The Commercial High Court of Colombo recently entered a judgment in favour of Seylan Bank PLC, the Plaintiff who had filed action against Tandon Lanka (pvt) Ltd and two personal guarantors for the recovery of sums due to the Bank under an export bill purchasing facility given to the 1st Defendant.
The case was laid by against the 1st Defendant and proceeded to trial against the 2nd and 3rd Defendants who were held liable on the personal guarantees signed by them. Commercial High Court Judge Shiran Gooneratne answered all issues in favour of the Plaintiff and entered judgment in favour of the Bank in a sum of Rs. 174,930,841 equivalent to US$ 1,537,853 together with interest against the two Guarantors.
The 2nd and 3rd Defendants defence that either of the Defendants did not have knowledge or of the implication involved in signing Guarantee Bond and that they were not put on notice of the banking facility made available to the Principal Debtor were not accepted by Court. The Court also rejected the Defendants contention that interest should be calculated on facility granted to the 1st Defendant at the New York prime interest + 1% and held that the Plaintiff had a right to charge a higher rate of interest which had not been objected to by the Defendants.
The Court further held that the Plaintiff established the consideration in respect of the personal guarantee and entered judgment in favour of Seylan Bank for Rs. 174,930,841 equivalent to US$ 1,537,853 against the 2nd and 3rd Defendants.
Counsel Shanaka De Livera with Kaushalya Samaraweera, Attorney-at-Law instructed by De Livera Associates, Attorneys-at-Law appeared for the Plaintiff Seylan Bank.
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