IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an appeal under Section 5(1) of the High Court of the Provinces (Special Provisions) Act No.10 of 1996, against the judgment of the learned Commercial High Court Judge of Colombo dated

28.03.2013.

THE TRAVEL CLUB (PVT) LTD., Formally of Taj Samudra Office Complex, No.25, Galle Face Centre Road, Colombo 3.

And presently of

4th Floor, Forbes and Walker Building, No.46/38, Nawam Mawatha, Colombo 2 .

Plaintiff S.C.CHC Appeal No.30 /2013 HC (Civil) No. .668/2010/MR Vs.

STERLING MERCHANT INVESTMENT LIMITED, Formally of No. 54, Walukarama Road, Colombo 3.

And presently of No. 85/1, Jambugasmulla Road, Nugegoda. Defendant AND BETWEEN THE TRAVEL CLUB (PVT) LTD., Formally of Taj Samudra Office Complex, No.25, Galle Face Centre Road, Colombo 3.

And presently of

4th Floor, Forbes and Walker Building, No.46/38, Nawam Mawatha, Colombo 2 .

Plaintiff-Appellant Vs.

STERLING MERCHANT INVESTMENT LIMITED, Formally of No. 54, Walukarama Road, Colombo 3.

And presently of No. 85/1, Jambugasmulla Road, Nugegoda.

Defendant-Respondent BEFORE : MURDU N.B. FERNANDO P.C., CJ.

A.H.M.D. NAWAZ, J.

ACHALA WENGAPPULI, J.

COUNSEL : Neomal Palpola with Keshani Nilaweera instructed by Ms. Serasinghe for the Plaintiff-Appellant Shiraz Hassan for the Defendant-

Respondent.

ARGUED ON : 11th November, 2021 DECIDED ON : 25th July, 2025 **********

ACHALA WENGAPPULI, J.

This is a direct appeal, preferred by the Plaintiff-Appellant-

Company (hereinafter referred to as the “Plaintiff Company”), against the judgment of the Commercial High Court dated 28.03.2013, by which its action was dismissed. The Commercial High Court accepted the claim of the Defendant-Respondent-Company (hereinafter referred to as the Defendant Company) that the said action is prescribed.

In instituting the instant action before the said High Court on

01.11.2010, the Plaintiff Company had averred in its Plaint that the Defendant Company is wrongfully and unlawfully in breach of its obligation, in its failure or neglect to pay a sum of Rs. 6,034,241.35 and therefore a cause of action accrued to sue that Company to recover the same. The Plaintiff Company accordingly prayed inter alia from the trial Court to grant a Judgment and Decree in a sum of Rs. 6,034,241.35, together with further interest at 16% per annum in a sum of Rs. 3,900,000.00, from 01.11.2010, until the date of the Decree and thereafter a further interest at 16% per annum on the aggregate amount of the Decree until payment in full.

The Plaintiff Company was involved in a travel trade and had some of its financial requirements being served by Pramuka Management and Financial Services Ltd., an entity which was re-named Pramuka Merchant Corporation in November 2000 and once more changed the name to its present form, Sterling Merchant Investments Ltd., in July 2003. It is stated in the Plaint that the Plaintiff Company made two fixed deposits with the Defendant Company, bearing Nos. 2002/MMB/035 and 2002/MMB/058 for a sum of Rs. 2,400,000.00 and Rs. 1,500,000.00 respectively at an interest rate of 16% per annum, on 08.02.2022. These two deposits were to mature on 06.01.2003.

In addition to the said two fixed deposits, the Plaintiff Company also obtained two Term Loans from the Defendant Company, amounting to a sum of Rs. 1,796,000.00 (Term Loan No. 1) and Rs. 1,500,000.00 (Term Loan No. 2), along with a bank guarantee of Rs. 8,000,000.00, issued by Pramuka Bank Ltd. The two fixed deposits of the Plaintiff Company were held under a lien by the Defendant Company in respect of those term loan facilities. The Plaintiff Company claims that the total yield of the two fixed deposits, once reached maturity, amounts to Rs. 4,524,000.00. The Plaintiff Company wrote to the Defendant Company on 14.12.2004, informing latter to make the necessary arrangements to pay the balance of the capital and accrued interest to the former, after settling its dues under two term loan facilities.

Instead of