Bank of Ceylon vs Jaqa Lanka International (Pvt) Ltd – SC APPEAL 50/A/2013-2023

In the case between Jaqa Lanka International (Pvt) Ltd and Bank of Ceylon, the court addressed whether the appellant Bank of Ceylon forfeited its status as a secured creditor by failing to elect a remedy under Section 358 of the Companies Act within the prescribed timeframe, consequently converting into an unsecured creditor. The court further considered whether the liquidator was entitled to deduct expenses, including insurance, security, and mortgage discharge costs, from the proceeds of the mortgaged asset’s sale. It was determined that the Bank of Ceylon did not respond to the liquidator’s notice within the statutory 20 working days and, as a result, lost its secured creditor status in accordance with the procedural scheme of the Companies Act. The liquidator’s entitlement to deduct re