instant case squarely comes within the mischief of Section 34 (10) of the Ain. Secondly on consideration of legal interpretation of Section 6(5) second proviso of the Ain in deciding the contention pressed into service by the learned counsel for the petitioner let as first read the law as it stands:-
Ò6(5) ................এবং আদালত কর্তৃক প্রদত্ত রায়, আদেশ বা ডিক্রী সকল বিবাদীর বিরুদ্ধে যৌথভাবে ও প"থক প"থকভাবে (Jointly and severally) কার্যকর হইবে এবং ডিক্রী জারীর মামলা সকল বিবাদী-দায়িকের বিরুদ্ধে একই সাথে পরিচালিত হইবে ঃ
তবে শর্ত থাকে যে, ডিক্রী জারীর মাধ্যমে দাবী আদায় হওয়ার ক্ষেত্রে আদালত প্রথমে মূল ঋণগ্রহীতা বিবাদীর এবং অতঃপর যথাক্রমে তৃতীয় পক্ষ বন্ধকদাতা (Third party mortgagor) ও তৃতীয় পক্ষ গ্যারান্টর (Third party guarantor) এর সম্পত্তি যতদূর সম্ভব আকৃষ্ট করিবে ঃ
Our view is very much clear on that point. The petitioner being a guarantor is not at all absolved from the liability and question of application of the said section is redundant since no property has been mortgaged with the bank.
12. The petitioner is only a guarantor for all practical purpose. The legal position of a guarantor under law has been enumerated in Section 128 of the Contract Act which governs the field in it's strict implication. To dispel any ambiguity on the proposition of law regarding a guarantor Section 128 of the contract Act quoted below. It enjoins:
"Surety's liability-The liability of the surety is coextensive with that of the principal debtor, unless it is otherwise provided by the contract. "
13. In the Case of .MM Ispahani Ltd vs Sonali Bank (1984) BLD (AD) 242 = 37 DLR (AD) I it was decided that:
"The guarantor is not only responsible for repayment of the loan, his liability to repay need not even be postponed till the principal debtor fails to repay the loan- He may be compelled before even compelling the principal debtor to repay - The choice lies with the creditor."
14. High Court Division also held in the same manner in Sonali Bank vs Hare Krishna Das, 49 DLR 282 that the liability of the principal debtor is co-extensive with that of the guarantor. A creditor is at Liberty to pursue either the principal debtor or the guarantor according to his sweet will for realization of his dues or he can proceed against both of them simultaneously.
15. The extent of liability of the guarantor to repay the loan as aforesaid has also been well reflected in the earlier decision of Privy Council in Mahanth Singh vs UBa Yi AIR 1939 PC 11, where the creditor's claim to sue the principal debtor became barred by limitation, it was held that the guarantor was liable to pay.
16. The same principle has also been echoed in the decision of Indian Supreme Court in the Bank of Hiber Ltd vs Damodar Prasad, AIR 1969 SC 297.
17. Moreover, Bank Company Act  1991 also by an amendment in the year 2013 amended Section 5(GaGa) of the Act and included guarantor as a defaulter which can be perceived when read with section 5(Q) of the Act. Amended Section 5GaGa of the Act says -    “৫(গগ) খেলাপী ঋণ গ্রহীতা অর্থ কোন দেনাদার ব্যক্তি বা প্রতিষ্ঠান ..........।”
18. Then Section-5 (Cha) enjoins-
“৫(ছ) দেনাদার অর্থ লাভ ক্ষতির ভাগাভাগি, খরিদ বা ইজারার ভিত্তিতে বা অন্য কোনভাবে আর্থিক সুযোগ সুবিধা গ্রহণকারী ব্যক্তি কোম্পানী বা প্রতিষ্ঠান এবং কোন জামিনদার (guarantor) ও ইহার অন্তর্ভুক্ত হইবে।” "Therefore, even on that score the argument of the petitioner falls apart.
19. So far the argument as regard non compliance of Section 30 of the Ain let us first quote the law for better understanding:
“ নোটিশ জারী সম্পর্কিত বিধান। আপাতত বলবৎ অন্য কোন আইনে যাহা কিছুই াকুক না কেন, ডিক্রিদার আদালতের জারীকারক কর্তৃক এবং প্রাপ্তি স্বীকারসহ রেজিষ্ট্রিকৃত ডাকযোগে প্রেরণের নিমিত্ত, জারীর দরখাস্তের সহিত নোটিশ জারীর জন্য সমুদয় তলবনা আদালতে দাখিল করিবেন, এবং আদালত অবিলম্বে উহাদের ডাকযোগে জারীর ব্যব¯'া করিবেন, এবং যদি সমন ইস্যুর ১৫ (পনের) দিবসের মধ্যে জারী হইয়া ফেরত না আসে, অথবা তৎপূর্বেই বিনা জারীতে ফেরত আসে, তাহা হইলে আদালত উহার পরবর্তী ১৫ (পনের) দিবসের মধ্যে বাদীর খরচায় যে কোন একটি বহুল প্রচারিত বাংলা জাতীয দৈনিক পত্রিকা এবং তদুপরি ন্যায় বিচারের স্বার্থে প্রয়োজনীয় মনে করিলে ¯'ানীয় একটি পত্রিকা, যদি থাকে, বিজ্ঞাপন প্রকাশের মাধ্যমে সমন জারী করাইবেন, এবং অনুরূপ জারী আইনানুগ জারী মর্মে গণ্য হইবে।”
20. Section 30 of the Ain provides for publication of the name of the Incumbent in a widely circulated newspapers in the instant case the publication was made in "Dainik Banik Barta" which, as the learned counsel submits. is not at all a widely circulated Journal. There is no court fixed to judge which one of the journals is to be treated as widely circulated one and which is not. The question of deciding the score of issuing order of warrant of arrest would not under and on the provisions of Section 30 of the Ain. The ratio decidendi of the Appellate Division in the Provat Kumar's case and the subsequent decisions of this Division as referred to above also approve the said proposition. Section 34 of the Ain is an independent section making provisions for issuing order of warrant of arrest in a fit case.
21. We hold that everything was perfected in terms of express provision of Ain and the order impugned against was passed absolutely in accordance with law. The argument pressed into service by the petitioner from different angle questioning the propriety of the order of issuing warrant of arrest therefore, does not have any legs to stand and for  that reason the Rule should be discharged being devoid of any substance.
(Side linings and under linings are mine)
22. That being the position we are of the view that this Rule should be discharged.
23. In the result, the Rule is discharged without any order as to cost. The order of stay granted earlier by this court is hereby recalled and vacated.
Communicate at once.

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