Notes to the Consolidated Financial Statements - Seylan Bank

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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.
North Bound > Seylan Bank Annual Report 2011 337 2. In addition to the above the following civil cases are pending against the Bank. Case CHC 638/09/MR (DC Colombo 6033/SPL) DC Colombo 04768/09DMR 36780/MR DC Negombo 2798/P DC Matara 20512/P DC Colombo DMR 09088/10 DC Horana 1792/P HC (Civil) 379/2011/MR CHC 157/2009/MR SC (APP) 85A/2009 DC Kalutara 6070/P HC (Civil) 166/05 (1) Nature/Description Counter claim made by the defendant for the case filed by the Bank. Claiming damages Rs. 10.0 Mn. from the Bank for negligence prosecution and wrongful act. Transferred to Commercial High Court and CHC 744/2010/MR . Against the fraudulent withdrawal of Rs. 280,000/- made by the 3rd party. Claiming the title of the mortgaged property by a third party. Claiming the title of the mortgaged property by a third party. Accusing the Bank for negligence resulting a cheque fraud (claim Rs 5.0 Mn.). Obtain a partition decree against the mortgaged property. Sarana International (Pvt) Limited property was acquired by the Bank in 2009. They claim that the Bank as a party of the Ceylinco Group has contributed money in settlement of the loan and due to non-payment by the Bank, the loan went into arrears. Claim Rs. 992,547.65 and interest from October 2008. Fraudulent encashment of a cheque of Rs. 9.5 Mn. by third party from BOC account. Hatton National Bank has filed to nullify Seylan Bank Mortgage Bond executed by Lanka Tractors. Obtain a partition decree against the mortgaged property to the Bank. Claiming a refund from the sales proceeds of the property. 3. Labour Tribunal Cases 1. Labour Department inquiry No. IR/1055/2009 CA Writ 891/2009 - Retired employees of Seylan Bank PLC vs Seylan Bank PLC. Labour Commissioner ordered to pay gratuity at the rate of one month salary of each year of the service for the employees who completed 10 years service. Bank has filed a writ/settlement application in Court of Appeal. Argument or settlement postponed to 26.01.2012. Again date refixed for support and argument on 15.03.2012. 2. LT application before the Labour Tribunal by ex-employees. Case Nos. LT 1/32/2010, LT 1/33/2010, LT 1/34/2010, LT 1/35/2010, LT 1/36/2010, LT 1/37/2010, LT 1/38/2010, LT 01/39/2010, LT 01/40/2010, LT 01/41/2010, LT 01/42/2010, LT 01/43/2010, LT 01/44/2010, LT 02/109/2010, LT/08/505/2010, LT/13/78/2010, LT/13/79/2010, LT/13/80/2010, LT/13/81/2010, LT/13/82/2010.
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Notes to the Consolidated Financial Statements - Seylan Bank

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