How to Stop Parate execution action by the banks?

To stop a parate execution by banks, one can take the following steps based on the applicable laws:

  1. Seek a Writ of Certiorari: Under Article 140 of the Constitution, one may seek a writ of certiorari to challenge the legality of the bank’s actions and restrain the bank from selling the mortgaged property by public auction.
  2. Legal Injunction: As seen in cases where the Court of Appeal has restrained banks from selling mortgaged properties, obtaining a legal injunction can halt the parate execution process.
  3. Challenge the Resolution: If a resolution to parate execute the property has been passed by the bank, it may be challenged, especially if it was made known to the public after a winding-up application had been filed in court.
  4. Liquidation Proceedings: If the company that mortgaged the property is being wound up by the court, as per the decision of the learned District Judge, the bank cannot proceed to parate execute the property.
  5. Interpretation of Laws: The court may need to interpret the provisions of the Companies Act and the Recovery of Loans by Banks Act to decide which provisions are applicable in the situation where a company is under liquidation.

The relevant laws that may apply in such cases include the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990, the Mortgage Act No. 6 of 1949, and the Companies Act No. 17 of 1982 or the Companies Act 7 of 2007, depending on the specific circumstances of the case. Consulting with a legal professional is advisable to navigate the complexities of these laws and to take appropriate legal action.

LankaLAW Newsletter

We don’t spam! Read our privacy policy for more info.


Please Login to Comment.