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of July 9, 2009

About interpretation of some provisions of Article 449 of the Civil code of the Azerbaijan Republic

Name of the Azerbaijan Republic

Plenum of the Constitutional Court of the Azerbaijan Republic as a part of F. Abdullaev (chairman), S. Salmanova, S. Gasanova, F. Babayev, R. Gvaladze, I. Nadzhafov of ia.sultanov (judge-speaker), with participation of the court secretary I. Ismaylov,

the interested subject - the judge of Nasiminsky district court S. Gafari

specialists - the judge of the Supreme Court of the Azerbaijan Republic B. Asadov, the associate professor of the Civil law of the Baku state university I. Akhmedov and the employee of the Central Bank of the Azerbaijan Republic A. Bakhyshov,

according to part VI of article 130 of the Constitution of the Azerbaijan Republic considered in proceeding in open court according to the procedure of special constitutional legal proceedings the constitutional case on interpretation of some provisions of Article 449 of the Civil Code of the Azerbaijan Republic.

Having heard the report of the judge A. Sultanov, performance of the legal representative of the interested subject and specialists in case, having studied case papers, the Plenum of the Constitutional Court established:

Nasiminsky district court of the city of Baku, having appealed to the Constitutional Court of the Azerbaijan Republic (further "Constitutional court") on the civil case which is in its production in connection with application of regulations of the civil law, asks to give interpretation of Article 449.1 from the point of view of application of Article 449.4 of the Civil Code of the Azerbaijan Republic (further - "Civil Code").

From the civil case specified in the address it is visible that the claimant of JSC Azernagliyatbank initiated to the defendant S. Mamedova the claim concerning the circulation of the requirement regarding mortgage and eviction from the apartment.

During legal proceedings it was determined that according to the credit agreement signed between JSC Azernagliyatbank and the defendant S. Mamedova for No. 22 of March 07, 2007, the credit for the amount of 45.000 US dollars with return condition within 360 days is issued to the defendant. As loan security the apartment No. 3, Tagizade located in the house No. 35 down the street Nasiminsky district of the city of Baku who is available in S. Mamedova's property was pledged in bank according to the mortgage agreement No. 22 of March 07, 2007. The defendant S. Mamedova and members of her family undertook the obligation certified in notarial procedure to voluntarily exempt the specified apartment in case of the circulation of the requirement regarding mortgage. S. Mamedova did not fulfill primary obligation properly and 2 times in a row broke the repayment schedule of the credit parts.

Court, having satisfied the claim with the correspondence decision of April 02, 2008, decided to sell the specified apartment pledged under mortgage from auction, and at the expense of the received means to hold for benefit of JSC Azernagliyatbank principal debt in 43.750 US dollars, debt on percent in 6.299 US dollars, penalty in the amount of 5.466 US dollars, all credit debt in 55.515 US dollars, and the paid state fee in the amount of the 19th manat 80 гяпик, and to issue the amount which remained after debt repayment to bank to S. Mamedova, in case of insufficiency of the money received from sale of subject of mortgage for satisfaction of the requirement, to direct debt repayment to other property belonging to the defendant and to evict from the defendant together with family members this apartment. After the introduction of this decision in legal force, the resolution of the legal executive of May 28, 2008 on case begins enforcement proceeding. According to the "Report on results of assessment of property" of September 05, 2008 submitted within this production by the relevant organization, noted apartment is estimated at 71.500 AZN. "Act" of voluntary release of S. Mamedova by the debtor and members of her family of the apartment, and providing acceptance - renting an apartment is constituted between the last and the bank representative on October 10, 2008. The legal executive, the letter of November 19, 2008 having addressed the director of Specialized Auction Center for Property LLC, asked to organize sale of this apartment and to transfer the amount received from sale into the account of department of legal executives. But, despite the opportunities enshrined in Articles 38, 43 and 45 Laws of the Azerbaijan Republic "About mortgage" this decision which took legal effect for the unknown reasons was not performed in the terms specified in the law. Therefore, JSC Azernagliyatbank showed on September 10, 2008 to S. Mamedova the claim "about receipt of again collected percent and penalty in view of non-execution of monetary commitments timely". The requirement is proved by the fact that, despite the expiration more than 5 months from the moment of pronouncement of the above-noted judgment, the obligation was not fulfilled and for this reason the defendant shall be attracted for payment percent and penalty for these five months. Nasiminsky district court determination of January 09, 2009 having suspended proceeedings considered necessary to send the appeal to the Constitutional Court. The address is proved by the fact that along with need of explanation of emergence of the extraction of benefit reflected in Article 449.1 of group of companies, application of Article 449.4 of group of companies when charging the percent formed afterwards it causes uncertainty. In the address the request is reflected to interpret the benefit extraction provided in Article 449.1 of group of companies from the point of view of application of article 449.4 of this Code.

The plenum of the Constitutional Court, in connection with the address, from the point of view of the civil legislation, and also the international practice considers necessary to note the following.


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