Sampath Bank PLC v Kaluarachchi Sasitha Palitha – SC APPEAL NO. 196/2011-2019

In the case between Sampath Bank PLC and Kaluarachchi Sasitha Palitha, owner of Sunrise Biscuit Manufactures, the Supreme Court addressed the issue of determining the commencement of the prescriptive period for overdraft facilities and the effect of a conditional acknowledgment of debt under Section 12 of the Prescription Ordinance. It was held that an acknowledgment of debt, even if conditional (as in the P5 letter), suffices to interrupt and extend the prescriptive period, rendering the precise date of commencement (whether from demand or last overdraft) immaterial. This reasoning reaffirmed the principle that a valid acknowledgment under Section 12 effectively resets the prescriptive timeline for recovery of debt. Reliance was placed on statutory interpretation of Sections 7 and 12 of t