HC rejects direct writ against bank auction under Money Loan Court Act

The High Court has ruled that a direct writ petition challenging the legality of a bank-conducted auction under the Money Loan Court Act, 2003 is not maintainable, holding that such petitions cannot be entertained where the law provides an alternative legal remedy.

The full text of the judgment in ATM Ashraful Islam Helal vs Bangladesh and Others was released on Wednesday (July 29).

A High Court bench comprising Justice Md Mujibur Rahman Miah and Justice Rezaul Karim issued the rule on July 16.

Accepting the respondents' arguments, the court held that a writ petition challenging an auction initiated under Section 12(3) of the Money Loan Court Act, 2003 was not maintainable. It accordingly discharged the previously issued rule and vacated the interim order staying the auction process.

Advocate Mohammad Ahsan appeared for the petitioner, while Barrister Jyotirmoy Barua represented the bank. Advocate Mahbubur Rahman Kishore appeared for the other respondents.

In its judgment, the court observed that once an auction sale is completed, the sale deed is registered and the property is mutated in the purchaser's name, the buyer acquires a final legal title. At that stage, an auction cannot be set aside, nor can the property be reclaimed through a writ petition after the prescribed time has elapsed.

According to the case records, ATM Ashraful Islam Helal obtained a loan of Tk 3 million from a bank in 2017. After he defaulted, the outstanding amount, including interest, rose to Tk 4.28 million. To recover the dues, the bank published an auction notice in December 2021 and sold the mortgaged property for Tk 7 million through a public auction in January 2022. The sale deed was registered and mutation completed in the purchaser's name in June that year.

The borrower later filed a writ petition challenging the legality of the property transfer. Following a preliminary hearing, the High Court issued a rule and granted an interim stay on the transfer on the condition that the petitioner clear the entire outstanding loan within 90 days. The court had stipulated that failure to do so would automatically render the rule and stay order ineffective.

As the petitioner failed to repay the dues within the stipulated period, the High Court ultimately dismissed the writ petition.

The court held that Sections 12(3) and 12(8) of the Money Loan Court Act provide an effective statutory remedy for disputes arising from auction proceedings. Therefore, where such an alternative remedy exists, a writ petition under Article 102 of the Constitution is not maintainable.

The judgment further noted that the interim protection had already lapsed due to the petitioner's failure to comply with the court's conditions. Since the sale deed had been registered and mutation completed, the auction purchasers had acquired lawful ownership of the property, leaving no scope to invalidate the auction through a writ petition.

However, the court directed the bank to return any surplus amount remaining from the auction proceeds to the petitioner without delay after adjusting all outstanding dues.