A Partial Admission of Liability Cannot Justify a Decree for the Entire Claim: High Court

Supreme Court of Bangladesh

The observation was made by a High Court Division bench comprising Justice Sardar Md. Rashed Jahangir and Justice Kazi Waliul Islam in Md. Mostafa Amzad alias Md. Mostafa Amzad Hossain v. Artha Rin Adalat No. 2, Dhaka and Others, Writ Petition No. 6241 of 2023. The judgment was delivered on 27 January 2026.

Background of the Case

According to the judgment, a financial institution sanctioned a term loan of Tk. 15 crore to the petitioner under the SME Finance (Astha) Scheme on 29 October 2015. The loan was granted for a period of 60 months and was subsequently rescheduled on 25 October 2018.

Alleging irregular repayment and failure to discharge the outstanding liabilities, the financial institution instituted Artha Rin Suit No. 528 of 2019 before the Artha Rin Adalat No. 2, Dhaka, seeking recovery of Tk. 9,14,15,469, including interest, calculated up to 30 May 2019.

The defendant filed a written statement admitting that the loan had been sanctioned and subsequently rescheduled. According to the defendant, the rescheduled liability stood at Tk. 8,22,13,200.92. However, the defendant did not admit the entire outstanding amount claimed by the financial institution, including the claimed interest and other charges.

The financial institution subsequently filed an application under Section 13(3) of the Artha Rin Adalat Ain, 2003, seeking a judgment and decree on the basis of the defendant’s admission. On 11 April 2022, the Artha Rin Adalat passed a decree in favour of the financial institution.

Being aggrieved by the judgment and decree, the defendant approached the High Court Division by filing a writ petition.

Court’s Observations

The High Court observed that Section 13(3) of the Artha Rin Adalat Ain, 2003, authorises an Artha Rin Adalat to pass a judgment or order on the basis of an admission made by the defendant in the written statement or otherwise. However, the court must carefully examine the scope and extent of such admission before exercising this power.

Upon examining the plaint and the written statement together, the High Court found that the defendant had admitted the sanction of the Tk. 15 crore loan and its subsequent rescheduling on 25 October 2018. The defendant had also acknowledged that the rescheduled liability stood at Tk. 8,22,13,200.92.

However, the Court found no express or implied admission of the entire outstanding claim stated in the plaint.

The Court held that an admission concerning the grant of a loan or its rescheduling cannot, by itself, be treated as an admission of the entire amount subsequently claimed by the lender.

The High Court further observed that, for the purpose of passing a final judgment and decree under Section 13(3), the defendant’s admission must extend to the total liability and the amount claimed as outstanding at the time of filing the suit.

A decree for the entire claim cannot be passed under Section 13(3) on the basis of an admission relating only to partial facts or a portion of the liability.

In support of its view, the Court relied on the decision in Md. Arfan Uddin Akand v. Joint District Judge and Artha Rin Adalat No. 1, Gazipur and Another, reported in 15 BLT 343, as well as an earlier unreported judgment in Writ Petition No. 4877 of 2016.

Decision of the High Court

The High Court found merit in the writ petition and made the Rule Nisi absolute.

Consequently, the Court set aside the judgment and decree dated 11 April 2022 passed by the Artha Rin Adalat No. 2, Dhaka, under Section 13(3) of the Artha Rin Adalat Ain, 2003.

The case was remitted to the concerned Artha Rin Adalat with directions to frame the appropriate issues, if not already framed, upon examining the plaint and the written statement. The Court further directed the Artha Rin Adalat to decide the suit on its merits after providing both parties with the necessary opportunity to present their respective cases in accordance with law.

Legal Significance

The judgment clarifies the distinction between admitting the fact of obtaining a loan and admitting the entire outstanding liability claimed by a financial institution.

For the application of Section 13(3) of the Artha Rin Adalat Ain, 2003, the court must determine whether the defendant’s admission covers the entire claim or only certain facts relating to the loan transaction.

Legal principle: Admission of partial facts does not justify a decree for the entire claim.

The decision reinforces the principle that a decree based on admission must remain within the scope of the admission actually made by the defendant. Where the total claim remains disputed, the matter must be adjudicated on its merits in accordance with law.