The process of enlistment of any defaulter name in the CIB list is a continuing process within the meaning of section 5 GaGa read with section 27 KaKa of Banking Companies Act 1991 and also read with Article 42 of Bangladesh Bank Order 1972. If all these provisions are read together one and only inference that could be made is that if any person or a company is indebted to in any manner with any financial institution and the debt remains unpaid, it is the duty of the respondent Bangladesh Bank in its turn to enlist the name of the incumbent in the CIB list nothing more nothing less. ...Shafi A Choudhury Vs. Bangladesh & ors, (Civil), 2 SCOB [2015] HCD 27 ....View Full Judgment

The moment a bank or any other financial institutions reschedules a loan or grants any kind of loan, credit facilities or any other sort of financial assistance infavour of any person, it is virtually an admission on its part that the person to whom such financial assistance is being granted is not a loan defaulter under the definition provided in Section 5 GaGa of Bank Companies Act,1991. ...Shoel Textile Mills Ltd & ors Vs Bangladesh & ors, (Civil), 5 SCOB [2015] HCD 74 ....View Full Judgment

Whether Directorship of a Bank-Director can be taken away for the default of a third party for whom the Director has stood a guarantor, without first going for recovery of loan through Artharin Adalat.
The scheme of the two statutes, namely, the Banking Companies Act and the Artharin Ain, are distinct and, further, the provisions of Section 17 of the Banking Companies Act and the provisions of Section 5 of the Artharin Ain provide completely different course of actions for the ‘defaulter loanee’ and ‘defaulter guarantor’. Md. Shahbuddin Alam -Vs.- Bangladesh Bank and others (St. Original) 2019 ALR (HCD) Online 199 ....View Full Judgment

While the provisions of Section 17 of the Banking Companies Act aims at vacating the directorship of a person of a scheduled Bank, Section 5 of the Artharin strategies about recovery of outstanding loan from the borrower, mortgagor and guarantor. Md. Shahbuddin Alam -Vs.- Bangladesh Bank and others (St. Original) 2019 ALR (HCD) Online 199 ....View Full Judgment

The directorship of any scheduled Bank shall be vacant on the following events; (i) if a Director of a Scheduled Bank does not pay the loan, or interest thereof, taken by him from any Bank/Financial Institutions, (ii) when a Director of any scheduled Bank places him/herself as a guarantor to any loan taken by a third person and the said Director of the scheduled Bank fails to repay the loan money after receiving notice from the Bangladesh Bank, and (iii) if a Director of any scheduled Bank fails to carry out/complete the duty and responsibility undertaken by him. In other words, when a Director of any scheduled Bank either takes loan for himself or stands as a guarantor of another loanee, and if the loan remains unpaid despite issuance of notice by the Bangladesh Bank under Section 17 of the Banking Companies Act, his/her directorship may be vacated without exhausting the formalities set out in sub-Sections (2) & (3) of Section 17 of the Banking Companies Act. …Md. Shahbuddin Alam Vs. Bangladesh Bank & ors, (Civil), 16 SCOB [2022] HCD 151 ....View Full Judgment

It is to be noticed from the language employed in sub-Sections 1, 2 & 3 of Section 17 of the Banking Companies Act that vacancy of directorship occurs the moment any of the events enumerated in clauses (a) to (c) of sub-Section 1 of Section 17 of the Banking Companies Act takes place, for, neither any of the sub-Sections of Section 17 of the Banking Companies Act nor any other provisions of the Banking Companies Act seek to halt the proceedings under Section 17 of the Banking Companies Act on the plea of filing a representation to the lender Bank or to the Bangladesh Bank or to any other authority. …Md. Shahbuddin Alam Vs. Bangladesh Bank & ors, (Civil), 16 SCOB [2022] HCD 151 ....View Full Judgment

The submissions advanced by the learned Advocate for the petitioner that the petitioner being not the loanee, that is to say that the petitioner being merely a guarantor of the loanee, his directorship in a scheduled Bank should not be taken away by invoking the provisions of Section 17 of the Banking Companies Act, is completely misconceived. The laws herald very stoutly that a Director of any scheduled Bank whenever would be found to be either as the ‘defaulter loanee’ or as the ‘defaulter guarantor’, proceedings against the aforesaid Director under Section 17 of the Banking Companies Act would be initiated. …Md. Shahbuddin Alam Vs. Bangladesh Bank & ors, (Civil), 16 SCOB [2022] HCD 151 ....View Full Judgment

Banking Companies Act
Section 17 and
Section 5 of the Artharin Adalat Ain:
The provisions of Section 17 of the Banking Companies Act and the provisions of Section 5 of the Artharin Ain provide completely different course of actions for the ‘defaulter loanee’ and ‘defaulter guarantor’. In other words, while the provisions of Section 17 of the Banking Companies Act aims at vacating the directorship of a person of a scheduled Bank, Section 5 of the Artharin strategies about recovery of outstanding loan from the borrower, mortgagor and guarantor. Thus, the submissions of the learned Advocate for the petitioner that without going for recovery of loan by invoking the provisions of the Artharin Ain from the Borrower-company at first, commencement of any proceedings under Section 17 of the Banking Companies Act is not legal, appears to me to be completely without any substance. …Md. Shahbuddin Alam Vs. Bangladesh Bank & ors, (Civil), 16 SCOB [2022] HCD 151 ....View Full Judgment

When a Director of any scheduled Bank either takes loan for himself or stands as a guarantor of another loanee, and if the loan remains unpaid despite issuance of notice by the Bangladesh Bank under Section 17 of the Banking Companies Act, his/her directorship may be vacated without exhausting the formalities set out in sub-Sections (2) & (3) of Section 17 of the Banking Companies Act. Md. Shahbuddin Alam -Vs.- Bangladesh Bank and others (St. Original) 2019 ALR (HCD) Online 199 ....View Full Judgment

Whether a Bank-Director’s office would be vacated due to failure of re-payment of loan taken by a third-party for whom the Director has stood as guarantor.
A Director of any scheduled Bank when-ever would be found to be either as the ‘defaulter loanee’ or as the ‘defaulter guarantor’, proceedings against the aforesaid Di-rector under Section 17 of the Banking Companies Act would be initiated. Md. Shahbuddin Alam -Vs.- Bangladesh Bank and others (St. Original) 2019 ALR (HCD) Online 199 ....View Full Judgment

Granting of loan to a person whose name has been included as a loan defaulter in the CIB list, by granting him such loan or by rescheduling the loan or extending any other credit facilities, it is practically redeeming a person from the classification of loan defaulter within the definition provided in Section 5GaGa of Bank Companies Act, 1991. ...Shoel Textile Mills Ltd & ors Vs Bangladesh & ors, (Civil), 5 SCOB [2015] HCD 74 ....View Full Judgment

Experience shows that the calculation of interest is a very challenging job and at times, we find that the Bank officials are not so vigilant and not so diligent in calculating interest; therefore, Bangladesh Bank should exercise its power as embodied under section 45 and 49 of the Bank Company Ain, 1991 to inspect the case as to the calculation of interest by FIs at least on random basis. Bangladesh Bank should examine as to whether the interest calculated is in accordance with law or not. Mere denial or no objection as to calculation of interest by the borrower does not ipso facto give validity of the statement as to interest. ...Md. Shahin Ikbal Vs. General Certificate Officer & ors, (Civil), 17 SCOB [2023] HCD 168 ....View Full Judgment