The High Court on Wednesday suspended the proceedings of all cheque dishonour cases filed by various banks against the defaulters for debt recovery.
The HC also ordered that no bank or financial institute will be allowed to file a cheque dishonour case while recovering the loan.
The single bench of Justice Md Ashraful Kamal passed the order during the hearing of an appeal filed by a customer, who has been convicted and sentenced to six-month imprisonment in a cheque dishonour case filed by Brac Bank.
In the verdict, the court said the cheque that the bank took against the loan was collateral but it was not a negotiable instrument. So, a cheque dishonour case cannot be filed against the person who deposited the cheque as collateral.
The court said that a loan from a bank or financial institution is taken through an agreement. But some corrupt, unscrupulous officers of the banks misuse cheques for their own interests to implement their hidden agendas. Their behaviour is similar to that of merchants, it said.
The court furthered that receiving a blank cheque against a loan is illegal. Banks and financial institutions have been doing this illegal thing for a long time, it observed.
The HC also asked lower courts not to accept any cheque dishonour case filed by any bank or financial institute from now on.
The court said that banks were supposed to be friends of the poor, but instead of that, the banks and various financial institutions are sucking the blood of the poor. It cannot be.
It said it heard about the bank waiving off the loans of those who are in default with thousands of crores of money.
Banks and financial institutions are filing check dishonour cases without filing cases under the Money Loan Act for the recovery of loans.
Following the verdict, a bank or financial institution can file cases only with the money loan court under the sections of Orthorin Adalat Act. Brac Bank lawyer Saifuzzaman Tuhin said the bank and financial institution can lodge debt recovery cases with the Money Loan Court following the Orthorin Adalat Act, 2003.
The HC also asked Bangladesh Bank authorities to issue directives to the banks and financial institutions following the HC order. It also asked the central bank to ensure insurance coverage against all kinds of loans.