The People’s Bank v. New Lanka Merchants Ltd. – sllr 1990 volume 1 page 067

In the case between New Lanka Merchants Ltd. and People’s Bank, the court addressed the issue of whether the erroneous affirmation by a bank employee, regarding the honouring of a cheque, amounted to actionable negligence and imposed liability on the bank for ensuing loss. It was held that the provision of incorrect information by the bank’s employee, which was relied upon by the plaintiff to their detriment, constituted negligence for which the bank was liable. The principle was reaffirmed that banks have a duty to exercise due care in dealings with their customers, and when their employees act within apparent authority, the institution bears responsibility for resultant loss. The decision relied on established standards of bank liability and principles of agency, clarifying that failure