Analysis of the Case

United Commercial Bank Ltd. Vs. Rahimafrooz

Batteries Ltd. and others,
2000, 29 CLC (HCD) [4919]
This assignment is submitted to the honorable course instructor for the partial
fulfillment of the course titled Legal Environment of Business (L501)

Submitted to:
Dr. Mohammad Towhidul Islam
Associate Professor
Department of Law, University of Dhaka

Submitted by:
Jonaid Yousuf Siam
Batch: MBA 52D
Roll No.: 09

Date of Submission
December 15, 2014

INSTITUTE OF BUSINESS ADMINISTRATION

UNIVERSITY OF DHAKA
Letter of Transmittal
December 15, 2014
Dr. Mohammad Towhidul Islam

Associate Professor
Department of Law
University of Dhaka
Dhaka-1000, Bangladesh.
Subject: Submission of the Legal Environment of Business assignment.
Dear Sir,
With due respect, as a student of Institute of Business Administration, I have analyzed the
case United Commercial Bank Ltd. Vs. Rahimafrooz Batteries Ltd. and others, 2000, 29 CLC
(HCD) [4919] for the partial fulfillment of the requirement of the course titled Legal
Environment of Business.
I have tried my level best to follow your guidelines in every aspect of preparing this report. I
enjoyed the challenge of preparing the report as it provided me with an opportunity to enlarge
knowledge trough analyzing real law case using IRAC method. I am honestly thankful for
your guidance during the preparation of this report. I hope you will appreciate my effort. It is
true that, it could have been done in a better way with an extensive knowledge of law. I hope
you will assess my report considering this limitation. If you have any further enquiry
concerning any information of this report, I would be very pleased to clarify that.
Yours sincerely

Jonaid Yousuf Siam

Batch: MBA52D
Roll No.: 09

Table of Contents
1.

Introduction.........................................................................................................................1

2.

Facts....................................................................................................................................2

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3.

Issues...................................................................................................................................3

4.

Rule of Law........................................................................................................................4

5.

Application of the Rule to the Facts...................................................................................5

6.

Conclusion..........................................................................................................................9

1. Introduction
United Commercial Bank Ltd. Vs. Rahimafrooz Batteries Ltd. and others is a case filed in 52
DLR (Dhaka Law Report) in 2000. As well as, this case has been reported in online Law case
database named CLC (Chancery Law Chronicles).
The case is mainly about the selling of the suit properties, Holding No.74 of Motijheel
Commercial Area, Dhaka to the highest bidder of the tender, defendant no.3 where plaintiff
had been running his business for many years.
The parties, the Honorable Judges and lawyers involved in this case are mentioned bellow:
Name of the Court
Parties of the Suit
The Bench of
Attorney-General - for the
Appellants
Advocates for the Appellant

Advocates for Respondent No.1

High Court Division

United Commercial Bank Ltd.
Vs.
Rahimafrooz Batteries Ltd. and others
Md. Mozammel Hoque J
Md. Abdur Rashid J
Mahmudul Islam
Syed Ishtiaq Ahmed
Dr. Syed Refaat Ahmed,
AH Abdur Rahman Chowdhury and
Asaduzzaman
PC Guha with Abdul Bashar Bhuiyan and
Purabi Saha

Advocates - for Respondent Nos. M Nurullah with AQM Safiullah,

2 and 3
Mohammed Ullah and Ashraf Kanial,

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The IRAC (Issue, Rule, Analysis and Conclusion) method has been followed to analyze this
case.

2. Facts
[1] The conflict arose when The Government of the Peoples Republic of Bangladesh
namely, the defendant No.1 intended to disinvest the Holding No.74. Motijheel
Commercial Area where plaintiff, Rahimafrooz Batteries Ltd., had been running his
business as a monthly tenant and thereby invited tenders from the intending purchasers
on the terms and conditions laid down in the tender form for selling the said property.
The plaintiff being one of the tenants of the suit holding submitted tender for
purchasing the suit property on 31-1-1985 with an earnest money of Taka 1,75,050.00.
Since the submission of the tender the plaintiff was not informed about the fate of his
tender. Suddenly by a Notice dated 29-6-1986 the plaintiff and other occupants were
asked to surrender possession of their respective tenanted portion of the said holding to
the Superintending Engineer, Management Circle of the Ministry of Works on 6-7-1986
failing which they would be driven out on any subsequent date. At that time it was
known to the plaintiff that the tender of the defendant No.3 namely, the United
Commercial Bank Limited was accepted for sale of the suit holding which led to the
plaintiff to file the instant suit being Title Suit No.211 of 1986 challenging the
impugned notice.
[2]

It is further stated that it was one of the conditions of the tender form that the earnest
money of the unsuccessful tenderers would be refunded within one month from the date
of decision regarding acceptance of the tender. As the plaintiff's earnest money had not
been refunded it was presumed that the tender of the plaintiff had not been refused and
the same was under consideration of the defendant No.1. It is stated that the plaintiffs
tender would be considered favorably as the plaintiff is an existing tenant in a portion of

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the suit building. Since the plaintiff is an existing tenant in the suit building the
plaintiffs tender ought to have been accepted. When the plaintiff came to know that the
highest bidder, the defendant No.3, has offered an amount of Taka 1 crore and odd, the
plaintiff submitted an application offering to pay the said highest tender money and
prayed for acceptance of his offer. But without considering the offer which was
subsequently made by the plaintiff, the tender of the defendant No.3 had been accepted
and the eviction notice was issued upon the plaintiff and other tenants in the suit
holding. It is further stated that the Government on the ground of equitable offer ought
to have accepted the tender and offer of the plaintiff and sell the suit property at a
negotiated price.
[3]

It was further stated in the plaint that the Abandoned Holding No.60, Motijheel
Commercial Area and Holding No.5, Dilkusha Commercial Area, were sold to the
demand note holders/authorized persons on the price as settled by the Government
without issuing any tender notice.

[4]

It is further stated in the plaint that the Ministry had issued circulars and guidelines for
selling the abandoned properties to the existing tenants or authorized persons at a price
fixed by the Ministry without selling it through open tender. So, as per Government
policy and the circulars the plaintiff is entitled to purchase the suit holding as he is a
lawful lessee with regard to the suit holding. It is further stated that in the matter of
policy of the Government, the Government cannot make any discrimination in
disposing of the abandoned properties. Further, it is stated that the plaintiff participated
in the tender and thereafter offered the highest bid money and, as such, he is entitled to
purchase the suit property from the Government being the lessee of the Government in
the suit premises.

3. Issues
Following are the issues from this case that needs to be addressed in this case:

Whether the suit is maintainable in the present form,

Whether the plaintiff has got a pre-emptory right to purchase the suit property over

the defendant No. 3 at the price offered by the highest tenderer,

Whether the plaintiff is entitled to any other relief or reliefs and

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Whether it is an enforceable contract between the defendant No.3 and the

government.

4. Rule of Law
Law regarding the case
The Contract Act, 1872
2(a) When one person signifies to another his willingness to do or to abstain
from doing anything, with a view to obtaining the assent of that other to such
act or abstinence, he is said to make a proposal.
2(b) When the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted. A proposal, when accepted
becomes a promise.
2(e) Every promise and every set of promises, forming the consideration for
each other, is an agreement.
2(h) An agreement enforceable by law is a contract. Order to convert a
proposal into a promise, the acceptance must7 (1) be absolute and unqualified;
7 (2) be expressed in some usual and reasonable manner, unless the proposal
prescribes the manner in which it is to be accepted. If the proposal prescribes
a manner in which it is to be accepted, and the acceptance is not made in
such manner, the proposer may, within a reasonable time after the acceptance
is communicated to him, insist that his proposal shall be accepted in the
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prescribed manner, and not otherwise; but if he fails to do so, he accepts the
acceptance.
Bangladesh Abandoned Property (Buildings in the Urban Areas) Rules, 1972, Rule
10(4A):
(4A) Notwithstanding anything contained in sub-rule (4), if the building
under auction is under the possession of a duly authorized person, it shall,
subject to the terms and conditions specified in the auction notice, he offered
to him at the price quoted by the highest bidder in the auction:
Provided that no offer shall be made to such person unless he has
participated in the auction:
Provided further that if such person does not communicate in writing his
acceptance of the offer within the period specified in this behalf by the
Government, the offer shall be deemed to have been cancelled and the
building shall be sold to the highest bidder at the price quoted by him.

Reference used in the case

Shyamakant Lal Vs. Rambhajan Singh, AIR 1939 Federal Court 74,

5. Application of the Rule to the Facts

Firstly, the court had to decide whether the suit is maintainable in the present formAs regards the first objection raised by Mr. Mahmudul Islam that as the suit was filed on 3-81986 and at that point of time the plaintiff had no legal right over the property or any preemptive right, the suit is not maintainable, it appears from the plaint as well as from evidence
of the D.Ws. and the judgment that at the relevant time the Government had sold similar
other properties of the Government on the basis of negotiated price with the existing lessees
or the tenants. Abandoned property like Holding No.60 Motijheel Commercial Area and
holding No.5 Dilkusha Commercial Area, Dhaka, were sold on negotiated price with the
existing lessees as per policy and existing circular of the Ministry of Works which had been
admitted by the D.W.1. Following the above policy of the Government that the abandoned
property would be sold to the existing lawful lessees and tenants on such a price as fixed by
the Government as it was done with respect to 60, Motijheel Commercial Area and 5,
Commercial Area as admitted by the D.W.1 the plaintiff also claimed his right to purchase the
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suit property over all the persons at a negotiated price fixed by the Government. Since the
defendant Nos. 1 and 2 had not followed the policy as adopted by the Ministry of Works and
since the Government by violating that policy emptied to sell the suit property through tender,
the plaintiff, has got a right to institute such a suit in view of the fact that he was a lawful
lessee in possession of the suit property and further that he participated in the tender and he
offered to purchase the suit property at a highest offer given by defendant No.3.
Some circular of the Ministry of Works has been produced before, viz, Circular No.
Section5/IM-26/83/459/1(60) dated 21-9-1983 which shows that all the abandoned properties
of different areas of Dhaka including Motijheel Commercial Area would be sold according to
the policy of the Government to the existing lawful lessees and allotters. In pursuance of that
Circular the Ministry of Works by a memo No. AP-8M-1184/349(2) dated 11-3-1985 offered
to sell some property at Mirpur, Dhaka, with the existing allotters at the price fixed by the
Ministry. Since it is a Government circular and a Memo of Ministry of Works can be taken
judicial notice of the same, though not made exhibit.
In this view of the matter it is found that at the relevant time the plaintiff had got a legal right
to sue against the defendants for purchasing the suit property with a pre-emptive right and the
defendant Nos. 1 and 2 are also bound to sell the property to the plaintiff following the policy
of the Government with regard to the disposal of the abandoned properties as mentioned
above.
In this connection it may be mentioned that in the plaint it is asserted that following the
policy and circular of the Government abandoned buildings of 60, Motijheel Commercial
Area and 5, Dilkusha Commercial Area, Dhaka, were sold to the existing lessees/tenants. The
above assertion was not rather it was admitted by the P.W.1 in his evidence.
Secondly, the court had to decide whether the plaintiff has got a pre-emptory right to
purchase the suit property over the defendant No. 3 at the price offered by the highest
tendererIt appeared that it is not an ordinary and simple sale of a property. In ordinary manner when a person
proposes to sell a property and when another person wants to purchase the same and offers a price and
when that price is accepted by the owner of the property, it becomes a concluded contract and the
owner of the property will be bound by that contract and the proposed purchaser has got a right to
purchase the suit property in the eye of law and if the seller refuses to do so, the proposed purchaser
has got a right to purchase it through Court of Law. But the present case is quite distinguishable from
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an ordinary or simple sale like offer and acceptance. Admittedly, it was a sale through tender. The
tender notice was issued for selling the suit property (Exhibit 6 Kha) with several terms and
conditions. After acceptance of the offer of the highest bidder the contract in the present context
cannot be called a concluded contract. Since it is a sale through tender notice, the contract for sale
cannot be a concluded one unless and until all the terms and conditions of the tender notice are
fulfilled. So long the terms and conditions are not fulfilled the tender procedure is continuing and it
will be concluded only when all the terms and conditions of the tender notice are fulfilled. In the
instant case the tender notice was issued, the tenders were submitted and the tender of the highest
tenderer was accepted by the defendant Nos. 1 and 2. There are other conditions laid down in the
tender notice such as an agreement is to be executed in between the seller and the purchaser and after
fulfilling several other conditions the final sale deed would be executed and registered by the
defendant Nos. 1 and 2. But here only the offer of the defendant No.3 was accepted by the defendant
Nos. 1 and 2 and a notice was issued for evicting the tenants but other terms and conditions of the
tender notice remained unfulfilled. So, in such a situation it is help that in the facts and circumstances
of the present case it cannot be called a concluded contract, rather the tender procedure was
continuing and in the meantime the plaintiff filed the instant suit

Thirdly, whether the plaintiff is entitled to any other relief or reliefsAfter carefully scrutinizing the amended provision of rule 4(A), which provides that
notwithstanding anything contained in sub-rule (4) if the building under auction is under the
possession of a duly authorized person, it shall, subject to the terms and conditions specified
in the auction notice be offered to him at a price quoted by the highest bidder in the auction.
In the instant case the question of retrospective effect of such amended rule does not arise at
all. Firstly, the tender procedure was continuing and it was not concluded. Secondly, during
the pendency of the suit this amended rule came into force and thirdly, the plaintiff being a
lawful lessee in the premises participated in the auction and subsequently offered the highest
bid money to the defendant Nos. 1 and 2 for purchasing 22 the same. As it was held that the
sale by tender was not concluded and the tender procedure was continuing and during
pendency of the suit this amended rule (4A) came into force, the plaintiff is entitled to have
the benefit of this amended rule, although it was not given any retrospective effect. The
plaintiff is claiming a right to purchase the property in the instant suit and during pendency of
the suit by operation of law such right was given to him and, as such, he is entitled to have
that right, although the suit was filed earlier. In this connection Mr. PC Guha has referred to
the case of Shyamakant Lal Vs. Rambhajan Singh, AIR 1939 Federal Court 74, wherein the
Federal Court of India decided a case showing that even during the pendency of an appeal if
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any legal right comes in favor of the appellant, in that case also the appellant will be entitled
to have the benefit of such right. The principle laid down by the Indian Federal Court in
above case, is applicable in the facts and circumstances of the present case.
Fourthly, whether it is an enforceable contract between the defendant No.3 and GovernmentFrom provision of The Contract Act, 1872 we can see that
2(a) When one person signifies to another his willingness to do or to abstain
from doing anything, with a view to obtaining the assent of that other to such
act or abstinence, he is said to make a proposal.
2(b) When the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted. A proposal, when accepted
becomes a promise.
2(e) Every promise and every set of promises, forming the consideration for
each other, is an agreement.
2(h) An agreement enforceable by law is a contract. order to convert a
proposal into a promise, the acceptance mustSo we can assume that there was an offer, but the acceptance must be absolute and
unqualified as per section 7 of the Act which denotes that:
7 (1) be absolute and unqualified;
7 (2) be expressed in some usual and reasonable manner, unless the
proposal prescribes the manner in which it is to be accepted. If the proposal
prescribes a manner in which it is to be accepted, and the acceptance is not
made in such manner, the proposer may, within a reasonable time after the
acceptance is communicated to him, insist that his proposal shall be
accepted in the prescribed manner, and not otherwise; but if he fails to do
so, he accepts the acceptance.
Now, what is the right the defendant No.3 acquired and the legal obligation the Government
incurred after acceptance of the highest bid, I think, will be clear from true construction of the
terms and conditions of the tender. Under paragraph 6 of the tender, possession of the first
and second floor was provisionally delivered to the defendant No.3 on receipt of 20 percent
of the bid price. But nothing happened further under paragraph 7 of the tender. No agreement
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contract was executed by the parties binding them into an enforceable contract. No Sale deed
was executed and registered. These are the most essential terms and conditions of the bargain
as contained in the tender in order to complete the transaction i.e. sale and pass title. So, by
acceptance of the offer of the highest bidder, there was at best an agreement on the price for
sale of the building. Nothing more.
In such circumstances, the acceptance of the offer must be held to be subject to those terms
and conditions i.e. subject to a proper contract. So, mere acceptance of the offer of the
defendant No.3 did not create any enforceable contract. Only obligation the Government
incurred by such acceptance, is to refund the money taken from the defendant No.3 as per
paragraph 6.3 of the tender.

6. Conclusion
In conclusion, Md. Abdur Rashid J. had gone through the judgments written by learned Md.
Mozammel Hoque J and concurred that the learned Subordinate Judge in decreeing the suit
on 24-3-97 did not commit any error of law calling for the interference in any way and, as
such, both the appeals therefore must fail.
Order of the Court
Both the appeals namely, First Appeal No.85 of 1997 and First Appeal No.158 of 1999 are
hereby dismissed without any order, as to costs and the judgment and decree passed by the
trial Court are hereby maintained.

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