IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an appeal under and in terms of Section 5(1) of the High Court of the Provinces (Special Provisions Act)

Act No. 10 of 1996.

Bank of Ceylon No. 4, Bank of Ceylon Mawatha, Colombo 01.

DEFENDANT SC Appeal No. SC/CHC/23/2008 Case No. HC (Civil) 167/2005 (1)

vs.

AraliyaImpex (Pvt) Ltd. No. 69, Old Moor Street, Colombo 12. PLAINTIFF AND NOW BETWEEN AraliyaImpex (Pvt) Ltd. No. 69, Old Moor Street, Colombo 12 DEFENDANT – APPELLANT vs.

Bank of Ceylon No. 4, Bank of Ceylon Mawatha, Colombo 01 PLAINTIFF – RESPONDENT Before: Priyantha Jayawardena PC, J Murdu N.B. Fernando PC, J S. Thurairaja PC, J Counsel: Lakmini Amaratunga for the Defendant-Appellant N. Wigneshwaran, Deputy Solicitor General with G.M. Gamage for the Plaintiff-Respondent Argued on: 6^th December, 2021 Decided on: 5^th July, 2023 Priyantha Jayawardena PC, J The Plaint The plaintiff-respondent (hereinafter referred to as the “respondent bank”) had instituted action in the District Court of Colombo to recover money given as an overdraft to the defendant-appellant (hereinafter referred to as the “appellant”). The respondent stated that the appellant had maintained a current account at the Gas Works branch of the respondent bank.

The respondent bank stated that, at the request of the appellant, it had provided an overdraft facility to the appellant on or about the 10^th of October, 2000 at a rate of 30% interest per annum.

The respondent bank further stated that, as at 31^st of July, 2003 the appellant had an outstanding amount of Rs. 1,829,489.21 and accrued interest of Rs. 1,212,909.98 to be paid to the respondent bank. Hence, by the letter of demand dated 19^th of August, 2002 the respondent bank had requested the appellant to pay the outstanding amount along with the interest due.

As the appellant failed to settle the said overdraft facility given to him, an action was instituted by the respondent bank in the District Court of Colombo to recover a sum of Rs. 3,042,398.29/-

against the appellant on the 18^th of December, 2003.

The Answer Thereafter, the appellant filed its answer inter alia denying that a cause of action had been accrued to the respondent bank to sue the appellant.

Further, the following preliminary objections were raised in the answer filed by the appellant:

“(a) this Court has no jurisdiction to hear and determine this matter in that, the alleged cause of action falls within the 1^st limb of schedule 1 to the High Court of the Provinces (Special Provinces) Act No. 10 of 1996.

(b) the Plaintiff does not have the authority to file this action.

(c) the Plaintiffs purported cause of action is prescribed in law.”

The appellant further stated that it does not owe any money to the respondent and that the action should be dismissed.

Request to transfer the case to the Commercial High Court On the 3^rd of August, 2005 the appellant had made an application to the District Court to transfer the case to the Commercial High Court in terms of section 9 of the High Court of the Provinces (Special Provisions) Act, No. 10 of 1996, stating that the District Court has no jurisdiction to hear and determine actions where the monetary value of the action exceeds Rs. 3 million.

Having considered the said application, the learned District Judge allowed the said application and transferred the case to the Commercial High Court.

Proceedings before the Commercial High Court The trial had commenced before the High Court, by making admissions and raising issues. After the respondent bank raised its issues, the appellant raised the following issues:

“18. As pleaded in paragraph 2 of the Answer, does the Plaintiff have the authority to file this action?

19. Has a cause of action accrued to the Plaintiff to sue the Defendant?

20. Does the Appellant have to pay the sum of money due to the Plaintiff as submitted in the Plaint?

21. Should the Respondent’s case be dismissed if one or more or all of the above issues are answered in