Sterling Merchant Investment Ltd v Liyanage – sllr 2004 volume 3 page 053

The case between Sterling Merchant Investment Ltd (plaintiff) and Liyanage (defendant-petitioner) addressed the validity of an affidavit required for leave to defend under section 706 of the Civil Procedure Code, and the propriety of court orders concerning security exceeding the principal claim when legal interest is included. It was determined that the affidavit submitted by the defendant’s manager was deficient, lacking the required particulars (name, address, seal, and clear designation of the administering authority), resulting in the absence of a valid application to defend. Further, it was clarified that it is permissible for a court to require security exceeding the principal amount if such excess represents legal interest. The District Court’s order was upheld, with revision refus