Ctg court appoints receivership for loan defaulter’s mortgaged property

A Chattogram company named Hill View Enterprise took over Tk28 crore in loans from City Bank at various times from 2011 to 2013, but did not repay the loans on time. Consequently, the bank filed a case with Chattogram Artha Rin Adalat in 2016 to recover the debt owed them.

The company mortgaged land including a 10-storey building against the loan while it was earning Tk50 lakh from the building every month. When the bank drew the court's attention to the fact that Hill View was earning money from the mortgaged property without paying back the loan, the court ordered the appointment of a receivership for the mortgaged property.

Chattogram Artha Rin Adalat Judge (Joint District Judge) Mozahidur Rahman issued the order on Tuesday. 

The order states that the receiver will be able to collect the income from the mortgaged property and keep its accounts, and perform the necessary functions for the management and maintenance of the property until the case is settled.

The receiver cannot terminate any tenant's contract on this property without the prior permission of the court and may not sack any staff employed by the mortgagor. The plaintiff bank will maintain the income and expenditure by opening a savings account for the scheduled assets.

According to the court, Hill View Enterprise started business in 2003. The company buys and sells steel, scrap, and chemical products. The company took a loan from the City Bank between 2011 and 2013 to purchase goods. But the company did not repay the loan installment within the stipulated time, and in 2014 the loan was rescheduled for two years by the concerned bank. When the company did not repay the loan even within that time period, the bank filed a case to recover it in August 2016.

During the course of the case, on 21 January 2020, the bank authorities applied for the transfer of the mortgaged property including the multi-storey building, to the lender. However, the respondent objected to this application.

The court order stated the respondent has taken a loan from the plaintiff and admitted liability but is not willing to repay it. Rokeya Begum, proprietor of Hill View Enterprise, and her husband Ahmed Lal Miah, were named  defendants in the case filed by the bank. 

The court also said, according to the mortgage document signed between the plaintiff and the defendant, the plaintiff will have the right to sell the mortgaged property if the defendant fails to repay the loan. Section 69 (a) of the Transfer of Property Act provides for the appointment of a receiver on the application of a mortgagee entitled to sell the mortgaged property. 

The mortgage property in this case is a commercial building. Although the defendant earned a large sum of money from the rent of this building, they did not show any willingness to repay the loan. In view of all these facts, it is reasonable and fair to appoint a receiver for the mortgaged property in accordance with the law, said the court. 

Consequently, Nazmul Ahsan Khan Alamgir, government pleader for Chattogram district, was appointed receiver of the scheduled property till the case is settled.

Advocate Mohammad Arif Uddin represented the plaintiff, while the defendant's lawyer was Subal Chandra Bhowmik.

City Bank officials or the lawyers involved in the case could not be reached for comment regarding the verdict.

People experienced in cases filed for loan defaults welcomed the verdict and said the court's order was exceptional and helpful for recovering loans.

Abul Hasan Shahabuddin, a veteran lawyer handling cases in the Arhta Rin Adalat, said "The court's verdict was very beautiful, exceptional and timely. Earlier we had to wait a long time to recover loans after resolving cases in Artha Rin Adalat. But if the income of the mortgaged property against the loan can be recovered from the borrower with such an order, the means to recover such loans will be easier."