SRI LANKAINSURANCE CORPORATION LTD

SRI LANKA INSURANCE CORPORATION LTD

Vs.

ATTORNEY GENERAL

COURT OF APPEAL
NAWAZ., J.
CA/LA/50/2007
DC COLOMBO 37551/MR

Performance bonds-Prescription Ordinance, sections 5, 6, 15- Civil Procedure Code, section 146-Liability of the guarantor in an unconditional bank guarantee-Implied terms in a commercial contract Renunciation of privileges accorded to sureties-NulIum tempus occurrit regi-lnalienable rights of the state

A performance bond was issued by the defendant, the Insurance Corporation of Sri Lanka, with a promise to compensate the beneficiary in the event of default in the performance of a construction contract by the contractor. There was a default alleged in the performance of the contract by the contractor and upon failure to pay on the bond further to a demand having been made, the plaintiff sued the defendant for recovery of the money on the bond.

The question that arose as a preliminary issue before the District Court was whether the plaintiff's action was prescribed. The contention of the defendant was that the action was prescribed in terms of section 6 of the Prescription Ordinance as the same was instituted si

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