LAKSHMAN PERERA

Vs.

UNION BANK OF COLOMBO LTD AND OTHERS

SUPREME COURT
PERERA, C.J.
ALUWIHARE, J.
MALALGODA, J.
SC/(CHC) APPEAU22/11
HC (CIVIL) 36/2007/MR
JUNE 27, 2017

Money recovery action-Personal guarantee-Rescheduling of existing loan or new loan-Rights of guarantors when creditor varies original loan-Approbate and reprobate

The 1st respondent bank filed action in the Commercial High Court to recover a sum of Rs. 5, 162,341.53 with interest alleged to be due to it from the 2nd respondent Company on certain credit facilities granted to the 2nd respondent at the request of the appellant and the 3rd respondent, who were the directors of the 2nd respondent. The appellant and the 3rd respondent were also made defendants to the action under a "Joint and Several Personal Guarantee" dated 16.03.1998, which they had signed at the time of granting the facility. In the year 2000, the 2nd respondent went into arrears in making its repayments and, at the request of another director, the 1st respondent bank restructured the outstanding amount subject to the terms and conditions of an offer letter, which was signed and accepted by the appellant on 16.07.