People’s Merchant Bank Limited v. Lanka Canneries Limited – CA CASE NO:-392/99 F -1999

The case between People’s Merchant Bank Limited (plaintiff-respondent) and Lanka Canneries Limited (defendant-appellant) addressed whether the plaintiff bank was entitled to recover sums advanced under bills discounting facilities, despite the defendant’s claim that only the procedures under the Bills of Exchange Ordinance (presentment and notice of dishonor) were applicable. It was held that the bank could enforce repayment based on original agreements (P1 and P2) rather than relying exclusively on the bills of exchange, thus the Ordinance’s requirements were not decisive. The principle reaffirmed is that a cause of action may arise on the underlying contract, and not solely upon a bill of exchange, even where bills have been issued as evidence of a debt. Relying on established authoritie