The Colombo Commercial High Court issued an order lifting its previous injunction in favor of New Nawaloka Medical Centre (Private) Limited against Hatton National Bank PLC, allowing for immediate execution.
Following this ruling, Hatton National Bank PLC can proceed with its board-approved resolution to auction properties securing specific loans granted to New Nawaloka Medical Centre (Private) Limited.
The bank's board of directors passed a resolution on March 3, 2023, utilizing its authority under the Recovery of Loans by Banks (Special Provisions) Act, No. 4 of 1990, as amended, to auction said properties.
Previously, the Commercial High Court had halted the bank's auction plans on May 26, 2023, following submissions by President’s Counsel Dr. Romesh De Silva representing New Nawaloka Medical Centre (Private) Limited.
Senior Counsel Priyantha Alagiyawanna, along with Counsels Isuru Weerasooriya and Duminda Premarathna, represented Hatton National Bank PLC.
After reviewing the interim injunction, the Commercial High Court dismissed New Nawaloka Medical Centre (Private) Limited's request for the injunction.
The Recovery of Loans by Banks (Special Provisions) Act, No. 4 of 1990, enacted to facilitate the expedited recovery of bank loans, aims to strengthen the country's financial system. The Act has undergone multiple amendments and has been subject to interpretation by the Supreme Court, including the recent case of Sunpac Engineers (Private) Limited and Another v. DFCC Bank PLC and Others decided on November 13, 2023, by a seven-judge bench.
