Bank of Ceylon vs. Araliya Impex (Pvt) Ltd. – SC APPEAL NO. SC/CHC/23/2008-2023

In the case between Bank of Ceylon and AraliyaImpex (Pvt) Ltd., the issue concerned whether the cause of action for an overdraft facility extended without a written agreement was time-barred under section 7 of the Prescription Ordinance. The litigation followed the grant of an overdraft facility at high interest rates by the plaintiff to the defendant, leading to a dispute over repayment. After the matter was initially filed in the District Court and then transferred to the Commercial High Court pursuant to the High Court of the Provinces Act, the core question on appeal to the Supreme Court was the computation of the limitation period applicable to unwritten agreements. It was determined that the limitation period commenced from the date of default and that the institution of legal procee