Money Loan Court Act 2003

Introduction:

Banks are the customers of the public money. People generally deposit their money to the banks for proper investment and transaction. Therefore, banks lend and invest this money to the borrowers. Thus, the banking transaction goes on. But sometimes the problem arises when some borrowers become defaulters of repayment of the borrowed money and the banks fall in a critical situation. For that reason, a proper legal process is highly required for the recovery of the money. And thinking the matter, the government has enacted a special law in 2003 for the proper and speedy realization of the money from the defaulter borrowers. This special law is called the Money Loan Court Act,2003 (properly known as Artha Rin Adalat Ain).The Money Loan Court Act,2003 enacted specially for the financial institutions to recover the defaulted money from it’s defaulter borrower. 

Objective of this Study:

• To acquire the theoretical as well as practical knowledge on the law.
• To be acquainted with the fundamental, essential and relevant provisions, rules, regulations, case laws etc. On the subject.
• To know the power and functions of this court and also the court process on this Act.
• To know safeguards for the banks and bankers under this law.

Historical Background:

The overall development of Bangladesh depends on economic development. Since no one in this country has enough capital, financial institutions have to take help. Financial institutions again maintain their existence by bringing money from one or other institution and investing money at some interest to the customers. Although financial institutions can raise funds, they just fail to do so on time and it is not possible to recapitalize. The jurisdiction of the public Demands Act of 1913 is limited and the finance Debt Ordinance of 1989 has been able to deal with this situation. In order to deal with such a situation, the finance Credit Court Act was enacted in 1990 to maintain the existence of the country’s financial institutions and to conti8nue the development work of the country. This law was amended in1990,1992, 1997. Despite such amendments, it was not possible to make the law suitable for the time and need. Therefore, Finance Court Act of 1990 was amended and this Finance Court Act was enacted in 2003.This law plays a vital role in speedy disposal of cases and issuance of decrees.

Concept and Features:

• Money Loan Court Act, 2003 is primarily legal instrument dealing with bank and non-bank financial institution loan defaulters, which prescribes mechanisms for the banks and financial institutions to get reimbursed.
• The Act provides for the establishment of a separate court for dealing with money loan cases, which can only be filled by a bank or a non-bank financial institutions.
• The Money Loan Courts which in 2003 to help expedition resolution of disputes between banks and their clients over loan repayment, are overburdened.
• There are sixty sections in this Act.
• This Act plays a vital role in speedy disposal of cases and issuance of decrees.
• Opportunities have been set aside for settlement of disputes in various cases.
• This law has provision for Appeal and Revision.
• The first Financial Court Act was enacted in 1990 and the present act was enacted thirteen years later. There have been many cases in these long thirteen years. All those cases settled according to the law of 1990. Therefore,  although the law of 1990 is invalid, there still a need for pre-2003 cases to be disposed of in accordance with the law of 1990
• The bank can file a suit against the defaulter borrowers but the borrowers can not file any suit against the banks under this law.

Power and Functions of Money Loan Court, 2003:

Money Loan Court Act, was enacted by the legislature of Bangladesh to address loan recovery process by financial institutions or banks. This court has some power and functions, which mentioned below :

• Any suit those are relating to recovery of lending by the financial institution shall be filed in Money Loan Court under this Act and disposed of in the said court.
• The suit for filing under this Act shall be registered as Money Lending Suit.
• Financial institution, mortgage of immovable property taken against given loan for selling and foreclosure of that property and issue any mortgage suit under the Transfer Property Act and the Code of Civil Procedure, 1908.
• To have a mortgage suit for foreclosure of a suit.
• The loan realizable by money loan court be payable to the Government under the PDR, 1913
• Local jurisdiction shall be determined by the District Judge.
• Money Loan court having local jurisdiction.
• The Money Loan Court shall be deemed as a civil court.
• The inherent powers of the court to pass any complementary order shall not be limited by anything in order to carry out of the purposes of justice.

Problems and Prospects:

Banks are custodians of the public money. People generally deposit their money to the banks for proper investment and transaction. Therefore, banks lend and invest this money to the borrowers. Thus, the banking transaction goes on. But sometimes the problem arises when some borrowers become defaulters of repayment of the borrowed money and the banks fall in a critical situation. According to the Bangladesh Bank statistics a total number of cases were awaiting disposal in the money loan courts across the country until June, 2019. According to the Supreme Court statistics, until June, 2019, at least 21849 cases were awaiting disposal in the money loan courts across the country. There are some problems are given below:

• Above sources said, a large number of cases have remained pending for many years, mainly due to the weakness of the existing  laws, lack of required number of judges, courtrooms, and complexities in case management.
• The section -17 of this Act mandates disposal of the cases within a maximum of 120 days, in reality, courts cannot dispose cases within this timeframe.
• Courts take a much longer time in hearing and disposing petitions of the defendants.
• The defendants file a writ petition in the High Court Division against any interim order of the lower court. The High Court Division in many cases, by issuing a stay order put off the proceedings of the lower court until disposal of the writ petition.
• Disposal of a writ petition is a lengthy process. If the order of the writ petition goes against the defendant, then appeals against the order of the writ petition. The case thus keeps travelling from one bench to another, one court to another.
• The main intention of the defendants is to keep the case pending at the stage of hearing in the lower court and they rake undue advantage of the legal bureaucracy.
• If they file an appeal against the decree of the lower court, they shall have to deposit 50 percent of the decreed valued to the lower court. That’s why defendants are usually willing to file an appeal against the decree of a lower court.
• Many cases under the money loan court Act, 2003 take even 8-10 years to settle.
• Besides, many bank loan defaulters using their political influence manage to delay the legal procedure of the cases filled against them for an indefinite period of time.
• The number of money loan court is insufficient in comparison with the number of cases.
• A legal Adviser’s negligence and dishonesty can also contribute to slow disposal 

Prospect :

If we truly get benefits from the laws pertaining to recovery-

• legal bureaucracy must be handled.
• To get rid of procedural delay and backblocks of the banks cases, it appears to crucial to form a separate bench in High Court Division of the Supreme Court for speedy disposal of writ petitions filed by the defendants.
• This bench will only hear and disposal of writ petition and appeals. In this way, writ petition and appeals will be disposed of an accelerated  way and the disposed cases will be increased.
• On the other hand, section -4 of the money loan court Act,2003 should be made functional  by establishing one or more Money Loan Courts with sufficient number of dedicated judges in each  district for the trial of cases constituted by the banks and financial institutions .
• Necessary amendments to law may be done so that bank’s CR cases for bounce cheques or any kind of money recovery cases can be lodged and tried with this dedicated court.
• The loan recovery process must be made functional and the banker, the legal system and the administrative bodies should play their due roles to make it happen. The related law and the legal system has significant role in this process.
• Making of law doesn’t make any changes, if it’s not applied. In fact, any law in force is toothless if it’s not effectively implemented.
• The application of law against the defaulters would create examples and thereafter wilful defaulters would think twice. At the same time, corrupt bankers should not be spared by termination or dismissal from the job only, they should be penalised and punished as per the law.
• But for all the above strategies to work, the government must show stern political commitment and goodwill against wilful defaulters.

Case Laws:

[IFIC Bank Ltd. Others Vs. M/S Beximco Holding Ltd. & others 13 BLT(HCD)23]

Impugned Judgment and decree passed under section -13(1)

Judgment : If there is no specific admission made in the written statement as contemplated in section -9(5) of the Act, the court can’t  come to conclusion as regards the said fact of the case.

[ IFIC Bank Limited Vs. M/S Marinar Fashions Wear Pvt.Ltd. & others 15

BLT(HCD) 425]

Whether on issuance of the certificate of title in favour of the decree holder, the execution case has already been disposed of and the court has got nothing further to do in this respect.

Judgment : Sub section-7 envisages vesting of ownership of the property of the judgment debtor upon the decree holder. The said vesting of ownership includes delivery of possession of property.  Without the delivery of possession, execution cannot be disposed of.

Conclusion

Money loan Court Act, 2003 is primarily legal instrument dealing with bank and non- bank financial institution loan defaulters, which prescribes mechanisms for the banks and financial institutions to get reimbursed. The Act provides for the establishment   of a separate court for dealing with many loan cases, which can only be filed by a bank or an nonbank financial institutions.

The money loan courts which in  2003 to help expeditions resolution of disputes between banks and their clients over loan repayment are overburdened. For that reason, a proper legal process is highly required for the recovery of the money. And thinking the matter, the Government has enacted a special law in 2003 for the proper and speedy realization of the money from the defaulter borrowers.

References:

1. Bare ACT, Money Loan court  ACT-2003
2. www. elearning.bdjobs.com