IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA LB Finance PLC, No. 101, Vinayalankara Mawatha, Colombo 10.

Now No. 275/75, Prof. Stanley Wijesundara Mawatha, Colombo 07.

S.C. (C.H.C.) Appeal No. 64/2013 Plaintiff C.H.C. Case No. 168/2008 (MR)

Vs.

1. Galolu Kankanamage Mithrapala, ‘Muditha’, Madola, Avissawella.

2. Wattedurage Sanath Ranjith Premarathne, 331/C, Pelpitiya, Eheliyagoda. Defendants AND NOW BETWEEN Wattedurage Sanath Ranjith Premarathne, 331/C, Pelpitiya, Eheliyagoda.

2^nd Defendant – Appellant Vs.

LB Finance PLC, No. 101, Vinayalankara Mawatha, Colombo 10.

Now No. 275/75, Prof. Stanley Wijesundara Mawatha, Colombo 07.

Plaintiff – Respondent Galolu Kankanamage Mithrapala, ‘Muditha’, Madola, Avissawella.

1^st Defendant – Respondent Before: E. A. G. R. Amarasekara, J.

A. L. Shiran Gooneratne, J.

Janak De Silva, J.

Counsel:

Dr. Jayatissa De Costa, P.C. with D. D. P. Dassanayake and Chanuka Ekanayake for the 2^nd Defendant – Appellant Kanchana Pieris with Nisal Fernando for the Plaintiff – Respondent Written Submissions:

23.10.2019 and 12.10.2022 by the Plaintiff – Respondent

18.11.2019 by the 2^nd Defendant – Appellant Argued on: 27.09.2022 Decided on: 11.10.2024 Janak De Silva, J.

The Plaintiff-Respondent (Plaintiff) entered into a lease agreement (Lease Agreement) with one Galolu Kankanamlage Buddhika Amarajeewa (Lessee) in terms of which the Respondent purchased vehicle bearing No. 63-0807 and leased it to the Lessee.

The 1^st Defendant-Respondent (1^st Defendant) and the 2^nd Defendant-Appellant (Appellant) entered into what is termed a “Guarantee and Indemnity” (Guarantee), jointly and severally guaranteeing the punctual payment by the Lessee to the Plaintiff of all rent interest and all other sums whatsoever due under the Lease Agreement.

The Lessor defaulted in the payment of rent due in terms of the Lease Agreement. The Plaintiff referred the dispute for arbitration as agreed. The sole arbitrator made an award in favour of the Plaintiff. The award was enforced by the High Court. However, it could not be executed.

Thereafter, the Plaintiff filed this action against the 1^st Defendant and the Appellant. Trial proceeded ex parte against the 1^st Defendant. The learned High Court Judge entered judgment in favour of the Plaintiff against both the 1^st Defendant and the Appellant.

The Appellant has raised the following points in appeal:

1. The learned High Court Judge has failed to consider that despite a decree been entered by the High Court in favour of the Plaintiff against the Lessee allowing the Plaintiff to recover the amount due under the Lease Agreement, the Plaintiff has instituted this action against the Guarantors without pursuing the said decree;

2. The learned High Court Judge has failed to consider that the obligation of the Guarantors is to indemnify the losses of the Plaintiff and the failure on the part of the Plaintiff to recover the amount due under the said decree has resulted in the liability of the 1^st Defendant and Appellant being unjustly increased;

3. The learned High Court Judge has failed to consider that the attempt of the Plaintiff to recover the amount due under the Lease Agreement from the 1^st Defendant and Appellant demanding the same after Nine Years and One Month from the date of the termination of the Lease Agreement would inevitably be an unjust enrichment especially in view of the fact that at the termination of the Lease Agreement, the amount due was only Rs. 2,236,728.39 whereas by the alleged demand the Plaintiff has demanded Rs. 9,450,732/= from the 1^st Defendant and Appellant;

4. The learned High Court Judge has failed to consider that the unexplained delay on the part of the Plaintiff to take steps against the 1^st Defendant and Appellant has been for the benefit of the Plaintiff, especially in view of the fact that at the termination of the Lease Agreement, the amount due was only Rs. 2,236,728.39 whereas by the alleged demand, the Plaintiff has added further interest and demanded Rs.