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SC stays HC order over cheque dishonour case

Published : Friday, 2 December, 2022 at 12:00 AM  Count : 261

The Appellate Division of the Supreme Court on Thursday stayed the High Court order that barred banks and financial institutions from filing any case for loan defaulter against any person over cheque dishonour.
A five-member bench of

the Appellate Division headed by Chief Justice Hasan Foyez Siddiqui stayed the HC order for two months following a petition filed by BRACK Bank.
The apex court, however, asked the BRAC Bank to file a regular appeal petition against the HC verdict within two months. It also upheld the bail order granted to the borrower by the High Court.
Attorney General AM Amin Uddin who appeared on behalf of the BRAC Bank said they will file a regular appeal petition against the High Court verdict.
In a verdict, the High Court (HC) on November 23 said that authorities concerned of banks or financial institutions (FI) could not file cheque dishonour cases against any person for defaulted loans.
The HC bench also said that a bank or financial institution could file cases against responsible persons before the Artha Rin Adalat only in the manner described in the Artha Rin Adalat Act, 2003 in order to recovery of the loans.
The HC verdict also stayed all proceedings of those cheque dishonour cases, which were filed by banks or financial institutions, currently pending in the courts across the country.
The HC verdict also directed the Bangladesh Bank to issue a guideline for keeping insurance coverage against all loans granted by banks and financial institutions. The single bench of the HC comprised of Justice Md Ashraful Kamal delivered the verdict after final hearing on an appeal filed over a cheque dishonour case of the BRAC Bank.
In its verdict, the HC bench said, "The cheque that the bank takes against the loan is a security, not a negotiable instrument. A cheque dishonour case cannot be filed against the cheque taken as security. Taking a blank cheque against a loan is illegal. Banks and financial institutions have been doing this illegal activity for a long time." It also observed that a loan from a bank or financial institution is taken through an agreement. Some corrupt and unscrupulous officers of the bank misuse cheque for their interests and to implement their hidden agendas.

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