Sunday, August 19, 2018 | ePaper

Loan once admitted cannot be subsequently denied

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High Court Division :
(Civil Appellate Jurisdiction)
Md Nuruzzaman J
SH Md Nurul Huda Jaigirdar J
Rupali Bank Limited
Plaintiff-Appellant
vs
Perfume Chemical  Industries Limited, and others.................... Defendant-Respondents
Jugement
July 30th, 2017
Evidence Act (I of 1872) Section 58
Once the loan is admitted the same cannot be allowed to be denied after failing to repay the said loan.
According to the provision of the Section 58 of the Evidence Act, facts admitted need not be proved; So, we are of the view that the learned Judge in decreeing suit in part violated the provision of the Section 58 of the Evidence Act as well as Section 13 and 50 of Artha Rin Adalat Ain, 2003. Therefore, we are of the opinion that the judgment and decree appealed before this Court has been suffering from legal infirmity and passed in flagrant violation of law. .. .... (30 & 31)
Sultana Jute Mills Ltd., vs Agrani Bank 2 ADC 149; Janata Bank Ltd vs Mohiuddin Specialized Textile, 62 DLR 501; Ibrahim vs Mizanul Huque Chowdhury, 69 DLR (AD) 192; Sonali Bank vs Md Mokshed Ali Khan, 13 BLT 331 = 10 BLC 701 and Md Arfan Uddin Akand vs Artha Rin Adalat, 15 BLT 343 ref.
Md Iman Hasan, Advocate-For the Plaintiff Appellant.
SM Abdur Rouf, Advocate-For the Respondent No.1
Judgment
Md Nuruzzaman J : The instant Appeal has been preferred at the instance of the plaintiff against the judgment and decree, dated 29-11-2010 and 3-1-2011 respectively passed by the learned Judge, Artha Rin Adalat No.1, Chittagong in Artha Rin Suit No. 62 of 2006 decreeing the suit in part.
2. The material facts, relevant for disposal of the instant First Appeal, precisely, are that the plaintiff is a Banking Company established under Banking Company Law. The defendant No.1 is a Public Limited Company registered with the office of Joint Stock Registrar in accordance with law. The defendant No.2 is the Managing Director of defendant No. 1 Company. The defendant No.3 is the Director, Finance, defendant Nos. 4 7 are the Director of defendant No.1 Company. Defendant Nos. 2- 4 are the personal guarantor of the loan availed by the aforesaid Company i.e. defendant No.1, defendant Nos. 2 and 3 in the name of defendant No.1 company opened bank account in the local branch of the plaintiff bank namely, Andarkilla Corporate Branch situated at Laldighi East under Police Station- Kotwali, District-Chittagong.
3. The defendant No.1 at the time of his business correspondence filed an application on 16-11-2003 to the plaintiff Bank praying for sanction loan. The plaintiff Bank sanctioned the loan vide Memo. No. HO/ICD-l/WE/2004/34 dated 7-8-2004. The category of the loan was CC (Hipo) Taka 3,00,00,000 (Three crore) LC margined in 2,00,00,000 (Two crore) and LTR loan 50,00,000 (Fifty lacs). The defendent No.1 after obtaining sanction letter vide his letter dated 9-8-2004 accepted the sanction loan with consent to abide by the stipulation inserted in the sanction letter. The defendant No.1 and the other defendants availed the loan facility through 2 accounts CC (Hipo) Hishab No. 52282 and LTR Hishab No. 6260. The defendants on 28-8-2005 applied for renewal of the  aforesaid loan. In view of the application for renewal of the aforesaid loan the plaintiff Bank vide Memo No. HO/JCD-l/WL/2006/03 dated 8-1-2006 renewed the aforesaid loan at the rate of taka 12.25% interest which would be counted quarterly and exceeded loan limit must be paid within 15 days from the date of receipt of the renewal letter. Thereafter, the plaintiff Bank vide letter dated 23-1-2006 requested the defendants for their consent regarding the renewal of the loan as mentioned herein above.
4. However, the defendants although received the sanction letter with acknowledgement, they on 29-1-2006 without giving consent directly filed another application for extension of the period of loan and renewed loan. The defendants being unable to accept the sanction of renewal in terms of letter of the plaintiff the period of loan cannot be extended further and the said information has been communicated to the defendants vide letter dated 20-3-2006. The plaintiff further requested the defendants to adjust and repay Taka 25,25,226 which have exceeded the previous sanction loan, for renewal of the loan. However, the defendants failed to pay the loan as mentioned above within the time hence, the plaintiff on 2-5-2006 issued a notice requesting them to pay the dues of the plaintiff Bank. The defendants, however, did not take any step to pay the loan money and, as such, the plaintiff on 28-5-2006 issued legal demand notice for adjustment of the dues. The defendants although received the legal notice but in spite of that they did not pay the loan amount. The Bank authority to comply with Bank law published a notice in accordance wilh law for auction sale of the mortgage property.
5. In view of the auction notice published in the newspaper the defendant filed the suit being No. 20 of 2006 wherein they prayed for injunction against the plaintiff Bank. However, the plaintiffs could not get any order of injunction. On 29-6-2006 they filed a Writ Petition in the High Court Division being Writ Petition No. 6070 of 2006 and they obtained order of stay hence, the plaintiff Bank could not sell the suit property through auction. The phiintiff Bank was compelled to file the suit of realisation the loan money with interest with a prayer for money decree amounting of Taka 4,03,79,845.32 as of 31-07-2006.
6. The defendant Nos. 1 and 4 contested the suit by filing a written statement stating, inter alia, that the defendant No. 4 is the Director of defendant No.1 Messrs Perfume Chemical Industries Limited.
The plaintiff Bank sanctioned the loan for production of seasonal cosmetic and toiletries product. The plaintiff Bank until filing the suit did not supply the Bank statement to the defendants explaining the actual loan money and interest.
The answering defendant also denied the total transaction with execution of the charge document. They further alleged that they did not sign as of guarantor of 3rd person, trustee and the plaintiff Bank obtained signature in the declaration of borrower without any deed. They stated that the plaintiff with ill motives did not make maximum Shareholder as party in the suit.
7. The defendants could not avail plaintiff Bank loan in time due to the delay in spite of their application. Further they did not renew the loan and due to refusal of renew of the loan the defendants were unable to open the LC in time for importing the raw materials. Therefore, the production of the defendant No.1 company was seriously hampered.
Consequently, the production of various products could not be marketed in time for which they suffered a long. In such situation, the defendant No.1 company could not disburse the dividend to the share-holder. As a result, the price of the share has been reduced remarkable i.e. 70%. The defendants' company due to serious negligence and non-cooperation of the plaintiff Bank suffered huge loss due to disbursement of the loan after 11 months of sanction of the loan. Moreso, the plaintiff Bank most illegally disbursed the renewed loan money after 8 (eight) months of the renewal.
In this way the plaintiff Bank seriously hampered the business of the defendant company. Consequentiy, the Managing Committee including the share holder suffered. Therefore, due to such unavoidable circumstances there was a labour unrest for which the administration of the company was not in position to run the company. Resultantly, the defendant company has lost the production and business.
The defendant company explaining the above facts and circumstances wrote letters time and again to the plaintiff Bank, specially on 1-6-2005, 28-8-2005, 29-1-2005 and March, 2006 informing the facts and circumstances regarding the huge loss, labour unrest etc of the defendant No. 1 company and requested them to solve the problem, but the plaintiff Bank without taking any fruitful steps filed the suit against the defendants.
8. The answering defendants further claimed that they are not responsible for the other defendants and shareholder for issuing the share and for the loss of the partner. They prayed for dismissal of the suit of the plaintiff against them.
9. The trial Court after perusal of the pleadings of the plaintiff and defendants framed the following issues:
(1) Is the suit maintainable in its present form and manner.
(2) Whether the defendants obtained the loan from the plaintiff Bank and thereby became defaulter.
(3) The claim of the plaintiff Bank against ·the defendants whether legal and lawful.
(4) Whether the plaintiff Bank can get the decree in a suit as prayed for.
10. At the trial the plaintiff Bank to establish their claim, adduced 2 witnesses i.e. PW 1 Md Shahjahan Chowdhury at the time of compromise decree dated 19-3-2009 later on they adduced another person as PW 2 namely, Md Anwarul Huque Chowdhury and produced some documents which were marked as exhibits. Exhibit No.1 resolution dated 12-8-2004, Exhibit No.2, the loan application dated 16-11-2003, Exhibit No 3, the sanction letter dated 7-8-2004, Exhibit No.4, the letter of plaintiff dated 9-8-2004, Exhibit No. 5 the consent letter of the defendants, Exhibit 6 series charge documents, Exhibit-7, Title deed of property. Exhibit No.8, mortgage deed, Exhibit No.9, Power of Attorney, Exhibit No. 10, affidavit. Exhibit No. 11, Application for renewal of the loan, Exhibit No. 12, sanction loan of the renewal of the loan dated 8-1-2006, Exhibit No. 13, letter of the plaintiff dated 23-1-2006, Exhibit No. 14, letter of the defendant dated 29-1-2006, Exhibit No. 15, letter of the plaintiff dated 20-3-2006, Exhibit No. 16, final notice dated 2-5-2006 Exhibit No. 17- 17 (Uma) demand letters on various dated by the plaintiff Bank clamming the payment of the loan from the defendants. Exhibit No. 18, legal notice dated 28-5-2006, Exhibit No. 19, auction notice, Exhibit No. 20, defendant letter dated 3-4-2006 and Exhibit No. 21, statement of account.
11. The defendants adduced DW No.1 Mr Perwaizuddin at first at the time of sole decree and later on they also examined the same person as DW No. I and produced some documents to substantiate their defence case which were marked exhibits:
Exhibit No. A - A (5) series, the letters of the plaintiff to defendant dated 16-11-2003, 1-6-2005, 28-8-2005, 29-1-2006, 3-3-2006 and 29-1-2006 to the plaintiff.
Exhibit No. B-B (2) series, the plaintiffs letter to defendants dated 15-11-2005, 7-8-2004, 3-4-2005 and 8-1-200o,
The learned Judge, Artha Rin Adalat, Chittagong by impugned Judgment dated 29-11-2010 considering the testimonies of the PWs and DW and materials on decord Jecreed the suit in part allowing the plaintiffs Taka 2,85,00,154.32 (Two crore eighty five lac one hundred fifty four and thirty two poisha) instead of plaintiff's of claim for money Taka 4,03,79,845.32.
13. The plaintiff Bank being aggrieved by the judgment and decree dated 29-11-2010 preferred the instant First Appeal before this Court.
14. Mr Md Imam Hasan, the learned Advocate appearing for the plaintiff-appellant has submitted that the learned Judge, Artha Rin Adalat No. I, Chittagong in passing the judgment and decree dated 29-11-2010 seriously erred in law taking further evidence at the instance of the plaintiff Bank and the defendants inspite of earlier compromise decree dated 19-3-2009.
 (To be continued)
15. He has further argued that the plaintiff and defendants by amicable settlement came to compromise and by dint of that compromise prepared application and Solenama signing by them on behalf of the respective parties. Thereafter, they filed a joint application before the Court on 19-3-2009. The terms of compromise have been laid down in application for compromise which was referred by the learned Advocate and pointed that by dint of that compromise on the same date the suit was decreed and, as such, the trial Judge without considering the earlier compromise decree acted illegally in taking further evidence decreeing the suit in part.
16. Therefore, Judgment and decree passed by the Court below on 29-11-2010 is liable to be set aside.
17. Mr Md Imam Hasan took us to the stipulations of compromise application as  recited therein and read out the same where from it has clearly shown that the defendants clearly admitted to repay Taka 4,34,35,754.32 excluding Taka 59,43,815 which was excluded as interest and in the earlier decree dated 19-3-2009 the Court has also examined PW No.1 and DW No.1 in respect of compromise application thereafter, the same Court has drawn up the decree decreeing the suit on compromise to pay money in terms of compromise petition.
18. Therefore, there is no further scope to adduce any evidence on Behalf of the plaintiff to narrate the plaint case. However, Mr Hasan concedes that the Mofassal lawyer also without considering the law to its legal perspective taking its own view inadvertently filed the application to proceed with the suit for further evidence which, was also allowed by the Court without considering the earlier compromise Judgment and decree.
19. Therefore, according to Mr Md Imam Hasan the 2nd Judgment and decree is illegal, void ab-initio which is liable to be set aside.
20. In respect of documentary evidence produced by the plaintiff at the time of 2nd testimonies given on behalf of the plaintiff Bank were produced before the trial Court and the defendant's company also produced some documents by giving testimonies which are not relevant for consideration of the instant suit. However, he argued that as a matter of fact the plaintiff and defendants none can go beyond the compromise decree. Therefore he prays for allowing the appeal setting aside the Judgment and decree dated 29-11-2010 passed by the Judge, (Joint District Judge) Artha Rin Adalat No.1, Chittagong as a 2nd Judgment and decree.
21. Mr Md Imam Hasan in support of his submissions he referred the Section 13 and 50 of the Artha Rin Adalat Ain, 2003. He also cited some decisions to the case of Sultana Jute Mills Ltd. vs Agrani Bank reported in 2 ADC 149, to the case of Janata Bank Ltd vs Mohiuddin Specialioed Textile reported in 62 DLR 501 to the case of Messers Ibrahim vs Mizanul Huque Chowdhltnj reported in 69 DLR (AD) 192. He further pointed that in view of the provision of the Section 13 of the Artha Rin Adalat, after passing the compromise decree in the instant suit decree was drawn up and suit was admittedly, decreed on the basis of that compromise decree, therefore, the 2nd Judgment and decree is nullity.
22. He has also pointed that as per subsection 1 of Section 15 of the Artha Rin Adalat Ain, 2003, the Court is not entitled to reduce cut any interest/profit as claimed by the plaintiff Bank against the defendants however, the learned Judge without considering the provision of Sections 13 and 15 of the Artha Rin Adalat Ain, 2003 decreed the suit taking view that defendants had suffered a lot due to negligence of the plaintiff Bank for which the Court erred in law in passing the 2nd decree in part. Mr Hasan argued that if any defendants claim any compensation and damage tor negligence then he can file proper suit in accordance with law against the company or respective parties. However, according to him the defendants cannot claim such damage, adjustment or counter claim in a Artha Rin case. In that view of the matter the trial court erred in law in adjudging' and giving some relief in favour of the defendants mentioning section 57 of the Artha Rin Adalat Ain, which is not only contrary to the law enacted in Artha Rin Adalat, rather, violation of the principles enunciated by the apex court. Therefore, he prays for allowing the appeal setting aside the 2nd Judgment and decree dated 29-11-2010 passed by the Judge, (Joint District Judge) Artha Rin Adalat No. I, Chittagong as a 2nd Judgment and decree.
23. Mr SM Abdur Rouf, the learned Advocate appearing on behalf of the Respondents at the first instance took us to the 2nd Judgment and decree referring to all the testimonies and documents produced before the trial Court and argued that the trial Court after considering all the materials on record correctly took the view that the defendants suffered a lot due to negligence of the plaintiff Bank. He has further argued that according to the testimonies of DW No. 1 the loan was disbursed after 11 months of the sanction. Therefore, the defendants company could not avail the seasonal product of the company of which the value of the products have come down measurable in the share-market and there is a serious labour agitation for non payment of the wages and other benefits. In such situation the defendant company was not in position to repay the loan and interest as claimed by the plaintiff Bank. However, such, circumstances and situations were communicated to the Bank. He referring the Exhibit Ka to Kha and Uma argued that those exhibits clearly indicated that the defendants claim were not vague, rather, the company rightly claimed waiver of the interest which was supported by the exhibits as a competent reason. In that view of the matter the Judgment and decree passed by the Court below on 29-11-2010 cannot be set aside. In support of his submissions he relied upon the case Sonali Bank vs Md Mokshed Ali Khan reported 13 BLT 331, to the case of Md Arfan Uddin Akand vs Joint District-Judge and Artha Rin Adalat No.1, Gazipur reported 15 BLT 343.
24. However, Mr SM Abdur Rouf, the learned Advocate very candidly concedes that the legal point raised by the learned Advocate for the appellant regarding compromise and if taken into consideration by this Court as compromise decree had already taken place in earlier occasion. In that case he has no legal submission, rather, the decision of the Court will be prevailed and upheld in accordance with law.
25. We have gone through the Judgment and decree dated 29-11-2010 passed by the Judge, Artha Rin Adalat No.1, Chittagong. On perusal of the Judgment and decree it appears that the learned Judge of the Courts below after taking evidences of both the sides passed the Judgment and decree. However, in the Judgment and testimonies of the PWs and D.W we do not find any mentioning regarding the earlier compromise Judgment and decree.
26. We have also perused the compromise application dated 19-3-2009. On perusal of the aforesaid compromise application it appears that there was a stipulation if the borrower defendants failed to repay two (2) loan instalments as per schedule of the compromise, then the suit would be revived and the interest waiver stipulation would be withdrawn; We have also perused the Judgment and decree dated 19-3-2009 from which it is clearly divulged that the Court at the time of passing the Judgment, the terms revival of the suit was considered, thereby, narrated in the decree that the suit is decreed as per stipulation of compromise application and decree was drawn up in accordance with the compromise application.
27. On perusal of the earlier Judgment and decree it has clearly reflected that there is no ambiguity regarding the compromise decree.
28. On behalf of the defendants the defendant No.4 has been adduced as DW No. 1 while he deposed in the Courts below he neither alleged that the earlier compromise decree was taken by the plaintiff Bank by any exception nor he has complained in evidence regarding the compromise decree. So, we have no hesitation to come to a conclusion regarding the compromise decree that it was legal, lawful and valid, even then, it was stipulated in the solenama that if the borrower failed to pay 2 (two) instalments of compromise loan in that case the suit would be revived.
29. We have considered the testimonies of the PWs and DW. It appears from the materials on record that after sanctioning the loan, the loan money was disbursed after 2 days and the defendant company withdrew the money by giving cheques from the companies account day by day and availed the total money in accordance with the terms and condition of the sanction letter of the loan. In the testimony of the DW No.1 though it has been alleged that the disbursement of the loan has taken place after 11 months of the sanction but all the documents have been produced by the Bank i.e. Bank statement Exhibit- 21 and others do not speak so, rather it appears from the Exhibit-21 that the plaintiff Bank never violated any terms and condition, of the sanction letter.
30. The compromise between the borrowers and Bank were not invalid due to the plaintiff Bank, rather, the borrowers were unable to maintain the stipulation and thereby failed to repay the loan. Therefore, it is admitted facts that the defendants are loanee of the Bank. Moreover, the written statement was submitted on 18-2-2007 and compromise application was filed on 19-3-2009, admitting Taka 4,34,35,754.32. So, the allegations made in the written statement do not bear any merit. The plaintiffs claim once admitted by the defendants cannot be denied later on. The plaintiff is precluded by the principles of estoppel. Moreso, at the time of compromise decree and deposition made at the time of contest Mr Perwaizuddin was at both times as DW No. 1. So,  it cannot be accepted that same person once admitted the loan and after foiling to repay the loan on admission, he would be allowed to deny the same.
31. According to the provision of the Section 58 of the Evidence Act, facts admitted need not be proved; so, we are of the view that the learned Judge in decreeing suit in part violated the provision of the Section 58 of the Evidence Act as well as Section 13 and 50 of Artha Rin Adalat Ain, 2003. Therefore, we are of the opinion that the judgment and decree appealed before this Court has been suffering from legal infirmity and passed in flagrant violation of law.
32. In view of the discussions made herein above we find the submissions advanced by the learned Advocate for the Appellant bear merit. The decisions cited by him in support of his submissions are also applicable in the instant first appeal.
33. On the other hand, the submissions advanced and decisions referred by the learned Advocate for the respondents in respect of factual aspect, not in legal point. Therefore, on perusal of the same it is clearly divulged that the facts and circumstances of those decisions are quite distinguishable from the facts and circumstances of the instant appeal.
34. In that view of the matter we are not inclined to accept the decisions dated in favour of the defendant-respondents.
35. Thus, the appeal having merit, it succeeds.
36. In the result, the appeal is allowed.
37. The Judgment and decree dated 29-11-2010 passed by the Judge, Artha Rin Adalat, 1st Court, Chittagong in Artha Rin Case No. 62 of 2006 so far it relates to part decree is hereby set aside. The suit is decreed on contest against the defendants Nos. 1 and 4 and ex-parte rest of the defendants. The defendants are directed to pay Taka 4,03,79,845.32 as of 31-7-2006 within 90 (ninety) days. In default, the plaintiff would be entitled to realise the same in accordance with law with 12% interest per annum till realisation of the amount.
However, the Office is directed to communicate the Order at once.

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