Hatton National Bank Limited vs Rumeco Industries Limited – 99A/2009-2011

In the case between Hatton National Bank Limited (Plaintiff-Appellant-Appellant) and Rumeco Industries Limited, Shirani Jasintha Thirunavukkarasu, and Kangasabapathy Thirunavukarasu (Defendants/Respondents), the Supreme Court addressed whether the personal guarantee provided by the 3rd defendant in 1992 could extend to cover liability arising from a term loan granted in 1995. The court determined that the subsequent term loan (P6) was a distinct contractual arrangement, not a mere rescheduling of the earlier loan (P1/P5), and further held that the guarantee did not constitute a continuing security covering the later transaction due to principles of novation. The earlier guarantee was found not to attach to the obligations arising from the new loan. Relying on established authorities and th