Realising the Borrowed Money

Security cheque should not be presented at the first instance

14 December 2019


High Court Division :
(Criminal Miscellaneous Jurisdiction)
Md Moinul Islam Chowdhury J
Khizir Hayat J
Nure Alam Siddique (Tulu) ..............Accused-Petitioner
vs
State and another  ........ Opposite-Parties'"
Judgment
April 2nd, 2019
Code of Criminal Procedure (V of 1898)
Section 561A
The legislature intended to realize the borrowed money from a defaulter primarily by exhausting the Artha Rin Adalat through selling the property on auction 'under the mortgage deed and thereafter for the remaining amount of the borrowed money thereafter, a schedule bank would be allowed to Use the collateral security of a cheque issued for realization of the remaining amount of the borrowed money.
The complainant should take recourse for realization of money pursuant to the registered mortgage deed and simultaneously a CR Case can be continuing for the remaining amount of the borrowed money including interests there from. Accordingly, the proceeding of Sessions Case arising out of CR under Section 138 of the Negotiable Instruments Act, 1881, shall remain stay until an Artha Rin Adalat Ain, 2003 is exhausted by undertaking an auction procedure even by publishing an auction notice in a Daily National Newspaper if the bank is so advised. ..... (17,19 & 20)
Negotiable Instruments Act (XXVI of 1881)
Section 138
We are not of the opinion that a case under Section 138 of the Act, is barred by the provision of the Artha Rin Adalat Ain but we are deciding here that the scheduled bank should follow the appropriate provision of law first for realization of the borrowed money………………(16)
Artha Rin Adalat Ain (VIII of 2003)
Section 3
The provisions of the Artba Rin Adalat Ain, 2003 have given superiority over any other law as to any loan -from any scheduled Bank. . .. ..... (16)
None appears-For the Petitioner.
Md Nahiyan-ibn-Subhan with AM Masum, Advocates-For the OP No.2.
Md Rezaul Karim DAG with Md Mohiuddin Dewan, DAG and Gazi Md Mamunur Rashid, AAG-For the State.
Judgment
Md Moinul Islam Chowdhury J : At the instance of the present accused-petitioner, Nure Alam Siddique (Tulu), this Rule has been issued upon an application tiled under Section 561A of the Code of Criminal Procedure calling upon the opposite partes to show cause as to why the proceedings of the Sessions Case No. 12 of 2014 arising out of CR Case No. 181 of 2013 under Section 138 of the Negotiable Instruments Act, 1881, now pending in the Court of Joint Sessions Judge, Znd Court, Lakshmipur should not be quashed.
2.  The relevant facts for disposal of the Rule, infer alia, are that the present accused petitioner obtained a CC (Hypo) loan amounting to Taka 9,00,000 on 31-1-2012 from the Bank of the opposite party No.2, namely, NCC Bank Limited, Ramganj Branch, Lakshmipur. The petitioner obtained the said loan in the name of Messer's Nur Jahan Pharmacy. As per the agreement for loan, the petitioner was supposed to return the loan amount by 31-1-2013 with interest accrued up to that date but he fail to repay the amount, On several requests the petitioner issued the cheque No. SB.10/F.F 8075663 in the account No. T-1337-2 for an amount of Taka 10,83,841. The said cheque was presented in the Janata Bank Limited on 18-9-2013 but the cheque was returned unpaid because of insufficient found. The opposite party bank issued a registered notice as per Section 138 of the Negotiable Instruments Act which was received by the present petitioner, thus, the present CR Case has been filed under Section 138 of the Act, 1881.
3. On receiving the aforesaid petition of complaint the learned Chief Judicial Magistrate, Lakshmipur initiated the proceeding. The present accused petitioner surrenders in the Court and obtained bail. The case was thereafter transferred to the Court of learned Sessions Judge, Lakshmipur for trial, it was renumbered as Sessions Case No. 12 of 2014, and the Court framed charge against the present petitioner and fixed the date for witnesses. The loan was guaranteed by a registered mortgage deed executed by the present petitioner and the bank for the land measuring 12 decimals of land through a registered No. 730 dated 31.1.2012, also executed, and registered Power of Attorney Deed No. 731 dated 31-1-2012 which empowered the bank to sale the mortgaged land. It is to be mentioned here that the loan was sanctioned in favour of the petitioner by the sanction letter No. NCCB/IRAMGONJ/ADV/CC-04/2012 dated 31-1-2012. The present petitioner filed this application under Section 561A of the CrPC for quashment of the proceeding of the session case and the present Rule was issued thereupon.
4. This matter has been appearing in the cause list for a long period of time but no one appears to support the Rule at any stage of hearing of this Rule. However, the petitioner has taken the ground that that complainant Bank being fully aware of registered mortgage deed and registered power of attorney has resorted to take action against its borrower under Section 138 of the Negotiable Instruments Act, 1881 which is penal in nature and beyond the banking practice. The borrower took loan at the risk of his valuable property not to suffer imprisonment in jail and pay three time  penalty of the cheque amount. The instant proceeding is barred by banking practice and the proceeding is liable to be quashed.
5. The further ground is that whether a banking company is correct to proceed first under Section 138 of the Negotiable Instruments Act, against its borrower in the name of recovery of loan without resort to Artha Rin Adalat to sale the mortgaged property on auction? If not; the proceeding is liable to be quashed.
6. The Rule has been opposed by the opposite party No.2 NCC Bank.
7. Mr Md Nahiyan-Ibn-Subhan, the learned Advocate appearing for the learned Advocate Mr AM Masum, submits that admittedly the present petitioner obtained loan from the NCC Bank amounting to Taka 9,00,000 and on 31-1o2013 the outstanding amount became Taka 10,82,441. Therefore, the petitioner became a defaulter. In order to repay the said, amount the petitioner issued a cheque which was returned unpaid by the concern bank, due to insufficient fund, accordingly, after complying all the requirement under Section 138 of the Act, 181 the complaint (CR) case was filed and after framing charge the date was fixed for PW but the present petitioner obtained the Rule by misleading the Court, therefore, the Rule should be discharged.
8. The learned Advocate also submits that the opposite party No. 2 has every right to take recourse under Section 138 of the Act, 1881. Because of the security cheque for repayment of the loan amount without seeking recourse under any other relevant provision of law, including, Artha Rin Adalat Ain, 2003 which is applicable for the loan issued by a schedule bank, therefore, this Rule is liable to be discharged.
9. Considering the above submissions made by the learned Advocates appearing on behalf of the opposite party No.2 and also considering the application filed under Section 56lA of the CrPC along with annexures therein, it appears to us that the present opposite party No.2, NCC Bank Limited, Ramganj, Lakshmipur granted loan pursuant to the sanction letter No.NCCB/RAM-GONJ/ADV/CC-04/20l2 dated 31-1-2012 for an amount of Taka 9,00,000. The said loan amount was guaranteed by a mortgage deed being registered deed No.730 dated 31-1-2012 by mortgaging land measuring 12 decimals in favour of the bank. In addition to the said deed the bank also registered the Power of Attorney Deed No. 731 dated 31-1-2012 executed by the present accused-petitioner as the borrower in favour of the bank as per the requirement of the Bank Companies Act/Law.
10. The admitted position in this case that the petitioner issued a cheque No. No. SB-101F-F 8075663 from the account No. T-1337-2 which was returned unpaid by the concern bank on presentation in the schedule bank. After following the required steps for filing a complaint, the opposite party satisfied all the requirement before filing the CR Case No. 181 of 2013 in the Court of the learned Senior Judicial Magistrate, Ramganj, Lalcshimpur.
11. In view of the above given factual aspects we have to take recourse whether the bank should be allowed to take recourse for realization of lended amount by the collateral security of cheque prior to the principle security of mortsaged property as per requirement of the Artha Rin Adalat Ain? In order to answer the above matter we have carefully examined the documents exhibited in the present petition including the mortgaged deed and also a deed of power of attorney (Annexures- 'D' and 'D-l ').
12. We consider that the lender being a bank has all right to realize the outstanding amount including interest thereof from the borrower. However, when a lender is a schedule bank within the framework of the Artha Rin Adalat Ain, 2003 and the loan issued by its is primarily guaranteed by a mortgage deed for mortgaging a specific property and also empowering the bank by a registered power of attorney then the bank must exhaust the primary security by way of mortgage. The Artha Rin Adalat Ain, 2003 also provides a clear provision that the lender bank can sale the mortgaged property on auction prior to filing a Artha Rin Suit as the Mortgaged property is the principle security against the loan sanction by the bank. Whereas, the cheque issued by the borrower as a security for the borrowed money including interest as a collateral security.
13. In view of the 2 (two) special laws, namely, the Artha Rin Adalat Ain, 2003 and the Negotiable Instruments Act, 1881. We are of the opinion that the above 2 prevailing laws in cases of realization of money a schedule bank should take first available recourse under the Artha Rin Adalat Ain, even by selling the property mortgaged against the loan at the initial stage and also file a suit for realization of remaining amount after the selling mortgaged property on auction. Without exhausting the principal recourse and taking the co-leteral security of cheque first we are concern about the any defaulter who fails to repay the borrowed money with interest until it is realize as quickly as it can be but a bank should not be allowed to use a co-leteral security prior to usin the principal security of mortgaged property within the frame work of Artha Rin Adalat Ain, because the mortgage deed and the deed of power of attorney have more contractual value for realization of loan amount including interest there from prior to making a defaulter criminally liable by using cheque issued in favour of a scheduled Bank. However, we are aware of the lengthy procedures of an Artha Rin Suit which causes sufferings to both lender and borrower because of immoral manipulation asto mortgage property by both sides which allow a borrower an easy prey to be defaulter and involves a lender to go through a difficult auction possess and suit at the cost of smooth banking system in our country.
14. In the instant case the present opposite party NO.2 NCC Bank presented the cheque (a blank cheque) by inserting the other contents of a signed cheque as security, thus this CR Case has been filed without exhausting the appropriate forum for realization of loan amount as per the provisions of the Artha Rin Adalat Ain. The loan can be realized quickly but not arbitrarily by a schedule bank which will cause the relevant first available provision of law as per the agreement between the lender and borrower prior to using the collateral security of cheque for punishing a defaulter under the provision of section 138 of the Act, 1881 because the co-Ieteral security is an additional security to be used in case of failure to satisfy the contractual obligation between the parties.
15. The learned Advocate for the opposite party No.2 tried to draw our attention that there is no bar to take a recourse under section 138 of the Act, 1881 for commission of offence and by punishing a defaulter and also simultaneously taking a civil recourse under section of Artha Rin Adalat Ain. In this regard, we are of the opinion that the present opposite party complainant should not be allowed to present the security cheque at the first instance for realization of money prior to using the mortgage deed for land measuring 12 decimals, which is a principal security for sanctioned loan amount, because there are procedures which have also provided under the existing provisions of law. In any event, an Artha Rin Suit is not a bar for a case under the Act, 1881 but it is a primary recourse as far as a loan from a scheduled Bank.
16. In view of the above, we are inclined to disposes of the Rule in order to allow the opposite party No. 2 NCC Bank for selling the mortgage property on auction and to file anArtha Rin Suit  for realization of principal borrowed money and the interest thereof as on today. However, we are not of the opinion that a case under section 138 of the Act, 1881 is barred by the provision of the Artha Rin Adalat Ain but we are deciding here that the scheduled bank should follow the appropriate provision oflaw first for realization of the borrowed money. In this regard we consider that the provisions of the Artha Rin Adalat Ain, 2003 have given superiority over any other law as to any loan from any scheduled Bank which reads as follows:
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17. After analyzing the above provisions of law we are of the view that the legislature intended to realize the borrowed money from a defaulter primarily by exhausting the Artha Rin Adalat Ain through selling the property on auction under the mortgage deed and thereafter for the remaining amount of the borrowed money thereafter, a schedule bank would be allowed to use the collateral security of a cheque issued for realization of the remaining amount of the borrowed money.
18. Accordingly, the Rule is disposed of.
19. The present complainant opposite party should take recourse for realization of money pursuant to the registered mortgage deed No. 730 dated 31-1-2012 and simultaneously a CR Case can be continuing for the remaining amount of the borrowed money including interests there from.     
20. Accordingly, the proceeding of Sessions Case No. 12 of 2014 arising out of CR Case No. 181 of 2013 under section 138 of the Negotiable Instruments Act, 1881, now pending in the Joint Sessions Judge, Court No.2, Lakshmipul" shall remain stay until an Artha Rin Adalat Ain, 2003 is exhausted by undertaking an auction procedure even by publishing an auction notice in a Daily National Newspaper if the bank is so advised.

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