Legal Framework for Debt Recovery
Statutory Recovery Timeline & Fees
| Action Phase | Statutory Provision | Timeline/Requirement |
|---|---|---|
| Pre-Suit Auction | Section 12 | Mandatory before filing suit |
| Filing of Suit | Section 6 | Within limitation period |
| Written Statement | Section 16 | 30 to 60 days maximum |
| Execution Case | Section 28 | Within 1 year of Decree |
The Recovery Roadmap
Section 12: Mandatory Power of Sale
Under Section 12 of the Artha Rin Adalat Ain 2003, a financial institution holding mortgaged property must attempt to sell the property through a public auction before filing a formal suit. Failure to comply with this section renders the suit liable to be dismissed, as established in various precedents by the Supreme Court of Bangladesh.
Section 33: Auction and Certificate of Title
If the property cannot be sold in a court-mediated auction during execution proceedings, Section 33(1) allows the court to invite fresh bids. If no valid bidder is found, under Section 33(5) and Section 33(7), the court shall issue a certificate vesting the absolute ownership and possession of the property to the decree-holder bank, effectively settling the debt to the extent of the property value.
- Notice Requirement: Formal demand notice under the loan agreement.
- Valuation: Professional valuation of the secured asset.
- Auction Publication: Advertisement in two widely circulated national dailies.
- Trial: Summary proceedings under Section 19.
- Execution: Filing of Artha Jari case under Section 28.
Consult Barrister Liton Asaduzzaman Sarkar
For complex commercial debt recovery and Artha Rin litigation strategies.
Schedule ScopingFrequently Asked Questions
Is it mandatory to sell the mortgaged property before filing a suit?
Yes, under Section 12(1) of the Artha Rin Adalat Ain 2003, the financial institution must attempt to sell the mortgaged property via public auction before filing a suit in the Artha Rin Adalat.
What happens if no buyer is found during the execution auction?
Pursuant to Section 33(7) of the Artha Rin Adalat Ain 2003, if the property remains unsold after multiple attempts, the Court shall issue a certificate in favor of the Bank, granting them ownership and possession of the property.
Can a debtor appeal against a judgment of the Artha Rin Adalat?
Yes, under Section 41, an appeal can be filed to the High Court Division. However, the appellant must deposit 50% of the decreed amount (minus any previous deposit under Section 42) to make the appeal maintainable.
◆ Related Statutory Guides & Practice Insights
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