DFCC Bank has won a judgment in the High Court of the Western Province after a case was filed in February 2008 against the bank by Onril (Pvt) Ltd, a company engaged in the business of manufacturing and exporting coir based products.
Onril filed action against DFCC and Schokman & Samarawickreme for purportedly passing a resolution in terms of Section 8 of the Recovery of Loans by Banks (Special Provisions) Act No.4 of 1990 after the company took out a loan and did not repay according to the terms and conditions laid out. The case was heard before High Court Judge E.A. Gamini Rohan Amarasekara, who determined that an interim order prayed for by the plaintiff is refused and does not have a prima facie case.
Onril stated in its petition that its loan application was approved and that security for the repayment was primary mortgage over the land as interim security. Onril further stated that the said capital sum was to be paid in 60 monthly equal installments with a grace period of 12 months. The monthly installments were calculated on the repayment of the total loan together with interest. However, Onril said it started the payments of installment well before the grace period but that DFCC passed the resolution.
Onril stated that the purported passing of the resolution is contrary to law and has no legal force or effect.. The company said DFCC was aware that the money was to be invested to a particular project that had to fall in place for the company to generate income and said it took all reasonable steps in terms of the agreement but that DFCC passed a resolution.
"When it is clear that the defendant is not acting illegally it cannot be held that an irreparable injustice would be caused to the plaintiff when the first defendant executes his prima facie legal rights," the judge said in his ruling. Romesh De Silva, PC with Sugath Caldera appeared for Onril (Pvt.) Ltd. instructed by John Wilson partners, while S.A. Parathalingam, PC with N.R. Sivendran appeared for the DFCC instructed by Sudath Perera Associates. (NG) |
E-mail