Artha Rin Case in Bangladesh: What Borrowers and Guarantors Need to Know
When a bank or financial institution sues to recover a loan, the case goes to the Artha Rin Adalat. The procedure is fast and favours the lender, so the early steps matter most. Here is how it works.
- Banks and financial institutions file loan recovery suits in the Artha Rin Adalat, not the ordinary civil court.
- Guarantors and third-party mortgagors are made defendants with the borrower; liability is joint and several (s.6(5)).
- Mediation follows the written statement: 60 days, extendable by up to 30 days (s.22).
- Setting aside an ex parte decree needs a 10% deposit (s.19); an appeal needs 50% of the decretal amount (s.41).
In this guide: Stage by stage · If you are a guarantor · Remedies after a decree
The short answer
The Artha Rin Adalat Ain 2003 created special courts for loan recovery by banks and financial institutions. The bank files a suit for the outstanding amount; the borrower, guarantors and any third-party mortgagor are named as defendants. After the written statement there is a settlement stage. If it fails, the case goes to trial and decree, then execution, which can include auction of mortgaged property.
Deadlines are short and remedies after a decree need cash deposits, so respond to the summons on time.
Stage by stage
| Stage | What happens | What you should do |
|---|---|---|
| Before the suit | Where the security and its power of sale allow, the bank must sell, or try and fail to sell, the security before suing (s.12) | Reply in writing, ask for statements, explore rescheduling |
| Summons | Suit filed against borrower, guarantors and third-party mortgagors (s.6(5)) | Appear and file the written statement in time |
| Settlement | Mediation after the written statement, within 60 days, extendable by up to 30 days (s.22) | Bring a realistic repayment proposal |
| Trial and decree | Evidence, hearing and decree | Challenge the claim with documents, not only denials |
| Execution | Auction of mortgaged property and other recovery steps | Negotiate before auction; check the sale notice |
If you are a guarantor
Under section 6(5) the guarantor and any third-party mortgagor are joined as defendants, and liability is joint and several. Execution should, so far as possible, follow the order of assets the Act sets, but you can still be pursued for the debt. Check the guarantee you signed, its limit, whether the loan was changed or rescheduled without your consent, and whether the bank released any security. Those points can reduce or end your liability, and they need to be raised in your written statement.
Remedies after a decree
- Ex parte decree: apply to set it aside under section 19 within 30 days of the decree or of learning of it, and deposit 10% of the decretal amount within 15 days of the application.
- Appeal: under section 41, to the High Court Division within 60 days if the decree is above Tk 50 lakh, or to the District Judge within 30 days if it is Tk 50 lakh or less. The borrower must deposit 50% of the decretal amount, with credit for any section 19 deposit; the financial institution is exempt. Days are counted under section 48.
- Settlement: a compromise with the bank can be recorded at any stage, including execution.
- Writ: only in narrow cases, such as a clear lack of jurisdiction; it is not a substitute for appeal.
Collect the papers
Sanction letter, guarantee, mortgage deed, statements and notices.
Check the claim
Interest, charges and payments credited; ask the bank for statements.
File in time
Appear and file the written statement before the deadline.
Prepare to settle
A documented proposal works best at the settlement stage.
Common questions
What is an Artha Rin case?
A suit by a bank or financial institution to recover a loan, filed in the Artha Rin Adalat under the Artha Rin Adalat Ain 2003.
Can the bank sue the guarantor?
Yes. Under section 6(5) guarantors and third-party mortgagors are made defendants with the borrower, and liability is joint and several.
Is there mediation in an Artha Rin case?
Yes. Under section 22 mediation follows the written statement and runs for 60 days, extendable by up to 30 days. Agreed terms are recorded by the court.
How do I set aside an ex parte Artha Rin decree?
Apply under section 19 within 30 days of the decree or of learning of it, and deposit 10% of the decretal amount within 15 days of the application.
How much must I deposit to appeal an Artha Rin decree?
50% of the decretal amount, with credit for any section 19 deposit. Above Tk 50 lakh the appeal goes to the High Court Division within 60 days; Tk 50 lakh or less to the District Judge within 30 days.
Can the bank auction my property?
Yes. After a decree, the court can sell mortgaged property in execution. Before a suit, where the security and its power of sale allow, section 12 requires the bank to sell, or try to sell, the security first.
Can I still settle after a decree?
Yes. Many cases settle in execution. Get the terms in writing and have the compromise recorded in court.
Can a borrower be sent to civil prison?
The Act allows civil detention of a judgment-debtor in execution in certain cases. It is used as pressure to pay, not as punishment.
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