Bank restrained from auctioning portion of farm land

Sandasen Marasinghe

Colombo Additional District Judge Priyantha Fernando yesterday issued an enjoining order restraining Seylan Bank PLC from auctioning a portion of Sandalanka Dairy Farm (Pvt) Ltd at Ibbankatuwa.

The Court issued this order following Sandalanka Dairy Farm (Pvt) Ltd of Maharagama filed a plaint against Seylan Bank alleging that the Bank had no right to auction the land of the Dairy Farm under the provisions of the Mortgage Act.

Sandalanka Dairy Farm filing the plaint through Attorney A. Nepata Arachchi cited Seylan Bank PLC and Manager of the Matale Branch of Seylan Bank PLC as the defendants. The plaintiff submitted before Court that it was raring a large number of cattle for milk at Naiwalawatta land in Ibbankatuwa, Dambulla for the local market.

The plaintiff mortgaged a portion of this land to the Matale Branch of Seylan Bank for the development of the farm.

The plaintiff stated that it could not settle the loan properly as it had to spent an unexpected amount of money on fodder for the cattle as the authorities were delaying to issue a licence for the plaintiff to import seeds of weeds to propagate cattle fodder.

Seylan Bank advertised in newspapers on March 31 to auction a portion of the land of the Sandalanka Dairy Farm that was mortgaged to it. The plaintiff stated that there were massive buildings of its company in that portion of land. In addition, the access road to the other portion of the land of this Farm is situated in the disputed land. Based on these grounds, if Seylan Bank auctioned the land, the plaintiff would undergo an irreparable loss.

The plaintiff also submitted that although the plaintiff dared to settle the loan by selling some other assets, the defendants calculated the full amount to be settled based on a higher interest rate than in the agreement.

The plaintiff submitted that it was willing to settle the loan if the full amount is calculated based on the interest rate in the agreement and if the plaintiff was granted a sufficient period to settle it.

The Court issued notice on the defendants to appear before Court on April 30.