Liyanage Danushka Sandamali De Silva v. Bank of Ceylon et al. – CA /WRIT/APP/NO.854/2008-2008

In the case between Liyanage Danushka Sandamali De Silva (petitioner, through attorney Pathahennadige Mala Padmini) and Bank of Ceylon, People’s Bank, among others, the court addressed whether Bank of Ceylon could lawfully sell the petitioner’s mortgaged property for a loan facility granted to Himaray (Private) Limited, in which the petitioner served as both director and third-party mortgagor. It was determined that the petitioner, by virtue of direct participation as a director and signatory to the loan transaction, was not a mere uninvolved third-party mortgagor and thus could not invoke protections limiting the bank’s recovery powers under the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990. The court reaffirmed the principle that protections for third-party securities