Hatton National Bank Ltd. v. Jayawardane And Others – sllr 2007 volume 1 page 181

In the case between Hatton National Bank Ltd. (Plaintiff) and Jayawardane and others (Defendants, including directors and guarantors of Nalin Enterprises Pvt Ltd), the court addressed the legality of the bank’s parate execution under the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990, the effect of mortgaged properties by company directors, the application of the laesio enormis principle to resale under statutory authority, and the conditions for piercing the corporate veil to impose director liability. It was held that directors acting as alter ego of the company could not claim third party mortgagee status to contest the statutory sale, that courts may disregard the corporate veil to prevent fraud or abuse, and that laesio enormis did not affect a sale properly conclud