Sunpac Engineers (Private) Limited et al. vs. DFCC Bank PLC et al. – SC APPEAL 11/2021-2023

In the case between Sunpac Engineers (Private) Limited and Ranath Jayaweera alias Sanath Jayaweera (as plaintiffs/appellants) and DFCC Bank PLC, Schokman and Samerawickreme Auctioneers, and several intervenient respondent banks, the court addressed the applicability of the Recovery of Loans by Banks (Special Provisions) Act, No. 4 of 1990 to third-party mortgages. The central issues concerned whether the Act confers parate execution rights to banks over property mortgaged by persons other than the actual debtor, the proper classification of directors who offer personal property as security, and the correct interpretation of “borrower” under the statute. The court held that the Act authorizes parate execution against all property mortgaged as security to a bank, regardless of whether the mo