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Challenging a Judgment and Decree of the Artha Rin Adalat

A borrower can challenge an Artha Rin Adalat judgment and decree in two main ways. An ex parte decree can be set aside by the same Adalat under s.19 on depositing 10% of the decretal amount. Any decree, ex parte or contested, can be appealed under s.41 on depositing 50%: to the District Judge where the decree is up to Tk 50 lakh (within 30 days), and to the High Court Division above that (within 60 days). Banks and financial institutions deposit nothing (s.41(4)).

The usual grounds are: no proper service of summons; lack of jurisdiction over the claim or the parties; fraud; an execution or decree barred by time; and errors in the amount, such as payments not credited. A decree that is void for want of jurisdiction or obtained by fraud can also be attacked by writ, and fraud can be raised even collaterally. A separate civil suit against the decree is barred by s.20, and the deposit cannot be avoided by recasting the challenge.

This note combines the sixteen judgments supplied earlier with two published articles on the Ain (listed under Sources). Points not confirmed in either are marked "to verify"; check the current text of the Ain, as amended, before filing.

How: the routes of challenge

Choose the route by the kind of decree and the kind of defect: s.19 for an ex parte decree, s.41 appeal for errors in any decree, writ only for a nullity.

Notes on the routes

Where the deposit goes. Under s.41(3) the 50% is paid to the decree-holder as part-satisfaction, or held as security by the Adalat (Daily Star article). The 50% deposit has been upheld as constitutional (Anisur Rahman v Bangladesh, as reported in the Financial Express article; to verify the citation).

Older authority on s.19. Md Nur Islam v Agrani Bank, 1 MLR 373, cited in Asadullah, required 50% for both a set-aside application and an appeal. That appears to reflect the earlier law; the 10% figure for s.19 is from Sonali Bank v Asa Tex (2014) and the Financial Express article. Confirm against the current Ain.

Appeal from an ex parte decree. The Act gives two remedies against an ex parte decree: a set-aside application or an appeal, and the deposit applies to both; s.151 CPC cannot be used to avoid it (Md Nur Islam, as cited in Asadullah).

Pre-decree orders. No appeal or revision lies against an interlocutory order (s.44(2)); it is raised in the appeal against the decree (Sonali Bank v Asa Tex).

Grounds of challenge

The strongest grounds go to the Adalat's power to pass the decree or to the borrower's chance to be heard; weaker grounds dispute the amount.

1. No proper service of summons

Under s.7 (as amended in 2007), if summons is not served or the return not received within 15 days, the Adalat must follow O.V r.20 CPC on substituted service. Before passing an ex parte decree, the Adalat should examine the process server under O.V r.19; because the Ain is a "harsh law", the Adalat must satisfy itself that the defendant knew of the case (Dr Md Asadullah v Sonali Bank, 62 DLR 474). In that case an ex parte decree passed within four months of filing, without considering whether summons was served, was criticised.

2. Lack of jurisdiction

Claim outside the Adalat. A decree amalgamating a Bangladesh House Building Finance Corporation loan, recoverable only before the District Judge under Article 27 of P.O. 7 of 1973, was "not passed legally" (Asadullah, following Jahan Ara Akhtar Begum v BHBFC, 47 DLR 158, affirmed 49 DLR (AD) 80).

Plaintiff not a financial institution. Only financial institutions may sue in the Adalat (s.5(1), as read in Sonali Bank v Asa Tex).

Loan not yet due. Where repayment periods differed (5 years for one lender, 25 for the other), one decree covering both was untenable (Asadullah).

3. Fraud

Fraud includes all acts, omissions and concealments involving a breach of equitable duty that injure another. A decree or order obtained by fraud is a nullity, can be attacked in a collateral proceeding, and is not protected by res judicata; the Adalat may act under s.57 despite being functus officio (Jahangir Kabir Chowdhury, 22 BLC (AD) 139, citing Abdul Aziz v Abani Mohan, 30 DLR (AD) 221 and Bangladesh v Khair Bhuiyan, 55 DLR (AD) 76). A borrower alleging the decree was obtained in their absence by fraud should still use s.19 rather than wait for the execution stage (Sonali Bank v Asa Tex).

4. Wrong amount

The decree must credit payments proved: in Agrani Bank v Rina Humayun, 14 ADC 872 (AD 2017), Tk 2,16,792.10 of a Tk 3 lakh loan had been repaid, and most of the decretal sum was interest. Disputes over interest, payments and adjustment are matters for appeal, not writ.

5. Natural justice and process

In Asadullah the Adalat refused an adjournment sought because the borrowers' lawyer was ill, and dismissed their set-aside case the same day; the High Court Division set the proceedings aside on other grounds but noted the haste. A ground of denial of hearing is strongest where the record shows the Adalat proceeded hastily, decided without the party, or ignored a pending application. Natural justice is one of the grounds on which a writ issues despite an alternative remedy (Fariduddin Mahmud, para 19).

6. Limitation in execution

Though not a ground against the decree itself, a money decree under the Ain is final when passed (s.5(3)), so the s.28 period for execution runs from it; a late execution case is without jurisdiction (Rina Humayun; Asadullah). This often matters more to a borrower than the decree.

Bars and pitfalls

The deposit is mandatory. An appeal without the 50% deposit is no appeal in law (Korea Bangladesh Food Products v National Bank, 13 MLR 253, as cited in Asadullah). The exception: a borrower who keeps the decree and attacks only the auction sale need not deposit (Asadullah). One commentator argues that exception gives defaulters more room than Parliament intended (Daily Star article), so expect it to be contested.

No separate civil suit. A suit to declare an Artha Rin decree or execution void is barred by s.20, even by a purchaser of the property from the judgment-debtor, who steps into the debtor's shoes (Agrani Bank v Rina Humayun).

No appeal or revision against interlocutory orders (s.44(2)); raise them in the appeal against the decree (Sonali Bank v Asa Tex).

Writ is discretionary. It will not issue to correct an error that is merely wrong; the order must be void, mala fide, or in breach of natural justice, or the statutory remedy must be ineffective (Fariduddin Mahmud). A writ attacking s.19's deposit condition as a breach of fundamental rights failed (Nilufa Yasmin v Artha Rin Adalat, Khulna, as reported in the Financial Express article; to verify the citation).

Conduct counts. Serial petitions, concealment of earlier proceedings and delay defeat discretionary relief (Fariduddin Mahmud; Banesa Bibi, 63 DLR (AD) 160).

Hear everyone. In any writ, the bank (and any auction purchaser) must be served and a Rule issued; summary relief will be set aside (Fariduddin Mahmud; National Engineers, 67 DLR (AD) 176).

Consider settlement. The Ain allows settlement before trial (ss.21–24), after decree during execution (s.38) and at any stage (s.45); rescheduling or instalments under s.49 may achieve more than a contested challenge (Fariduddin Mahmud; Jahangir Kabir Chowdhury).