SAMPATH BANK PLC

Vs.

PALITHA

SUPREME COURT
ALUWIHARE, J.
DEHIDENIYA, J.
FERNANDO, J.
SC/APPEAL/196/2011
SC/HC/CA/LA/453/2011
CP/HCCA/KANDY/157/2009
DC KANDY/362/2004/MR
MAY3, 2018

Prescription Ordinance, sections 7, 12-Prescriptive period for an unwritten contract-Temporary overdraft facility-Conditional acknowledgment of debt

The plaintiff instituted action before the District Court seeking a specified sum of money together with interest on an overdraft facility granted by

the plaintiff to the defendant. In the answer, the defendant acknowledged obtaining the overdraft facility but took the position that the claim was prescribed. The District Court entered judgment in favour of the plaintiff. On appeal, the High Court entered judgment in favour of the defendant on the ground that firstly, in the absence of a contract with the condition that the overdraft is payable on demand, the trial Judge erred in holding that prescription begins to run from the date of the demand, and secondly, that the letter considered by the trial Judge to be an acknowledgement of the debt cannot be treated as an unqualified acknowledgement. The plaintiff appealed to t