Artha Rin Adalat Ain, 2003 in Bangladesh is being misused by loan defaulters to delay repayment, and outlines legal precedents that courts have established to combat this abuse.
The Core Problem
The Act was designed to help banks and financial institutions quickly recover loans by allowing them to auction mortgaged property and obtain ex parte decrees (judgments without the defaulter present) when served with summons. However, defaulters have found ways to exploit the system by:
- Not appearing during trials, letting courts pass ex parte decrees
- Filing writ petitions to the High Court Division to delay execution
- Making the government a party to invoke Article 102 jurisdiction artificially
- Filing appeals and applications to stay proceedings
Key Legal Precedents Established
The Supreme Court has developed several precedents to counter these delaying tactics:
1. Mamun-ur-Rashid (Md) v Secretary, Ministry of Law and others (2013)
- Held that making the government a party is just a "cunning device" to attract writ jurisdiction.
- Writ petitions are inadmissible against private banks
- Using Article 102 jurisdiction this way is merely a "futile exercise"
2. Gazi v Towfic v Agrani Bank and others (2002).
- Blocked applications under Article 102 against judgments and decrees
- Confirmed that specific appeal provisions in the Artha Rin Adalat Act preclude general constitutional remedies
3. Banesa Bibi v Senior Vice President (2011)
- Established that auctions held illegally or irregularly cannot be challenged through writs
The Solution Proposed
Rather than amending the law , properly following these Supreme Court precedents will automatically:
- Bar unwarranted writs
- Stop the flood of frivolous petitions filed with mala fide (bad faith) intentions
- Save precious court time
- Restrain the embezzlement trend
The Timeline of Delay
Stage 1: During Trial - "Show Up and Delay"
The document states:
"the trend is to use this legislation to delay the reimbursement process. As a usual practice the defaulters do not show up during the trial and let the Court pass ex parte decrees by only hearing the plaintiffs"
What this means:
Defaulters have a choice: attend trial or skip it
Strategy: They deliberately do not appear during trial
This lets the court pass an ex parte decree (judgment without hearing the defendant)
Why skip the trial?
Appearing means defending the case immediately.Skipping creates a tactical opportunity to challenge later. Sets up the next delaying tactic.
Stage 2: After Ex Parte Decree - Writ Petitions to High Court
"followed up with writ petitions to the High Court Division (HCD) of the Supreme Court of Bangladesh seeking a stay order"
The sequence:
Ex parte decree is passed (defaulter absent)
Before execution/auction, defaulter files writ petition
Requests stay order from High Court
Stay order stops the auction from happening
Stage 3: Fighting Rarery - "Seeking Stay of Execution"
"Rarely do they fight on merits of the case to get the ex parte decrees thrown out; instead, they seek to delay the process for as long as possible"
What defaulters DON'T do:
❌ Challenge the decree on its merits
❌ Try to prove they actually paid
❌ Show the decree was wrong
What they DO instead:
✓ File procedural challenges
✓ Seek stays and delays
✓ Use technical legal maneuvers
The goal:
"which allows the defaulters more time to do business with the credited amount and pressurises the banks to decrease the interest rate"
Summary: The "1-2-3" Pre-Filing Strategy
Before any writ is filed, defaulters stop the sale by:
Not showing up at trial (deliberate absence),
Letting ex parte decree pass (without contest),
Immediately filing writ petition with stay request (before property can be auctioned)
This sequence ensures:
⏱️ Maximum delay
💰 Continued use of loan money
🏦 Pressure on banks to settle for less
🏠 Property remains in defaulter's possession
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