The High Court (HC) on Wednesday gave its verdict that no bank or financial institution (FI) could file cheque dishonour cases against anyone for defaulted loan, except with the Artha Rin Adalat (money loan court).
A bank or FI can file a case in the Artha Rin Adalat only in the manner described in the Artha Rin Adalat Act 2003 for recovery of loan.
Besides, proceedings of all the check dishonour cases -- filed by banks or FIs -- currently pending in the courts across the country would be stayed, the court also ruled.
The HC also directed the Bangladesh Bank to issue a guideline for keeping insurance coverage against all kinds of loans granted by banks and FIs.
The HC bench of Justice Md Ashraful Kamal delivered the verdict after hearing an appeal petition filed over a cheque dishonour case of BRAC Bank Ltd.
According to the case documents, Mohammad Ali, a businessman from Nabinagar upazila under Brahmanbaria district, took a loan of Tk4 lakh from Brac Bank's Nabinagar branch in 2011.
He paid Tk3.19 lakh in 22 installments of the total 36 installments.
However, he was unable to repay the remaining loan later when his business conditions deteriorated.
Then he gave a cheque of Tk2.95 lakh to the bank against the due, but it bounced.
In this circumstance, Brac Bank filed a case in 2015 with a magistrate court in Brahmanbaria for recovery of the remaining loan.
Following filing of the case, the judge of the Additional District and Sessions Judge's Court in Brahmanbaria handed down a sentence of six-month prison to Mohammad Ali and fined him Tk2.95 lakh.
Mohammad Ali later filed an appeal petition against the lower court verdict.
The HC admitted the appeal on October 8, 2018 and after the hearing, it delivered the verdict on Wednesday.
Brac Bank's lawyer Syfuzzaman said: "Now our outstanding due from the loan receiver is Tk9.72 lakh. We will appeal against the judgment."
The HC asked the government bodies concerned to return the money to Mohammad Ali, which he deposited during filing the appeal.
The court also said that the check that the bank takes against the loan is a security, not a negotiable instrument.
A check dishonour case cannot be filed against the check taken as security. Taking a blank check against a loan is illegal. The banks and FIs have been doing this illegal activity for a long time, it noted.
The HC asked the lower court concerned across the country to summarily reject cheque dishonour cases filed by banks and FIs.
It also asked the courts to send the parties concerned to the Artha Rin Adalat directly.
