Big fish, small fish: How large loan default cases linger on

Shoe retailer Imtaz Mahmud was sued in January 2014 for failing to repay some Tk1.5 lakh in principal and interest out of a Tk3.5 lakh loan he had taken out from the Babubazar branch of Agrani Bank four years ago.

The Artha Rin Adalat-3, Dhaka announced the verdict in the case in March 2016. The court asked the bank to recover the loan by auctioning Imtaz's shop, the collateral against the loan. The appeal filed against the verdict was also disposed of within one year or so. Imtaz negotiated with the bank and eventually paid Tk2.5 lakh to the lender as interest, principal, and compensation.

The same branch filed another case with the same money loan court in 2012 against water transport owner Hafizur Rahman for defaulting on a Tk87 crore loan, which stood at Tk123 crore including interest. Ten years on, the case is still pending with the court. Incidentally, Hafizur Rahman is a relative of a former director of Agrani Bank.

These two instances represent the overall situation of disposal of loan default cases in courts across the country – disposal of cases involving big amounts takes much longer.

According to Supreme Court sources, some 72,000 loan default cases are currently pending with various courts in the country, which involve around Tk1.4 lakh crore. Around 3,800 of the cases involve loan defaults of Tk100cr or more, and more than half of these cases have been pending for at least five years.

On the other hand, 7,532 cases were disposed of in the last two years, of which 2,877 involved defaults of Tk50,000-Tk2 lakh loan each. A number of other cases even involved less than Tk50,000.

And in contrast to the snail's pace in the trial of large default loan cases, 80% of small default loan cases – filed over loan defaults of less than Tk2 lakh – are disposed of within 2-3 years.

The Dhaka Money Loan Court-3, in particular, disposed of 419 loan default cases in 2021 which involved around Tk1,500 crore.

A review of the verdicts shows that 134 of these cases involved about Tk2 lakh each, 76 cases involved an average of Tk5 lakh each, 58 cases an average of Tk10 lakh each, 49 cases an average of Tk15 lakh each, and 44 cases involved an average of Tk20 lakh each.

Only 30 of the cases settled by the court last year involved an amount ranging from Tk1 crore to Tk10 crore each, while no case involving loan defaults of more than Tk10 crore saw a verdict.

Sources at the court said 103 of the cases that involved less than Tk2 lakh each had been filed in 2018 and 2019.

On the other hand, 94 of a total of 9,607 loan default cases that the court is presently dealing with involve over Tk100 crore each and about 60% of them have been pending for more than five years, the sources added.

Among the pending cases in this court, 475 cases have been stayed by the High Court. About 200 of these cases involve loan defaults of over Tk10 crore each, while eight involve more than Tk50 crore each.

Why this inconsistency?

Company law expert Barrister Ajmalul Hossain QC told TBS that every wrongdoer is equal in the eyes of the law, but the reality is different in Bangladesh.

"Large loan defaulters are always influential, as a result, they always get away in one way or another. I do not know if any defaulter of a Tk100 crore or more in loans has been convicted by a court in the last decade," he said.

Even though petty defaulters are also the accused, their way out is not easy, he observed, adding, "As a result, big cases continue to be tried in court for years and small ones are settled quickly."

Agrani Bank's lawyer Advocate Shamshul Islam echoed Ajmalul Hossain, saying that launch owner Hafizur Rahman, the accused in the Tk123 crore loan default case, hired several senior lawyers who got stay orders from the High Court and for eight years there was no progress.

On top of this, lawyers of the defaulter repeatedly applied to the court for delaying hearing on the case on various pretexts, causing the trial proceedings to slow down, he added.

Shamshul also said that launch owner Hafizur Rahman did not have to land in jail in the Tk123 crore loan default case as he initially secured anticipatory bail for six months and later secured permanent bail from the court.

But shoe retailer Imtiaz Mahmud, who had failed to repay only Tk1.5 lakh to the bank, had to serve jail for one month.

Imtiaz told TBS, "I failed to repay the loan as I had suffered losses in business. I did not have the money to run the case. Also, I could have avoided the case had I colluded with the bank's officials concerned. But I did not have that kind of financial status or connections.

"I could not hire a good lawyer. Many suggested applying to the High Court, but I could not even do so due to a lack of money."

The Bangladesh Bank's lawyer Barrister Tanzib-Ul-Alam, however, said small cases are less complicated and do not need much time for gathering evidence, taking testimony, or hearing. So verdicts are reached quickly."

Muhammad A (Rumee) Ali, former chairman of AB Bank, said the matter of settling cases depends on the courts concerned.

Although the Money Loan Court Act calls for establishing separate money loan courts in each district headquarters for the recovery of defaulted loans, such courts have not yet been set up anywhere except for two-three districts including Dhaka and Chattogram, he said, adding, " This might be also a reason for the delay in the trial of loan default cases."

Big scams stuck in probe

In the single-largest case of loan scam in the country, Tk4,500 crore was laundered by BASIC Bank through loan forgery between 2009 and 2013.

In 2015, the Anti-Corruption Commission filed 56 cases in connection with the scam, but neither the then-chairman of the bank nor the members of the board of directors were accused in the cases. The ACC filed five more cases in 2017.

In the last seven years since the start of the trial of these cases, the ACC has not been able to complete investigations and file a charge sheet.

The Appellate Division and the High Court Division of the Supreme Court had summoned the officials concerned three times in this regard, but nothing came of it.

In November this year, a High Court bench gave the ACC three months' time to complete the investigation into these cases.

The ACC also filed a case against 22 people including Crescent Group Chairman MA Quader in 2019 on charges of embezzlement by withdrawing Tk1,745 crore from Janata Bank through fake export bills. Investigations into this case are yet to be completed.