Notes to the Consolidated Financial Statements - Seylan Bank

336 North Bound > Seylan Bank Annual Report 2011
Notes to the Consolidated Financial Statements
42. Litigation and claims
42.1 Cases Against the Bank
In the normal course of business, the Bank is involved in various types of litigation with borrowers or others
who have asserted or threatened claims/counter claims against the Bank, including the following:
1. Civil Cases
(i) CA(Rev)1788/04 - Claim against the Bank with regard to a draft deposit to BCCI Bank at the time of
Seylan Bank taking over the operations of BCCI Bank. (Draft value USD 500,000/-).
(ii)
CHC 157/2001(1), (SC01/2010) - Case filed by Lanka Milk Foods, with regard to dishonouring a
Guarantee issued by BCCI Bank before taking over by Seylan Bank (Guarantee value USD 72,730.23
and USD 56,732.25 ).
(iii) SC CHC 20/2007 - 02 plaintiffs had filed H.C. (Civil) 137/99 (1) adding the Bank as a defendant praying
judgment for a sum of Rs. 11,535,525/-. (equivalent to USD 161,381.15) – Judgment was delivered on
22.02.07, in favour of the Bank. The plaintiff made the above appeal to Supreme Court.
(iv) DC Colombo 15958/M – Case filed claiming Rs. 200,000/- as damages from the Bank for wrongful
honouring of a guarantee. The judgment given in favour of the plaintiff for Rs. 100,000/- with legal
interest. The Bank has filed an appeal against the judgment and to be listed.
(v)
CHC 14/98(1) – Case filed for dishonouring cheques and a letter of credit. Claim Rs. 111.0 Mn. Judgment
given in favour of the plaintiff but both parties have filed appeals against the said judgment and not yet
listed.
(vi) DC Mt. Lavinia 234/claim - Case was filed claiming damages for wrongful seizure (claim Rs. 2 Mn.)
(vii) DC Ratnapura 23391/MR – Case was filed by the customer for wrongful take over of machinery which
is not mortgaged to the Bank. (claim Rs. 23.0 Mn.)
(viii) CHC 232/2002, CHC 320/2002, CHC 243/2002 - These claims are instituted with regard to sale of shares
of Blue Diamond Jewellery Worldwide (BDJWWL) held as security for the facility of Gold Lada.
(ix) 00367/DMR/09 - Damages claimed by the customer claiming MLN Branch has wrongfully refused to
issue Dollars for travel purposes. Case transferred to CHC (559/10/MR and the case is fixed for filing
affidavit evidence).
(x)
CHC Colombo 359/09 MR - Case filed by the customer against the Bank stating that the Bank charged
default interest on the default facilities, while keeping FDs (Ceylinco Investment Co.) of Rs. 8.0 Mn. as
securities for the said facilities.
(xi) DC Colombo DMR/1605/11 - The plaintiff claims that as per the lease agreement the Bank did not
vacate the premises on the due date causing him damages and loss of revenue (claim Rs. 2.4 Mn.).
(xii) HC (Civil) 159/06 - Case filed by the customer for wrongful take over of machinery which is not
mortgaged to the Bank (claim Rs. 23.0 Mn.).
(xiii) DC Ratnapura 12734/M - Bank has filed a case against the borrower claiming for Rs. 226,687.95 and at
the answer borrower cross claimed from the Bank for Rs. 2.5 Mn. as damages on the ground that the
Bank has wrongfully handled the relevant accounts. Case is at the trial stage.