High Court issues interim injunction restraining DFCC Vardhana Bank from imposing parate execution

Monday, 14 July 2014 01:44 - - {{hitsCtrl.values.hits}}

By S.S.Selvanayagam The Commercial High Court of the Western Province issued an interim injunction on 4 June against the Defendant DFCC Vardhana Bank preventing it from auctioning by way of parate execution the properties owned by two Plaintiffs. An enjoining order was issued in the first instance. Commercial High Court Judge Anura Ranasinghe issued the Interim Injunction until the end of the case after considering submissions made on behalf of parties. High Court issued this order preventing the parate execution which is a procedure special to banks, which allows the resale of property mortgaged to the bank. 1st Plaintiff Fathima Ruzana Fakurdeen who is the sole proprietor of the F.F.B. Mobiles is the wife of 2nd Plaintiff Zaruk Mohamed Fakurdeen. Both are partners of ‘Eat More’ Restaurants, Colombo. Farman Cassim with Charaka Jayaratne instructed by Lanka Dharmasiri appeared for the Plaintiffs. Kushan de Alwis PC with Kaushal Nawaratne appeard for the Defendant DFCC Bank. The Plaintiffs have obtained several mortgage facilities under the names of said businesses by mortgaging the said properties. Plaintiffs contend the resolution passed by the Defendant Bank consisted of two distinct properties situated in Grandpass and two different facilities and that the said resolution did not distinctly reflect the outstanding amount relevant to the individual mortgage bonds. The Plaintiffs maintain the said resolution was in violation of Section 10 of the Recovery of Loans by Bank (Special Provisions) Act No. 4 of 1990 wherein inter alia the mortgage is permitted to appropriate the outstanding value and redeem the property mortgaged.

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