Sampath Bank PLC vs. Palitha – sllr 2019 volume 2 page 320

In the case between Sampath Bank PLC and Palitha, the court addressed the issue of whether a claim for recovery under an overdraft facility is prescribed under the Prescription Ordinance, and whether a conditional acknowledgment of debt, as set out in letter P5, qualified to interrupt or extend the prescriptive period in terms of Section 12 of the Ordinance. It was determined that a written acknowledgment of debt—whether conditional or otherwise—is sufficient to restart the prescription period. The court further clarified that, in the context of an overdraft facility, the relevant prescriptive period may be extended by such acknowledgment. This holding reaffirmed the principle that acknowledgment under Section 12 operates to interrupt prescription, emphasizing that even a conditional ackno