Sumudu Sanjeevanee Nanayakkara vs Hatton National Bank PLC & others – SC APPEAL 53/2017-2017

In the case between Sumudu Sanjeevanee Nanayakkara (Plaintiff-Appellant) and Hatton National Bank PLC with associated respondents (including Don Ashok Ranjan Vitharana and legal heirs), the Supreme Court addressed whether the bank could proceed under the Recovery of Loans by Banks (Special Provisions) Act No.4 of 1990 (as amended) to auction mortgaged property when the balance of the principal sum due was less than Rs.5 million. It was held that the bank’s authority to auction under Section 5A of the Act is contingent upon the principal amount due and owing at the time of default being not less than Rs.5 million. The reasoning established that the statutory threshold refers to the outstanding principal, not the original loan sum, thus restricting the bank’s recourse to statutory recovery w