The High Court on Wednesday ordered banks and financial institutions not to file cheque dishonour cases against borrowers to realise their default loans. It also instructed the lower courts to dismiss such cases and transfer them to the Artha Rin Adalat, or Money Loan Court, directly.
At the same time, the High Court stayed the proceedings of all cheque dishonour cases filed by banks and financial institutions and pending in different courts.
The HC bench of Justice Md Ashraful Kamal passed the order after disposing of an appeal by Mohammad Ali who was sued by Brac Bank and received a sentence of six-month imprisonment and a Tk2.95 lakh penalty in a trial court.
Brac Bank's lawyer Saifuzzaman Tuhin said they will appeal against the HC order after they receive the complete written verdict.
In the verdict, the High Court said lawsuits, however, can be filed in the Money Loan Court under the Money Loan Act for loan recovery.
The court ordered the governor of the Bangladesh Bank to issue instructions to banks and financial institutions soon to implement the verdict.
Meanwhile, talking to The Business Standard, bankers said their loan recovery might be delayed if they are not allowed to file cheque dishonour cases.
"Loans can be recovered by filing cases with the Money Loan Court, but it is time-consuming," said Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank.
"In the case of a cheque dishonour case, the customer comes to negotiation easily and the process of debt recovery is possible in comparatively less time."
He further said another bench of the High Court had given such a verdict, but it was stayed by the chamber court of the Appellate Division.
AB Bank's former chairman Muhammad A (Rumee) Ali suggested banks should go for appeal or review if they feel they would be in trouble with the verdict that closed the scope of the cheque dishonour case.
Bank company law expert Advocate Imran Ahmmed Bhuiyan told TBS that banks usually take cheques from customers as security. Cheque dishonour is tried under the Negotiable Instruments Act.
"In such cases, if banks can prove two things – the payee's identity and that the bank holds the cheque – verdicts go in favour of the banks," he added.
The court, in its observation, said a loan from a bank or financial institution is taken under an agreement. However, some corrupt, unscrupulous officers of the bank misuse the cheque for their own interests to implement their hidden agendas.
"Taking a blank cheque against loans is illegal. Banks and financial institutions have been doing this for a long time," the court observed.
It also said, "Banks were supposed to be a friend of the poor, but instead, they are now sucking the blood out of the poor. It should not happen.
"We hear about the bank waiving off the loans of those who are in default with thousands of crores of taka, but we never heard of a poor man's debt being forgiven."
The High Court said, "Banks and financial institutions are filing cheque dishonour cases instead of going to the Money Loan court which makes our criminal [justice] system almost ineffective. Therefore, from now on, banks or financial institutions can file cases with the Money Loan Court only."