LEX/BDHC/0377/2014

Equivalent/Neutral Citation: 2C LR(HC D)(2014)208, 2C LR(HC D)(2014)208

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Writ Petition No. 9203 of 2012
Decided On: 23.02.2014
Sultana F. Nahar Vs. Artha Rin Adalat, 3rd Court, Dhaka and Ors.
Hon'ble Judges/Coram:
Syed Refaat Ahmed and Mahmudul Hoque, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Nasima K. Hakim, Hassan M.S. Azim and Kamal Hossain
Meahzi, Advocates
For Respondents/Defendant: Najmul Karim, Advocate
JUDGMENT
Syed Refaat Ahmed, J.
1. In this Application under Article 102 of the Constitution a Rule Nisi was issued calling
upon the Respondents to show cause as to why the impugned order No. 16 dated
24.06.2012 (Annexure-'II') passed by the Respondent No. 1 Adalat in Artha Rin Case
No. 104 of 2011 rejecting an application under Order 1, Rule 10(2) of the Code of Civil
Procedure ("Code") read with Section 57 of the Artha Rin Adalat Ain, 2003 ("Act") for
striking out the name of the Petitioner from the cause title of the plaint as filed in the
above noted case on 21.07.2011 (Annexure-'A') should not be declared to have been
issued without lawful authority and is of no legal effect and/or such other or further
order or orders passed as to this Court may seem fit and proper.
2 . The Respondent No. 2. Bank filed a Suit against the Petitioner and others on
21.07.2011 being Artha Rin Suit No. 104 of 2011 before the Respondent No. 1 Adalat
for recovery of loan money amounting to Tk. 5,56,56,318.08/- (Taka Five Crore, Fifty-
Six Lac, Fifty-six Thousand, Three Hundred Eighteen and Paisa Eight only) stating, inter
alia, that upon application of Seasons Travel Limited, the Defendant No. 1 to the said
Suit ("Company"), the Respondent No. 2 Bank approved credit facilities amounting to
Tk. 15 Lac and Tk. 35 Lac and renewed, reviewed, reduced and enhanced the same vide
its sanction letters dated 27.05.2003, 07.09.2004, 09.08.2005 and 17.09.2006.
Thereafter, on account of changes brought about in the management of the Company,
the Petitioner and another individual resigned as directors and shareholders, new
members were inducted and, resultantly the management of the Company was
reconstituted. Subsequently, upon further requests by the new management of the
Company, the Respondent No. 2 Bank approved fresh credit facilities. The Company
availed of all aforesaid credit facilities by giving securities in favour of the Respondent
No. 2 Bank. Eventually, despite repeated requests made by the Respondent No. 2 Bank,
the Company having failed to pay back the aforesaid credit facilities to the Respondent
No. 2 Bank within the stipulated period the Suit was filed for recovery of the
outstanding loan amount together with the accrued interest.
3 . The Petitioner states that at the relevant time the Petitioner was the Company's
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director and shareholder, the Company availed of credit facilities up to the amount of
Tk. 45 Lac from the Respondent No. 2 Bank against collateral, i.e. the Petitioner's
immovable properly appearing as the Schedule-B mortgaged property in the plaint of
the Suit. It is in that capacity and status that the Petitioner was impleaded in the Suit by
the Respondent No. 2 Bank.
4 . The Petitioner contends that since, however, she was no more a director or
shareholder of the Company with effect from 01.03.2006 and, accordingly, no liability
attached to her regarding the repayment of the subsequent loan amount of Tk.
5,56,56,318.08/-, the Petitioner filed an application on 21.03.2012 under Order 1, Rule
10(2) of the Code read with Section 57 of the Act praying for striking out her name
from the cause title of the plaint and also sought for deletion of the said Schedule-B
property in the plaint.
5. It is noted that the facts as asserted above bring to fore core facts and developments
that are to be extracted for an effective disposal of the Rule based on the application
both of relevant law and legal principles. Attention is drawn first to Clause 13 of the
Deed of Mortgage dated 08.09.2004 executed by the Petitioner which reads thus:
"That mortgagee Bank shall have the right to grant further and/or additional
financial accommodation to the Borrower and in that case their deed of
mortgage shall continue and subsist for further and/or additional financial
accommodation also and the mortgagee Bank shall have the right to take
necessary action for recovery of all legitimate dues on terms and conditions of
this indenture of mortgage".
6. The next fact of certain substantive consequences is the Petitioner's resignation from
the Board of Directors of the Company, the liquidation of her shareholding in that
Company with effect from 01.03.2006 as evident from both Form-XII Particulars of
Directors etc. and Schedule-X Annual Summary of Share Capital and list of shareholder
Directors and the Sanction Advice of the Respondent No. 2 Bank dated 25.11.2008,
inter alia, as pertaining to approval for release of the Petitioner's mortgaged property
specifically identified thus:
"1700 s.ft. Apartment No. 8/B, at Walsow Tower along with proportionate share
of 0.30 decimal land at Municipality Holding: 21-23, Kazi Nazrul Islam Avenue,
Dhaka valuing Tk. 35.00 lac as per your opinion and Tk. 25.00 lac as estimated
by the Bank. The property stands in the name of Ms. Sultana F. Nahar, mother
of the Managing Director (Existing Collateral) ".
7. Such release is contemplated in the Sanction Advice to take place after completion of
the mortgage formalities of the "new property".
8. Certain features of the Sanction Advice of 25.11.2008 bear particular note in terms of
the attachment or not of a mortgagor's liability to the Petitioner as of 25.11.2008. First
and foremost, the Sanction Advice as its subject the "Replacement of Existing
Mortgaged Property" of the Petitioner by accepting as collateral the property of yet
another mortgagor. In that regard, a contemplation as to the release of the Petitioner's
property, upon completion of "mortgage formalities pertaining to the new property" as
evident in Clause 'C' of the Advice, is significant in that it not only anticipates new
facilities being granted to the Company as of that date upon new security arrangements
spelt out therein being effected but, significantly, also is declaratory of disbursal under
the new credit facility hinging on duly securing a new registered mortgage of a fully
described property in Clause 'D(4)a' leading to the automatic release, thereby, of the
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Petitioner from her mortgage liability as otherwise envisaged in the Deed of Mortgage of
08.09.2004. The above referred provision in Clause 'D(4)a)' of the Sanction Advice as
identities the collateral to secure the new credit facility for case of reference reads thus:
"1743 s.ft. (including common space) apartment # C-2(2" Floor), at plot No.
27/A, Rood No. 18 Sector No. 3, Uttara Model Town. Dhaka valuing Tk. 73.00
lac (branch estimation) and Tk. 85.00 lac (market value). The property stand in
the name of Mrs. Nilufar Yasmin (3" party mortgagor)."
"The property documents along with original Title deeds and necessary
mortgage papers will be vetted by the legal Adviser. The Mortgagor will execute
personal Guarantee, Mortgage Deed along with the registered Irrevocable
General Power of Attorney (if not executed earlier) empowering ABBL, Motijheel
Branch, to sell the mortgaged property to be completed before disbursement of
the credit facility."
(Emphasis provided by this Court).
9 . It has not escaped this Court's attention further that in paragraph 5 of the plaint
lodged before the Artha Rin Adalat the new credit arrangement so struck by and
between the respondent No. 2 Bank and the company during a period after the
Petitioner's departure from the Company and the liquidation of her shares is aptly
described as "a separate deal" which in this Court's opinion bears significant legal
consequence in the facts and circumstances.
10. The Petitioner contending, therefore, in the above facts and circumstances that her
liability to pay the alleged loan money otherwise emanating from the Company's failure
to meet its liability under the subsequently extended credit facility, as is the subject
matter of Artha Rin Case No. 104 of 2011, having lawfully ceased to exist with effect
from 01.03.2006, it remained incumbent upon the Adalat on receipt of her application
filed on 21.03.2012 invoking Order, 1, Rule 10(2) of the Code read with Section 57 of
the Act praying for her name to be struck out of the case proceedings to be disposed of
favorably.
1 1 . The Adalat having instead rejected the application and held in abeyance a firm
decision upon a substantive consideration of the Bank's case on merit, the Petitioner
contends that the Adalat, so acted without lawful authority and without the benefit of
the application of judicial mind, thereby, prejudicing the Petitioner irreparably. These
facts asserted by the Petitioner constraining her to file this Application are preliminarily
argued away by the Respondents, as was indeed done through a written objection
submitted to the Adalat on 04.06.2012 in response to the application of 21.03.2012,
that the Petitioner having in her application raised disputed questions of fact those
could not, therefore, be finally disposed of with a favorable disposal of that application
barring evidence being adduced in relation to the same during substantive hearing of
the Suit itself. That argument is notably carried through into these proceedings by the
Respondent Bank in an Affidavit-in-Opposition in elaborating further the Bank's adopted
stance that by dint of the presence of the disputed questions of fact in the application of
21.03.2012 along with questions of law being raised therein the Petitioner remains a
necessary party in the Artha Rin proceedings up until the final disposal of the Suit.
12. The Petitioner's ostensible status, therefore, as a necessary party from the Bank's
perspective is as one whose presence is both enjoined by law or in whose absence no
effective decree can be passed. This is substantiated on the ground that the overdraft
and revolving Bank guarantee facilities as initially granted in favour of the Company and
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secured, inter alia, by way of the registered mortgage of the Petitioner's property,
continue to be so secured to the extent that the said facilities still remain unadjusted
even beyond the Petitioner's effective departure from the Company on 01.03.2006 and
notwithstanding the express declaration in the Sanction Advice on 25.11.2008 of
granting a further credit line to the Company secured, inder alia, by the "replacement of
existing mortgaged property" that the Petitioner still remains liable to the extent that
such initial facility remains unadjusted by operation of the express provisions of Clause
13 of the Deed of Mortgage of 08.09.2004. These provisions are submitted to have an
overreach beyond the fact of the Petitioner's departure from the Company in liquidation
of shares therein and the express premise of the Sanction Advice itself of extended
reedit facility secured afresh by a replacement mortgage provided by another individual.
Such continuing effect of Clause 13, thereby, negating any notion of a redemption of
mortgage by the Petitioner up until satisfactory repayment of the loan availed of in
relation to that mortgage and the factual admitted reality of the Bank's failure wholly to
secure the extended credit facility of 2008 by a fresh mortgage remains the sheet
anchor of the Respondent Bank's case before us.
13. Hence the declaration in the Affidavit-in-Opposition that since "no mortgage has
been created over the two (replacement) properties and consequently, the instant
mortgage of the petitioner has not been released and therefore the respective sanction
term has now no bearing at all and the Petitioner in all material times shall be
responsible for the liability of the Defendant No. 1 with this Respondent". (Clarification
provided by this Courts).
14. Based on these grounds the Respondent now prays for this Rule to be discharged.
15. Heard the Learned Advocates for the Petitioner and the Respondent No. 2, perused
the Writ Petition, the Affidavit-in-Opposition and supplementary Affidavits filed on
behalf of the Respondent No. 2 and the annexure.
16. The core argument of the Petitioner in justifying the issuance of the Rule Nisi was
aptly placed at the very initial stages by the learned Advocate Ms. Nasima K. Hakim in
that a mortgagor's liability must necessarily be coextensive with that of a loan
arrangement and the assumption of such liability has to be predicated on express
consent given by the mortgagor. Referring to the Sanction Advice of 25.11.2008 as
being in existence at a point in time during which the Petitioner had no legal capacity
either as a director or a shareholder of the Company to enter into the renegotiated loan
arrangement of November 2008, Ms. Hakim submits that the Petitioner necessarily
remains released of all liability both with regard to any persisting credit facility
remaining unadjusted as well as regards the November 2008 arrangement struck
between the Company and the Respondent Bank.
1 7 . That line of argument, this Court finds, would lead any court to a preliminary
enquiry at least of the Petitioner's status vis-Ã -vis the Company and the Bank on
material dates. That exercise would entail the need to enquire beyond the mere issue of
redemption in general to the more particular issues of a possible motivation of a
contract operating in law to discharge the initial mortgagor not privy by consent or
otherwise to a renegotiated credit arrangement and indeed further the law's perceptions
of the relative rights and interests of a mortgagor and a mortgagee under such altered
circumstances. This Court finds that to be an exercise that the Artha Rin Adalat appears
not to have undertaken beyond the alleged hurdle of probing into the disputed
questions of fact. It was more an intensive enquiry into the law that was required of the
Artha Rin Adalat on being seized of the application under Order 1, Rule 10(2) of

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21.02.2012 and to dispose of it immediately. Even without reference to this particular
fact, the invocation of Order 1, Rule 10(2) for striking out a party's name in itself
reflects an urgency the significance of which ought not to have been lost on the Adalat.
It is this Court's reading of this provision of the Code that the very act of adding or
striking out a party to any proceeding is anticipatory of the making of a decree.
Therefore, by its very nature the surgical exercise of adding or striking out a party has
to be proactive of arriving at any substantive finding leading to a decree in preference
to being woven into the substantive proceedings leading to the making of the decree.
To ignore that would be to introduce a fallacy as spelt out in Abdul Sac v. Sundara
Mudaliar reported in AIR 1930 Madras 817 given that at the disposal stage the court
remains limited in its option to fully strike out a party given the inevitable choice of
either decreeing the case against such a party or, in the alternative, dismissing it
against him. That would lead, the court aptly observed, to the paradoxical situation
"that a person who is held at the trial of the suit not to be a proper party to the suit
remains still a party to the suit". Resultantly such a person is left in a precarious and
worse position than someone in respect of whom the court may have resorted to the
correct procedure of striking out at the outset or the earliest opportunity.
18. That is a conundrum this Court finds, that the Adalat could have well avoided but
clearly opted not to. By that argument alone the non-application of the judicial mind by
the Adalat is ground enough for a favorable disposal of this Rule as prayed for by the
Petitioner as this Court is indeed of mind to do. But this Court in disposing of this Rule
in Certiorari is obliged to undertake the exercise by default as ought to have been done
by the Adalat itself in additionally answering the questions of law that are raised by the
Petitioner both in the application of 21.03.2012 and in this Writ in Certiorari.
19. The learned Advocate for the petitioner Mr. Hassan M.S. Azim has carried forward
the notion introduced by Ms. Hakim of the coextensive nature of a mortgagor's liability
vis-Ã -vis any given loan arrangement for any kind of liability from the same to ensue
and as bolstered by express consent. In this regard, Mr. Azim has argued that the fact
of a novation of that arrangement behind the mortgagor's bank would operate to
discharge the mortgagor of all liability in law. Mr. Azim has referred, in particular, to
the judgment in Motilal Ramkumar vs. Akbarbhai Fakhruddin reported in AIR 1939
Bombay 309 and has required of this Court to examine the very nature of a mortgage
arrangement by drawing on an analogy of a surety's relationship to a creditor under a
guarantee provided. In that regard this Court's attention is drawn to an explanation in
the Halsbury's Law of England relying on which the court in the Motilal Ramkumar Case
found on the position of a surety with regard to a contract that is strictissimi juris.
Halsbury's elaborates on this notion of strictissimi juris in this context thus:
"The surety is regarded as a favored debtor. He is entitled, as such, to insist
upon a rigid adherence to the terms of his (the surety's) obligation by the
creditor, and cannot be made liable for more than he has undertaken; for,
though his contract is not, like that of an insurer, uberrima fidei, it is one
strictissimi juris."
20. It merits noting here that the learned Advocate for the Respondent Bank Mr. Najmul
Karim has argued against the drawing of such analogy. The Bank views such analogy as
being inherently misconceived and Mr. Karim argues that a guarantee provided by a
surety and a mortgage are governed by distinct statutory regimes dominated by the
Contract Act, 1872 and the Transfer of Property Act, 1882 respectively. Predicated on
that assertion it is submitted that the notions of novation and discharge as inherently
govern the working of a guarantee are, not therefore, automatically attracted to a
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mortgage.
21. The notion of strictissimi juris as understood by this Court highlights in general the
fact that when a person receives an advantage under any arrangement he is bound to
conform strictly to the right given him and that in case of a dispute it will be strictly
constructed against him and in favour of the party extending the benefit.
22. This Court notes further that a contract of guarantee is indeed one to be construed
strictissimi juris has been spelt out in a catena of cases decided both in this jurisdiction
and otherwise as cited extensively by both Mr. Azim and Ms. Hakim. Perhaps the most
succinct enunciation of that principle comes across in the following finding of the
Madras High Court in S. Perumal Reddiar vs. Bank of Baroda reported in AIR 1981
Madras 180 at paragraph 46, page 192 thus:
"The true rule, applicable to the contract of guarantee is that if there is any
agreement between the principals with reference to the contract guaranteed, the
surety ought to be consulted. If the alteration is to the disadvantage of the
surety, or its unsubstantial nature is not self-evident, the surety can claim to be
discharged. The contract of the surety should not be altered without his consent
and the creditor should not undertake to alter the contract and then say, that
though the contract had been altered, it was not done to the disadvantage of
the surety, especially when such alterations were made with respect to material
particulars regarding the contract of guarantee affecting the surety."
23. This finding which this Court finds as the true constriction of the principle of the
strictissimi juris has found endorsement otherwise, for example, much earlier in
Pratapsing vs. Keshavlal reported in AIR 1935 Privy Council 21 as was relied upon
substantially in this very Court's Judgment in The Oriental Bank Ltd. vs. Federal
Insurance Co. Ltd. & Anr. reported in 2011 BLD (HCD) 31, 592.
2 4 . At this juncture this Court deems it prudent to respond to the Respondent's
objection as to the analogy drawn by the learned Advocates for the Petitioner between a
contract of guarantee provided by a surety and a mortgage in terms of the need for
strict adherence to the terms of both. In this regard, this Court finds no reason to hold
that a strict construction of any instrument concerning transactions creating the rights in
question in favour of one against the other party should necessary be a matter confined
exclusively to a contractual relationship between a surety and a creditor in a guarantee
arrangement. In the American jurisdiction, notably, there are indeed instances of cases
that attest to the view clearly that mortgages are also equally representative of
contractual arrangements as attract the concept of strictissimi juris and are, therefore,
not necessarily created, extended or modified by analogy or a fine tune of language
{Chase Manhattan Mortgage Corp. vs. Suarez No. 99-332(732 So. Ed. 394(1999).
District Court of Appeal of Florida, Third District, March 24, 1999 (following In Re B.
Schrewe, 108 B.R. 116 (E.D. La 1989)). This Court remains wholly in agreement with
this view and adopts the same for the purpose of the instant case.
2 5 . The US Courts in this regard further draw significantly a fine distinction in
constructing a contract strictissimi juris in terms of the identity and capacity of the
individual or entity providing, for example, a guarantee, a mode of construction which
this Court holds can, by extension, by applicable to a mortgage. These Courts notably
lean in favour of readily protecting the rights and interests of a volunteer individual
surety, i.e. contract suretyship or, by extension, a mortgage entered into by an
individual through friendship or other similar motives in preference to contracts made

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by corporations organized for the express purpose of acting as surety for a
consideration (Matchett v. Winona Assembly Summer Schools Association, 113 N.H.I.
Supreme Court of Indiana). This is because in the latter case the contractual
arrangements as Surety or otherwise entered into by a corporation are constructed as
contracts of indemnity, rather than as that of providing a guarantee, in keeping with
their business which is essentially that of insurance. Considered in that light, the
Petitioner in the present case stands, in this Court's view, in the position of a volunteer
individual who by an obvious motive of relationship with another director or other
directors in the Company on the material date of 08.09.2004 executed the Deed of
Mortgage. Even if it can be said that the Petitioner in guaranteeing the credit facility at
the time through the mortgage was not merely acting as a mortgagor but seeking to
derive benefit for herself as a shareholder in promoting an enterprise in which she was
interested, it cannot be ignored that she shed that garb of an interested party to all
intents and purposes from 01.03.2006 onwards when she positively ceased to be either
a director of or a shareholder in the Company. Mr. Hassan M.S. Azim has satisfactorily
argued that, thereafter, the Petitioner assumed the status of a mere volunteer individual
mortgagor retaining no interest in the Company at all and deriving no benefit from the
credit facility so secured by her and availed of by the Company, but that too only up
until 25.11.2008 when "a separate deal" was executed between the Bank and the
Company raising the spectrum of a novation of contract as was the product of an
exercise to which the Petitioner was not privy at all. Indeed, by the Bank's own
admission the Sanction Advice of 25.11.2008 envisaged a separate and new credit
facility to be granted to the Company with disbursal of the facility conditional upon a
stringent express requirement as to the obtaining of a new mortgage of a designated
property in replacement of the mortgage earlier provided by the Petitioner of property
reflected in the Schedule-B of the plaint of the Suit. Mr. Azim aptly points out that the
Sanction Advice of November, 2008 remains an admitted document by the terms of the
plaint itself.
26. It is noted further that while the Bank clearly has owned up to its negligence in
extending the credit facility under the Advice of November, 2008 without notably
securing the alternative mortgage as contemplated therein, the Petitioner also
acknowledges that an actual release of the mortgage property in terms of a declaration
emanating from the Bank or of a formal redemption of the mortgage never materialized
post-25.11.2008.
2 7 . It is in that legal vacuum that the Petitioner senses the menacing presence of
Clause 13 of the Deed of Mortgage of 2004 that is now so heavily relied upon by the
Respondent Bank to establish a continuing liability arising from the Deed in terms of
satisfaction of liabilities under a series of both pre-and post-November 2008 credit
facilities remaining outstanding.
28. In this regard, Mr. Hassan M.S. Azim points out that a mortgage is otherwise an
enforceable and contingent interest and not an absolute one dependent on underlying
circumstances should, therefore, by operation of law itself the enforcement of a
mortgage become an impossibility then there remains no cause to rely on an argument
of non-execution of a redemption deed. Taking a cue from the principle of strictissimi
juris restricting the beneficiary of such contractual arrangement to derive benefit, if at
all, by strict adherence to the express terms of such arrangement, Mr. Azim has relied
on the earlier referred decision in the Pratap Singh and the Oriental Bank Cases which
endorse the view that any variation to an underlying credit arrangement between a
creditor and a borrower as struck unbeknown to a surety or, by extension, a mortgagor,
and as would otherwise compel the latter to do something wholly different from his or
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her initial contractual undertaking, would operate automatically to discharge him/her by
operation of law as best reflected variously in Sections 133, 135 and 139 of the
Contract Act (See also, Venkamma v. Sanyasayya reported in AIR 1938 Madras 422).
2 9 . That notion of automatic discharge becomes more compelling and, therefore,
meriting this Court's consideration when viewed from the Petitioner's perspective
focusing mainly on the novation of contract and the admitted negligence of the Bank to
follow up duty and strictly on the Sanction Advice of November, 2008 but instead its
attempts to impose a liability on the Petitioner resultantly by default. That issue of the
convergence of novation and negligence cumulatively operating to discharge someone
in the position of what this Court terms a "volunteer individual mortgagor" as the
Petitioner is best explained in the judgment in Indian Bank, Madras vs. S.
Krishnaswamy reported in AIR 1990 Madras 115 at paragraph 12, pages 121-122. It
suffices to note here that the court in that case relying in turn on the Judgment in
Commercial Bank of Tasmania v. Jones, reported in (1893) AC 313 categorically found.
"that under Section 62 of the Contract Act, if the parties to a contract agree to
substitute a new contract for it, or to rescind or alter it the original contract
need not be performed."
30. In subscribing to that finding this Court finds categorically that the action of the
Bank in the issuance of the Sanction Advice of 25.11.2008 in the terms as admitted and
beyond the period that the Petitioner ceased to be a director of and shareholder in the
Company operated to release the Petitioner from any further performance under the
Deed of Mortgage of 08.09.2004, thereby, extinguishing any remedy that the Bank
would otherwise have against the Petitioner mortgagor. In so holding, this Court has
not lost sight of the fact that the Petitioner remained a volunteer individual mortgagor
up until November, 2008 and merits the favorable consideration due in this regard.
Such is the case given further the express declaration in the Sanction Advice authorizing
the release of the Petitioner's property from mortgage liability and, thereafter, initiating
a separate credit arrangement based on fresh security expressly contemplated to be
taken but which admittedly never materialized. That in turn presents the Respondent
Bank in a rather poor light in this Court's view given not only the admitted negligence
and oversight in securing the fresh replacement mortgage but, nevertheless, continuing
to disburse vast amounts to the Company under ostensible authority of the Sanction
Advice of 2008, thereby, allowing the Company to accumulate a liability of over Taka
five Crore as is the subject matter of the Artha Rin Suit No. 104 of 2011.
31. Endorsing fully the Judgments in the Indian Bank Case and Amrit Lal vs. State Bank
of Truancies, reported in MANU/SC/0001/1968 : AIR 1968 SC 1432 it is now held by
this Court that the creditor Bank having operated fully to its detriment by negligence,
willful or otherwise, has to an equal extent forfeited its rights to proceed against the
Petitioner erstwhile mortgagor.
32. The exercise as undertaken above by this Court in default of the one as should aptly
have been embarked upon by the Adalat itself has resultantly had the invariable and
inevitable. The exercise as undertaken above by this Court in default of the one as
should aptly have been effect of convincing this Court that the Petitioner's application of
21.03.2013 under Order 1, Rule 10(2) of the Code simply asked the Adalat to do the
obvious. This Court finds, accordingly, that in failing to respond duly and favorably to
that request and prayer the Adalat by the Impugned Order No. 16 24.06.2012 in
rejecting the application not only arrived at a wrong decision but that in doing so
adversely affected the rights and interests of the Petitioner. That such Impugned Order

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must now aptly be struck down as being made without lawful authority and is of no
legal effect is borne out by the Appellate Division's Judgment in Sonali Bank v. Md.
Sirajul Hoque Chowdhury reported in 9 MLR (AD) 2004, 270. The Adalat is reminded
here that unless such a party in a Artha Rin struck off at the earliest then there remains
the risk of such a person being dragged unnecessarily into the substantive proceedings
creating the fallacy of the case being either decreed or dismissed visa-vis such a party.
That, as this Court has already found above, is a scenario and outcome that is highly
undesirable and to be avoided at all cost. Premised on the above findings and
observations this Court, accordingly, finds that the Impugned Order No. 1 Adalat
rejecting the Petitioner's application for striking off her name from the cause title of the
plaint is indeed without lawful authority and is of no legal effect.
33. Considering the above this Court finds merit in the Application and substance in the
Rule issued.
34. In the result the Rule is made absolute.
35. There is no Order as to costs.
3 6 . The Adalat is accordingly, hereby, directed to proceed with the Suit but after
striking out the name of the Petitioner as Defendant No. 2 from the cause title of the
plaint in Artha Rin Suit No. 104 of 2001 forthwith and definitely no later than 2(two)
weeks from the date of receipt of certified copy of this Judgement and Order.
37. Communicate this Judgment and Order on the Respondent No. 1, Artha Rin Adalat,
3rd Court, Dhaka at once.
Mahmudul Hoque, J.
I agree.
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