Colombo District Court issues enjoining order against ComBank

By Lakmal Sooriyagoda
Colombo District Court Judge Anura Aluthge yesterday issued an enjoining order restraining Commercial Bank PLC from acting upon the board resolution passed on November 29, 2019. 
This order will be effective until March 9.

The court made this order over a case filed in terms of the Recovery of Loans Act (Special Provisions) No.04 of 1990 (as amended) with regards the facilities granted to the plaintiffs carrying on business under the name style and firm of ‘Kamil Jewelers’.

The plaintiffs in the plaint stated that they were partners of Kamil Jewelers and obtained credit facilities from Commercial Bank PLC pledging their residential property as security. The plaintiff stated that they have already paid a sum in excess of Rs.80,000,000 to Commercial Bank PLC as part of the repayment.

The plaintiffs stated that the mortgage bonds as well as the offer letter specifically stated that the interest rate that could be charged for the said credit facilities would be at a rate of PLR + 3 percent and that if  there was any change and/or variations to the said interest rate, the plaintiffs would be formally communicated of such change.
The plaintiffs stated that the purported board resolution passed on November 29, 2019 and published on newspaper on December 17, 2019, was illegal and/or unlawful as the resolution contained interest rate at PLR + 4 percent and PLR + 5 percent for two of the three credit facilities.

Farman Cassim PC, with Counsel Charaka Jayartne, Budwin Siriwardena and Mithun Imbulamure instructed by Purnima Gnanasekara, appeared for the plaintiffs.