Default, recall notice and the filing clock

The Artha Rin case process in Bangladesh begins when the bank classifies the loan, serves a recall notice and decides to sue. Timing matters. Section 46 says that if the borrower fails to repay at least 10% of what fell due in the first year of the repayment schedule, 15% in the first two years or 25% in the first three, the bank must file within one year after that. A reschedule restarts this clock. For loans with a total term under three years, the trigger is recovery of less than 20%.

A late filing is reported to the bank's chief executive for disciplinary action against the officer responsible.

Where: Bank or financial institution · Time: 1-3 months · Law: s.46 Artha Rin Adalat Ain 2003; s.47 Artha Rin Adalat Ain 2003 · Documents: Sanction letter and loan agreement, Statement of account, Demand or recall notice with proof of service, Rescheduling papers, if any

Tip: Borrowers should keep every repayment receipt. A reschedule or partial payment can change both the limitation position and the final figure.

Sell the pledged or mortgaged security first

Before suing, a bank holding a pledge, lien, hypothecation or mortgage with a power of sale must sell that security, or try and fail to sell it, and credit the proceeds to the loan. The sale follows the sealed tender procedure in s.33(1)-(3) as far as possible. A sale made under this power gives the buyer good title, and the borrower's remedy for any irregularity is compensation, not undoing the sale. If the bank skips this step, the court may deduct the security's value from the decree, using a sub-registrar's valuation where needed.

Where: Bank or financial institution · Time: 1-4 months · Law: s.12(1)-(4) Artha Rin Adalat Ain 2003; s.12(6)-(8) Artha Rin Adalat Ain 2003 · Documents: Mortgage deed or hypothecation agreement, Irrevocable power of attorney to sell, Tender notice in a Bangla national daily, Valuation report

Tip: A borrower who believes the security was sold at a gross undervalue should collect evidence early. The claim is for compensation, so proof of value is everything.

Ask the District Magistrate for possession if the borrower will not hand over

To sell the security, the bank may need physical possession of a factory, flat or vehicle. It first asks the borrower in writing to surrender possession to the bank or the buyer. If the borrower refuses, the bank applies to the District Magistrate. Once satisfied that the property is mortgaged or hypothecated against the loan, the District Magistrate, or a first class magistrate he nominates, recovers possession and hands it to the bank or buyer. This is an administrative step outside the Artha Rin Adalat and is often contested.

Where: District Magistrate (Deputy Commissioner's office) · Time: 1-3 months · Law: s.12(5) Artha Rin Adalat Ain 2003; s.12(5A) Artha Rin Adalat Ain 2003 · Documents: Written request to the borrower, Application to the District Magistrate, Security documents proving the charge

File the plaint with affidavit and court fee

In the Artha Rin case process in Bangladesh, the bank files a plaint in the Artha Rin Adalat with jurisdiction, backed by an affidavit and the ad valorem court fee. The plaint must schedule the principal, ordinary and penal interest, other charges, payments received and the security held, and attach the documents relied on with a list. Third-party mortgagors and guarantors must be joined. Any decree binds them jointly and severally, but execution goes first against the principal borrower.

The total claim cannot exceed 300% of the principal (principal plus 200%), and the court will not accept a higher claim.

Where: Artha Rin Adalat · Time: 1-2 weeks · Law: s.5(1)-(2) Artha Rin Adalat Ain 2003; s.6(2), s.6(5) Artha Rin Adalat Ain 2003; s.8 Artha Rin Adalat Ain 2003; s.47 Artha Rin Adalat Ain 2003 · Documents: Plaint with supporting affidavit, Schedule of dues and securities, Loan and security documents, Board resolution or power of attorney for the bank officer, Copies for each defendant

Tip: Documents not filed with the plaint can be added later only with good cause and costs (s.8(5)), so the bank should file the full set at the start.

Summons by court process, registered post and newspaper

The bank files all process fees with the plaint. The court serves summons at the same time through its process server and by registered post with acknowledgement. The bank also files a draft newspaper advertisement. If service is not returned within 15 days, or comes back unserved, the court publishes the summons within the next 15 days in a widely circulated Bangla national daily, and a local paper if needed, at the bank's cost. Publication counts as valid service, so a borrower cannot simply avoid the process server.

Where: Artha Rin Adalat · Time: 2-6 weeks · Law: s.7(1)-(3) Artha Rin Adalat Ain 2003 · Documents: Process fees, Draft newspaper notice, Correct addresses of all defendants

Written statement within 40 days

The borrower and guarantors appear and file a written statement supported by an affidavit. They must state clearly which amounts they admit, which they dispute and why, and attach their documents. The court will not accept a written statement filed more than 40 days after appearance. It may extend the time by up to 20 more days only if the defendant pays Tk 2,000 to Tk 5,000 in costs into the treasury.

A borrower cannot claim set-off or file a counter-claim against the bank, and a separate suit by the borrower elsewhere will not stay this one.

Where: Artha Rin Adalat · Time: 40-60 days from appearance · Law: s.9 Artha Rin Adalat Ain 2003; s.10 Artha Rin Adalat Ain 2003; s.18(2)-(3) Artha Rin Adalat Ain 2003 · Documents: Written statement with affidavit, Payment receipts and bank correspondence, List of documents held by others

Tip: Missing the 40-day window usually means an ex parte decree. Diarise it from the date of first appearance, not from the next hearing.

Ex parte decree and the 10% deposit to reopen it

If the defendant is absent on a hearing date, the court decides the suit ex parte on the papers. A suit is never dismissed for the bank's default either. The court decides it on the merits from the record. A defendant can apply to set aside an ex parte decree within 30 days of the decree or of learning of it, but must deposit 10% of the decretal amount within 15 days, in cash with the bank or as security in court.

If the deposit is made, the decree is set aside automatically and the suit resumes at the earlier stage. If not, the application is dismissed.

Where: Artha Rin Adalat · Time: 30 days to apply, 15 days to deposit · Law: s.19(1)-(6) Artha Rin Adalat Ain 2003 · Documents: Application to set aside, Proof of 10% deposit (pay order, bank draft or cash receipt)

Mandatory mediation after the written statement

Once the written statement is in, the court must send the case to mediation through the parties' lawyers. Within 10 days the parties name a neutral mediator, such as another lawyer, a retired judge or a retired banker. Otherwise the court appoints one. Mediation must finish within 60 days, extendable by 30. Everything said is confidential. A settlement is recorded in writing and the court passes a decree on it, which cannot be appealed. The bank must act within its board's delegated authority, and claims above Tk 5 crore need its managing director's approval.

Where: Mediation before an agreed mediator · Time: 60-90 days · Law: s.22(1)-(11) Artha Rin Adalat Ain 2003; s.24 Artha Rin Adalat Ain 2003; s.25 Artha Rin Adalat Ain 2003 · Documents: Mediation order, Bank's delegation circular, Settlement agreement or mediator's report

Tip: A mediated settlement entitles the bank to a certificate for refund of the whole court fee (s.22(9)). This gives both sides a real incentive to negotiate instalments here.

Framing of issues, or judgment on admission

If mediation fails, the case returns to court at the point where it left. On a fixed date the judge reads the plaint and written statement and frames the issues in dispute. If the defendant has admitted the claim, or there is no real dispute of fact or law, the court can give judgment at once without a full trial. Parties can still try mediation again with the court's leave at any stage before judgment, but that does not extend the statutory time limits.

Where: Artha Rin Adalat · Time: 1-3 months · Law: s.13(1)-(4) Artha Rin Adalat Ain 2003; s.22(11) Artha Rin Adalat Ain 2003; s.23 Artha Rin Adalat Ain 2003 · Documents: Pleadings, List of issues, Any admission relied on

Evidence on affidavit and cross-examination

The affidavits filed with the plaint and written statement are substantive evidence. Witnesses, usually the bank's recovery officer and the borrower, are cross-examined on them. A party can get an adjournment of the final hearing only once. Further adjournments need Tk 1,000 to Tk 3,000 in costs paid in advance, and failure to pay leads to an ex parte disposal. Once the hearing starts it must run day to day. Partly heard cases can be adjourned only to the next working day.

Where: Artha Rin Adalat · Time: 3-12 months · Law: s.6(4) Artha Rin Adalat Ain 2003; s.14 Artha Rin Adalat Ain 2003 · Documents: Affidavits in evidence, Certified bank statements under the Bankers' Books Evidence Act 1891, Exhibits

Written arguments and judgment

Oral argument is not compulsory. Either side may file written arguments within 5 days of the close of evidence, with no reply allowed, unless the judge asks for oral submissions as well. Judgment must follow within 10 days of evidence or arguments. By statute the whole suit should be decided within 90 days of the written statement, extendable once by 30 days, or within 30 days of service where the defendant never appears. Only the judge's working days count. In practice these targets are often missed, but they let the court refuse delay.

Where: Artha Rin Adalat · Time: 1-3 months after evidence · Law: s.15 Artha Rin Adalat Ain 2003; s.16(1) Artha Rin Adalat Ain 2003; s.17 Artha Rin Adalat Ain 2003; s.48 Artha Rin Adalat Ain 2003 · Documents: Written arguments, Case law relied on

Decree, payment period and interest

The decree is final, except in a foreclosure mortgage suit, and also operates as a preliminary foreclosure decree over the mortgaged land. That becomes final the moment the land is auctioned, and the borrower then loses any right to redeem. The court orders payment within a period of up to 60 days, or allows instalments: four quarterly instalments over a year, or twelve over three years if the bank agrees. Missing one instalment makes the whole balance due. The court cannot waive lawful pre-suit interest.

Post-suit interest is 12% simple, or 16% or 18% if the borrower goes to a higher court.

Where: Artha Rin Adalat · Time: Immediate; payment window up to 60 days · Law: s.5(3)-(4) Artha Rin Adalat Ain 2003; s.16(2) Artha Rin Adalat Ain 2003; s.49 Artha Rin Adalat Ain 2003; s.50(1)-(3) Artha Rin Adalat Ain 2003 · Documents: Certified copy of judgment and decree

Tip: Before appealing, the borrower should work out the cost. The higher interest band under s.50(2) can add more to the debt than an appeal is likely to save.

Execution case within one year

If the decree is not paid, the bank files an execution case in the same Artha Rin Adalat. It must do so within one year of the decree, or of the end of any payment or instalment period. A late execution case is dismissed as time-barred. A second execution case must follow within a year of the first ending, and no new one can be filed six years after the first. Notice goes by court process, registered post and, if needed, a Bangla daily.

An appeal does not stop execution unless the higher court expressly stays it.

Where: Artha Rin Adalat · Time: Statutory target 90 days, extendable by 60; in practice 1-3 years · Law: s.26 Artha Rin Adalat Ain 2003; s.27 Artha Rin Adalat Ain 2003; s.28(1)-(4) Artha Rin Adalat Ain 2003; s.29 Artha Rin Adalat Ain 2003; s.30 Artha Rin Adalat Ain 2003; s.31 Artha Rin Adalat Ain 2003; s.37 Artha Rin Adalat Ain 2003 · Documents: Execution application, Certified decree, Schedule of property to be attached

Third-party claims and auction by sealed tender

The court attaches property and invites sealed tenders with at least 15 days' notice in a national daily, on the notice board and by beat of drum. Bidders deposit 20%, 15% or 10% of their bid, depending on its size, and pay the balance within 30, 60 or 90 days, or forfeit the deposit. The court can reject a bid the bank shows to be abnormally low. A third party claiming the property must lodge security of 10% of the decree.

A claim found to be made only to delay recovery is dismissed and the security forfeited.

Where: Artha Rin Adalat · Time: 3-12 months · Law: s.32(1)-(4) Artha Rin Adalat Ain 2003; s.33(1)-(4) Artha Rin Adalat Ain 2003; s.36 Artha Rin Adalat Ain 2003 · Documents: Tender notice, Bid security (bank draft or pay order), Claim petition and 10% security bond

Vesting, certificate of title and delivery of possession

If two rounds of tender fail, the court vests the property in the bank with possession and enjoyment until the decree is satisfied, and issues a certificate. The bank may instead ask for title itself. The court then declares the property vested in the bank and issues a certificate that serves as a title deed, free of tax and registration fee, and sends a copy to the sub-registrar. If six years pass after vesting with possession, ownership passes automatically. Before delivering possession, the court must re-check that this is the property actually mortgaged or attached.

Where: Artha Rin Adalat · Time: 3-12 months · Law: s.33(5)-(9) Artha Rin Adalat Ain 2003 · Documents: Application for vesting or title, Certificate under s.33(5) or s.33(7), Application for delivery of possession

Civil prison and recovery from third parties

To pressure payment, the court can send a judgment-debtor to civil prison for up to six months. Directors and partners can be detained for a company or firm. This usually requires at least one auction attempt first, unless none was possible. A person under 18, and heirs of a deceased borrower, cannot be detained. Paying 25% of the balance with a bond to pay the rest in 90 days secures release. Detention does not wipe out the debt.

The court can also order banks, insurers and others who owe money to the borrower to pay it into court.

Where: Civil prison · Time: Up to 6 months' detention · Law: s.34(1)-(13) Artha Rin Adalat Ain 2003; s.35 Artha Rin Adalat Ain 2003; s.36 Artha Rin Adalat Ain 2003 · Documents: Application for arrest warrant, Bond for release on 25% payment