The court held that the bank has the legal authority to proceed with the recovery process and ordered the petitioners to pay legal costs amounting to Rs. 1 million.
The judgment was delivered by a bench comprising Justices R. Gurusinghe and Dr. Sumudu Premachandra after considering the petition filed by the companies.
The dispute arose after the Board of Directors of People’s Bank passed a resolution to recover outstanding loan facilities exceeding US$1.42 million obtained by the petitioning companies. The bank had decided to sell the mortgaged properties through a public auction and use the proceeds to settle the outstanding debt.
In its ruling, the Court of Appeal rejected the companies’ challenge to the proposed auction, thereby allowing the bank to continue with the recovery process in accordance with the law
