SONALI BANK Vs. RANA OIL MILL

JUDGEMENT

(1.) This appeal at the instance of the plaintiffs is directed against the judgment dated 31-1-1991 and decree dated 23-2-1991 passed by Mr. Abdur Razzak, Subordinate Judge, Artha Rin Adalat, Feni, in Artha Rin Money Suit No.1 of 1990 decreeing the suit in part for an amount of Taka 5,67,540.00.

(2.) The plaintiff, Sonali Bank, brought this suit for recovery of Taka 22, 85,314.30 against the defendants for the amount of loan granted to them with interest accrued thereon as on 26-5-90 on the facts, in short, that, the defendant No. 2 made an application for loan for setting up Rana Oil Mills, defendant No.1, under 3rd International Development Agency (IDA) Credit. The Bank made feasibility report by their expert committee of the proposed project on the application of the defendant No. 2 and found the project, the defendant No.1, viable and eligible and sanctioned the project for loan under 3rd IDA credit. The Bank advanced a sum of Taka 7,00,000.00 as capital finance and another sum of Taka 2,70,000.00 as working capital to the defendant No.1 vide their sanction letter dated 31-1-1984, Exhibit 1. The defendant No. 2 accepted the sanction letter containing various terms and conditions by signing the same and took the loan placing his and his wifes (defendant No.3) immovable properties under equitable mortgage and hypothecation against project machinery and equipment, stock of raw materials. etc. as security of the loan. In the sanction letter the rate of interest or capital finance was mentioned as @ 13% per annum at half yearly rest. The period of capital loan was given for a period of 7 years including 12 months grace period and the period of working capital loan was mentioned as 4.5 years including 6 months grace period. The sanction letter further contained the mode of repayment of capital finance by 12 (twelve) half yearly installments at the rate of Taka 97,314 each payable in June and December year. Repayment will start from 18 months of the date of 1st disbursement of loan. Any residue to be repaid along with last instalment. The schedule of repayments of working capital loan was by 8 half-yearly instalments @ 47,226 each payable in June and December each year, which will start from the 12 month of the date of first disbursement of Any residue to be repaid with the last instalment. The plaintiff also sanctioned a cash credit limit of Taka 3,00,000 payable from Banks own fund, against hypothecation of raw materials, stocks, etc. and equitable mortgage of immovable properties vide letter dated 1-9-1984 vide Exhibit 2, stipulating the rate of interest @ 16% per annum with penal interest upto 20%. The Exhibit 2 further binds the defendants that, the defendants will route his business through the plaintiff bank and that he will not borrow from any other bank without its prior permission. The amount of said limit of CC credit of Taka 3 lac was however renewed and enhanced to Taka 4 lac by the plaintiff vide its letter dated 1-2- 87 on the terms and conditions mentioned therein and also subject to recovery of the overdue amount of Taka 1,44,540 fallen in arrear in the units loan amount under IDA credit.

(3.) The defendant No. 2 after accepting and signing the sanction letter and mortgaging his own properties and those of his wife and executing several bonds. DP notes and other documents in favour of the bank, set up the mill in the building already constructed by the defendant at his own cost, and put the mill into operation on one shift basis. The further case of the plaintiff is that, though the cash credit limit was enhanced to Taka 4 lac and the amount was disbursed to the defendants, there were no raw materials in the mill against the said money. The plaintiff alleged that the defendant removed the loan money to different sector illegally and thereby cheated the plaintiff. It is further alleged that the defendants have defaulted in paying the instalment of both the capital finance under IDA loan as well as cash credit limit from June, 1985. The plaintiff requested the defendant to make payment. But the defendant instead of paying gave undertaking, but of no effect. The defendants asked the plaintiff to give them fresh loan of Taka 25,00,000.00 on hypothecation and pledge but as the defendants could not furnish fresh security to the bank, as such, the plaintiff could not grant the loan. The bank asked the defendants to take loan of Taka 10 lac by way of pledge but the defendants did not take it. The defendants ultimately closed down the mill. The plaintiff served legal notices on them for recovery of their money and ultimately filed the suit for an amount of Taka 22,85,314.30 including capital finance, working capital, cash credit loan and interest as on 26-5-90.