Artho Rin Adalat Ain, 2003

(Money Loan Court, 2003)

Md. Mofizur Rahman K. Chowdhury, CFA, FCMA

Deputy General Manager, BBTA
 Background
• Generally Money Suit is filed before the Civil Courts in order to realize
outstanding demand. But these general provisions of law proved to be
inadequate in many respects.
• Especially the Financial Institutions were suffered a lot for want of effective
and speedy machinery to realize their unpaid claim.
• In consequence thereof the economic flow of the country was going to be
paralyzed. Being realized these facts a special legislation was at first
promulgated in the name of Artha Rin Adalat Ordinance, 1989 and
subsequently the said Ordinance replaced with the enactment of Artha Rin
Ain of 1990 for realization of outstanding demand of Financial Institutions.
• But in course of time that very Act seemed to be again inadequate to face
various new problems during the trial and execution proceedings.
• Thus, with a view to make the said Act more amended and consolidated,
the Arhta Rin Adalat Ain, 2003 has been enacted for recovery of dues by
Financial Institutions.
 Other Laws Related to ARAA

• Bangladesh Bank Order, 1972 (P.O. No. 127 of 1972)

• Banking Companies Act, 1991 (Act No. 14 of 1991)
• Bangladesh House Building Finance Corporation Order,
1973 (P.O. No. 7 of 1973)
• Investment Corporation of Bangladesh Ordinance, 1976
(Ordinance No. XL of 1976)
• The Bangladesh Krishi Bank Order, 1973 (P.O. No. 27 of
1973)
• The Rajshahi Krishi Unnayan Bank Ordinance, 1986
(Ordinance No. LVIII of 1986)
• The Bangladesh Small and Cottage Industries Corporation
Act (E. P. Act XVII of 1959)
 Other Laws Related to ARAA
• Civil Courts Act, 1887
• The Transfer of Property Act, 1882 (Act No. IV of
1882)
• The Code of Civil Procedure, 1908 (Act No. V of
1908)
• The Public Demands Recovery Act, 1913 (Act No. III
of 1913)
• Court Fees Act, 1870 (Act No. VII of 1870)
• The Limitation Act, 1908
• The Code of Criminal Procedure, 1898
• The Penal Code, 1860
 Contents of the Act
- Short title, Extent and Commencement (Section-1)
- Definitions (Section-2)
- who are the Financial Institutions
- Court/Artho Rin Adalat (Section-4)
- Judge of ARA
- Parties of the suit
- Auction before filing Artho Rin Suit under section-12 (3).
- Legal Notice to the defaulter borrower/s
- Preparation of plaint and it's essential parts (Section 8
- steps of this suit
- Service Return of Summon [section 7(1)]
-Time for SR 30 days
-Written Statement/WS (sec...)
-Time for WS....
-Hearing
-Arguments
-Judgment & decree
 Contents Contd…..
-Cancellation of Exparte decree(sec-19) and it's procedures
-Special time limit for filing suit (section 17)
-Special time limit for filing ATA suit (sec.46)
-Interest calculations ( sec.....
-Filing of Artho Rin Execution Case(sec. 26 -39)
-Steps of Execution Case
-Summons
-Auction under section 33 and it's detail
-Time limit for filing Ex.case
-Time limit for disposing of the Execution Case ( section- 37)
-Appeal (sec.40)
-Revision(sec.42)
-Writ - who file writ and why and where ?
-ADR (sec.22)
-ADR in Ex. case ( sec-38)
-Restrictions in claiming (sec-...
-Counting of days ( sec. ....)
What matters are dealt with this Act?
• Matters regarding recovery of loans by financial institutions are
covered by this statute.
• Irrespective of Public Demand Recovery Act (PDRA) 1913, if the loan is
recoverable under ARAA then it has to be recovered using the Artha
Rin Adalat no matter whether this loan is considered as
‘Public/Government Loan’ [section 5(5) of ARAA].
• Cases involving claims by Bangladesh Krishi Bank and Bangladesh
Krishi Unnoyon Bank and other state-owned financial institutions not
exceeding the amount of taka 5 lacs can be filed as certificate case
using the PDRA 1913 instead of filing in Artha Rin Adalat [section 5(5)
of ARAA].
• If there are special provisions for recovering loan by financial
institutions established by special law, then the ARAA provisions will
be counted as additional to those provisions. However, if that financial
institution files a case in Artha Rin Adalat for recovering loans, then
the ARAA will be applicable [section 5(6) of ARAA]
 What matters are dealt with this Act?
• Loans given to the Government by the following institutions
[section 2Ka (12-17)] are not recoverable by the Artha Rin
Adalat:
 International Finance Corporation
 Commonwealth Development Corporation
 Islamic Development Bank
 Asian Development Bank
 International Bank for Reconstruction and Development
 International Development Association
– However, appropriation of money by the officers or employees of a
financial institution can not be entertained with this act (section
18(1) of ARAA).
– The loan-receiver cannot file a case against the financial institutions
under this statute. Neither he can counterclaim or put any claim of
set off against the financial institution while filing the written
statement (section 18(2) of ARAA)
 Definitions
• Financial Institution Means:
– Bangladesh Bank, a bank company established or run
under Bank Company Act, 1991, BHBFC, ICB, BKB,
RAKUB, BSCIC, FIs established or run under FI Act, 1993
– International Finance Corporation (IFC), Commonwealth
Development Corporation (CDC), Islamic Development
Bank (IDB), Asian Development Bank (ADB), International
Bank for Reconstruction and Development (IBRD),
International Development Association (IDA).
– A bank established under any act
– As declared by the court established under section 4
 Definitions
Loans Mean:
• Advance, credit, cash credit, overdraft, bank credit, discounted or
purchased bill, investment made by the financial institutions
regulated in accordance with Islamic Shariah or any other financial
favour or facilities described in whatever name;
• Guarantee, indemnity, letter of credit or any other financial
arrangement, which any financial institution grants or issues in
favour of the borrower or accepts as liability.
• Loan granted by financial institutions to any of its officer or servants.
• Legally imposed any interest, penalty interest or profit or lease upon
the above-mentioned debt or in some cases investment made by the
financial institutions regulated in accordance with Islamic Shariah.
 Court
• Govt. shall constitute one or more money loan
court(s) for every districts. One court may also may
also act for two or more districts.
• If no court is constituted for any district the Court of
Joint District Judge will act as Money Loan Court.
• This court shall have exclusive jurisdiction to try the
suits filed by the financial institutions for realization
of debt. This court has been excluded from
exercising any other civil or criminal jurisdiction
 JURISDICTION OF THE ARTHA RIN ADALAT
• All suits relating to the realization of loan of a financial institution including
Mortgage Suit for foreclosure and sale and even public demand of more than Tk.
50,000.00 (Taka fifty thousand) are exclusively triable by the Artha Rin Adalat.
• A Financial Institution cannot file a Suit before the Court accusing its employees
for misappropriation of money labeled it as debt.
• A borrower is not entitled to file any Suit before this Court against any Financial
Institution though the cause of action may arise from debt.
• However, cases involving claims by Bangladesh Krishi Bank and Bangladesh Krishi
Unnoyon Bank and other state-owned financial institutions not exceeding the
amount of taka 5 lacs can be filed as certificate case using the PDRA 1913
instead of filing in Artha Rin Adalat [section 5(5) of ARAA].
• If there are special provisions for recovering loan by financial institutions
established by special law, then the ARAA provisions will be counted as
additional to those provisions. However, if that financial provision files a case in
Artha Rin Adalat for recovering loans, then the ARAA will be applicable [section
5(6) of ARAA]
PRIOR CONDITION TO FILE ARTHA RIN SUIT:
(SECTION 12)
• No financial institution is entitled to file an Artha Rin Suit before the
Court without adjusting the liability by selling the property (movable or
immovable) under lien, pledge, hypothecation or registered mortgage of
which the financial institution is lawfully authorized to sell by dint of
irrevocable notarized power of attorney in case of movable property and
registered power of attorney in case of immovable property.
• For selling the above-mentioned property, the financial institutions shall
follow the procedure of auction sale provided in Section 33 of the Ain so
far as it is possible.
• After selling the property in question, if the financial institution fails to
make delivery of possession to the purchaser, it can take recourse to the
District Magistrate and the District Magistrate or his nominated
Magistrate of the First Class upon satisfaction of mortgage against debt,
shall take necessary step to transfer the possession of the property to
the concerned purchaser on behalf of the Financial Institution.
 AFFIDAVIT AS SUBSTANTIVE EVIDENCE:
(SECTION 6)
• Every plaint and written statements has to be attached
with an affidavit and this affidavit shall be treated as
substantive evidence so that the trial court may make
instant order or pass judgment only upon perusing the
concerned plaint or written statement together with
other documentary evidence without deposition of any
witness.
• The list of defendant shall include the third party
guarantor or mortgagor (s 6(5) of ARAA
• The plaint should be supported by Affidavit and Ad
Valorem court fees has to be paid with the plaint
(section 6(3) of ARAA).
 Plaint (Section -8)
• Financial Institute shall initiate suit by filing plaints. The plaint shall
have following information:
• Name of the plaintiff, address, place of work etc.
• Name of the Defendant, address, place of work etc.
• All particulars related to plaintiff’s Claim
• Cause of suit, place and date
• Suit value for court fee (suit value shall not exceed 300% of Principal
amount)
• Particulars regarding Jurisdiction of Court
• Remedy Sought
• Details about the loan like principal, amount repaid, interest, profit
etc.
• Schedule of Immovable asset Mortgaged
• Documents required as evidence as the plaintiff think fit
• The person who will represent the plaint in favour of plaintiff
 Plaint (Section -8)
• plaint should be supported by Affidavit and Ad
Valorem court fees has to be paid with the
plaint (section 6(2) of ARAA).
 Summon (Section-7)
• Based on the plaint the court will issue summon

• summon has to be personally served and returned within 15 of

days of issue.
• If the summon returns without being served then within the
next 15 days from the date of return, the court, if considers
just, will serve the summon by advertising it in a popular
national and a local newspaper, if there is any.
• In this way the court can get rid of the requirement of serving
personally as in many cases the address of the defendant is
wrong or something unexpected occurs [section 7(2) of ARAA].
 Filing of written statement:
• After receiving the summon the defendant shall appear before the court and
submit written statement to the court regarding the claims of the plaintiff.

• The written statement has to be submitted within 40 days after the

defendant first appears in the court in order to answer the summon

• This written statement supported by affidavit will be counted as substantial

evidence and the court, in case of default or summary judgment, can give
order or judgment by solely relying on the written statement without
examining any witness (section 6(4) of ARAA)

• If the plaintiff wants to give an additional written statement in reply to the

written statement of the defendant then he has to file it within 15 days of the
filing of the written statement by the defendant (section 11 of ARAA)
 Trial and Judgment
• If the parties are not at issue on any question of law
or fact, irrespective of their presence or absence at
court, the court may at once pronounce judgment
or order after the submission of written statement
or at any stage of the trial if it appears to the court
upon scrutinizing the plaint and written statement
(Section 13(1), (2) and (3) of ARAA.
• If the defendant admits the statement of the plaint
whether by written statement or any other way, the
court can at once pronounce judgment or order by
ignoring other pending issues awaiting to be
disposed of.
 Trial and Judgment
• It is not obligatory for the judges to hear oral
arguments before pronouncing judgment (section
15(1) of ARAA).
• The court may set a date for hearing after getting
written statement from the plaintiff and frame the
issue of disposal of the suit.
• The date settled for hearing can be stayed only once
upon application of any of the parties (section 14(1) of
ARAA)
• However if a party applies for staying the settled date
again by paying an amount (between tk. 1000-3000
before a due date, the court can again allow to stay the
settled date for hearing (section 14(2) of ARAA)
 Arguments/hearing

• Within five days of the completion of peremptory

hearing (i.e. after examining all the witnesses), the
parties or any of them can submit written arguments
to the court after notifying the court in writing and
supplying copies of the written arguments to all
other parties. There is no option to answer the
arguments in written form (section 15(2) of ARAA).
• The court can order the parties to give oral
arguments for/against the written arguments if it
considers necessary (section 15(3) of ARAA).
 EX PARTE DECREE: (SECTION 19)
• The Court shall hear the suit ex parte and pass a decree against the
defendant if the defendant does not appear before the court on the day
fixed for hearing or when the Suit is taken for hearing but the defendant
is not available at that very time.
• The defendant may file an application for setting aside the ex parte
decree within 30 days from the day passing of the ex parte decree or
from the day when the defendant come to know about the ex parte
decree.
• In order to setting aside the ex parte decree, the defendant is required
deposit 10% of the decreetal amount within 15 days from day of filing
the application by cash payment to the concerned Financial Institution as
recognition of claim made by the plaintiff, or by Bank Draft, Pay Order or
any kind of Negotiable Instrument to the Court as security.
• Upon payment of the said 10% decreetal amount, the ex parte decree
shall be set aside and the Suit will be immediately restored in the original
number and file; failing which the Court shall straightly dismiss the
application for setting aside the ex parte decree.
 NO DISMISSAL OF SUIT (SECTION 19)

No pending Suit before the Artha Rin Adalat

shall be dismissed on account of non-
appearance of the plaintiff or any kind of
failure on the part of the plaintiff. In this case
the Court shall adjudicate the Suit upon
verification of the documentary evidence.
 ALTERNATIVE DISPUTE RESOLUTION

The provisions of alternative dispute resolution

(ADR) is a unique feature of the Artha Rin
Adalat Ain, 2003. After filing the written
statement, the proceeding of ADR shall start
by adjourning the next procedure of the suit.
Only two kinds of ADR are recognized by the
Act:
1. Settlement Conference; and
2. Arbitration.
 Settlement Conference:
Settlement Conference means a conference
presided over by the judge of the Court in which
the parties to the suits, their appointed lawyers
and their representatives may be present.
The judge shall play co-operative role with a view
to settle the dispute on the basis of
cooperation, sympathy and mutual
understanding in a informal, non-contesting,
non-obligatory and confidential environment.
 Mediation
• Instead of Settlement Conference, the Court may
forward the suit to the appointed lawyers or the
parties to the suits for resolving the dispute
through Arbitration.
• The lawyers shall mutually appoint an arbitrator
upon consultation of the parties to the suit among
the following kinds of person:
1. Any lawyer who is not engaged by the parties
2. Any retired judge
3. Any retired officer of a Financial Institution
4. Any other competent person other than a person
employed in the profitable service in the Republic.
 LIABILITY OF MORTGAGOR AND
GUARANTOR (SECTION 6):
• Generally the principal debtor, third party mortgagor
and third party guarantor are jointly and severally
liable for making repayment of the outstanding liability
to the Financial Institution.
• Nevertheless when the dues are realized through
execution, the principal debtor, third party mortgagor
and third party guarantor are liable to pay the
decreetal amount consecutively.
• That is, at first the principal debtor, then third party
mortgagor and at last third party guarantor shall be
liable to pay the decreetal amount.
 APPEAL
Upon deposit of Tk. 50% of the decreetal money to the decree
holder or to the Court, the aggrieved party may prefer an
appeal against the order or decree of the Artha Rin Adalat
before-
• The Court of District Judge: Where the decreetal amount is
upto 50 lac.
The High Court Division: Where the decreetal amount is more
than 50 lac.
• But the Financial Institution need not to deposit any money
or security to prefer any appeal against the judgement or
order of Artha Rin Adalat.
• The appellate court shall dispose of the appeal procedure
within 90 days from the date of acceptance of appeal and in
some cases another 30 days may be extended. :
 REVISION:
• Upon deposit of 75% (including 50% during
appeal) of the decreetal money to the decree
holder or to the Court, the aggrieved party
may file a revisional application against the
judgment or decree of the appellate court.
• The revisional court shall dispose of the
revisional procedure within 60 days from the
date of acceptance of revision and in some
cases another 30 days may be extended.
 APPEAL BEFORE THE APPELLATE DIVISION
OF THE SUPREME COURT:
The aggrieved party may prefer an appeal
before the Appellate Division of the Supreme
Court against the judgement, decree or order
passed by the High Court Division in an
appellate or revisional procedure. In this case
the Appellate Division may order to deposit
the rest of the decreetal money or any
amount of them as the Hon’ble Court thinks
fit and proper.