Summary on the case between RICBL vs Ugyen Wangchuk
Background of the Case
The case of RICBL vs. Ugyen Wangchuk revolves around a loan default amounting to Nu. 102 million. Initially, the default comprised a principal of Nu. 61.123 million, interest of Nu. 14.236 million, and penalties of Nu. 0.765 million, totaling Nu. 78.368 million in outstanding loans.
The District Court judgment required Ugyen Wangchuk to repay the principal amount of Nu. 71 million. The interest and penalties totaling Nu. 25 million were to be shared equally between RICBL and Ugyen Wangchuk, amounting to Nu. 12 million each. This decision was based on the international legal principle that “when both parties are at fault, the losses must be shared equally.” Additionally, Ugyen Wangchuk was sentenced to 1½ years of imprisonment for deceptive practices, including double mortgaging land at Debsi (first with RICBL and then with BIL), selling mortgaged land in Trashigang, and selling a Prado vehicle without RICBL’s consent.
Both parties appealed to the High Court. The High Court reversed the District Court’s judgment, ruling that the entire principal, interest, and penalties amounting to Nu. 102 million should be shared equally in three portions: one-third by Ugyen Wangchuk, one-third by relevant RICBL officials, and one-third by RICBL, amounting to Nu. 34 million each. The imprisonment sentence for Ugyen Wangchuk was dismissed by the High Court.
RICBL appealed to the Supreme Court, but the appeal was dismissed, and the High Court’s decision was upheld. Consequently, Nu. 34 million was to be paid equally by RICBL, relevant officials, and Ugyen Wangchuk.
RICBL later appealed to the Office of the Gyalpoi Zimpon, emphasizing only four employees allegedly involved in Loan A/C No. CRSC/2010/84, misleadingly citing only the case summary (Sherchud) without including 11 other loans and 7 bank guarantees that were submitted. Due to this misleading appeal, the Office dismissed the case.
Notably, the four employees were not named in the judgments or orders of any of the three courts but were specifically identified during the appeal to the Office of the Gyalpoi Zimpon.
Enforcement of the High Court Judgement by RICBL
The four employees, who were not direct parties to the case, were informed of the judgment only after the appeal to the Office of the Gyalpoi Zimpon was dismissed. On October 4, 2022, RICBL served them with a show-cause notice.
Although the High Court’s judgment cited eight points of fault for the relevant officials concerning 12 loans and 7 bank guarantees, RICBL only cited a single sentence, holding the four employees liable for Nu. 8.5 million each.
If RICBL had correctly enforced the High Court’s judgment, it could have recovered Nu. 10 million. However, RICBL’s legal representative did not enforce the recovery from Ugyen Wangchuk’s sister Tshering Pem and Dechen Pelden, nor did it auction the mortgaged assets, as ordered by the court, allegedly to favor Ugyen Wangchuk.
On January 16, 2023, RICBL submitted a letter for the enforcement of the High Court order naming 1. Ugyen Wangchuk, 2. Relevant Officials, and 3. RICBL, without specifying the names of the relevant officials. The Enforcement Department requested RICBL provide a list of relevant officials and to name management of RICBL (Click Here for List of Management Officials ). RICBL’s legal representative named only four officials, not including all signatories to the loans and guarantees (click here for officials who were signatory to all 12 loan accounts). Additionally, RICBL stated its share for the Management Officials would be written off in the next board meeting.
At the same time, the court issued a seizure notice for Ugyen Wangchuk’s mortgaged properties. Ugyen Wangchuk appealed to the Office of the Chief Justice, which canceled the seizure notice and granted a three-month extension.
Reason for Naming the Four Employees in the Case Summary (Sherchud)
Jigme Namgyal and Jurme Chetsho: Mentioned for a Nu. 2,440,000 transaction in 2012 related to the sale of 15 decimal land at Debsi to Ugyen Wangchuk.
Tashi Penjor: Named for withdrawing Nu. 186,000 from Ugyen Wangchuk’s loan account OD/230 without formal consent in 2012. The amount was given in cash to Ugyen Wangchuk’s wife after receiving verbal consent via phone in the presence of the supervisory officer. Ugyen Wangchuk later acknowledged the transaction and retracted his claim.
Ugyen Lhamo: Adjusted Ugyen Wangchuk’s loan amounts from account OD/217 to CRCS/84, totaling Nu. 1,662,834 at year-end 2012, based on management’s instructions. This practice, known as loan greening, aimed to reduce NPLs and boost profits and was carried out per the Recovery Team’s directions.
These transactions were listed in the High Court’s case summary as being “without the consent of Mr. Ugyen Wangchuk,” although there were other such transactions not specifically named.
Management Administrative Actions
After the Office of the Gyalpoi Zimpon dismissed the appeal, RICBL suspended the two serving employees, Jigme Namgyal and Ugyen Lhamo, pending investigation. Following multiple internal harassments, including transfers, withheld promotions, suspensions, and revocations, both employees resigned. RICBL withheld their post-service benefits, including their own contributions.
Update !!! (October 2023)
The Hon'ble Bench II of High Court issues Clarification Letter to the Enforcement Department, District Court naming four employees as "Relevant Officials of the Bank" issued on October 2, 2023 (received on October 10, 2023)
Click here for the Clarification Letter
