Reading of Bankruptcy Act should be section specific

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High Court Division :
(Special Original Jurisdiction)
Md Ashfaqul Islam J
Md Jahangir
Hossain J
Wahiduzzaman (Md) ….
………………..Petitioner
vs
Additional District Judge, Bankruptcy Court, Dhaka and others …………….Respondents*
Judgment January 19th, 2015
Bankruptcy Act (X of 1997)
Sections 46(5) and 110
Judgment January 19th, 2015.
The Court below though tried to tread within the purview of Section 110 of the Act but ultimately gave a decision under Section 46(5) of the Act which to our mind is not in keeping under the scheme of law governing the issue and thus bereft of any legal consideration. The decision should have been given in strict compliance and adherence to Section 110 of the Act itself. Since both the sections have a different connotation distinct in nature. …………(14)
Md Obaidur Rahman Mostafa with Md Mozammel Haque, Advocates-For the Petitioner.
Ali Imam Khaled Rahim, Advocate-For the Respondent No.3.
Md Kamruzzmnan, Advocate-For Proforma Respondent No.4.
Judgment
Md Ashfaqul Islam J: At the instance of the petitioner Md Wahiduzzaman, this Rule Nisi was issued under the following terms:
“Let a Rule Nisi be issued calling upon the respondents to show cause as to why the impugned order (Annexure-B) dated 21-8-2013 in order No. 88, in Bankruptcy case No. 16 of 2000 passed by Additional District Judge and Judge of Bankruptcy Court, Dhaka, the respondent No.1 allowing the application made by the respondent No.2, approving the respondent No. 3 to award the auctioned property knocking down the proposal of the proforma respondent No. 5 (the receiver) who recommended the petitioner as successful bidder of the legally held auction should not be declared illegal and without any lawful authority and is of no legal effect and as to why the impugned order should not be set-aside as have been passed illegally and arbitrarily in applying misleading provision of law.
2. The background leading lo the Rule, in short, is that the petitioner being attracted by an advertisement published by the proforma respondent No.5 ACNABIN who was appointed as receiver by the Bankruptcy Court, participated in the bid and became the highest bidder which was forwarded to the respondent No.1 Bankruptcy Court for its approval. The petitioner was recommended as the highest bidder who intended to purchase the land in auction with an amount of Taka 1 crore. The land in question is 16.72 decimal as contained in mortgage schedule 1 (Kha) (Annexures-A and A-1).
3. The proforma respondent No.4 Agrani Bank prayed for a declaration to declare the respondent No. 2 as bankrupt on 6-3-2000 in Bankruptcy case No. 16 of 2000 in the Bankruptcy Court, Dhaka. The said Court by its order dated 13-9-2000 declared the respondent No.2 as bankrupt as per provision of Section 30(ka) and accordingly appointed the proforma respondent No. 5 ACNABIN Chartered Accountant as receiver. Since thereafter respondent No.2 M/s Joy Silk Mills Ltd. did not file any prayer for redemption as a result he was declared as un-discharged Bankrupt on 24-10-2000 under Section 31(2) of the Bankruptcy Act, 1997 and the property was entrusted with the proforma respondent No.5, the receiver by the Court. Thereafter the said respondent No. 5 (receiver) in observance of all the procedures arranged for auction under Section 71 (ka) of the Act by publishing advertisement in the Daily Newspapers twice and consequently auction was held where the petitioner being the highest bidder put quotation to pay Taka 1 (one) crore for the auctioned property and the respondent No.5 after considering the auction bid recommended that the auction quoted price was consistent with the present market rate and prayed for approval of the said auction sale before the Bankruptcy Court and for awarding the bid in the name of the petitioner.
4. The respondent No.2 thereafter filed an application before the respondent No.1 under Section 110 of the Act for exercising its inherent jurisdiction with a prayer for approval of the offer of the stranger in this bankruptcy matter.
The present respondent No.3 Shafiur Rahman Chowdhury who has shown interest to buy the auction property on payment of Taka 1 Crore 10 lakh and as a result the respondent No.1 in violation of mandatory provision of law allowed the application of the respondent No. 2 in deciding the same in the light of section 46(5) of the said Act and ordered the auction property to be awarded to respondent No.3 (Annexures B and B(l). It is at this stage the petitioner moved this Division and obtained the present Rule and order of stay.
5. Mr Obaidur Rahman Mostafa, the learned counsel appearing for the petitioner after placing the petition, the order impugned against and other materials on record mainly submits that the respondent No.1 Bankruptcy Court declared the respondent No. 1 as bankrupt in the year 2000 and respondent No.2 got ample time to apply under Section 46 of the said Act i.e. for obtaining order of reorganization from the respondent No. 1. But without exhausting proper procedure provided in the Bankruptcy Act, 1997 all of a sudden in 2013 after a lapse of almost 12 years he applied to respondent No.1 under Section 110 of the said Act which is malafide and the allowing of the application filed by the respondent No.2 in the light of Section 46(5) of the Act having been misleading should have been declared illegal by the Court below.
6. Substantiating his argument the learned counsel further submits that the application though filed by respondent No.2 under Section 110 of Bankruptcy Act but in the prayer portion of the application it has been clearly mentioned that relief is deemed to have been sought under Section 46 of the Act which relates to reorganization within the meaning of said section.
The Court below ignoring the said aspect misdirected itself in holding that the application filed by the respondent No. 2 is competent and accepted the offer of respondent No.3 Shafiur Rahman Chowdhury which is without any lawful authority having no legal effect.
7. Mr Ali Imam Khaled Rahim, the learned counsel appearing on behalf of the respondent No.3, on the other hand by filing affidavit-in-opposition vehemently opposes the Rule on several grounds. The bone of his contention is that the writ petition is not maintainable in its present form. He submits that Deulia Bishayak Ain, 1997 (Bankruptcy Act, 1997) is a special law and provides for a forum of appeal against certain orders of the Court and provides an option of review of all other non appealable orders but without filing a review petition before the Bankruptcy Court within the prescribed period the petitioner directly moved this Division in special original jurisdiction which is palpably wrong and not maintainable on that score.
Further he submits against any action of the receiver the person aggrieved is entitled to move before the Bankruptcy Court within 30 days and in the present case the petitioner submitted his report along with recommendation on 30-7-2013 and the respondent No.2 filed his objection on 4-8-2013 which was within the statutory period of limitation and though Section 83 was not quoted in the application but the Bankruptcy Court rightly exercised its jurisdiction and gave a correct decision.
8. Mr Md Kamruzzaman, the learned counsel by filing affidavit-in-opposition on behalf of proforma respondent No.4 opposes the Rule as well.
9. That being the situation, the only question that falls for consideration by this Division is whether under the facts and circumstances of the case the order impugned against is sustainable in terms of divergent arguments pressed into service by the parties.
10. We have heard the learned counsel of both sides and considered their submissions carefully. We have gone through the petition, the order impugned against, the application filed by the respondent No. 2 before the Bankruptcy Court and other materials on record with precision. To appreciate the issue before us it would be profitable to quote Section 110 of the Bankruptcy Act which runs as follows:
ÒAv`vj‡Zi AšÍwbwnZ ÿgZv t †`bv`vi, †Kvb cvIbv`vi ev wiwmfv‡ii Av‡e`bµ‡g, Av`vjZ Dnvi we‡ePbvg‡Z h_vh_ Ggb †h †Kvb Av‡`k w`‡Z cvwi‡e, hvnv b¨vq wePv‡ii ¯^v‡_© ev Av`vjZxq Kvh©µ‡gi Ace¨envi †ivaK‡í cÖ‡qvRbxq ewjq Dnv g‡Zb Kib t
Z‡e kZ© _v‡K †h, GB avivi cÖ`Ë ÿgZv Ggb †Kvb †ÿ‡Î cÖ‡qvM Kiv nB‡e bv, †h †ÿ‡Î GB AvB‡bi Aax‡b Ab¨ †Kvb cÖwZKv‡ii e¨e¯’v Av‡Q|Ó
11. For the sake of convenience let us also reproduce section 46(5) of Act which runs thus:
Ò46(1)……………………………………………….
46(5) h_v‡hvM¨ cvIbv`v‡ii Ges wiwmfvi Av‡e`b ïbvbxi Zvwi‡Li c~‡e© cÖ¯ÍvweZ cyb©MV‡bi e¨cv‡i Zvnv‡`i wjwLZ AvcwË ev AvcwË ev civgk© `vwLj Kwi‡Z cvwi‡eb; Ges Av`jZ Dcaviv 4(L) Abymv‡i wiwmfvi KZ©„K `vwLjK…Z cÖwZ‡e`b, hw` _v‡K, Ges D³ Av‡e`b G †Kvb AvcwË ev civgk© `vwLj Kiv nB‡j `Zm¤ú‡K© ïbvbxi ci wbgœewY©Z welqvw` we‡ePbvq ivwLqv GKwU cyb©MVb Av‡`k cÖ`vb Kwi‡Z cvwi‡e, hv t
 (K) RvZxq ¯^v_©;
(L) cvIbv`vi‡`i ¯^v_©;
(M) †`bv`v‡ii ¯^v_©
Z‡e kZ© _v‡K †h, Av`vj‡Z cÖgvwbZ mKj †`bvi g~j¨gv‡bi wfwˇZ hw` `yB-Z…Zxqvsk cvIbv`vi, e¨vw³MZfv‡e ev Zvnv‡`i wbKU nB‡Z ÿwZcÖvß cÖwZwbwai gva¨‡g, D³ cyb©MVb cwiKíbv m¤ú‡K© wjwLZ m¤§wZ Ávcb bv K‡ib, Zvnv nB‡j †Kvb cyb©MVb Av‡`k cÖ`vb Kiv nB‡e bv;
AviI kZ© _v‡K †h, Av`vjZ, cyb©MVb Av‡`k cÖ`v‡bi †ÿ‡Î, D³ cwiKíbvq m¤§wZ cÖ`vb K‡i bvB GBiæ‡c cvIbv`vi ev wewfbœ †kªbxi cvIbv`viMb ev mvavibfv‡e mKj cvIbv`vi‡`i ¯^v_© myiÿvi D‡Ï‡k¨, wewai weavb mv‡c‡ÿ, D³ cwiKíbvq cÖ‡qvRbxq i`e`jmn Dnvi we‡ePbvg‡Z cÖ‡qvRbxq kZ© Av‡ivc Kwi‡Z cvwi‡e, Ges GBiæc i`e`j I kZ© cwiKíbvi Ask nB‡e|Ó
12. On a combined reading of both the sections one of which (Section 110) deals with inherent power of the Bankruptcy Court and section 46(5) which relates to reorganization it becomes clear that both the sections in the Act is meant for different purposes. One is the HC-23 inherent power of the Court to be exercised in the absence of alternative remedy available to any aggrieved person under the Act which resembles Section 151 of the Code of Civil Procedure where the Court has inherent jurisdiction to act ex-debito justitiae to do real justice and can decide an application so filed where there is no alternative remedy. Secondly, section 46 deals with reorganization which also carries a different connotation altogether.
13. On a gleaning of both the provisions which do have bearing upon the application of respondent No.2 (Annexure-B-l) it has been found that the application was primarily addressed under Section 110 of the Act in the prayer portion it is mentioned that:-
ÒDc‡iv³ Kvibvax‡b I b¨vq wePv‡ii ¯^v‡_© Ges ‡`Dwjqv welqK AvBb, 1997 Gi 46 avivi weav‡bi Av‡jv‡KB AÎ †gvKÏgvq wbhy³xq wiwmfvi KZ©„K MZ 30-7-2013 Zvwi‡Li `vwLjx cÖwZ‡e`‡bi D‡jøwLZ 1,00,00,000 (GK †KvwU) UvKvi `icÎ MÖn‡Yi Av‡`k bv w`qv AÎ weev`x/`iLv¯ÍKvix KZ©…K cÖ¯‘ZK„Z 1,10,00,000(GK †KvwU `k jÿ) UvKvi AÎ `vwLjK…Z `icÎwU MÖnY Kivi wbhy³xq wiwmfvi‡K wb‡`©k w`‡Z ûRyiv`vj‡Zi gwR© nq|Ó
14. In the said order we have found that the Court below though tried to tread within the purview of section 110 of the Act but ultimately gave a decision under Section 46(5) of the Act which to our mind is not in keeping under the scheme of law governing the issue and thus bereft of any legal consideration. The decision should have been given in strict compliance and adherence to Section 110 of the Act itself. Since both the sections have a different connotation distinct in nature.
15. That being the position, we are of the view that the order impugned against suffers from inherent defect which should be set-aside.
In the result, the Rule is made absolute. The order impugned against is declared illegal and without any lawful authority and is of no legal effect and the same is set-aside.
The case is sent back on remand to the Court below to give a fresh decision in the light of the observations and discussions as made above within 2 (two) weeks on receipt of this order without any fail.
Communicate at once.
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