A case of Mortgage property sale by the Bank

Md. Juwel Azad : One ABC bank (used for naming purpose) initiated a legal proceeding against his defaulted borrower by publishing a sale advertisement of mortgage property in auction. This process is called an auction publication in newspapers for complying with the provisions of 12 (3) of Artha Rin Adalat Ain, 2003.

Then, the defaulted borrower being aggrieved by this impugned publication moved to the High Court Division of the Supreme Court of Bangladesh with a petition made under Article 102 of the Constitution of the People’s Republic of Bangladesh. This approach has been drawn within the parameter of judicial review as there is no alternative remedy against such auction publication of properties.

Now the question is what will be the result if the mortgage properties have been sold out in auction. Law clears the subsequent stage of property in auction sale. The bank with the help of the borrower or with the help of the concerned magistrate (if needed) transferred the peaceful possession of the property to the auction purchaser.

Once the property has been sold out in auction to the auction purchaser it becomes complete and creates absolute rights and title over the property and none can dispute the purchaser’s right. So, the auction purchaser’s right is protected under the provision mentioned in section 12(8) Artha Rin Adalat Ain 2003.

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As per provision of Registration Act, a transfer deed has been executed in between the bank and purchaser and the same was registered in sub registry office. Here, people should remember that fraud vitiates everything even the courts order. That’s why some bona fide borrowers can take the privilege of laws. But most of the defaulted borrowers practiced cannily and tried to escape from legal action of banks for realization of debt/loan amount.

However, in writ petition the defaulted borrower received an order from the Division Bench of the Hon’ble High Court Division of the Supreme Court of Bangladesh like The Rule Nisi was issued and further pleased to pass an interim Order as to, “Pending hearing of the Rule, let the operation of the auction notice published in the daily newspaper be stayed for a period of months from the date and petitioner is directed to pay a portion of claiming amount to the Bank within a stipulated time otherwise the rule shall be discharged.

This order creates an obligation to the defaulted borrower to make compliance. After receiving the breathing space, the defaulted petitioner most of the time did not pay the amount that was ordered by the Hon’ble High Court of The Supreme Court of Bangladesh. The concerned bank after a long wait with a hope to get the portion of loan amount but at the end of the time, the result became the same i.e. defaulter. Here the borrower became defaulted to the bank as well as defaulted to court order.

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Now, the bank addressed the facts to the Rule issuing bench with certificate of statements and account statements regarding non-payments of amount as ordered from the defaulted borrower petitioner. After repeated efforts from the part of the bank, the bank managed to come up with the matter for hearing and after hearing, the Hon’ble Court was pleased to discharge the rule.  In the hearing, the bank stated that the current financial criminals, those who are habitual loan defaulters, are reluctant to pay the due payment to the bank or financial institution.

The bank further disclosed the present data of 4,20,334/- crore taka is now a nonperforming loans (NPLs) of total loan amount as of March, 2025. That the ratio would be 16.93% of total loan amount and this ratio leads the country to be the top in negative phases amongst Asian countries.

The competitors of Bangladesh in global business like India stood NPLs is 2.8%, Pakistan stood NPLs is 7.6 %, Srilanka stood NPLs is 12.8%, Maldives stood NPLs is 7.49 %, and the Vietnam stood NPLs is 8%. This caused a global impact on transparency and confidence on investors and businesses.

To come round from this financial sickness, the legal action should be taken properly and the outcome of such action should be visible. The Bangladesh bank should make guidelines on Non Performing Loans NPLs policy. In absence of such an action plan and guidelines, the defaulted loans are rising abnormally.

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Furthermore,  the defaulted borrowers should be debarred from using any sorts of cunning device in the name of judicial review stated in Article 102 of the Constitution of the People’s Republic of Bangladesh.  Let me address the present pending cases in our country.

The list is too high i.e. 45, 16,603 (Forty Five lac Sixteen thousands and six hundred three) cases are pending and waiting for result (ensuring justice) in from the Apex court to the lower Court as of July 2025. Wherein, 2,04, 000 ( Two lac Four thousands) cases are pending with Artha Rin Adalat over the country. The claiming amount is 2,12,000/- crore in these lawsuits. 

This picture was revealed by the Bangladesh Bank (BB) himself. Now Bangladesh faces financial trouble. Recently, the BB printed and issued 22,500 crore notes for recovering financial trouble but the benefit has been given to only 6 private banks. None will bring sustainable financial operation unless or until rule of law is established. Finally, we all together should play a role against financial criminals for the sake of depositor’s money i.e. public money.

Written by Md. Juwel Azad, Advocate, Supreme Court of Bangladesh.