Money Loan Court focuses more on recovery
Thursday, 13 August 2009
Md. Ershad
Ullah and Md Asikuzzaman
ARTHA Rin Adalat or Money Loan Court was established under a law in 1990 to adjudicate the cases relating to the recovery of loans of financial institutions. Earlier, the cases for loan recovery were the jurisdiction of the general civil courts. To strengthen the Artha Rin Adalat (Money Loan Court), the law -- a new Artha Rin Adalat Ain -- was enacted in 2003. Under the law specialised courts for the settlement of disputes between the borrowers and the lenders were established in the premises of the District Judge's Court. The Courts of Joint District Judge established under the new law have overriding powers on other laws of the land. This means, in case of conflict with any other law in force, the provisions of the new law relating to money loan shall prevail.
Under the provisions of the Act, subordinate judges are appointed judges of the money loan courts in consultation with the supreme court. The law requires filing of all suits for realisation of the loan of the financial institutions, banks, investment corporation, house building finance corporation, leasing companies and non-banking financial institutions, constituted under the provisions of Financial Institutions Act 1993, with the money loan courts for trial. A civil court, the money loan court has all the powers of the civil court.
The special courts were necessitated as the civil courts are always burdened with too many cases. The law of 2003 was amended in 2004 to strengthen the provisions for loan recovery. It helps the financial institutions recover their claims through litigation. But the borrowers are not too happy with the provisions of the law, particularly the rigid procedures followed by the Money Loan Court. The law does not allow a borrower to claim compensation on suits filed by a bank or other lending institutions or to run compensation suit simultaneously. They favour the abolition of various provisions of the law to make it more balanced.
Lawyers criticise the law, saying it is unfair against the borrower.
At the trial stage, the law does not allow taking the matter to superior court until the borrower repays 50 per cent of claimed or decretal amount even if the order is totally misleading. But the bank officials are not required to pay any amount in advance to the higher court. This bears out a disparity of law and justice. The law allows a borrower or the owner of an industry to be jailed to compel him to repay the bank loan. The provisions create grievances among the borrowers or entrepreneurs.
But a positive provision of the law is that it permits alternative dispute resolution (ADR), apparently more successful than the adversarial trial system of the special court.
The idea of money court is admittedly unique and helpful for developing the country's legal system. But the governing law contains anomalies and hence needs amendment.
The writers are lawyers
Ullah and Md Asikuzzaman
ARTHA Rin Adalat or Money Loan Court was established under a law in 1990 to adjudicate the cases relating to the recovery of loans of financial institutions. Earlier, the cases for loan recovery were the jurisdiction of the general civil courts. To strengthen the Artha Rin Adalat (Money Loan Court), the law -- a new Artha Rin Adalat Ain -- was enacted in 2003. Under the law specialised courts for the settlement of disputes between the borrowers and the lenders were established in the premises of the District Judge's Court. The Courts of Joint District Judge established under the new law have overriding powers on other laws of the land. This means, in case of conflict with any other law in force, the provisions of the new law relating to money loan shall prevail.
Under the provisions of the Act, subordinate judges are appointed judges of the money loan courts in consultation with the supreme court. The law requires filing of all suits for realisation of the loan of the financial institutions, banks, investment corporation, house building finance corporation, leasing companies and non-banking financial institutions, constituted under the provisions of Financial Institutions Act 1993, with the money loan courts for trial. A civil court, the money loan court has all the powers of the civil court.
The special courts were necessitated as the civil courts are always burdened with too many cases. The law of 2003 was amended in 2004 to strengthen the provisions for loan recovery. It helps the financial institutions recover their claims through litigation. But the borrowers are not too happy with the provisions of the law, particularly the rigid procedures followed by the Money Loan Court. The law does not allow a borrower to claim compensation on suits filed by a bank or other lending institutions or to run compensation suit simultaneously. They favour the abolition of various provisions of the law to make it more balanced.
Lawyers criticise the law, saying it is unfair against the borrower.
At the trial stage, the law does not allow taking the matter to superior court until the borrower repays 50 per cent of claimed or decretal amount even if the order is totally misleading. But the bank officials are not required to pay any amount in advance to the higher court. This bears out a disparity of law and justice. The law allows a borrower or the owner of an industry to be jailed to compel him to repay the bank loan. The provisions create grievances among the borrowers or entrepreneurs.
But a positive provision of the law is that it permits alternative dispute resolution (ADR), apparently more successful than the adversarial trial system of the special court.
The idea of money court is admittedly unique and helpful for developing the country's legal system. But the governing law contains anomalies and hence needs amendment.
The writers are lawyers