Watagodagedara Mallika Chandralatha Vs. Hearath Mudiyanselage Punchi Banda & Watagode Gedara Dhammika Ranjith Watagodage – SC APPEAL/185/15-2017

In the case between Watagodagedara Mallika Chandralatha (plaintiff-appellant-petitioner) and Hearath Mudiyanselage Punchi Banda, as well as Watagode Gedara Dhammika Ranjith Watagodage (defendants/respondents), the court addressed whether the evidence established the existence of a constructive trust despite the transaction being titled as a straightforward sale. The holding determined that the cumulative facts—including the nominal consideration in the property transfer, the subsequent lease arrangement, and ongoing conduct of the parties—supported the inference that the transaction was not a bona fide sale but rather a nominal transfer for security purposes, thus establishing a constructive trust in favor of the plaintiff. The principles affirmed that courts must evaluate all circumstance