IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA The Hong Kong and Shanghai Banking Corporation Limited, No. 24, Sir Baron Jayathilake Mawatha, Colombo 01.

Plaintiff S.C. (C.H.C.) Appeal No. 62/2012 Vs.

H.C. (Civil) Case No. 194/2009/MR Pratap Shyam Sunder Singh, No. 1, Rockwood Apartment, Rockwood Place, Colombo 07.

Defendant AND NOW BETWEEN Pratap Shyam Sunder Singh, No. 1, Rockwood Apartment, Rockwood Place, Colombo 07.

Defendant – Appellant Vs.

The Hong Kong and Shanghai Banking Corporation Limited, No. 24, Sir Baron Jayathilake Mawatha, Colombo 01.

Plaintiff – Respondent Before: Hon. Jayantha Jayasuriya, P.C., C.J.

Hon. A. H. M. D. Nawaz, J.

Hon. Janak De Silva, J.

Counsels: Harsha Soza, P.C. with Srihan Samaranayake for the Defendant – Appellant Manoj Bandara with Gamini Balasooriya for the Plaintiff – Respondent Written Submissions:

21.12.2018 and 05.06.2024 by the Defendant – Appellant

01.04.2019 and 10.06.2024 by Plaintiff – Respondent Argued on: 22.05.2024 Decided on: 27.11.2024 Janak De Silva, J.

The Defendant-Appellant (Appellant) applied to the Plaintiff-Respondent (Respondent) for a housing loan. The housing loan application identified the property to be purchased as 18/9, Chitra Lane, Colombo 05 (demised premises).

The Respondent by letter dated 23.05.2006 intimated its decision to offer the Appellant a loan of Rs. 18,200,000/= or 80% of the market value, whichever is lower, repayable over a period of 180 months at the interest rate of 13.90% which was to be reviewed annually.

This letter contained several terms and conditions of the loan.

The Appellant signed the letter of acceptance on 23.05.2006 itself and accepted the loan subject to the terms and conditions of the letter dated 23.05.2006.

The Respondent by letter of offer dated 05.06.2006 sent a more detailed letter setting out the terms and conditions of the loan which was signed and accepted by the Appellant on the same day.

Accordingly, a sum of Rs. 18,200,000/= was lent and advanced to the Appellant. The Appellant used the loan proceeds and bought the demised premises from Jayawardena Vidana Arachchige Lakshman Nalaka, who claimed to be seized and possessed and/or otherwise well and sufficiently entitled to the demised property. It was signed on his behalf by Vijith Sarath Kumara, who claimed to be the Attorney of Jayawardena Vidana Arachchige Lakshman Nalaka. The Transfer Deed bearing No. 3135 dated 05.06.2006 was attested by Mallikaratchige Dilrukshi Lalani Perera of the firm Julius & Creasy.

On the same day, the Appellant mortgaged the demised property to the Respondent as security for the loan repayment by Primary Mortgage Bond No. 3136 dated 05.06.2006 (Mortgage Bond), attested by the said Mallikaratchige Dilrukshi Lalani Perera of the firm Julius & Creasy.

The Appellant paid five loan instalments and defaulted afterwards. In this action, the Respondent seeks to recover the amount due on the housing loan transaction. The Appellant contends that good and valid title to the demised premises did not pass to him resulting in the total failure of the consideration. Hence he asserts that nothing is due. Furthermore, the Appellant has made a claim-in-reconvention in a sum of Rs. 50 million for damages suffered due to breach of duty of care on the part of the Respondent.

The learned Commercial High Court judge entered judgment as prayed for in the plaint and dismissed the claim-in-reconvention. The Appellant appeals.

There are two primary questions that arise for determination in this appeal. Firstly, whether there has been a total failure of consideration of the housing loan. Secondly, whether the Respondent has any duty of care towards the Appellant and if so, whether it was breached.

The Appellant has based his submissions on English law principles. Moreover, there is a clear difference between the concepts of justa causa and consideration. Hence, the need to first determine the applicable law.

Introduction of English Law Although our common law is the