IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an application for leave to appeal made under Section 5 (1) of the High Court of the Provinces (Special Provisions) Act No. 10 of 1996.

Standard Credit Lanka Limited carrying on its business at No. 277, Union Place, Colombo 02 and registered at No. 97, Hyde Park Corner, Colombo 02 (formerly Ceylinco Investment and Realty Limited).

S.C. (CHC) Appeal No. 72/2013 Plaintiff H.C. (Civil) Case No. CHC/244/07/MR Vs.

1. Harankaha Arachchige Menaka Jayasankha No. 49/6, Makola South, Makola.

2. Dewasinghe Hewage Kulawathi Minipura No. 49/6, Makola South, Makola.

Defendants AND NOW BETWEEN

1. Harankaha Arachchige Menaka Jayasankha No. 49/6, Makola South, Makola.

2. Dewasinghe Hewage Kulawathi Minipura No. 49/6, Makola South, Makola.

Defendants – Appellants Vs.

Standard Credit Lanka Limited carrying on its business at No. 277, Union Place, Colombo 02 and registered at No. 97, Hyde Park Corner, Colombo 02 (formerly Ceylinco Investment and Realty Limited).

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

Janak De Silva, J.

Achala Wengappuli, J.

Counsel:

Thilak Wijesinghe with Gayanthika Menike Goonesinghe for the Defendants-Appellants Wasantha Fernando with Chamathka Suriarachchi, Shaloshi Fernando and Kavindya Dharmarathnam for the Plaintiff-Respondent Written Submissions:

Defendant-Appellants on 24.01.2022 Plaintiff-Respondent on 24.01.2022 Argued on: 14.12.2021 Decided on: 23.11.2023 Janak De Silva, J.

The Plaintiff-Respondent (“Respondent”) instituted this action against the Defendants- Appellants (“Appellants”) to recover a sum of Rs. 12,433,028/= and interest thereon. Admittedly, on 17.01.2006, a sum of Rs. 3,000,000/= was lent by the Respondent to the Appellants as a housing loan. The property more fully described in the schedule to the plaint was mortgaged by Mortgage Bond No. 486 as security.

At the trial, the Appellants admitted the due execution of Mortgage Bond No. 486 and the receipt of a sum of Rs. 3 million in accordance with the said Mortgage Bond.

On behalf of the Respondent, the Chief Financial Officer gave evidence and marked documents X1 to X10 as evidence. None of them were marked subject to proof. They included the statement of accounts (X9), letters of demand (X7 and X8), and the reply of the Appellants (X10) to the letter of demand (X8).

On behalf of the Appellants, only the 1^st Appellant gave evidence.

The only defenses raised by the Appellants at the trial were that the contents of the Mortgage Bond were not explained prior to signing and that the statement of account was incorrect.

The learned Judge of the Provincial High Court of the Western Province holden in Colombo (Commercial High Court) rejected these contentions and entered judgment as prayed for in the plaint.

In this appeal, the Appellants seek to assail the judgment of the learned Commercial High Court Judge on the following three grounds:

(1) The amount of Rs. 12,433,028/= sought to be recovered by the Respondent is not recoverable in terms of Section 192 of the Civil Procedure Code and the law of contracts;

(2) Awarding interest on Rs. 12,420,504/= is contrary to section 192 of the Civil Procedure Code; and, (3) Interest granted is contrary to Section 5 of the Introduction of Law of England Ordinance, No. 5 of 1852 (“Civil Law Ordinance”).

According to the Appellant, in the statement of account marked (X9), the amount claimed by the Respondent includes:

(1) Defaulted instalments (as at 24.11.2006 after deduction of Rs. 158,000/=

payment made by the Appellants) - Rs.

313,101.00 (2) Default charges (interest on defaulted instalments) - Rs. 12,524.00 (3) Future Rentals (from 24.11.2006 to December 2026) - Rs. 12,107,403.00 Total - Rs. 12,432,028.00 The Appellants contend that in terms of the law, the said amount of Rs. 12,432,028/=

includes:

(a) Balance principal sum;

(b) Interest accrued on the principal sum prior to the institution of the action;

(c) Interest on the defaulted installme