Welhena Kankanamge Bandulal Senerath vs DFCC Bank – CA WRIT 666/2023-2024

In the case between Welhena Kankanamge Bandulal Senerath (Plaintiff) and DFCC Bank alongside other respondents (including Welhena Kankanamge Aruna Srilal Senerath, Welhena Kankanamge Lalith Nirosha Senerath, and La Monarose Hotels & Resorts (Private) Limited), the court addressed the legality of DFCC Bank’s resolution to auction a mortgaged property under Section 4 of the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990. It was held that a director who provides his property as security for a company’s loan acts as a borrower within the Act’s terms, and is consequently subject to parate execution, notwithstanding the director’s status as a third-party mortgagor. The principle was reaffirmed that such directors do not qualify for additional protection under Section 10 when f