Lakshman Perera vs Union Bank of Colombo Ltd and Others – sllr 2019 volume 2 page 395

In the case between Union Bank of Colombo Ltd (Plaintiff-Bank) and Lakshman Perera (2nd Defendant-Appellant) along with other defendants, the central issue involved whether a personal guarantee executed in 1998 by the defendants, including the appellant, remained enforceable after a loan restructuring in 2001, or if the 2001 arrangement constituted a new and separate loan facility. Additional considerations included the commencement of the prescription period for enforcing the guarantee, and whether the extension of repayment terms through rescheduling would release the guarantor from liability. It was held that the 2001 restructuring was not a new loan, but a rescheduling of the original 1998 facility, thereby preserving the original guarantee’s enforceability. The prescription period was