Oct 13, Colombo: The Court of Appeal has issued a writ of mandamus directing the Secretary to the Treasury and the Compensation Tribunal to pay the Seylan Bank PLC a sum of Rs.96.6 million defaulted on a loan obtained by mortgaging Ceylinco properties under the control of the Secretary to the Treasury in 2011.
Court of Appeal two-judge-bench comprising Justice Mohammed Laffar and K.K.A.V. Swarnadhipathi issued this order after hearing the writ petition filed by Seylan Bank seeking compensation for non-payment of the mortgage loan.
The petitioner, Seylan Bank PLC states that Ceylinco Leisure Properties had been vested on the Secretary to the Treasury under Revival of Underperforming Enterprise or Underutilized Assets Act No. 43 of 2011 and a competent authority was appointed to govern it.
The petitioner bank had granted a loan in the form of a mortgage to the property, which belongs to the Urban Development Authority which had leased out the property to Ceylinco Homes International (Lotus Tower) Limited.
The property was mortgaged to Seylan Bank on December 31, 2011 by Ceylinco Lotus International with the approval of Urban Development Authority and obtained a loan.
The company and the Urban Development Authority have to pay Rs. 3,410,654,094.65 to Seylan Bank and the Seylan Bank has made a claim under Act No. 43 of 2011 to the compensation tribunal.
After an inquiry, the compensation tribunal awarded compensation to the petitioner amounting to Rs. 2,146,415,239.80 on 20th November 2013. In terms of Act 43 of 2011.
The petitioner states that after repeated inquiries, the respondents agreed to pay the compensation by or about January 2015A and a total of Rs.1,179,937,389.87 had been paid out of Rs. 2,146,415,239.80 at the time the petition was taken up for argument.
The court has issued the writ of mandamus compelling the Secretary to the Treasury and the Compensation Tribunal to pay the petitioner bank the remaining amount of Rs 96,647,789.