The case will be filed with a magistrate court here under sections 402 and 406 of BPC (Bangladesh Penal Code) after delivery of the verdict by the Bogra Artho Rin Adalot (loan recovery court) regarding their defaulted loans, according to sources at the Shoptopody Branch of Janata Bank (JB), which disbursed the loans.

The Adalot will give its verdict on March 4, sources there said.

The two persons took loans of Tk three crore 20 lakh in the name of setting up a tannery named Bogra Tannery at Lichutola in Bogra sadar upazila. The loans disbursed between 1986 and 1992 stood at Tk ten crore 50 lakh with interest as on December last year, the sources said.

But no tannery was set up there. "So it is a forgery case because the loans were taken by showing a fake project", one source at the bank told this correspondent on Thursday. Of the amount, Tk one crore 20 lakh was project loan and Tk two crore cash credit, he said.

The borrowers are defaulters on two counts-- for taking loans showing a "fake" project and for not repaying it, he said.

The sources also alleged that the loan defaulters have "forcibly reoccupied the mortgaged" lands at Lichutola and at other places against the loans.

The case with the Artha Rin Adalot was filed on October 18, 1999.

Lalu was elected from Gabtoli constituency (Bogra 7) in the by-election after BNP chief Kaleda Zia vacated it as she was elected from two seats in the last parliamentary polls.

Asked how a loan defaulter could run in the polls race, the bank sources said Lalu relevant papers showing him as a loan defaulter were submitted to the election commission office here.

Sources at the Deputy Commissioner's office said the papers were submitted by the bank but those were later missing. The Deputy Commissioner acts as the Returning Officer.

He was contacted over phone but he declined to talk on the issue.