The Appellate division has stayed the High Court verdict which barred banks and financial institutions from filing cheque dishonour case for debt recovery.

The Appellate division bench headed by Chief Justice Hasan Foez Siddique gave the verdict on Thursday (1 December).

The High Court on 23 November ordered banks and financial institutions not to file cheque dishonour cases against borrowers to realise their default loans after disposing of an appeal by Mohammad Ali, who was sued by Brac Bank and received a sentence of six-month imprisonment and a Tk2.95 lakh penalty in a trial court.

During Thursday's hearing Attorney General AM Amin Uddin represented Brac Bank in court. Lawyer Abdullah Al Baki was in favour of the writ.

On 23 November, the High COurt also instructed the lower courts to dismiss such cases or transfer them to the Artha Rin Adalat (Money Loan Court) directly.

The High Court in its order further said insurance coverage is needed against all kinds of loans. The court asked Bangladesh Bank authorities to issue directives in this regard and requested the National Parliament to amend the laws concerned.

At the same time, the High Court stayed the proceedings of all cheque dishonour cases filed by banks and financial institutions and pending in different courts.