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2009

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Importance of Tort Act in restoring justice

M S Siddiquii

IT may be hard to believe that human beings in the Stone Age

were living just like animals in jungles and caves. They learnt
the modern way of living through constant efforts and
innovations by the entrepreneurs. The entrepreneurs are
inclined to take risks for mental satisfaction, name, fame,
power and status. The society which encourages and cultivates
entrepreneurs develops at a faster rate. There are many kinds of
entrepreneurs like: Social Entrepreneurs, Rural Entrepreneurs,
Internationals Entrepreneurs, Business entrepreneurs etc. Dr
Yunus and Fazle Hossain Abed are examples for the whole
world. There are many innovators in science, education,
industry etc. Bangladesh has a rather rocky ground for the
entrepreneurs. They have to live and survive against many
odds. There are few people on this planet opposed to awarding
Nobel peace prize to Dr Mohammad Younus. Unfortunately all
of them live in this part of planet i. e. in Bangladesh. We may
study to know reaction of Dr Yunus that the people of his
country oppose him.

The business- entrepreneurs are in the worst situation in terms

of social, political and legal point of views. Until and unless we
respect the productive entrepreneurs more compared with the
unproductive or destructive ones, the society will not advance.
But the society has a very different approach towards business
entrepreneurs.

Industrial activity is the most essential as well as beneficial

activity for the modern human society. The industrial units are
the real place of worship which provide livelihood to the people
and generate real wealth for the masses. The society which
supports entrepreneurs and new industrial units becomes richer
at faster rate compared with the society which does not do so.

Continuous investment in new units of industry and business

are needed and desired by the society to fulfil the aspirations of
the entrepreneurship. The resultant additional benefits are
wealth creation, employment and better quality of life for the
masses. Hence the same are supported, directed and
implemented by the Government. The Constitution, Five year
plan or Poverty Reduction Strategy Paper (PRSP), Industrial
policy etc., lay down such activities as statutory duties of the
Government and all its functionaries. Accordingly several
enactments and legal provisions support such creations
including expansion and diversifications.
The industrial sickness comes simultaneously with investment.
Sickness in the industrial units is not a new phenomenon in the
developing countries and also in industrially developed
countries of the world. An industrial unit may face a number of
odds during its implementation and operation stage because of
a number of factors in the environment - internal and external.
The sick industries are unable to utilise the production capacity
or unable to produce products and services. The sickness has
been acute and adversely affecting production and employment
in the country, besides other socio-economic repercussions. But
sickness assuming an epidemic shape causes concern for the
policy makers and stakeholders in some of the countries
including Bangladesh.

On the other hand, the financial sector in Bangladesh is passing

through a crucial situation. The economy has a burden of huge
bad loan. The volume of defaulted loans in the banking system
rose above Tk 230 billion till date.

The situation prompted the government to pass Artha Rin

Adalat Act 2003 (ARA Act) and also update the Insolvency Act
and curtail certain privileges like further loan, denial of any
public office, barring participation in any legislative and local
government election etc., though amending a number of other
acts.

The bankers are protected by the laws for all of their wilful and
non-wilful acts. They can advance loan and in case of default
file case against borrower and all the legal costs of bank are
used to debit on account of borrower and calculate the interest.
The process will continue but the net outcome known to all of
us that the bad debt is increasing day by day.

But unfortunately there is hardly any remedy or protection of

borrowers as the ARA act is a one-way law and only a banker
can sue the borrowers and the courts have no jurisdiction to
listen to borrowers. The outcome and Judgment of cases are
known to all concerned. The judges can give judgment without
any virtual trial.

The present system of adjudication between borrower and bank

is heavily loaded in favour of lenders. This is highly against
equity, justice and good conscience. The litigation starts when
the borrower is unable to pay the interest on loans or unable to
pay the instalments of the loans. In most of the cases, it
happens when his business or industry becomes sick or is
closed. Many a time, such situation arises due to circumstances
beyond his control. Thus when the borrower is having acute
shortage of finances, the recovery suit is filed by the lenders.

By this time, some of the financially strong borrowers filed

counter-claims against the banks for negligence both wilful and
non-wilful, under other laws like tort based on common law.
Unfortunately there is no law of tort and there is no convention
or reference of such legal decision. Court cannot consider the
mistake, carelessness or other offence or violation of lending
rule of the Bangladesh Bank or banks' own lending guideline.